About the best that can be said for the settlement announced last week between the state of Oregon and Oracle over the failed Cover Oregon website is that the dispute is over. Neither side came out looking good, despite Attorney General Ellen Rosenblum's description of the deal as a "win-win."
The settlement announced Thursday dismisses six lawsuits and counter-suits filed by the the two sides in the dispute that stretches back to 2014. Under the terms, Oracle will pay Oregon $25 million in cash — essentially covering the legal bills the state has rung up to date — and will provide six years of software licenses and support to modernize the state's IT systems. The entire package is valued at $100 million, including a $10 million grant for math, science and technology education in Oregon schools.
That's a tiny fraction of the $6.5 billion in damages Oregon had sought from Oracle in suits that alleged fraud, false claims and racketeering. The state had won several court rulings recently on Oracle motions, including the right to seek punitive damages, and the main lawsuit was scheduled to go to trial in January.
But both sides clearly saw it in their interest to avoid going to trial, which would have been fiendishly expensive, and the outcome could have gone either way. Even if the state won the suit in the end, Brown said, legal costs could have been as high as $1.5 million a month.
The $25 million in cash represents a fraction of the $250 million the state paid Oracle for a website that never functioned, but the $100 million package is far better than a $25 million settlement Oracle claims it reached with the state last spring. State officials say there was no deal.
The $300 million the state spent to develop the website was largely federal money provided under the Affordable Care Act. It's unclear whether the federal government might seek reimbursement from any of the settlement, but at least one legal expert says the deal appears to be structured to prevent that.
The whole Cover Oregon debacle was marked by confusion and conflicting reports of progress and reflected state government's long history of being very bad at computer technology. But it's also clear that Oracle failed to deliver what it was hired to produce: a functioning website.
The state also failed to properly oversee the work, instead signing a time and materials contract that allowed Oracle to run up substantial charges.
State officials said the software portion of the settlement is a chance for the state to modernize much of its information technology systems with Oracle's state-of-the-art expertise.
That will be a plus for the state — if the software works.