GAO: Troubled rollout due to poor planning and oversight


Poor planning and oversight led to significant cost increases, schedule delays and flawed functionality of the federal website and systems that is the centerpiece of the president's healthcare program, congressional investigators said in a new report released July 30.

As of March, the Centers for Medicare and Medicaid Services, or CMS, said it has spent about $840 million on and its supporting systems across 62 contracts and task orders, the Government Accountability Office said in the report (pdf).

However, GAO only focused on two task orders and one contract for the development of's two core systems - the federally facilitated marketplace and data services hub systems. CMS said it spent about $369 million - or more than 40 percent - of the total amount spent on the system as of March, the report noted.

The disastrous October 2013 launch of, designed to help Americans find affordable health insurance through federal and state exchanges, was marred by website crashes and other technical glitches. Soon after, the Obama administration decided to switch contractors - from CGI Federal to Accenture - to fix the problems.

A GAO contracting official was scheduled to testify before the House Energy and Commerce Committee's oversight and investigations subcommittee July 31.

In prepared testimony (pdf), William Woods, the GAO expert, said CMS developed and its systems "without effective planning or oversight practices, despite facing a number of challenges that increased both the level of risk and the need for effective oversight."

The GAO report said CMS officials made several decisions and trade-offs that were supposed to save time, but contained significant risks. CMS didn't define requirements, didn't have a good acquisition strategy in place and there was confusion over who was responsible for contract administration, the report added.

Even when CMS was faced with the choice to stop progress on the site and hold the contractor accountable for poor performance or meet the October 2013 rollout, the agency chose to meet the deadline, the report said. When it did decide to replace CGI Federal, it had to spend more funds to get the website functional.

"Ultimately, more money was spent to get less capability," the report said.

GAO made several recommendations such as better contracting oversight and governance to improve management of the federal marketplace. It said that CMS and the Health and Human Services Department concurred with the recommendations.

For more:
- read the GAO report on (.pdf)

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