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Friday, October 25, 2013

Bombing Obamacare Again

“Obamacare Website Failure Threatens Health Coverage for Millions of Americans” --

Not bad for a headline if your intention is to scare the “bejeezus” out of a large number of people.  This, and other headlines and articles about the “failure” of the website are everywhere you look, with a false implication that “millions” of people are going to lose their healthcare coverage because of it.  Nothing could be further from the truth.  Of course, Congress has gotten into the act, for here is another incident for the House Republicans to manufacture and seize upon as a “failure” or “scandal".”  So let’s see now, what are the failures exactly?

  • Creating personal accounts is difficult
  • Actually signing up online for a plan is virtually impossible
  • The codes are too complicated and way too long
  • The cross-overs between systems created by separate vendors is not going well
  • Too much money has been spent on the contracts
  • The administration made the decision beforehand to make people go through a verification process first and then choose a plan after they have been declared eligible; some sites do it the other way round: shop first, then apply
  • Secretary of HHS, Kathleen Sebelius, deserves to be fired

Don’t you love it?  None of these so-called failures has anything to do with the efficacy of healthcare reform contained in the Affordable Care Act!  Apparently, some of these critics have never been on a new website that has been constructed to handle huge numbers of visitors, and yet has miscalculated.  I remember when genealogists were greatly anticipating the opening of a new site for Ellis Island that would contain many ship’s lists of immigrants to this country in the 19th and 20th centuries.  Everyone tried to get on the site when it opened and it crashed almost immediately!  This same scenario has happened so many times, that it is not unusual at all in the cyber world.

Criticisms about decisions made by the Obama administration are not unusual;  glitches are not unusual; delays are not unusual; the complaints are not unusual.  So first of all, let’s hope that the critics, including Congress, get to the bottom of this mess by ignoring the usual and concentrating on the real problem: the private contracts and the contractors responsible for building this site.  Secondarily, the decisions and parameters given the contractors by representatives of the administration should be examined.  So far, it doesn’t look like the former will happen, if yesterday (the 24th) is any example.  Giving soft-ball questions to the contractors; passing-the-buck to the government by both questioners and contractors; nailing the Obama administration and the ACA for a big failure are all we saw -- that’s what Congress is doing.

I want to be perfectly clear about what I am saying here.  I am saying that much of the problem lies with one of the favorite mantras of the Republican party:  “privatizing government operations.”  I am willing to bet that had the Obama administration brought together the best and the brightest IT minds within government agencies, and the best and brightest from their own 2012 campaign, to build this site that it would have gone much more smoothly and turned out to be more effective.  One reason:  the government IT folks would have had some “skin-in-the-game” -- they would have wanted it to succeed beyond expectations.  Second, they would have already had some idea of the parameters that were needed, having worked on government systems before.  Third, they would have been able to translate the jargon spoken by government  bureaucrats that sometimes leaves outsiders from the private sector in a fog.

On what basis do I make these observational claims?  I personally took part in helping to build a system from scratch utilizing just such government employed IT’s.  I was the project director for a state-run Program that needed an automated system that could prepare payrolls and also track a myriad of individualized services of stipended mentors.  It was my job to work with the IT’s to help them understand our goals for the system, the outcomes we wanted, and the user friendliness that needed to be built in to the system.  My job was also to gather from my Program’s office staff and field staff their recommendations and hopes for outcomes, so that I could feed that into the process.  The IT staff and I, along with my staff at times, worked well together.  We mostly understood each other; we made accommodations where needed to the exigencies of a governmental system that we all worked within and knew well.  Testing the system at certain intervals was crucial to its success.  Roll-out was fairly smooth, but some glitches did need fixing before it was finally implemented.  Even after initial implementation, there were glitches and inadequacies that needed to be re-coded or adjusted in some way.  That is the nature of the “beast.”

I am saying that I think that having a number of outside private contractors work on this crucial government website may have been the biggest mistake of all.  Privatization either by devolvement or by contract is not always the best way to go!  However, let’s face it, choosing the Centers for Medicare and Medicaid Services (CMS) to oversee this website’s construction and affiliated services, was probably not the best idea either. 

According to several sources, the CMS did not have the expertise necessary to manage the blending of all the different software and systems necessary to build this site.  According to the NY Times, problems that have arisen in the last few weeks are “not uncommon when software from several companies is combined into a large, complex system.”

So, if Congress wants to look at something in this particular case, let them look at the private contractors and the contractual components and behaviors.  So far, the hearings being held have not delved deeply into their shortcomings, allowing them to place blame on government failures to provide enough testing time or enough oversight and managerial coordination.  However, Luke Russert of MSNBC on Thursday, the 24th, hit the nail on the head when he said that the main focal point of any hearing should be the questioning of how contracts are distributed and the performance of the contractors.  Here‘s something of a guide for doing so, from my own experience:

1)    What was the preliminary process by which this private contract was initiated?

  • How were applicants notified
  • Was there an RFP process
  • Who oversaw the process
  • On what bases were applications (RFP’s) judged; were there standards for pre-qualification promulgated by the government
  • How were finalists vetted - e.g. was past work explored; past clients interviewed or contacted
  • What determined the final selection

2)    What was the process by which the final decision was made to award the contract?

