The latest figures are in on the seemingly bottomless hole that is healthcare.gov, the troubled federal insurance marketplace web site. By any measure, the Obama Administration was grossly negligent in the creation of the system, which ultimately failed on its rollout despite numerous warnings of substandard work, overruns, and major technical problems. It appears that we are not done with bill for the program. A new Inspector General report stated that the Obama Administration issued sixty contracts from 2009 to 2014 to build Healthcare.gov, which had already cost roughly a half a billion dollars by February 2014. However, the Administration has signed new contracts that obligate the taxpayer to cover an addition $300 million, and the estimated value of the sixty contracts totals $1.7 billion. Despite numerous accounts and reports on the mismanagement of this program, there appears to be little real effort to hold anyone accountable as we continue to pour hundreds of millions into this system. The contracts include money to CGI Federal, the well-connected company that was partially response for the disaster in October as well as other controversies in large contracts.
With some contracts obligating as much as $200 million, healthcare.gov has become a major cash cow for some companies like Booz Allen Hamilton, Deloitte, Lockheed Martin, Northrop Grumman and HP Enterprise Services. Of the 60 contracts, nearly $800 million has been committed for the development of the Federal Marketplace as of February 2014.
Worse yet, The Hill is reporting that the Administration is due to pay at least 20 contractors more than their original estimates for work on HealthCare.gov and the rollout of ObamaCare. Thus, the overruns are continuing and, despite the dismal work done on the rollout, even the most dubious companies are continuing to benefit from the windfall. Most notably, while one 2011 contract with CGI Federal was estimated to be worth $93 million at its awarding, CGI Federal could ultimately receive more than $200 million. The CGI Federal contract (and its dismal performance) has been the source of considerable criticism over the companies connections to fundraising for the Obama campaign and personal connection to the First Lady (Toni Townes-Whitley, a senior vice president at CGI Federal, was a Princeton classmate and friend of First Lady Michelle Obama). I am less concerned over the personal relationship allegations (which seen speculative at this point) as with the simple question of how a company (one of a number of companies) could continue to produce subpar work on a major federal project and still receive massive overrun payments.
What is maddening is that the House of Representatives killed one of the oldest programs in the United States, the page program, for $5 million dollars but it barely makes news that we will spend $1.7 billion on a grossly managed marketplace website. Overruns are shrugged off and you will barely find any mention of the IG report among the major media.