Oracle says Oregon governor spiked Obamacare site for political reasons

Oregon and Oracle are likely headed to a battle in court over Cover Oregon

The battle between Oracle and Oregon officials over the state's Cover Oregon health insurance exchange site is raging on, with the vendor now claiming the exchange was functional in February, but Governor John Kitzhaber decided to dump it for political reasons.

Portland television station KATU-2 unearthed a PowerPoint presentation Oracle officials used to brief members of the U.S. House and Energy Committee last week. In the document, Oracle states the site was fixed and ready for rollout in February, but that officials "would not permit it."

The House committee asked the Government Accountability Office to investigate Cover Oregon, which the state spent more than US$200 million to build.

Oregon appears close to filing a lawsuit against Oracle in hopes of getting back the money it paid the company. Kitzhaber has been a strong public proponent of suing Oracle, saying it failed to deliver a working product.

Oracle has made public statements suggesting it will put up a vigorous defense should a lawsuit occur, and the presentation to lawmakers could be a preview of its legal strategy.

"Oracle can only conclude that the Governor's unwillingness to release the website is because doing so doesn't fit with his re-election strategy of blaming Oracle for his own mistakes," the presentation states.

Cover Oregon was supposed to go live Oct. 1 along with the national Healthcare.gov site, but was wracked by severe performance and stability problems.

The resulting fallout led to the departure of a number of state officials and a rash of political finger-pointing, particularly involving Kitzhaber, a Democrat who is up for re-election this year. Oregon recently decided to move enrollment to the federal exchange, Healthcare.gov, which also experienced initial performance problems but was subsequently stabilized.

A key issue of contention is the fact that Oregon served as its own systems integrator on the project, and hired Oracle consultants on an hourly basis. Oracle has maintained that the state badly mismanaged the project and that an investigation will "completely exonerate" the vendor.

But one federal investigative report already completed found blame to be had on both the state and Oracle's part.

Oregon hired Deloitte to examine the relative costs of fixing the site Oracle helped build, compared to moving to the federal exchange, and found the latter option would be only several million dollars, compared to nearly $80 million.

The estimate Deloitte made to fix the exchange is "grossly inflated" and based partly "on Deloitte's lack of experience with certain functional areas and their desire to replace those portions of the existing system with their own custom approach," Oracle said in the presentation.

A Deloitte spokesman declined to comment on Oracle's claims on Monday.

A spokeswoman for Kitzhaber didn't respond to a request for comment.

However, the governor's office provided a statement to KATU, saying that "after repeated testing from October 2013 to February 2014 and failures of the website to perform at minimal levels, Cover Oregon leadership, Cover Oregon's Board and Governor Kitzhaber made the decision (not to deploy the site)."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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