Jeff Manning

Oregon's long-simmering feud with Oracle is about to break out into open warfare. Gov John Kitzhaber (D-OR) has asked Attorney General Ellen Rosenblum to initiate legal action against the giant information technology company for its central role in the state's bungled effort to build a health insurance exchange.

The state has paid Oracle well over $130 million for the exchange, which never operated as intended. "There is ample cause there to file a lawsuit," Gov Kitzhaber said. "We were not delivered a product that worked and we certainly weren't delivered a product on time."

First Data, the firm hired by the state to assess how the Cover Oregon exchange project went so horribly wrong, blasted Oracle. "Oracle's performance is lacking," First Data said. "Their inability to adhere to industry standards and professional software and project management tenets warrant further review."

Gov Kitzhaber also reached out to officials in Washington, DC asking them to act against Oracle. In a May 29 letter, he asked the US Department of Health and Human Services to "levy the appropriate fines and penalties" against the company. He also asked Oregon's two US senators, Sens Ron Wyden (D-OR) and Jeff Merkley (D-OR) to use their clout against Oracle.

It promises to be a difficult case. With $37 billion in annual revenue, Oracle is a deep-pocketed foe.