Oct 10, 2006 4:21 pm US/Pacific
Oracle Settles With Gov't On Overcharge Complaints
WASHINGTON (AP) ―
Software maker Oracle Corp. agreed Tuesday to pay $98.5 million to settle complaints that it overcharged the government on multiple contracts, Justice Department officials said.
The settlement with Oracle's PeopleSoft kicked off what the department called a crackdown on waste, fraud and abuse in federal contacts.
ORCL: Latest Quote, NewsDeputy Attorney General Paul McNulty was to announce the settlement with Redwood Shores, Calif.-based Oracle Corp. along with a new government-wide task force, including investigators from at least 20 federal agencies, at a late afternoon news conference in Washington.
Oracle's PeopleSoft had a number of software and service contracts with the General Services Administration between 1997 and 2005, and provided "defective price disclosures," according to an official who spoke on condition of anonymity because the settlement had not yet been announced.
"At a time of heightened concern for our nation's security, every tax dollar is precious," said McNulty said in a statement. "We simply cannot tolerate fraud and abuse in government contracting."
Oracle said the complaints originated with PeopleSoft, which Oracle purchased last year for $11.1 billion after an 18-month hostile takeover battle. The deal created the world's second-largest business software manufacturer after Germany's SAP AG.
"Oracle was not aware of the suit at the time of the acquisition," said Oracle spokesman Bob Wynne. "Oracle is pleased to have fully resolved this legacy PeopleSoft suit and all claims under the PeopleSoft contract."
The new task force is modeled in part after efforts to track relief money and contracts rushed to the Gulf Coast last year after Hurricanes Katrina. It will rely on military investigators to monitor Pentagon contracts. The Defense Department and the Homeland Security Department spend billions of dollars annually on government contracts with private companies.
Congressional reports have highlighted fraud and waste in Katrina contracts, including $10.6 billion worth of agreements awarded without full competitive bidding, and double-billing involving hundreds of millions of dollars more.
(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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