Topics: Obamacare

Obama administration awards another noncompetitive contract for healthcare.gov

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Watchdog,Richard Pollock,Obamacare,Health Care,Healthcare.gov,Government Contractors,Transparency

Open government advocates and IT experts are slamming the administration’s decision to award without competition another multimillion-dollar contract for the troubled Obamacare website.

They say the administration’s refusal to solicit multiple bids not only might cause the government to overpay, but may trigger new technical headaches as they switch contractors in the middle of the Obamacare health care enrollment period, which ends March 31.

On Saturday, administration officials at the Centers for Medicare and Medicaid Services announced they were firing CGI Federal as the designer and manager of the botched healthcare.gov and replacing the firm with Accenture, the world’s largest consulting firm.

The new contract, valued at $90 million, was given to Accenture as a non-competitive and sole-source contract, according to news sources.

CMS officials, in a statement to the Washington Examiner, said they did not open the bidding process to full and open competition and instead used an “expedited process” to award the new contract. CMS officials told the Examiner the Accenture hire was "an interim approach" for only 12 months, but agency officials did not explain how the competitive process would be carried out over the year.

The agency admitted it relied on a loophole in federal contracting regulations that permitted it to forgo full and open competition “when the need to make an award is urgent and compelling.”

This is the second time CMS elected to award an Obamacare website contract without the benefit of open competition. CGI Federal, a Canadian subsidiary with a previous record of uneven performance, originally received a $93 million a “one-bid” contract in 2011.

However, the government’s explanation for the new contract did not sit well with watchdog groups.

Judicial Watch, which criticized the Bush administration’s use of a sole-source contract for Halliburton during the Iraq war, called the Obama administration’s reliance on the loophole “an abuse of the process.

“There’s no emergency in that they had plenty of warning there were issues,” Judicial Watch president Tom Fitton told the Examiner.

“Even over the last few months they could have put out a request for proposals that would have gotten potential solutions from multiple vendors,” he said.

Scott Amey, senior counsel to the Project on Government Oversight, another watchdog group, says the administration had plenty of time to organize even a “limited competition” given the high-profile CGI failures.

“A limited competition might have produced more vendors and solutions, and resulted in lower costs which would be welcome news for a project that spiraled out of control,” he told the Examiner in an interview.

Rep. Diane Black, R-Tenn.., a ranking member of the House Ways and Means Oversight subcommittee that has jurisdiction over Obamacare, said the administration was wasting taxpayer money with a noncompetitive process.

“If they were interested in getting the best service at the best price for taxpayers, clearly they would rely on competitive bidding for this project," she told the Examiner in an email.

Federal officials learned of possible problems with CGI as early as March 2013 when a McKinsey & Co. report warned federal officials the CGI had fallen woefully behind its deadlines.

After the botched launch in October, federal officials suspended many website activities until Nov. 30, when it re-launched it for visitors.

HHS Secretary Kathleen Sebelius told a House Energy and Commerce Committee hearing on Dec. 11 she had asked the department’s inspector general to investigate the performance of the contractors.

"I think the launch was flawed and failed and frustrating for millions of people," Sebelius told the House committee.

In fact, on Dec. 13, HHS issued an “enterprise solicitation notice” to small IT companies seeking information about ways to “to support critical Medicare, Medicaid and Affordable Care Act (ACA) Federal Healthcare Marketplace business functions.”

Amey says he believes at the time CMS officials were fishing for competitors to CGI even then. “So it seemed even then, it looks like they’re not happy with the vendors’ and trying to reach out to some other people,” he concluded.

IT experts are worried the government is changing contractors in the middle of the enrollment period, which ends March 31. CGI will continue its work through the end of February when it hands over control to Accenture.

If Accenture inherits healthcare.gov with the same flaws, the two-month transition period is inadequate, according to a highly regarded IT government consultant.

Michael Daconta, a vice president of InCadence Strategic Solutions, says Accenture might discover it does not have enough time to properly run the website.

“If the objective is to start with a clean-sheet of paper then two months is fine,” he told the Examiner in an email.

“If the objective is to continue with the existing baseline and make changes/enhancements to that then two months is inadequate,” he said. “If that is the scenario, I would estimate that two months is probably about a one-third of the required time necessary to properly maintain and enhance the existing baseline.”

Amey agrees. “The healthcare.gov site has been an utter mess, and now CMS is switching the contractor in the middle of the enrollment period.

"Could this have been done earlier? That gives the new vendor a month before new enrollment,” Amey says.

A former IT contractor who worked at CMS said turning to Accenture would be “a big mistake” and that the transition period is likely to be very difficult.

“How is the transition going to occur?” she asked in an interview with the Examiner. “So much information will be lost as CGI leaves the project. Most likely Accenture will be very unhappy with their plight.”

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