HealthCare.gov Botched $600 Million in Contracts

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1The public employees responsible for overseeing $600 million in contracts to build healthcare.gov were inadequately trained, kept sloppy records, and failed to identify delays and problems that contributed to millions in cost overruns.

That’s according to a new government audit, published today. It reveals widespread failures by the federal agency charged with managing the private contractors who built healthcare.gov. The audit is the first to document, in detail, how shoddy oversight by the Centers for Medicare and Medicaid Services (CMS), which manages federal health programs including Obamacare, contributed to the website’s early struggles.

To develop healthcare.gov, CMS hired and managed private companies to create vast, interlocking software systems that would allow consumers to shop for insurance policies. According to the report, issued by the agency’s inspector general, lapses in oversight of those companies started early on—well before the website’s limping debut, on Oct. 1, 2013. The site faltered for months, frustrating consumers until a scramble to repair it ultimately allowed millions to enroll in health plans.
The agency says it has already addressed some of the auditors’ recommendations and is working on others. A spokeswoman for the Department of Health and Human Services, which oversees CMS, declined to say whether any employees had been terminated or disciplined over the lapses the inspector general identified.
The audit, conducted over 11 months, focused on the 20 contracts most critical to the website’s operation. The contracts went to eight companies (some worked on multiple projects), with most of the money going to CGI Federal, Quality Software Services, and Verizon subsidiary Terremark Federal. Together they’re worth more than $600 million, with 70 percent already paid out.
But government employees made multiple missteps in doling out and managing those contracts. In January 2012, for example, new federal rules required employees overseeing contracts worth more than $10 million to undergo 96 hours of training meant to prepare them to manage complex projects. CMS disregarded this requirement and allowed less qualified employees to oversee contracts worth as much as $50 million, according to the audit. One employee, who isn’t named in the report, oversaw a $130 million contract for at least 15 months without even the lower-level certification that the government requires for managing contracts worth more than $25,000.
Read more at BLOOMBERG