Remarks As Prepared
Oracle Settlement Press Conference
Sept. 15, 2016
Good morning, thank you for joining us today. Regrettably, Attorney General Rosenblum out of state and unable to be here to join me in sharing this good news:
Today, the State of Oregon and Oracle have reached a settlement agreement with an estimated value of more than $100 million dollars to the state.
This agreement resolves years of legal disputes related to Cover Oregon, the state’s troubled health insurance exchange, a program I dissolved more than a year ago.
This settlement not only closes a damaging chapter of public finger-pointing and failure.
It also provides millions of dollars for science education programs in K-12 schools.
And it gives the State of Oregon the opportunity to significantly improve services to Oregonians at a far lower cost.
This is a solid agreement, and it is the right thing for Oregon.
The settlement has two main components – in-kind, and cash.
The in-kind elements include:
- A 6-year unlimited license agreement, or “ULA,” for several business enterprise software packages for the State of Oregon.
State government’s IT systems are in desperate need of modernization. The ULA is a powerful tool for the Legislature to use and bring state government technology out of the 1980s. Yes, that’s what I said: the 1980s.
If fully utilized, the ULA could potentially save the State hundreds of millions of dollars over the next several years on this project.
- The agreement also includes customer support services for the State of Oregon, with a market value of $60 million, and hardware valued at an estimated $20-$30 million.
The agreement also provides cash payments to Oregon:
- $10 million dedicated to Science, Technology, Engineering, Arts, & Math (STEAM) initiatives at K-12 schools.
I am thrilled to be able to channel millions from the settlement into programs proven to help our students excel, and awakening them to the power of their own potential. We must do everything we can to increase the number of Oregon students who graduate from high school with a plan for their future.
Resolving this litigation obviously ends the ongoing expenses associated with it; plus the agreement reimburses state costs to date, approximately $25 million. And that is a very good thing.
But it is also worth noting another important financial benefit resulting from the settlement: cost avoidance – in other words, real savings to Oregon taxpayers.
For example, should the matter have proceeded to trial, legal costs were estimated to jump to as much as $1.5 million per month.
Additionally, ending the litigation eliminates the need for state agencies to switch away from Oracle products to other vendors, as the litigation would have required. This saves us $22 million.
Most importantly, today’s settlement not only gives the Legislature a way to save a significant portion of the estimated $500 million it would cost to modernize our antiquated and duplicative state IT system.
By taking advantage of the ULA, the State could also cancel major agency IT projects that would no longer be necessary. This saves another $35 million.
So, in addition to those impressive savings, Oregon gets $10 million for science education; $25 million for our expenses, and the opportunity to bring state government IT into the 21st century at a fraction of the cost.
In short: by settling, Oregon wins.
I am grateful to the parties for coming together to slay the many-headed dragon that the litigation had become. In doing so, we are now able to close this damaging chapter and move Oregon forward. Thank you.