Wednesday, January 21, 2015

The Politics and Procurement of Obamacare's Website

After the publication of the Office of the Inspector General (OEI-03-14-00230) of Health and Human Services, it should not be any big surprise that the opening of the Obamacare website was such a fiasco.  There are very few things in contracting and performance monitoring that went right in that procurement, but reading the report,  I find more missing than present. 

HHS has already started to say that it was way ahead of the report and has taken actions to make sure this doesn’t happen again.  (Note the timely departure of Louis Tavenner, one day after the report was released and the departure of CGI as a website contractor on January 10, though retains it for other work. )  The politics of this are not the main point of this post, though they certainly seem to be worth looking into further.  According to Patrick Howley ( http://dailycaller.com/2014/01/20/after-firing-cgi-no-bid-contract-for-obamacare-site-goes-to-firm-that-ran-obama-campaign-tech/ ) CGI employed Toni Townes-Whitley, Michelle Obama’s Princeton classmate and White House Christmas dinner guest, and replaced them in a non-competitive bid with Accenture, which employs Rayid Ghani, Obama for America data analytics team member.  His article is worth reading.  It is the non-competitive nature of this work that got HHS into trouble to begin with.  

Given the scope of these IG report findings, it is unlikely HSS will recover quickly.  This is a summary of the main points:  

1.  There were 60 contractors with no lead integrator named.  Even the worst programs in the history of government IT have not had this problem.  A former CIO was interviewed and offered this comment:  “…CMS perceived CGI to be the project’s lead integrator, but the company did not have the same understanding of its role. This deficiency could have been addressed through more rigorous acquisition planning, such as clearly defining roles in an acquisition strategy and in descriptions of contractors’ work.”

 2.  Several of the contractors did not submit proposals for the work.  When the OIG report says they didn’t understand their roles, they were probably understating the problem.  Of those that did submit proposals, four were identified as not technically sufficient and were rejected.  Only CGI remained.   When they had to be replaced, the OIG says CMS said there was not sufficient time to compete the contract and rolled the new one out.  Of course, we might wonder why nobody protested this method of getting the work, but it would be worth knowing if anyone even raised an objection. 

3.  Five of the six contracts were cost reimbursement, putting all the burden on the government for cost containment.  The OIG says there was no reason given for choice of a contract “where it assumed the risk of cost increases” except a general statement that the real costs “could not be defined accurately”.  The replacement contract for CGI was a cost-plus award fee contract.  This was not an overnight process of building a website and it was not like the HHS did not know they would need one, years out.  

The IG report is wishy-washy even by standards of their profession.  The “missed opportunity” and “additional challenges” are describing events that are a good deal more than can be explained away like this.  We would have to hope there will eventually be hearings this year on procurements and how they are being done in HHS.  They are obviously a mess and describing the process as a missed opportunity will not save them from them scrutiny.  


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