State of Oregon Sues Oracle Over Failed Health Care Website

Terry Olaes

Terry Olaes

I Used to be the [H] News Guy
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The drama around the failed Cover Oregon online health insurance exchange website has taken a litigious turn as the state of Oregon has sued Oracle and several of its executives.

The lawsuit, filed in Marion County Circuit Court in Salem, alleges that Oracle officials lied, breached contracts and engaged in "a pattern of racketeering activity." ...In a statement, Oracle called the lawsuit "a desperate attempt to deflect blame from Cover Oregon and the governor for their failures to manage a complex IT project."

"The complaint is a fictional account of the Oregon health care project," the company's statement said. "Oracle is confident that the truth - and Oracle - will prevail in this action."
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This is an interesting case. Will be interesting to see the outcome. On one side you have the state claiming that Oracle charged them for work they never did or did for other states, falsified demos to show they were further along than what they were, never finished the project (which both sides agree never happen), talked them out of hiring a 3rd party to work as a mediator between the two and instead said they would take care of all the aspects the 3rd party would. On the flip side you have Oracle saying that the state was the one that didn't want to hire a 3rd party, they the IT people they worked with were unable to do their jobs, that the state lied about what technology they had.
 
Their fault for going to such a mammoth company like Oracle for a simple website.
 
Its a pattern.
But its not racketeering

Oracle is a hugely expensive and silent embarrassment for many companies.

The problem is that Oracle is the only industrial database game in town.
If you want an Oracle car all they do is sell the Oracle tires.
You are responsible you building the rest of the car.
Oracle will charge for in depth audits and further recommendations

In all cases where Oracle fails its becuase the customer failed to follow Oracle recommendations.
This is in all cases is due to lack of proper project funding and technological leadership

Whats is scary is that this underlines just how poorly understood technology is by Government leadership
They dont higher project managers that are truly capable.
They cut cost where they really cannot.
Instead of taking responsibility for their failed hiring practices
they sue, highlighting themselves as ignorant fools.
 
Fuck Oracle.

Fuck them long and fuck them hard.

I'd say karma is a bitch, but this single lawsuit doesn't even start to scratch the surface on the payback they are due for what they did to Sun Microsystems and all their open source projects after the acquisition.

If there is any company I'd love to see go down in flames, its Oracle.
 
There's lots of government out there replacing Ora-$$$ with open source. It's now becoming a matter of necessity given cost-cutbacks.
 
Yeah, both are dirty, corrupt and incompetent. All involved should be fired. They cost my state $250million for nothing. At the end the state was hiring high school kids to run the call centers for people calling in to get signed up.
 
I have a good friend who used to work for oracle as a senior project manager, no stories where ever good.
 
shade91 said:
Their fault for going to such a mammoth company like Oracle for a simple website.
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Or simply choosing Oracle to begin with. The Nevada university system switched to an Oracle PeopleSoft platform a few years back and it *still* has issues with Chrome. Terrible layout as well.

Guess it's better than their old way. But still.
 
Ranulfo said:
Yeah, both are dirty, corrupt and incompetent. All involved should be fired. They cost my state $250million for nothing. At the end the state was hiring high school kids to run the call centers for people calling in to get signed up.
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I really don't see how a website + database would cost $250million. Heck, give me 10% and I'll assemble the best minds to do it.

Government waste at its finest, being sucked in by megacorps with deep donating wallets.
 
The whole situation is funny because Oracle seems to know they never delivered, and the incompetent fools who selected Oracle obviously didn't do their homework (constant failure spanning decades: Kellogg's CPG fiasco, 8 year + $1 billion US chairforce failure, several college project failures*, etc).

