Menu
Oregon sues Oracle over troubled health insurance website

Oregon sues Oracle over troubled health insurance website

Oracle's actions amount to a 'pattern of racketeering,' the state alleges

Oregon has filed a long-expected lawsuit against Oracle over its role developing the state's troubled health insurance exchange website, alleging the vendor fraudulently induced Oregon to pay hundreds of millions of dollars for software and services that didn't work as promised.

Oracle's actions "amount to a pattern of racketeering," according to the 126-page complaint filed Friday by Attorney General Ellen Rosenblum in a state circuit court.

First, Oracle lied about its capabilities, saying its software could meet Oregon's needs "out-of-the-box," the complaint states.

After a deal was struck, Oracle committed breach of contract by "overcharging for poorly trained Oracle personnel to provide incompetent work," hiding its shortcomings from Oregon, and refusing to honor a warranty calling for it to fix errors at no charge, the complaint alleges.

In a statement Friday, Oracle called the suit "a fictional account" and said it expects to prevail in its own lawsuit against Oregon, which was filed two weeks ago. Oracle has said state officials are running a "smear campaign" and are attempting to cover up their own failings.

A key point of contention in the case is Oregon's decision to act as its own systems integrator on the project, using Oracle staffers on a time-and-materials basis.

"That decision was akin to an individual with no construction experience undertaking to manage the processes of designing and building a massive multi-use downtown skyscraper without an architect or general contractor," Oracle said in its complaint.

But the state's lawsuit tells a different story, alleging that Oracle was "dead set" against Oregon hiring an independent systems integrator and conducted a "behind-the-scene scheme" to make sure it didn't happen.

Oracle recommended that Oregon hire an internal consulting service to play the same role and in effect became the systems integrator, thereby collecting millions in extra payments, the suit states.

"The cost of Oracle's lies and appalling work is extraordinary," amounting to more than US$240 million in fees, it adds.

Cover Oregon, as the site is known, went live on Oct. 1 and immediately experienced serious technical issues that were never fully resolved. The state has since decided to transfer the exchange over to the federal Healthcare.gov site, which also had a bumpy go-live but was ultimately stabilized.

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


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags IT managementOraclelegalservicessoftwareit strategyCivil lawsuits

Featured

Slideshows

Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News honoured the industry’s finest on a standout evening for the New Zealand channel, recognising the achievements of established partners, emerging players and innovative start-ups, in front of over 460 technology leaders in Auckland.

Reseller News Innovation Awards 2018: meet the top performing partners
Champagne Reception kicks off Reseller News Innovation Awards 2018

Champagne Reception kicks off Reseller News Innovation Awards 2018

More than 460 channel leaders came together to toast the top performers of the New Zealand industry, during the opening Champagne Reception at the Reseller News Innovation Awards 2018 - in association with Techbuyer.

Champagne Reception kicks off Reseller News Innovation Awards 2018
Chasing innovation: how Kiwi partners can create a new customer agenda

Chasing innovation: how Kiwi partners can create a new customer agenda

This exclusive Reseller News Roundtable - in association with Rhipe and Microsoft - detailed a blueprint for customer success, outlining the new role of the modern-day partner and wider network in New Zealand.

Chasing innovation: how Kiwi partners can create a new customer agenda
Show Comments