Software giant Oracle, which has an operations center near Sacramento, has agreed to pay about $200 million to the U.S. government. The payment should end a contract dispute between the two in which Oracle was accused of overcharging the federal government for products it sold more cheaply to commercial clients.

The problem began with a contract Oracle and the federal government inked in 1998. Under the terms of that agreement, Oracle would sell software licenses and technical support to government offices. The goal of the agreement was to get one main supplier of software and tech help, so government workers could quickly and easily obtain the computer equipment and assistance they needed to do their jobs.

The program through which Oracle was awarded the contract requires parties to disclose to the government the prices they charge on the market. That way, the government can assess whether it is getting a fair deal. Legal counsel for the government had alleged that Oracle knowingly and willfully failed to disclose that it offered certain discounts to other customers and purposely did not tell the government about this sales practice. Since it was deliberately kept in the dark, the government "paid far more than it should have for Oracle products," its legal counsel claimed

The lawsuit was brought on behalf of the government by a former Oracle employee. He brought his claim under the False Claims Act, which permits private citizens to sue on behalf of the government and, if the claim is successful, to share under recovery.

A spokesman for Oracle declined to speak to a reporter about the settlement.

Source: The San Jose Business Journal, "Oracle to pay $200M in settlement," Eli Segall, Oct. 6, 2011