Obamacare Contractor Linked to 20 Troubled Government Projects

Friday, 15 Nov 2013 11:13 PM

By Cathy Burke

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The lead contractor on the dysfunctional Obamacare website is filled with executives from a company that mishandled at least 20 other government IT projects — including a costly and troubled effort to automate retirement benefits for millions of federal workers, The Washington Post reported Friday.

CGI Federal, the main Web site developer for HealthCare.gov, entered the U.S. government market a decade ago when its parent company purchased American Management Systems — and more than 100 ex-AMS employees are now senior executives or consultants for CGI Federal, the Post reported.

A year before CGI Group acquired AMS in 2004, AMS settled a lawsuit brought by the head of the Federal Retirement Thrift Investment Board, which had hired the company to upgrade the agency’s computer system.

AMS had gone $60 million over budget and virtually all of the computer code it wrote turned out to be useless, the Post reported, citing a report by a U.S. Senate committee.

But the thrift board work was only one in a series of troubled projects involving AMS at the federal level and in at least 12 states, the Post reported, citing government audit reports, interviews and press accounts.

AMS-built computer systems sent Philadelphia school district paychecks to dead people, shipped military parts to the wrong places for the Defense Logistics Agency, and made 380,000 programming errors for the Wisconsin revenue department, forcing counties to repay millions of dollars in incorrectly calculated sales taxes, according to the Post.

“You couldn’t count on them to deliver anything,’’ said Lawrence Stiffler, who was director of automated systems for the thrift board.

In the past two years, the Post said, the company has been awarded contracts with at least 25 federal agencies worth $2.3 billion.

Ironically, the Centers for Medicare and Medicaid Services (CMS) — the government agency that awarded the Affordable Care Act contract to CGI Federal — rejected the company’s bid in 2010 to perform work on four health IT systems in part because of “performance issues” in carrying out an earlier contract, the Post reported, citing a Government Accountability Office ruling.

CGI Federal protested the CMS decision, but the GAO upheld it. Neither agency has publicly detailed what the “performance issues” involved.

Meanwhile, state auditors in Hawaii in 2010 partially faulted another CGI subsidiary, CGI Technologies and Solutions, for years of delay on a computer system for the state tax department. The project had been marred by slow response time and numerous system failures, the Post reported.

More recently, three of the new state health-care exchanges that CGI Technologies and Solutions helped develop — in Hawaii, Vermont, and Colorado — have also encountered major glitches and delays. Asked about the problems, CGI officials said all three exchanges are now up and running.

“These should all have been red flags for contract officers,” Daniel Gordon, who was in charge of government procurement policy earlier in the Obama administration and is now associate dean for government procurement studies at George Washington University Law School, told the Post.

Administration officials have faulted CGI Federal’s performance on the health-care initiative. CMS administrator Marilyn Tavenner, for instance, told a congressional committee the firm sometimes missed deadlines.

The government also grew frustrated with CGI Federal because the firm said on repeated occasions that features of the exchange were ready when they were not, several officials have said.

In response to questions about CGI’s record, CMS spokeswoman Tasha Bradley said: “Unfortunately, the experience on HealthCare.gov has been frustrating for many Americans. HealthCare.gov can and will be fixed, and we have called in additional technical help from across the country to solve some of the more complex technical issues.”

A CGI spokesman declined to comment on the company’s work on HealthCare.gov.
“What’s important now,’’ he said, is that CGI is “fully committed to being part of the solution.’’

CGI officials rejected any comparison with AMS’s earlier failures.

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