Did Federal Contracting Process Cause Obamacare Woes?

Some say purchasing rules lock out important IT talent.

by / October 22, 2013
President Barack Obama speaks during an event in the Rose Garden of the White House on the initial rollout of the health-care overhaul on Monday, Oct. 21. AP Photo/Charles Dharapak

With the federal government’s Healthcare.gov website still riddled with problems three weeks after its debut, President Barack Obama took to the Rose Garden on Monday in an attempt to stop the bleeding. Meanwhile, a growing chorus of observers is pointing to the federal procurement process as a key contributor to the site’s botched launch.


Problems with the federal online health insurance marketplace at first appeared to be start-up glitches combined with higher-than-anticipated traffic levels. But nagging software issues continue to frustrate users, suggesting deeper trouble with the site. At the very least, the rocky launch has become a public relations nightmare for the president and his signature health-care reform law.

"There's no sugarcoating it," Obama said at a Rose Garden event with supporters of the health-care overhaul. "It's fair to say that nobody is more frustrated by that than I am. ... There's no excuse for the problems, and these problems are getting fixed."

Obama said a team of top private-sector tech experts was working around the clock to fix Healthcare.gov, though he and his staff declined to name the companies that are involved. On Sunday, a blog post from the U.S. Department of Health and Human Services promised a “tech surge” aimed at solving “some of the more complex technical issues we are encountering.” The blog added that coding changes already made to the site have “greatly improved” the user experience.

Bad System

As the feds struggled to fix the site, others focused on what went wrong. Netscape co-founder Marc Andreessen, now a Silicon Valley venture capitalist, complained to Politico on Monday that complex procurement rules lock out some of the nation’s best IT talent from federal contracts.

“The government has accreted over the last 30 years contracting rules and regulations that make it impossible” for Silicon Valley companies to compete for projects in Washington, he said. “So you’ve wired the system basically to prohibit the people who really know what’s going on.”

Former federal CIO Vivek Kundra, now an executive for Salesforce.com, echoed some of those concerns, telling The Wall Street Journal, “It seems like with Healthcare.gov, a set of decisions were made at the agency level that aren't in line with how modern technology is deployed.”

Kundra added that a lack of technology leadership at the agency level leads to an “inability to execute” on federal IT projects.

A report in The Washington Post on Monday seemed to back up the claim that the federal Centers for Medicare and Medicaid Services (CMS) – the agency in charge of running the health insurance exchange – struggled to manage the complex, high-pressure deployment. Citing an unnamed source close to the Healthcare.gov project, the Post said the CMS assumed the task of overseeing all 55 contractors involved in the project and failed to ensure that all pieces of the complex site were working together in time for the Oct. 1 launch.

Under a Microscope

CMS was joined on the hot seat by CGI Federal, the prime contractor for Healthcare.gov. Clay Johnson, a Presidential Innovation Fellow who now heads a tech startup called the Department of Better Technology, was critical of both the contractor and the contracting process.

“The problem here isn’t just the result of bad programming,” he wrote in a Monday blog post. “It’s the result of bad systems and bad architecture from the get-go.”

Others took aim at the firm’s insider status in the insular world of federal procurement. InfoWorld, for instance, led an Oct. 14 story on Healthcare.gov with this: “The biggest problem with Healthcare.gov seems simple enough: It was built by people who are apparently far more familiar with government cronyism than they are with IT.”

Linda Odorisio, vice president of U.S. communications for CGI, said in a statement released to media outlets on Monday that "CMS and its other contractors, are working around the clock toward the improvement of Healthcare.gov, a system that is complex, ambitious and unprecedented. We remain confident in our ability to deliver continuous improvement in system performance and a more positive user experience.”

Bloomberg News, citing an unnamed source familiar with the project, noted that the CMS didn’t give CGI final technical requirements for Healthcare.gov until May — as a result, about a third of the work already performed by the contractor had to be redone.

No Gloating

State-run health insurance exchanges have been widely credited with outperforming the federal health insurance marketplace. But state CIOs meeting at the NASCIO Annual Conference last week in Philadelphia were sympathetic to their federal counterparts.  

“I think they had a good deal more complexity than state health exchanges had,” said Carolyn Parnell, CIO of Minnesota, which launched its own exchange Oct. 1 and created more than 6,000 user accounts during the first week of operation. Not only is the federal government running the online insurance marketplace used by 34 states, it's also running the central information hub used by all states to check eligibility of health-care customers.

Michael Cockrill, CIO of Washington, said the 16 states that opted to build their own health insurance exchanges are now seeing that decision pay off.

“When states made a choice to go with the federal exchange, I think they missed the fact that the feds had to solve maybe 30 different business problems,” he said. “States only had to solve business problem. That problem was very complex and very sophisticated – but it was just one.”

Steve Towns

Steve Towns is the former editor of Government Technology, and former executive editor for e.Republic Inc., publisher of GOVERNING, Government TechnologyPublic CIO and Emergency Management magazines. He has more than 20 years of writing and editing experience at newspapers and magazines, including more than 15 years of covering technology in the state and local government market. Steve now serves as the Deputy Chief Content Officer for e.Republic. 

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