Last week Governor Kitzhaber asked Oregon Attorney General Ellen Rosenblum to immediately initiate legal action to recover payments and other damages from Oracle, the state’s chief technology vendor for Cover Oregon. Citing Oracle’s failure to deliver to the state a fully functional website, the Governor also made a request to Daniel Levinson, the inspector general of the U.S. Department of Health and Human Services, to evaluate the work performed by Oracle and consider the full range of legal options. He also wrote Senators Ron Wyden and Jeff Merkley requesting they use their oversight authority to help investigate and recoup taxpayer dollars paid to Oracle.
Last month, the Cover Oregon board voted to drop its unfinished IT project and shift to the federal exchange, despite $248 million spent. The move will cost approximately another $40 million, most of it picked up by the federal government.
The Governor offered that progress has been made saying, “We are making progress moving away from the failed technology toward a reliable enrollment process with the federal exchange that will ensure Oregonians have better access to health care.” Given the colossal screw up of Cover Oregon, there wasn’t much left the Governor could do but try to save face, move on, recover costs and blame Oracle, the same company that has numerous lawsuits filed against it for unfulfilled promises and substandard work.
Several months ago the Governor acknowledged that oversight was a problem at Cover Oregon. He tried to solve that management dilemma by firing acting head of Cover Oregon, Dr. Bruce Goldberg, in March. However, according to the Oregonian and the Associated Press Goldberg is still drawing a salary. Through July 18 he’ll draw his same director’s pay of $14,425 a month from the Oregon Health Authority where he once served as director. Although the Governor assured the public that Goldberg would not return to the Oregon Health Authority he is still being paid. Typically, departing employees are allowed to choose a lump-sum payout of vacation time. Goldberg’s decision to be reinstated to serve out his vacation time allows him to use health benefits as well as accrue pension benefits.
It’s alarming that while the new healthcare programs are managed by appointed (and oftentimes incompetent) paid federal and state directors (who draw those ample salaries), failures rest with the companies hired to design these massive technology projects. How can this be? We hold business in high regard, believing that they are well suited to implement their promised tasks. Not so though with Oracle and part of the problem lies with the way the contract with Oracle was prepared. Instead of using a performance based contract, Cover Oregon Executive Director Rocky King (who was said to leave due to health reasons) allowed the company to operate on a time and materials agreement.
In May 2013 the state’s information technology expert with the department of administrative services warned Cover Oregon that Oracle’s status reports on the exchange were non-compliant, omitted clear information, showed a lack of performance and did not fulfill basic standards of project management work. Cover Oregon staff and the Governor’s office did not heed the warning. If you were running a company and your employees or subcontractors were performing substandard work you would fire them immediately.
Oracle should never have been hired in the first place when it had numerous lawsuits filed against it on poorly delivered work? Computer Sciences Corporation reportedly spent a billion dollars developing a computer system for the U.S. Air Force that yielded no significant capability. The Oracle software on which the system was based could not be adapted to meet the specialized performance criteria.
In 2010 the U.S. Department of Justice filed suit against Oracle alleging fraud. The lawsuit argued that the government received deals inferior to those Oracle gave to its commercial clients. The 2011 settlement forced Oracle to pay $199.5 million to the GSA.
In 2012 the U.S. General Services Administration banned Oracle from the most popular portal for bidding on GSA contracts for undisclosed reasons. Oracle has previously used this portal for around $400 million a year in revenue. That same year Oracle lost lawsuits with HP, Google and Android.
And yet the State of Oregon saw fit to hire a company with a reputation of delivering inferior work?
Overall the consensus must be that government is doing a pretty bad job of managing the most important benefits to its citizens from the national troubles of veterans’ care to Oregon’s healthcare system. And now, as the Governor says, we have to sue a very large corporation, the second largest software company in the world, and it will undoubtedly fight us tooth and nail, but he insists he will not allow that to stop us from recovering the money Oracle received for technology that did not work and was not delivered on time.
