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Thursday, October 12, 2006

Oracle closes book on PeopleSoft overcharging

Oracle Corp. has agreed to pay the U.S. government $98.5 million to settle allegations that PeopleSoft Inc., which it acquired last year, overcharged federal buyers under the General Services Administration’s multiple-award schedule program.

When Oracle acquired PeopleSoft Inc. of Pleasanton, Calif., for $10.3 billion in January 2005, it inherited its liability under the GSA contract. Former PeopleSoft employee James Hicks told government officials that PeopleSoft did not give federal buyers discounts for purchases of multiple goods and services that commercial customers received. The false pricing is alleged to have taken place over a period of eight and one-half years.

The settlement is the largest payment ever obtained by the United States in a civil settlement under the False Claims Act involving the GSA’s multiple-award schedule program, the Justice Department said Tuesday in a printed statement.

The False Claims Act is a federal law that imposes liabilities for damages and fines for knowingly submitting to the federal government a false or fraudulent claim for payment.

Those with insider knowledge of false claims in government spending programs can receive a percentage of the settlement. Hicks will receive $17.7 million, the Justice Department said.

The U.S. Attorney’s Office for the District of Maryland and GSA’s Inspector General Office investigated the allegations along with the Justice Department. The lawsuit alleged that PeopleSoft gave GSA inaccurate pricing disclosures and incomplete information about the sales of software licenses and related maintenance services.

As a result, the federal agencies that made purchases under the contract overpaid PeopleSoft for software and related maintenance services between March 17, 1997, and Sept. 30, 2005, the Justice Department said.

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