Washington, DC – Silicon Valley database software giant Oracle will pay $199.5 million to settle allegations that it failed to meet its contractual obligations with the General Services Administration (GSA), the Justice Department announced. The GSA called the payment “the largest False Claims Act settlement” it has ever obtained.

The settlement relates to a 1998 contract Oracle won to sell software licenses and technical support to government entities through the GSA’s Multiple Award Schedule (MAS) program.

The government claims the company knowingly failed to provide the GSA with “current, accurate and complete information” about its sales practices, including discounts it was offering to other customers.

“Companies that engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create an unfair advantage against the majority of companies that are playing by the rules,” said Tony West, assistant attorney general for the Civil Division of the Department of Justice.

Former Oracle employee Paul Frascella, who originally filed suit against the company on behalf of the U.S., will receive $40 million as his share of the recovery.

This article was also published in Potomac Tech Wire.

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Photo of Oracle headquarters by flickr user Peter Kaminski, used under Creative Commons license