Report: Healthcare.gov Budget Tripled as Problems Grew

The budget for Healthcare.gov tripled as the administration rushed to rescue a floundering project. That’s the conclusion of a Reuters story based on a close examination of the government contracts with CGI Federal.

“CGI Federal reported at the time of the
extension that it had received $55.7 million for the first year’s work
to build Healthcare.gov. In
addition, said CGI spokeswoman Linda Odorisio, there were three one-year
options, bringing the total potential value of the contract to $93.7
million.”

But CGI had nearly reached that limit in late 2012.  Scott Amey, general counsel at the Project on Government Oversight, tells Reuters “They just blew through the original ceiling. Where was the contract oversight?” CGI Federal eventually tripled the budget. The final ceiling for the work was $292 million.

It might sound as if CGI Federal didn’t know what they were doing, but Reuters makes clear that the problem was on the other end. “The Obama administration was issuing regulations
and changing policy regarding how the reform should be implemented late
into this summer. Many required significant changes to the IT running
Healthcare.gov, which kept contractors scrambling.“

The Reuters story isn’t clear but “late into the summer” probably means this summer, i.e. 2013. The administration delayed issuing all manner of regulations until after the 2012 election. Obamacare in particular was put off to prevent it from becoming an issue in the election (contradicting recent claims that the 2012 election was a public referendum on the program). So the budget for this 70 percent complete website tripled because political considerations overrode practical ones.

The NY Times was puzzled by the “highly unusual decision” to turn a massive IT project over to CMS rather than an outside contractor who would have been much better equipped to handle it. But there’s not much of a mystery here. The Obama administration wanted CMS in charge to insure that every decision about the project could be made on the basis of politics. Just one more cynical decision connected to a piece of legislation that was built on misleading the public from the outset.