- Associated Press - Friday, March 7, 2014

PORTLAND, Ore. (AP) - More than five months after Oregon’s botched health-insurance exchange failed to go live, concern is mounting for another, less visible state IT project that was built in conjunction with the exchange, using the same technology.

Officials say they are about to launch a formal review of the so-called modernization program, a multimillion-dollar Department of Human Services project meant to improve online access to public benefits, to see if it hides serious flaws similar to those of the Cover Oregon exchange.

The exchange was once a part of modernization, and both projects were designed by the same technology contractor, Oracle Corp., on a foundation of the same Oracle software and hardware.

The state has since blamed Oracle for Cover Oregon’s fiasco, including critical issues with its website coding. What’s not known is whether the Department of Human Services project may have similar problems. Independent analysts had raised red flags about that project before it was put on hold last fall, but it has never been fully tested.

“When I hear IT and Oracle, I think we have to be careful,” said state Sen. Alan Bates, a Medford Democrat who co-chairs the committee overseeing the human services budget. “Oracle has not been a good partner, and I think everybody understands that.”

For over five years, Oregon has worked to replace its outdated internal computer systems for the Department of Human Services and the Oregon Health Authority. Modernization’s grand vision, supported by federal dollars and state bonds, was to build a one-stop-shop for people seeking food stamps, cash assistance for families with children, Medicaid and other benefits.

When the federal government gave Oregon $48 million in February 2011 to start building a health insurance exchange, that project was tacked on to the modernization work.

Because overall modernization was originally envisioned as one multiservice portal - an online house with many doors - the state chose to purchase an array of Oracle products and hired Oracle to do all the development work. There was no separate bidding process for the exchange, and a lot of the technology was shared among the projects.

Modernization, not including the health exchange, was projected to cost more than $140 million in federal and state money, according to records obtained by The Associated Press. Thus far, the Department of Human Services has spent about half of that sum on the project, said Jim Scherzinger, the department’s chief operating officer.

The spending includes $48 million for Oracle products and development for modernization, records show. The figure does not include the more than $130 million paid to Oracle by Cover Oregon, which eventually split off from modernization to install its own software environment and become an independent platform.

Modernization was eventually scaled back to focus on food-stamp benefits, with the goal of later adding other programs and features. It was slated to launch in October alongside the exchange, records show.

But as testing of Cover Oregon’s online enrollment system revealed multiple bugs and coding flaws, modernization was halted in September. Its staff and resources shifted to working on the troubled exchange and helping enroll Oregonians in health insurance using a workaround manual-paper process.

Since the project has been on hold, little is known about where modernization stands. Department of Human Services officials say the system has never been tested end-to-end because it’s not finished. They say modernization’s upcoming evaluation by business analysts and Oracle developers will shed light on the project.

“We need to determine how much has been built and how much work we’ll need to finish,” Scherzinger said. “All the pieces work, but that doesn’t mean the whole thing does. We’re concerned because we started down the road building both portals on the same technology environment.”

Over the past year, reports by quality-assurance contractor CSG Government Solutions and by the state’s Department of Administrative Services have raised numerous red flags about modernization and labeled the project as high risk.

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