WASHINGTON – Oracle's PeopleSoft agreed Tuesday to pay $98.5 million to settle complaints that it overcharged the government on multiple contracts, Justice Department officials said.
The settlement kicked off what the department called a crackdown on waste, fraud and abuse in federal contacts.
Deputy Attorney General Paul McNulty was to announce the settlement and a new government-wide task force, including investigators from at least 20 federal agencies, at a late afternoon news conference in Washington.
Oracle's (ORCL) PeopleSoft had a number of software and service contracts with the General Services Administration between 1997 and 2005, and provided "defective price disclosures," according to an official who spoke on condition of anonymity because the settlement had not yet been announced.
"At a time of heightened concern for our nation's security, every tax dollar is precious," said McNulty said in a statement. "We simply cannot tolerate fraud and abuse in government contracting."
The new task force is modeled in part after efforts to track relief money and contracts rushed to the Gulf Coast last year after Hurricane Katrina. It will rely on military investigators to monitor Pentagon contracts. The Defense Department and the Homeland Security Department spend billions of dollars annually on government contracts with private companies.
Congressional reports have highlighted fraud and waste in Katrina contracts, including $10.6 billion worth of agreements awarded without full competitive bidding, and double-billing involving hundreds of millions of dollars more.