Oracle Files Lawsuit Against Oregon Over Insurance Exchange Site

On Friday, Oracle Corporation filed a breach-of-contract lawsuit against Oregon, alleging state officials are continuing to use the technology firm's software despite $23 million in unpaid bills, AP/Modern Healthcare reports (AP/Modern Healthcare, 8/9).

Background

Earlier this year, Oregon severed ties with Oracle because the site it developed, Cover Oregon, was so plagued by technological glitches that no residents had been able to enroll in coverage online. Recently, Cover Oregon signed an $18.4 million contact with Deloitte Consulting to act as the state's systems integrator as it moves over to the federal exchange (Reston, "Nation Now," Los Angeles Times, 8/9).

Lawsuit Details

Oracle is seeking $23 million plus interest and additional unspecified damages (AP/Modern Healthcare, 8/9). Oracle already has received $130 million for its work.

In a 21-page complaint, Oracle said state officials privately sought its help to fix the website while taking part in a campaign of "constant public slander" against the company. "Oracle gave that help for many months, in spite of the public excoriation" in part because "Cover Oregon repeatedly promised to pay Oracle for its services," according to the complaint. Oracle noted that Cover Oregon never paid the company for those services.

Oracle also alleges that the state failed to hire a "systems integrator" to coordinate the work of several technology vendors and was consequently overwhelmed by directing dozens of subcontractors.

In addition, the complaint cites disagreements among state officials and then-Cover Oregon Executive Director Rocky King's failure to understand the extent of the site's technical issues as reasons for the failed website.

Reaction

Melissa Navas -- spokesperson for Gov. John Kitzhaber (D) -- in a statement said, "The Governor is aware of the lawsuit and isn't surprised by it; the State fully expected to end up in litigation over Oracle's failure to deliver" ("Nation Now," Los Angeles Times, 8/9).

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