Oracle is under investigation by the state auditors of California over a deal which they claim involves tens of millions of dollars worth of software that no-one really wants.
An agreement between Oracle and the Department of Finance, the Department of Information Technology and the Department of General Services was said to be intended to save tax dollars by entering into a 10-year, bulk purchase contract.
But the state audit revealed that one year into the contract the three departments are still figuring out how to pay for the software, and that as of last month no state workers were actually using the software.
The auditors are questioning why officials in three state agencies completed a $122.6 million deal without opening it up to competition and despite the findings of a survey which suggested that only a handful of the state’s employees felt they needed to use the database software.
The auditors now want the attorney general's office to look into whether the deal was legal because it was awarded without competitive bids. In addition the consultant on the deal Logicon, stood to make $28 million from the deal.
According to the auditors, Logicon used "shaky" assumptions in calculating the state savings. As a result, they claim taxpayers could end up doling out $41 million more than if they had bought the software separately.