Report: Oracle pushes back against Oregon officials over troubled health care site

A strongly worded letter from Oracle's co-president says Cover Oregon's woes are the state's fault

Oracle is gearing up for a fight with officials in Oregon over its role developing an expensive health insurance exchange website that still isn't fully operational.

Dubbed Cover Oregon, the site is connected with the Obama administration's sweeping health care overhaul and is similar to ones in other states as well as to the federal-level Healthcare.gov, which experienced high-profile performance problems of its own following its Oct. 1 launch.

Oregon officials have provided the public with a "false narrative" concerning who is to blame for Cover Oregon's woes, Oracle co-president Safra Catz said in a letter obtained by the Oregonian newspaper this week.

Oregon officials decided to act as their own systems integrator on the project, using Oracle consultants on a time-and-materials basis.

"This decision has been criticized frequently by many," Catz said in the letter sent to Cover Oregon officials, according to the Oregonian's report. As far as Oracle is concerned, "Cover Oregon lacked the skills, knowledge or ability to be successful as the systems integrator on an undertaking of this scope and complexity," she added.

Oracle also repeatedly warned officials that the website wouldn't be ready by the Oct. 1 launch date, according to Catz. The state's current effort to deflect responsibility by claiming that Oracle failed to communicate the status of the project is demonstrably false," she wrote.

Cover Oregon's problems have resulted in a political firestorm and prompted the removal of a number of officials. Oregon is severing ties with Oracle and also withholding $25.6 million of some $69.5 million in payments the vendor says it is still owed.

The state is also reserving its right to sue Oracle. Based on the tone of Catz's letter, Oracle would likely put up a vigorous defense and possibly pursue counterclaims against Oregon.

In a letter sent in response to Catz and obtained by the Associated Press, acting Cover Oregon director Clyde Hamstreet said he wasn't able to immediately address Oracle's positions.

A recently released investigative report by the federal Centers for Medicare and Medicaid Services on Cover Oregon, as well as an independent review commissioned by Gov. John Kitzhaber took both state officials and Oracle to task for the site's woes.

An Oracle spokeswoman declined comment on Thursday regarding Catz's letter.

It's somewhat unusual for a software vendor to make such aggressive statements against a customer prior to a lawsuit, compared to the bland verbiage commonly used, said analyst Michael Krigsman, CEO of consulting firm Asuret and an expert on IT project failures. "Historically when these things happen, the software vendor has basically said: 'we're committed to the success of this project as we are all projects.'"

The fact that both Oracle and Cover Oregon can make such strong claims against each other "demonstrates how commingled the responsibilities are on this type of project," Krigsman added. "And also, we're talking about communication. The success of communication often lies in the perceptions of the receiver and giver. Oracle can complain it's demonstrably wrong to say they did not communicate properly, and the other side say the same thing, and from their perceptions they're both right."

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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