State mismanagement and bureaucratic incompetence led to the botched launch of the $305 million Cover Oregon Obamacare exchange. Specifically, Cover Oregon can trace its failure from the lack of a single point of authority combined with its decision to serve as its own systems integrator.

As a report released by the House Committee on Oversight and Government Reform notes, there were multiple issues with the project that ultimately contributed to its failure:

“An overly ambitious project scope and technically inexperienced (and constantly changing) leadership caused challenges for Cover Oregon. Those challenges were compounded by Oregon’s ambitious health care initiative, which was the source of discord among the various state agencies and organizations developing the exchange, especially the Oregon Health Authority and Cover Oregon.”

These many issues resulted in the failure to launch by the October 2013 deadline. This botched launch, combined with political corruption, a failure of federal oversight, and unrealistic plans led to the ultimate demise of the Cover Oregon exchange.

The lack of a single authority to keep the project on track and mediate the different entities resulted in complete chaos and unaccountability. A report by First Data, a technology solutions company, revealed that there were numerous management problems with the Cover Oregon project:

Differing Priorities: Three different organizations worked on the same project, all with different priorities. As the report notes:

“A common theme from the assessment interviews was that the entities involved (Cover Oregon, OHA, and DHS) had different, and sometimes competing, priorities.  As a result, these disparate entities did not always function as a cohesive unit.”

Ineffective Communication: The project, already far behind schedule, was stymied even further from ineffective communication between the three organizations. As the report states:

“It is clear that communication across agencies was ineffective and at times contentious. The lack of a single point of authority slowed down the decision making process and contributed to inconsistent communication, and collaboration across agencies was limited at best.”

Fragmented Authority and Decision-Making: The lack of one authority muddled communication and decision making among the three entities. As the report points out:

“Authority was not only parceled out to multiple committees, but was also fragmented across Cover Oregon, OHA, and DHS. To complicate things further, all of these entities were making different decisions for the same project.”

Organizational Conflict and Lack of Transparency: Each entity was not transparent with one another on the projects, resulting in hostility and overall choleric attitudes, especially among leadership. As the report indicates:

“Organizational conflict between OHA and Cover Oregon, especially at the leadership level, was highlighted often. An email exchange between Rocky King [Executive Director of Cover Oregon] and Carolyn Lawson [OHA Chief Information Officer] from June 12-13, 2012, clearly illustrates that the two leaders were not effectively leading the two teams collaboratively.  Statements in the e-mails characterized the interactions as ‘lobbing rocks over the fence in a defensive, accusatory and inaccurate way’ and ‘This is not good communication and certainly continues to create an environment based on distrust and information.’ In the interview with Rocky King, he stated, ‘The relationship did not develop between OHA and Cover Oregon-no transparency.’

Aside from having lack of leadership across the entities working on Cover Oregon, the project was crippled from Oregon’s decision to act as its own systems integrator.  As the committee report notes, “documents and testimony show Cover Oregon’s failed launch was caused in part by the decision not to hire a systems integrator,” which only increased the amount of risk that Oregon took on for the project. A review of this exchange conducted by First Data revealed that using a system integrator “created a lack of accountability on the project” and “contributed to a lack of scope control, a delay in requirements definition, and unrealistic delivery expectations.”

At the same time as this mismanagement occurred, federal officials responsible for overseeing the Cover Oregon project failed to do their job. Officials instead hailed the project as a “model exchange” and granted Oregon millions more in federal funding even though Maximus, Oregon’s quality assurance manager, raised red flags.

State mismanagement and poor federal oversight meant that Cover Oregon Obamacare exchange was doomed to fail. Given the findings of this report, it is clear that taxpayer dollars should be recovered.