Question from an actual Oracle interview: "tell us about a recent project failure" The right answer is probably not "Air Force", "Oregon's healthcare exchange" or "Montclair State College". :D

* sample: "The deployment got underway in 2009, but after a series of missed deadlines and disputes during the summer of 2010, the project came to a screeching halt in November 2010 when, MSU said, Oracle walked away from the project when the university refused to pay $8 million more than the agreed-upon implementation fee." Sounds like something else happening now. It just needs to draw its way through the courts for a couple of years and Oregon should be up and running by 2017.
 
erexx said:
Its a pattern.
But its not racketeering

Oracle is a hugely expensive and silent embarrassment for many companies.

The problem is that Oracle is the only industrial database game in town.
If you want an Oracle car all they do is sell the Oracle tires.
You are responsible you building the rest of the car.
Oracle will charge for in depth audits and further recommendations

In all cases where Oracle fails its becuase the customer failed to follow Oracle recommendations.
This is in all cases is due to lack of proper project funding and technological leadership

Whats is scary is that this underlines just how poorly understood technology is by Government leadership
They dont higher project managers that are truly capable.
They cut cost where they really cannot.
Instead of taking responsibility for their failed hiring practices
they sue, highlighting themselves as ignorant fools.
Click to expand...

No, Oracle just kinda sucks if you move beyond the database. Our company used one of their products, which shall remain nameless and to use it you had to hire an integrator to implement the customized functionality. We used a recommended vendor (who it turned out had NEVER done it before...at least not in our industry). We then asked for training so we could maintain the software going forward they would not provide it.

/1sh7VVK is a satirical look at enterprise software, but it was pretty dead on with our experience with one particular oracle product.
 
I think Nevada is going to do the same thing or similar to Xerox. They've been having major issues with enrolling people in the Obama care system and they're switching over to the Federal system.

Although it sounds like Oregon really got the shaft with no working site whats-so-ever.
 
If the outcome of this case is what I believe it will be then there may be other cases presented to the legal system regarding ERP implementations. I know this due to assisting the implementation of two ERP systems of which one succeeded at a high equipment cost and the other 'sort of' worked with the addition of third party software.

10 Biggest ERP Software Failures of 2011

Check-out the instances against Epicor. Prime examples of Epicor's sales representatives over-selling the current capabilities of the software to prospective clients without consulting the software engineers first.

This bullshit practice has to stop.

Sales representatives should know the products they are selling from top to bottom prior to fully engaging the customer. If the sales representatives do not know the product then they should not be marketing said product to prospective clients. Due diligence fail. Big time.

The reality is these types of situations will continue to occur due to the "Sell! Sell! Sell!" nature of the business. "Sell our shit now, we'll fix it later and charge them more." Bullshit.
 
The State of Oregon was at fault. All of the higher-level people at the state who were involved were fired. The State made the mistake of operating on a time and materials basis. They initiated millions of dollars in change orders and totally changed the scope of the project.
 
Good article: http://www.statesmanjournal.com/sto...er-responsible-cover-oregon-failure/11654641/

Cover Oregon, Oregon’s attempt at a health insurance exchange, has been a disaster. It didn’t start out that way — it started full of promise and high expectations.

Back in 2011, Gov. John Kitzhaber spoke of the support from the Obama administration for Oregon to become a pioneer in health care reform: “We have great support with this administration, and deep support within (the Centers for Medicare & Medicaid Services). Their inclination right now would be to give us whatever flexibility we need.”

Kitzhaber also spoke in 2011 on the importance of Oregon developing its own health insurance exchange rather than using the federal exchange: “A local exchange accountable to Oregonians — not the federal government – offers choice competition, value, and transparency,” and “a local exchange established by and accountable to Oregonians and not the federal government is vital to bringing quality, affordable health care to more than 350,000 Oregonians.”

The Associated Press noted in November 2013 that “Oregon officials set out to build one of the biggest and best in the nation — a model that other states would want to copy.”

That same AP article went on to report: “But more than a month after Cover Oregon’s online enrollment was supposed to launch, reality is lagging far behind Gov. John Kitzhaber’s grand ideas. The online system still doesn’t work, and the exchange has yet to enroll a single person in health insurance.”