  • How many sessions or interviews were held with the contractor applicants before the contract was signed
  • What was discussed at these sessions
  • What goals were laid out for this project and for the contractor
  • What were the outcomes or expectations laid out for the contractor
  • Was there a full Plan or preliminary Plan discussed
  • If preliminary, when was the final Plan expected
  • Were past projects discussed with questions or glitches explored
  • What were the deciding factors in the choice of the contractor

3)   Once the contract was awarded, what steps were followed?

  • Which government personnel were assigned to work with the vendor in the construction of the project;
  • who was assigned to monitor all aspects of the private contractor’s performance under the contract terms
  • Who was assigned overall responsibility for the Project
  • Was there a Tic-Toc (schedule of benchmarks or achievements) put in place
  • What was the final Plan that was locked into place; was it included in the contract
  • Were monthly progress reports required from the contractor
  • What sort of testing procedures and schedule for them would be implemented
  • Were there any penalties placed in the contract if the vendor missed or delayed deadlines or benchmarks; what liability for failure could be incurred
  • Was termination of contract included without penalty to contracting government agency
  • Was a plan of evaluation at certain increments placed in the Plan
  • Who was responsible for evaluation
  • Who were the responsible parties involved in each aspect of the Plan
  • Were there any contingency plans placed in the contract in case of failures
  • Who were the responsible parties assigned to these plans

The aspects of process are not something about which people get excited, but without some major attention to them, there is cause for alarm.  The process by which contracts are let by our federal government and other government offices is something that cannot be ignored if we are to solve the failures caused by inadequate contracts and by unregulated and unguided contractors.

So, what about that $93.7 million contract with CGI for the website?  And please, don’t forget those other vendors like Quality Software Services, Inc. (QSSI)-- a unit of the UnitedHealth Group, by the way -- responsible for the “data hub” that funnels information collected by federal agencies to and from the state health care exchanges ($55 million).  Or, how about Oracle, sub-contracted by QSSI to build the key “identity management system”, or maybe Teal Media, responsible for visual design, who created the “Look and Feel” of  the various windows, especially the “card motif.”  All told, the GAO reported in March 2013 that between fiscal year 2010 and March 2013, the total doled out on about a dozen contracts has been $394 million!  CGI itself has about tripled their original contract costs to $294 million! Could any of these vendors have had an ulterior motive for sabotaging their part of this project?  We can’t be sure.... 

But, with all contracts from government, the crucial question must be: what are we getting for the taxpayers’ money?  Another critic, Luke Chung, who heads a small software and site-building firm in Virginia, appeared on the Chris Jansing show on MSNBC Thursday to criticize the contractors for botching a relatively simple procedure of getting information and then having users fill out an application.  He was a bit brutal in his assessment of the final product. 

It appears what we have gotten is a system with certain inadequacies that does not begin to meet the demand of consumers for information and application.  Now the administration appears to be scrambling to bring in the best and the brightest to fix the problems.  One would think that’s what should have been done in the first place.  And that’s another reason why process is so important:  to try and avoid the type of situation we now find ourselves in.  Attention to a careful process at the beginning of contract-letting is superior to trying to fix problems after they arise!  For, as one technology and consumer expert has said: “With software, adding people at the end of a project to fix things that are broken or unfinished can actually do more harm than good.”   It may actually slow a project down even more.

I’d sure like to see those contracts -- wouldn’t you?  Sorry, we can’t get them unless we file an FOIA, and that sometimes takes up a lot of time, and garners poor results.  But here’s what the Washington Examiner had to say on the subject on October 13th:

“Federal officials considered only one firm to design the Obamacare health insurance exchange website that has performed abysmally since its Oct. 1 debut.

Rather than open the contracting process to a competitive public solicitation with multiple bidders, officials in the Department of Health and Human Services' Centers for Medicare and Medicaid accepted a sole bidder, CGI Federal, the U.S. subsidiary of a Canadian company with an uneven record of IT pricing and contract performance.

CMS officials are tight-lipped about why CGI was chosen or how it happened. They also refuse to say if other firms competed with CGI, or if there was ever a public solicitation for building, the backbone of Obamacare’s problem-plagued web portal.

Instead, it appears they used what amounts to a federal procurement system loophole to award the work to the Canadian firm.

CGI was one of 16 companies that had been qualified by HHS during President George W. Bush's second term (emphasis added) to deliver, without public competition, a variety of hardware, software and communication products and services.  In awarding the contract, CMS relied on a little-known federal contracting system called ID/IQ, which is government jargon for ‘Indefinite Delivery and Indefinite Quantity.’

CGI was a much smaller vendor when it was approved by HHS in 2007. With the approval, CGI became eligible for multiple awards without public notice and in circumvention of the normal competitive bidding procurement process.

The multiple awards were in the form of ‘task orders’ for projects of widely varying size. Over the life of the CGI contract — which expires in 2017 — the IT firm can receive awards worth anywhere from the ‘$1,000 to $4 billion,‘ according to a contracting document provided by CGI to the Washington Examiner.

