Feds Banish Oracle From Popular Contract Vehicle - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Government // Enterprise Architecture
02:40 PM
Connect Directly

Feds Banish Oracle From Popular Contract Vehicle

Federal government cancels Oracle's services contract on the General Services Administration's IT Schedule 70. Feds spent $388 million on Oracle products and services through Schedule 70 in fiscal 2011.

Top 20 Government Cloud Service Providers
(click image for larger view)
Slideshow: Top 20 Government Cloud Service Providers
Some federal agencies will have to find a new place to look to buy Oracle services next month, as the General Services Administration said Thursday that it had canceled Oracle's contract on the popular GSA IT Schedule 70. The GSA said all blanket purchase agreements for Oracle services made under the contract would be terminated as well.

The government is keeping tight-lipped about exactly what happened to cause the cancellation. Mary Davie, assistant commissioner of the Federal Acquisition Service's Office of Information Technology Services, said in a statement only that the Oracle contract "was not in the best interest of the government." A GSA spokeswoman declined to give additional details.

GSA's IT Schedule 70 is the federal government's single largest acquisition vehicle, and focuses exclusively on IT products and services. It's essentially a shopping list that gives federal agencies direct access to acquire products and services from more than 5,000 vendors. Agencies spent $15.7 billion on Schedule 70 in fiscal 2011 alone.

[ Read about Oracle's courtroom battle with Google: Oracle Vs. Google: Tour The Evidence . ]

Due to the cancellation, agencies won't be able to exercise options on existing task orders or place new orders after May 17, and blanket purchase agreements for Oracle services made under Schedule 70 will be terminated. That's a big hit for Oracle, because the government used Schedule 70 as the vehicle for $388 million in fiscal 2011 spending on Oracle products and services.

The services covered under the contract include operations and maintenance, system development, system analysis, design, integration, data conversion, network management, consulting, and assorted miscellaneous IT services--basically, everything that an agency might need.

Oracle did not respond to a request for comment.

This isn't Oracle's first rumble with GSA. In October, the company agreed to pay more than $199.5 million to settle a lawsuit filed under the False Claims Act that charged the vendor with overcharging feds for software and services. Specifically, the suit had claimed that Oracle was giving some agencies much deeper discounts than it was giving others or making publicly available.

That settlement was GSA's largest-ever False Claims Act settlement, but Oracle in agreeing to the settlement continued to deny any wrongdoing. "The company has always had strong controls in place to insure that the government agencies who purchased from the GSA schedule received fair pricing," an Oracle spokeswoman told InformationWeek at the time. Oracle shareholders have since sued the company for mishandling its settlement of the claim.

In October 2006, Oracle had agreed to pay the government $98.5 million to settle a case in which PeopleSoft--an Oracle acquisition--was alleged to have provided false pricing information to the GSA.

IT's challenge in dealing with social networks comes on two fronts: How to interact with would-be customers on big social networks like Facebook, and how to provide employees on internal networks with collaboration that's as powerful as their Facebook experiences. This virtual event, Social Business: Marshaling Expertise, Engaging Customers, Building Brands, will help IT leaders sort through their strategic choices. It happens April 26.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Why IT Leaders Should Make Cloud Training a Top Priority
John Edwards, Technology Journalist & Author,  4/14/2021
10 Things Your Artificial Intelligence Initiative Needs to Succeed
Lisa Morgan, Freelance Writer,  4/20/2021
Lessons I've Learned From My Career in Technology
Guest Commentary, Guest Commentary,  5/4/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Flash Poll