Cover Oregon became a national embarrassment. An embarrassment that ended up costing taxpayers a quarter of a billion dollars, and one where Oregon ultimately had to admit defeat and give up on Kitzhaber’s vision of “a local exchange accountable to Oregonians.” The Los Angeles Times reported in April, “Oregon officials voted unanimously Friday to jettison the state’s disastrous health insurance exchange and switch to the federal system, admitting disappointment and defeat in an arena where the state had been a trailblazer.”

Kitzhaber made national news for the Cover Oregon fiasco and his attempts to run from the issue, including the fact that he ignored warnings about Cover Oregon problems almost a year before its failed launch. He and his subordinates also ignored the first review of Cover Oregon from quality-assurance contractor Maximus – with red flags going back to 2011.

There are now at least four different federal investigations into the Cover Oregon fiasco: by the FBI, the U.S. Department of Health and Human Services, the Government Accountability Office and the U.S. House oversight committee. There have been massive sackings and resignations from the leadership of Cover Oregon, including Carolyn Lawson, Rocky King, Dr. Bruce Goldberg, Aaron Karjala and Triz delaRosa.

The buck stops here. Kitzhaber’s fingerprints are all over the Cover Oregon failure. In fact, his hands are still on the steering wheel!

He is the head of the executive branch that was charged with implementing Cover Oregon. The people in charge of the agencies who were building Cover Oregon were appointed by the governor, including King and Goldberg. The chairwoman of the Cover Oregon Board is still Liz Baxter. Kitzhaber nominated Baxter to the Cover Oregon Board back in August 2011. Baxter came up through the organization Kitzhaber founded in 2006, the Archimedes Movement/We Can Do Better — a progressive organization advocating for health care reform.

Kitzhaber, largely aided by the Oregon media, with the notable exception of KATU, has attempted to avoid taking responsibility for the Cover Oregon disaster. But this buck stops firmly at the desk of Gov. John Kitzhaber.
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DarthBeavis said:
The State of Oregon was at fault. All of the higher-level people at the state who were involved were fired. The State made the mistake of operating on a time and materials basis. They initiated millions of dollars in change orders and totally changed the scope of the project.
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Sounds like we have an Oracle fan. ;)

In the lawsuit Oracle filed against the state earlier this month, the company doesn't claim the entire scope was changed. It is suing over the public statements made by Oregon state officials and demanding compensation for its shoddy work (another $23 million on top of what the state has already paid). Oracle blames the problems on Oregon's inability to integrate the system properly.

The lawsuit filing is actually pretty funny, in a rambling 7th grade whine fest kind of way: http://s3.documentcloud.org/documents/1272829/oracle-complaint.txt

The opening is worded as Oracle operating as an employee of the state rather than as an independent contractor. That garbage is just being used as leverage to 1) push towards an out of court settlement as the state's case moves forward and 2) get the state to stop bad mouthing Oracle, because these kinds of high profile debacles hurt Oracle's business.
 
pxc said:
Sounds like we have an Oracle fan. ;)

In the lawsuit Oracle filed against the state earlier this month, the company doesn't claim the entire scope was changed. It is suing over the public statements made by Oregon state officials and demanding compensation for its shoddy work (another $23 million on top of what the state has already paid). Oracle blames the problems on Oregon's inability to integrate the system properly.

The lawsuit filing is actually pretty funny, in a rambling 7th grade whine fest kind of way: http://s3.documentcloud.org/documents/1272829/oracle-complaint.txt

The opening is worded as Oracle operating as an employee of the state rather than as an independent contractor. That garbage is just being used as leverage to 1) push towards an out of court settlement as the state's case moves forward and 2) get the state to stop bad mouthing Oracle, because these kinds of high profile debacles hurt Oracle's business.
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I am not a fan of Oracle, I am just not a fan of the State of Oregon.

http://www.oregonbusiness.com/contributed-blogs/12131-avoiding-software-failures

Oregon has a 20-year history of budget busting software failures. Cover Oregon is just the latest and the first to catch national attention.

