Oracle is target of Justice Department lawsuit

The federal government continues to join whistleblower lawsuits that allege contractors are not giving the government their best prices.

Oracle Corp. is the latest target of a federal lawsuit, which has been filed under the False Claims Act in the U.S. District Court in Alexandria, Va.

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The case was instigated by a whistleblower, who claims that Oracle failed to disclose discounts that it gave to its favored commercial customers, Bloomberg reported.

The General Services Administration requires that schedule holders give the government its best prices.

The whistleblower is former Oracle employee Paul Frascella, who filed his complaint in May 2007. The Justice Department joined the lawsuit in April, according to Bloomberg.

Officials with Oracle declined to comment.

The case against Oracle comes on the heels of a settlement the Justice Department reached with EMC Corp., which agreed in May to pay $87.5 million to settle similar charges involving its pricing on the GSA schedule. 

In April 2009, NetApp Inc. paid $128 million to settle its dispute with the Justice Department and GSA.

The EMC and NetApp cases also were instigated by whistleblowers. In the NetApp case, whistleblower Igor Kapuscinski received $19.2 million as part of the settlement.

Other companies that have come under fire from the Justice Department and GSA inspector general include Cisco Systems Inc., Sun Microsystems and Panasonic Corp.

Often the issue of pricing comes up when companies attempt to renew their GSA schedule. The result has been that several companies, such as Sun and Cisco, decided to no longer hold their GSA schedules directly and instead use third parties to sell through GSA.