California to Cancel Oracle Deal

ShaunC writes "Back in mid-April, the state of California bought $95M worth of Oracle software, which turned out to include more licenses than the state has employees, at a taxpayer cost of $41M more than necessary. Now, CNet is reporting that the contract is being cancelled. Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."

What?

[delta407]

How does one, exactly, "undo" a contract for millions of dollars worth of software licenses? Seems like a very sticky legal situtation. Especially since "There are some parts that have already moved forward."

And how is CA doing this, when Oracle says "they must have been talking to themselves because we didn't know about it"?

Where's the money going now?

[foniksonik]

I live in CA and I'm curious about where that money will now go. Back to the treasury? It's already been budgeted... maybe we could invest in some Savings and Loans project?

Well, this should all be quite humorous.

licenses and employees?

[southpolesammy]

What does the number of employees have to do with the number of licenses? The last time I checked, Oracle was licensed on a per server basis, not on who uses it...

Also, I'm going to assume that there are far fewer servers in the CA gov't than there are employees, and if so, then someone made a made a REALLY big error in budgeting. Of course, we are the country that paid $43,000 for a screwdriver and that sort of thing, so who knows?

Oracle arrogance

[totallygeek]

I side with Oracle on the contribution. All companies make contributions to political fundraisings. This is nothing new or unethical. What I find striking is the statement made by Oracle that $95 million won't affect anything because it is less than one percent of their money for this year. What ass for a company says, "$95 mil, no problem", or something to the similar?

That is just Ellison arrogance that has trickled down to people under him.

Re:the donation is not a smoking gun

[aengblom]

Let's Play The "Get into Oracle's Head Game"!!

(Announcer) Mr. Ellison! You've just tricked Gray Davis into paying YOU $50 million taxpayer dollars he didn't have to. What are you going to do?

(Ellison) I'm going to Disney World! But first, I'm making sure this idiot gets re-elected.

$25K IS a drop in the bucket and $50 million is worth more to Davis politically than a 25K campaign contribution.

Sales Tax - OUCH!

[phoenix26x]

$3 million in sales tax? Ouch! Wait a minute... a $95 million dollar deal, and only $3 million in sales tax? Since when did California's sales tax drop from 7.25% to ~3%?

To be on topic: this deal was fishy on many fronts:

• More Oracle licenses than state workers
• Not just a third party (Logicon), but a fourth party (Koch Financial Services) was involved
• The contract was signed last May, but the software is still not in use. You spent $95 million to sit on software licenses?
• Finally, the sales tax issue already mentioned

We can only hope that $95 million dollars worth of state officials are ousted.

Re:Who pays ?

[Zeinfeld]

You are most definitly correct. Oracle will most definitly sue CA for breach of contract

Bzzzt! Wrong!!

Read the damn article, Oracle offered to let CA out of the contract. Moreover the company with severre legal difficulties is the agent which took money to consult defining the state database needs then sold the software. That is at the very least a conflict of interest. The state attorney general appears to be alledging that there was something more.

Oracle is offering to let CA out of the contract for good reason, the cost to oracle's reputation of a major investigation of whitewater proportions would be vast. The state (and national) repubicans have a vested interest in that type of investigation, both to damage Davis who is a possible opponent to GWB in 2004 and more importantly to draw attention away from the stench comming from the GOP/GWB Enron connection.

While US politics is corrupted to a major extent by campaign contribribetions, $25K is simply too small a kickback on a $95 million contract to be a bribe. The going rate is at least 1%.

GWB and the GOP received several million in cash and services in return for being allowed to rape the CA energy market. GWB was lent a jet plane by 'Kenny Boy' for the campaign. That cost consumers an additional $20 billion.