This year, it was revealed that the Oregon Employment Department burned up $6.9 million on a software project that never worked and expects to spend another $1.2 million to go back to the old system. Even worse, the Oregonian reports that the state may be forced to repay $1 million or more in federal funding because the project is being canceled.
The Oregon Wireless Interoperability Network blew through $600 million before it was deemed a failure and laid to rest in 2011. The project was intended to migrate all of the state's radio systems to one system such that each of the systems could talk to each other. A scaled back State Radio Project hopes to salvage some of OWIN’s earlier work.
Many Portlanders still recall the city’s $35 million water billing software debacle. This was followed a decade later by a payroll and financial services software disaster costing $47 million, or more than triple the original estimate. The project was completed more than a year late, and did not include expected functions.
In 1993, the Oregon Department of Motor Vehicles began what was projected to be a five year, $48 million project to automate its operations. By 1996, the costs had soared to $123 million. That year, the state pulled the plug on the project, leaving the agency “saddled with useless hardware and programs” according to the Oregonian.
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DarthBeavis said:
http://www.katu.com/news/investigat...story-of-Cover-Oregons-failure-239699521.html

Read up
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Did you actually read it? It highlights the problems caused by Oracle at several steps of development, including Oracle dropping support for products used by the state and Oracle's lack of incentive to complete the project in a timely manner. Certainly the state's IT clowns lacked the experience or skill to push the project, but Oracle wasn't delivering products which could be managed anyways.
 
pxc said:
Did you actually read it? It highlights the problems caused by Oracle at several steps of development, including Oracle dropping support for products used by the state and Oracle's lack of incentive to complete the project in a timely manner. Certainly the state's IT clowns lacked the experience or skill to push the project, but Oracle wasn't delivering products which could be managed anyways.
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When you hire a third party, YOU are responsible for project management. I am not saying Oracle did a good job at all. The burden is on the State. They hired Oracle, they were responsible for making sure module level testing met requirement and that end-to-end testing was done and time-lines were being met. They okay-ed all the change orders which changed the project scope and impacted the project management critical path.

I use Cover Oregon as an example when I teach project management, networking, and software development classes (I worked as a software engineer before going back to school to get my masters degree to teach at the college level).
 
DarthBeavis said:
I am not saying Oracle did a good job at all.
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Then I don't think we have a significant disagreement. There is blame to spread around, and Oracle is much richer despite yet another high profile failure.
 
pxc said:
Then I don't think we have a significant disagreement. There is blame to spread around, and Oracle is much richer despite yet another high profile failure.
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I do not see where they will be liable though. The governor is up for re-election. Hope he gets fired. The buck stops at the top.
 
DarthBeavis said:
The State of Oregon was at fault. All of the higher-level people at the state who were involved were fired. The State made the mistake of operating on a time and materials basis. They initiated millions of dollars in change orders and totally changed the scope of the project.
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Anyeone who has ever worked on a software project knows that changing user requirements are the norm.

If you can't handle that, you have no business working on software projects.
 
Zarathustra[H];1041045822 said:
Anyeone who has ever worked on a software project knows that changing user requirements are the norm.

If you can't handle that, you have no business working on software projects.
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In the real world, there is no such thing as true Waterfall software development. The best we can hope for is well managed Agile development, and even then, there will be lots of user requirements changes throughout the development project, and software developers need to be able to manage this.
 
Zarathustra[H];1041045822 said:
Anyeone who has ever worked on a software project knows that changing user requirements are the norm.

If you can't handle that, you have no business working on software projects.
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I do not think you understand the issue here. Oracle did not say the State could NOT change requirements. What they are saying is that the requirements changed the scope of the project. That means the critical path clearly was changed. The State of Oregon clearly could not handle the impact of the changes they submitted. They pushed forward with their original go-live date when they should have known there was no way it was possible. Just like with the Obamacare site, they did not do proper testing but instead just passed a hail mary hoping it would work.
 
