The race to construct an online insurance exchange by Oct. 1 spurred the Obama administration to use an expedited bidding system that limited its choice of a builder to just four companies, including CGI Group Inc.
Eighteen months elapsed after passage of the 2010 health-care overhaul before CGI was selected to begin work, government documents show. That left the Montreal-based vendor two years to create a website, healthcare.gov, designed to link consumers with insurers while drawing data from a variety of U.S. agencies, including the Internal Revenue Service.
The relatively short time frame for the work and the political controversy surrounding the law probably signaled the project was “doomed from the start,” said Larry Allen, head of a McLean, Virginia consulting firm. Now, CGI and the administration are sorting out what went wrong and how to fix the site by the end of the month, when uninsured Americans will have weeks to sign up for coverage that begins in January.
“I am sure there are companies that looked at this specific opportunity and said, ’you know, I’ve got other things in the pipeline,’” said Allen, the president of Allen Federal Business Partners, in a telephone interview.
The online federal exchange was created to help the uninsured access medical coverage under the Patient Protection and Affordable Care Act of 2010. Following the website’s Oct. 1 debut, it has been overwhelmed by software flaws, breakdowns and delays. Initially, U.S. officials blamed the turnout of millions of Americans on the first day for the problems, saying the unexpectedly high numbers overwhelmed the system.
Since then, the Obama administration has identified a number of software flaws that led to the problems, criticized CGI’s handling of the work, named another software company to supervise their work and pulled in engineers from Google Inc., Red Hat Inc. (RHT) and Oracle Corp. (ORCL) to help get the website working smoothly by the end of this month.
In House hearings last week, Kathleen Sebelius, the secretary for Health and Human Services, and Marilyn Tavenner, the head of Medicare, both testified that CGI failed to meet expectations outlined in its contract. In earlier hearings, CGI said it got late instructions from the government to make changes to the site and that end-to-end testing, the responsibility of Tavenner’s agency, didn’t begin until about two weeks before launch.
Remarkably, there are no penalties for the incompetent CGI and they’ll keep on raking in taxpayer money.
CGI has been paid $104 million already and while no penalties are built into its contract, Sebelius said on Oct. 30 said that “paying for work that isn’t complete is not something that we will do.”
The Canadian company is due $197 million through the end of March, Sebelius said. The entire website project is budgeted to cost $630 million, said Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, on a Nov. 1 conference call.
Of course, in the end it will cost much more, especially since Obama’s bringing in more cronies to help fix his mess.