Oracle: Cover Oregon website worked, but plug pulled for political reasons

Oracle: Cover Oregon website worked, but plug pulled for political reasons »Play Video

PORTLAND, Ore. – Did the Cover Oregon website work, after all?

Software vendor Oracle provided information last week to the U.S. House and Energy Committee claiming the website was operational in February, but that the state of Oregon pulled the plug on it for political reasons.

The On Your Side Investigators obtained a copy of the Power Point presentation, which alleges the state deliberately distorted the case for abandoning the Cover Oregon website in favor of transitioning to the federal exchange.

“Cover Oregon executives have stated to Oracle that the application functionality is sufficient to support individual enrollment,” Oracle president Safra Catz wrote in a letter addressed to Cover Oregon interim director Clyde Hamstreet and state CIO Alex Pettit. “However, Cover Oregon has not agreed to give individuals direct access to the application. Thus Cover Oregon, not Oracle, made the decision to keep the exchange closed to individuals even though the functionality has been delivered by Oracle.”

The presentation was delivered to the U.S. House Energy and Commerce Committee, which requested the federal investigation that is currently underway by the Government Accountability Office.

In its presentation to the House committee, Oracle claims an analysis of the website by one of its competitors, Deloitte, overestimated the time and money required to finish the website. Deloitte concluded it would cost $78 million to finish the job, or $5 million to move to the federal exchange.

“Deloitte’s analysis ignores the fact that the system is ready for release, and has been since February 2014,” Oracle’s presentation reads. “Deloitte’s estimate to complete the existing exchange is grossly inflated and appears to be based, at least in part, 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’s presentation does not specify who in state government officially pulled the plug on the Cover Oregon website but speculates its functionality was kept from the public for political gain.

“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 reads.

The governor's office responded with a statement Sunday evening.

“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),” it reads.

As KATU News has reported, Oregon took more steps toward a lawsuit against Oracle last week. The state issued legal demands for potential evidence in the case and continued to beef up its stable of private lawyers.

Kitzhaber called for a lawsuit late last month.

"Oracle's failure is unacceptable to Oregonians who need and deserve access to quality health care and who have been faced with months of uncertainty," Kitzhaber testified before an Oregon legislative committee. "The failed rollout of Cover Oregon has cast a shadow on these reform efforts, the success of which are absolutely crucial to the future of this state. So the time has come to hold Oracle accountable for failing to deliver technology that worked on the timelines that they agreed to."

As the On Your Side Investigators reported earlier this month, some of the state’s claims against Oracle are similar to those made by Montclair State University in 2011. Montclair’s lawsuit, which charged Oracle with breach of contract, gross negligence, willful misconduct and fraud, has since been settled.

Kitzhaber blamed Oracle for missing deadlines and for what he called fundamental flaws in the portal’s architecture and for thousands of bugs in the system.

Oracle’s presentation to Congress counters that it is not ultimately responsible for the site’s failure because it was hired as vendor, not as a Systems Integrator.

The On Your Side Investigators reported in December that the decision not to hire a Systems Integrator was the first major wrong turn for the project. The Investigators unearthed reports from independent quality-assessment contractor Maximus that reached the same conclusion.

Oracle also claims the much-maligned time-and-materials contract it negotiated with Oregon is a reflection of the secondary role it was to play in building the website.

“Contracts make clear that Oracle’s role was to ‘assist’ OHA and Cover Oregon with the State’s effort to implement both the (DHS) Modernization project and the health insurance exchange,” the report reads. “Contracts make clear that Oracle worked ‘at the direction’ of the OHA and Cover Oregon employees.

“Cover Oregon was consistently adamant with Oracle that the state was in charge.”

Oracle says it tried to keep the project in line even in the months after it missed its go-live date of Oct. 1, but Cover Oregon officials continued to circumvent normal procedures and attempt to expand the scope of work beyond what was necessary to make the website functional.

Oracle says when it complained, chief technology officer B. Garrett Reynolds wrote back “I thought Cover Oregon paid for and owned the system…”

A copy of that email exchange is included in Oracle’s presentation to the House committee.

U.S. Rep. Greg Walden, R-Hood River, is on the House and Energy Commerce Committee.

“This is yet another reason why I worked hard to secure and independent investigation by the Government Accountability Office, so we can get the truth,” he said. “Taxpayers deserve answers, and those in charge of this expensive boondoggle need to be held accountable.