Oracle has left the (Schedules) building. No prime. No re-sellers selling for it. The reason for this decision?: Continued exposure to (sometimes substantial) False Claims Act fines tied to information that each Schedule contractor provides on its commercial sales and discount practices. In a world where pricing and discount decisions are made daily, or even hourly, it can be very difficult for a company to submit information to GSA on its practices without exposing itself to some degree of risk. Oracle has been burned twice on this front, once to the tune of $199.5 million in fines, not to mention the follow-on shareholder lawsuit. It owns first and third place on the list of record FCA fines leveled against Schedule contract holders.
Yet, Oracle’s issues are experienced by nearly every commercial IT company, as well as others with business across multiple sectors. Ironically, the core of GSA’s latest initiatives is to drive dynamic pricing for Schedule users similar to that in the commercial market. The hitch is that you can still be liable at GSA for historical information on a paper form, regardless of how dynamic you are with your Schedule pricing today.
The more dynamic your pricing is to customers, the more potential exposure you have to a GSA audit or whistle-blower action. Understanding this risk is key. All large, multi-line contractors should take the time to examine their disclosures against current discounting practices. Some will likely follow Oracle’s lead and depart the program.
The solution? GSA needs to move forward now to totally eliminate the Commercial Sales Practices Sheets and the Price Reductions Clause. Anachronistic, outdated practices have no place in the 21st century Multiple Award Schedules program. There is risk for GSA as well. If it doesn’t take action on its own, it might find that others take action for it.