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Feds: Cost of Healthcare.gov Estimated $1.7 Billion

Jeryl Bier

August 26, 2014 1

The federal government issued sixty contracts from 2009 to 2014 in efforts to build Healthcare.gov, the federal insurance marketplace. According to a report issued today by the inspector general (OIG) of the Department of Health and Human Services (HHS), the government had already paid out just under half a billion dollars by February 2014, five months after the beginning of open enrollment. The government is already under obligation for another $300 million, and the estimated value of the sixty contracts totals $1.7 billion. The OIG provided a summary of its findings:

The 60 contracts related to the development and operation of the Federal Marketplace started between January 2009 and January 2014. The purpose of the 60 contracts ranged from health benefit data collection and consumer research to cloud computing and Web site development. The original estimated values of these contracts totaled $1.7 billion; the contract values ranged from $69,195 to over $200 million. Across the 60 contracts, nearly $800 million has been obligated for the development of the Federal Marketplace as of February 2014. As of that date, CMS had paid nearly $500 million for the development of the Federal Marketplace to the contractors awarded these contracts.

A few familiar names appear on the list of contracts, such as Northrop Grumman and Lockheed Martin. Also appearing are CGI Federal, widely blamed for the botched roll out of the site last October, and Accenture Federal Services, which has taken over for CGI in hopes that this year's open enrollment will go better than 2013.
The inspector general presented the report on the contracts largely with commentary, instead noting that "[i]n the coming months, OIG will be issuing additional, indepth audits and evaluations that look more closely at contracting for the Federal Marketplace and will include, when appropriate, recommendations to resolve vulnerabilities we identify and/or build on promising approaches."