DarthBeavis said:
I do not think you understand the issue here. Oracle did not say the State could NOT change requirements. What they are saying is that the requirements changed the scope of the project. That means the critical path clearly was changed. The State of Oregon clearly could not handle the impact of the changes they submitted. They pushed forward with their original go-live date when they should have known there was no way it was possible. Just like with the Obamacare site, they did not do proper testing but instead just passed a hail mary hoping it would work.
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Sadly, this is the norm at many places, not just the government. I'm working on a project now where the date is way too soon (even though it's been pushed out, somewhat). There are 2 possible outcomes. Push it back further at considerable cost or don't push it out and have an incredibly buggy product that will cause issues for customers and make life miserable for employees.

It's not clear which decision they'll make, but I'd bet on the latter.
 
pxc said:
lol

So cruel, but still funny.
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Many of my grads started out making between 45-55k/year last June. Make fun all you want. I cannot speak for ITT in general just those I teach (I try to make it engaging, doing things like LN2 over-clocking when we cover the bios and giving them real world experience - like providing IT support for the local food bank, we are building our second set of 12 workstations as well as putting in new servers (combination of physical and VM) and redoing their network infrastructure. I know we did not get to do that at OSU (where I received my bachelors and masters degrees).

:D

A few of my students got a nice care package from NVIDIA including an SR2 mobo with two extreme edition procs and a bunch of GPUS . . . for their personal use. I could go on but why?
 
nilepez said:
Sadly, this is the norm at many places, not just the government. I'm working on a project now where the date is way too soon (even though it's been pushed out, somewhat). There are 2 possible outcomes. Push it back further at considerable cost or don't push it out and have an incredibly buggy product that will cause issues for customers and make life miserable for employees.

It's not clear which decision they'll make, but I'd bet on the latter.
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well said
 
Spidey329 said:
I really don't see how a website + database would cost $250million. Heck, give me 10% and I'll assemble the best minds to do it.

Government waste at its finest, being sucked in by megacorps with deep donating wallets.
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Keep in mind you aren't just building a simple web site, don't get me wrong $250 million might be a little high. But you aren't just looking at a site. You are looking at a full system that can support hundreds of thousands of people logging in at one time, so you need to make sure that you have multiple servers all clustered correctly. A database system tied to them all that is able to stand up to the load. Whatever backup systems are needed. You then need the site to preform whatever operations is needed, tie into what ever other systems is needed. Things need to be planned out correctly for stability and the load.

Trying to compare the cost of all that to some basic site you throw together in a weekend is like trying to say that you can build a computer for $500 so why does a company need a server that cost $30,000+ for hosting files. You are on completely different levels.
 
DarthBeavis said:
When you hire a third party, YOU are responsible for project management. I am not saying Oracle did a good job at all. The burden is on the State. They hired Oracle, they were responsible for making sure module level testing met requirement and that end-to-end testing was done and time-lines were being met. They okay-ed all the change orders which changed the project scope and impacted the project management critical path.

I use Cover Oregon as an example when I teach project management, networking, and software development classes (I worked as a software engineer before going back to school to get my masters degree to teach at the college level).
Click to expand...

If the one statement was correct though they were being shown fake demos that shown that Oracle was further alone that they were. In a case like that you can't really do anything but go based off of what you see. There also are times where you just have to go off of somebody's word about something.

I do fully agree that you should have a project manager but at the same time for some projects you can only see so much till it is done and have no way to knowing if you are being lied to about the progress being made or the claims being made till the very end. The reason you hire an outside company for something like this is that you don't have the manpower or knowledge to do it yourself. So if you are shown a demo you aren't going to know if it is real or a canned demo. Especially if you are already expected it to be slightly canned. Even if you have them show you all the code there on site, the people there aren't going to understand what they see.

While the state might have fucked up in a few areas, it still sounds like Oracle fucked up just as much.
 
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