Oracle Corp., who was publicly blamed for the failed $250 million effort to build a state-based exchange, was excluded from the list of 10 firms invited to bid on the project.
Oregon has invited 10 firms to bid for the approximately $35 million job of transferring Cover Oregon to the federal health insurance exchange, and given them two weeks to reply.
The "special procurement" issued by the Oregon Health Authority (OHA) underlines the fact that time is short. The state seeks a "systems integrator" firm – sort of an information-technology general contractor -- to make sure Oregonians have a functioning exchange in time for the next open enrollment period opening Nov. 15. To save time, the state won't pursue a months-long competitive bidding process – instead inviting 10 firms to bid.
One firm that's not on the list? Oracle Corp., the lead information-technology vendor on the Cover Oregon project, which officials have publicly blamed for the failed $250 million effort to build a state-based exchange.
The state intends to select a top bidder by June 18, and finalize the contract by June 30. That would leave four and a half months for a job that a consultant earlier estimated to take between five and eight months.
The firms were selected because they'd successfully connected other states to the federal exchange, according to the state. The federal exchange will be used by consumers to select private plans, but not those who qualify for the Medicaid-funded, Oregon Health Plan.
Shifting the Medicaid eligibility system used for Cover Oregon over to the OHA --and making it compatible with the federal exchange – could run into unforeseen pitfalls, the subject of a $3 million "gap analysis" under way by Deloitte Consulting.
While the federal shift bears an estimated cost of $5 million, state officials say the Medicaid work could cost $35 million. The special procurement document estimates a combined cost of $30 million to $35 million, but allows it could be expanded to include further work. State officials say the federal government has agreed to pay for the bulk of the project.
The 10 firms invited to bid include Accenture, Deloitte Consulting, Engage Point, HP Enterprise Services, KPMG, Northrop Grumman, Red Mane Technology, Social Interest Solutions, Vertical Build and Xerox Corp.
Deloitte, which has been heavily involved in Cover Oregon's efforts to figure out if its state-based, Oracle technology is salvageable, would seem to have the most familiarity with Oregon's situation. But earlier negotiations with the firm did not bear fruit.
In a February report, Deloitte indicated rescuing the troubled Oracle technology would cost approximately $40 million. But as the state sought to hire Deloitte, the figure roughly doubled – causing the state in April to decide to shift to the federal exchange.
Todd Williams, a local consultant on rescuing troubled technology projects, said it's good that the state is seeking multiple bidders. But the special procurement document doesn't do enough to spell out the work that would lead to such a high price tag. The important thing is to avoid a "Son of Cover Oregon" situation, he said, so "How is the state's culture going to change to make this a better project?
©2014 The Oregonian (Portland, Ore.)
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