Healthcare.gov faltered last fall in large part because it was built by a crowd of uncoordinated contractors with no one in charge of making sure all the interlocking pieces fit together.
As the White House tries to prevent a repeat catastrophe, government watchdogs are investigating why the Obamacare marketplace failed in the two months after it opened on Oct. 1, 2013. A new report (PDF) details the 60 separate government contracts, awarded to 33 companies, that contributed to building healthcare.gov. The chart above shows how much each contractor was awarded.
The total price tag: almost $800 million, of which about $500 million had been paid as of February 2014, according to the Health and Human Services Office of Inspector General, which oversees the department responsible for healthcare.gov. CGI Federal (GIB) was the main contractor, awarded $251 million in five contracts to build, test, and maintain the exchange, beginning shortly after the Affordable Care Act became law in 2010.
Quality Software Services, a division of UnitedHealth Group (UNH), a contractor on many aspects of the site, was hired for additional repairs. HP Enterprise Services, a division of Hewlett-Packard (HPQ), won a contract to host the website in 2013, a job originally awarded to Terremark Federal Group, a division of Verizon Communications (VZ). And consultant Accenture (ACN), new to the project, took the lead role early this year.
Many of these companies have other business with the Department of Health and Human Services beyond healthcare.gov. The inspector general found the total value of the 60 contracts examined, including other work unrelated to the Obamacare site, was $1.7 billion. A third of the contracts cost the government more than originally estimated, and in seven cases, the cost was more than double the original price tag, according to the inspector general’s report.
The watchdog says mapping the contracts is just a starting point. The inspector general “will be issuing additional, in-depth audits and evaluations that look more closely at contracting” for healthcare.gov—and offering advice for better approaches in the future.
Healthcare.gov reopens for business on Nov. 15. The Obama administration on Tuesday named the first “chief executive officer” for the marketplace, elevating Kevin Counihan, who previously led Connecticut’s successful health insurance exchange. His CEO title evokes efficiency and accountability. It may be a sign that the White House understands that the muddle of contractors contributing to a monster high-stakes project is a recipe for trouble.