Here’s Why Oracle Refuses New Business From Oregon’s Government

Oracle's Executive Chairman of the Board and Chief Technology Officer Larry Ellison speaks during his keynote address at Oracle OpenWorld in San Francisco
Former Oracle Corp. CEO Larry Ellison.
Photograph by Robert Galbraith — Reuters

Oracle has had enough of Oregon.

The business technology giant has decided it will no longer take on new business with the state’s government amid an ongoing legal battle, Oracle senior vice president Ken Glueck told Fortune on Wednesday.

The decision follows a protracted legal tussle between the two parties over a disastrous state healthcare enrollment website that never came online. In 2011, Oregon enlisted Oracle (ORCL) to build a healthcare exchange website related to Obamacare after being impressed by the company’s sales pitch, according to a previous legal filing.

However, a series of technical issues plagued the website from the get-go. The two side quickly had a falling out over who was to blame.

Oracle says it will still honor its existing business contracts with Oregon and related state agencies. The decision will have no impact on any corporate clients in the state, Glueck explained.

“We are just not interested in expanding the relationship,” he said.

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Oracle’s state government clientele typically includes social services agencies, motor vehicle departments, and tax agencies. But now, if an Oregon agency seeks out Oracle for a new project, the company will essentially just say no way.

The Portland Business Journal first reported the news that Oracle wanted to scale back its business in the state. Oregon filed a lawsuit against Oracle in 2014 that accused the company of “racketeering activity that has cost the State and Cover Oregon hundreds of millions of dollars,” according to the filing.

Oracle fought back in 2015 with its own countersuit that claimed certain Oregon officials connected with the state’s former governor were responsible for the project’s failure and that they had shifted the blame to Oracle.

In January, Oracle sued Oregon again over allegations that the state did not comply with a proposed settlement to end the litigation. Oregon, however, argued that the settlement talks did not include the state attorney general and therefore any agreement was invalid.

Last week, Oracle filed yet-another lawsuit, this time against the U.S. Department of Health and Human Services. The company wants to compel the department to investigate why Oregon’s health insurance exchange project collapsed.

In his interview with Fortune, Glueck said that Oracle was never the website’s project lead (otherwise known as a systems integrator) and that all of Oregon’s allegations are unfounded. Additionally, the fact that Oregon “sued five of our employees personally” helped to factor into the decision to cut future ties to the state, he said.

Glueck didn’t seem concerned that Oracle could lose out on new business with Oregon to rival companies like IBM (IBM) and Amazon (AMZN). He emphasized that Oregon’s government agencies account for only a small part of Oracle’s overall revenue.

“The state of Oregon is really not material to our business,” Glueck said. “It’s just too small.”

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A spokesperson for Oregon Attorney General Ellen Rosenblum downplayed the news of Oracle’s decision. In an email to Fortune, she pointed out that the state had asked in its original lawsuit that “the court to prohibit the company from doing future business with the state of Oregon.”

Apparently, the bad blood flows both ways.

Glueck, for his part, said he is unconcerned about any negative impact to Oracle from its other customers. He said other state governments and private customers won’t be cut off, saying Oracle has “almost no litigation anywhere in the country” and that the Oregon legal drama is merely an “anomaly” that is “never going to happen again.”

“We’re the same Oracle,” said Glueck. “You know you can count on us.”


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