The US Justice Department said the government consequently overpaid for software and services between 1997 and 2005 due to the over-inflated prices from PeopleSoft, which Oracle acquired in 2004.
Oracle admitted defective pricing disclosures in relation to PeopleSoft’s contract with the government, said Justice Department officials, in a statement.
Specifically, PeopleSoft used false pricing when negotiating a contract with the General Services Administration (GSA), which buys various goods and services for the federal government. The contract was part of GSA’s multiple award schedule program, which enables vendors to provide multiple government departments under a single central contract.
As part of the program, PeopleSoft was required to disclosed its commercial pricing, but the Justice Department said the company understated the discounts it provided in the commercial realm.
Because PeopleSoft did not give GSA accurate pricing information, it negotiated higher prices for its products and services than it would have obtained if GSA had known the truth, said US Attorney Rod Rosenstein, in a statement.
At least 60 federal agencies are through to use PeopleSoft software, said the authorities.
The government also said it was creating a new fraud task team for procurement to prevent fraudulent pricing in the future.