This is apparently the route chosen by CMS officials in awarding the Obamacare website design contract to CGI. 

Between 2009 and 2013, CMS officials awarded 185 separate task orders to CGI totaling $678 million for work of all kinds, according to, a federal spending database. The Obamacare website design contract was for $93 million.”

Funny - no, more like ‘tragic’ - that the Obama administration seems to be carrying through on what the George W. Bush administration started which is an all-too-familiar and unfortunate pattern.  So, the first major failure is very simple: this should not have been a no-bid contract by any stretch of the imagination.  There was too much at stake.  

Let’s see what else we can find about these contracts.  The Washington Examiner points us in a second direction.

“CGI in Canada also suffered embarrassment in 2011 when it failed to deliver on time for Ontario province's flagship project of a new online medical registry for diabetes patients and treatment providers.  Ontario government officials cancelled the $46.2 million contract after 14 months of delay in September 2012. Ontario officials currently refuse to pay any fees to CGI for the failed IT project.”

Not only do we find a no-bid contract for a project of massive importance, but now we also find that this particular lead company failed to deliver on a similar product in Canada.  Since the contract with our CMS was signed in October of 2011, and the Canadian failure to meet deadlines began around July of 2011, this should have immediately raised a red flag for the U.S. government that something was amiss with this contractor.  An immediate investigation should have been launched as to their competency and their ability to fulfill the CMS contract. 

What else can we find out about this contract and this contractor (or others involved)?

According to the Sunlight Foundation’s website, there were an estimated “dozen or more” companies tasked with actually building the main site.  But Sunlight reviewed contract award information from two websites that follow government contracts -- and -- and found that 47 entities won contracts from HHS and Treasury to “manage support or service the implementation of the Affordable Care Act.”  Some top on-going government contractors show up in the list: Northrop Grumman, Deloitte LLP, SAIC, Inc., General Dynamics, and Booz Allen Hamilton, as well as Rand Corporation and MITRE Corporation.  All but one of the 47 contractors for the  ACA healthcare-related matters had worked for government prior to the passage of the ACA, according to Sunlight (for all 47 contractors and their contract amounts, see

But here’s the really important thought to consider:  some 17 of the ACA private contractors “reported spending more than $128 million on lobbying in 2011 and 2012, while 29 had employees or political action committees or both that contributed $32 million to federal candidates and parties in the same period.”  Is this how business gets done in Washington?  You bet it is!

I can agree that, for some supply items that government needs quickly, it is probably best to have contractors available on a no-bid basis.  Otherwise, and particularly in the cases where the project to be done is as large and varied and complicated as the ACA website, if it has been decided that government cannot handle the project, it is far better to go to open bid so that a “scratch-my-back, I’ll-scratch-yours” perception is avoided.  The Obama administration has failed here to support open bidding, open government, innovation and transparency.  There is no excuse for that, except that every administration does it! 

But, that does not mean that the Republican House of Representatives can be excused for their part in accosting and distorting the ACA for their own purposes.  They now want the resignation or firing of HHS Secretary, Kathleen Sebelius, as the best outcome for this software problem.  Such nonsense.  Her firing would not accomplish a thing, which is, apparently, what Republicans in Congress seek, above all else!

More to the point is for Congress to look again at the waste and abuse involved in out-sourcing and contracting government services and programs to private contractors.

In 2010, Sen. Bernie Sanders of Vermont inserted into the defense bill for that year a provision calling for an analysis of DOD private contracts, as well as ways for the DOD to punish violating contractors who had been disbarred or suspended for misusing taxpayer funds.  Sanders, at the time, pointed to the importance of reining in contractor abuse by saying that the deficit cannot be reduced without looking at the waste, fraud and abuse in the Pentagon’s budget.  In commenting on the published Defense Department report that he had asked for, Sanders said, “With the country running a $14 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money.  The sad truth is that virtually all of the major defense department contractors in this country for years have been engaged in fraudulent behavior, while receiving hundreds of billions of dollars in taxpayer money.”

If Republicans are really after deficit and debt reduction, then they must take seriously the need to look at the contracts let to private contractors for this ACA website and accompanying services and systems.  How could the CGI contract balloon to three times its original size, without someone taking notice and calling that company to account?  If oversight is the business of the legislative body, then it is time to focus efforts on waste, fraud and abuse inherent overall in government contracts, and in this one in particular.

ACA itself is not the problem.  Kathleen Sebelius is not the problem.  Barack Obama is not the problem.  Government IT employees are not the problem.  The 5,000 lines of code are not the real problem (they can be fixed).  The real problem is a Congress that has failed again and again to look seriously at the waste of taxpayer dollars, especially involving large and small private corporations that feed at the public trough without being called to account for their poor performance.  Look at the contracts let by Congress to private companies, look at the contracts for the healthcare website and the ACA implementation, and then look beyond that to other departments of government. The private sector must not be allowed to get away with defrauding the United States Government.  It is part of the job of Congress to see that it doesn’t happen, and to fix it when it does!

Any other approach to the performance of this website and its relationship to the ACA will be nothing but a political side-show, and another waste of taxpayer money by a dysfunctional Congress that seems to be incapable of honing in on real problems!