Epic FAIL for all!
(1) Oracle agrees to a ludicrous contract whereby it is required to give the government any discounts it gives to anyone else. WTF? I'm not a multi-billionaire, but if someone walked in to my shop and said, "Hey, I'll pay $100 for that TV, but if you ever sell that same make and model for under $100, you have to give me the discount," I'd throw them out of my store, sans TV.
Epic FAIL on Oracle for agreeing to such a stupid deal, even if the U.S. Government demands it.
(2) The U.S. Government expected Oracle to honestly keep track of whatever discounts it gave customers. Have you ever worked with major software sales reps? They'll pull numbers out of their bodily orifices to make a sale, and then fudge the contracts later to make it all add up. Oracle was supposed to keep track of all that?
Epic FAIL on the U.S. Government for expecting Oracle to carefully audit their sales discounts.
All that said, a contract is a contract, and so Oracle's likely to owe the U.S. some cash. And if intent is proved, treble damages is reasonable.
I'm just shocked either party is involved in such shenanigans.