The Daily Caller

The Daily Caller
A busy screen is shown on the laptop of a Certified Application Counselor as he attempted to enroll an interested person for Affordable Care Act insurance, known as Obamacare, at the Borinquen Medical Center in Miami, Florida Oct. 2, 2013. (REUTERS/Joe Skipper) A busy screen is shown on the laptop of a Certified Application Counselor as he attempted to enroll an interested person for Affordable Care Act insurance, known as Obamacare, at the Borinquen Medical Center in Miami, Florida Oct. 2, 2013. (REUTERS/Joe Skipper)  

The maze of Obama administration web contracting cronyism keeps getting bigger

Photo of Adam Andrzejewski
Adam Andrzejewski
Founder, OpenTheBooks.com

Whether it’s Washington, DC or state patronage systems, the modus operandi for IT contracting is to stonewall and delay transparency.

On Friday, we learned that the Obama administration will not renew the $93 million contract of the primary healthcare.gov contractor, CGI Federal. Accenture will take CGI’s place, by virtue of a no-bid $90 million, twelve month contract.

A USA Today report suggested that CGI used 10-year old technology on healthcare.gov and the site may need a complete overhaul. According to the Washington Examiner, this same company ran into trouble doing work in Canada, “the Montreal-based CGI Group was officially terminated by an Ontario government health agency after the firm missed three years of deadlines and failed to deliver the province’s flagship online medical registry.

Never-the-less, CGI just received another $37 million in U.S. government IT work. Michelle Obama’s classmate at Princeton is a senior vice president at CGI and the idea that this has nothing to do with using CGI stretches credulity.

Accenture gets to drive healthcare.gov despite agreeing in September 2011 to pay a $63 million settlement to the Justice Department who had filed suit alleging price inflation and bid distortion.

Accenture’s not the first healthcare.gov contractor to be investigated for wrongdoing. Since 2012, Client Services Network, Inc (CNSI) has been a healthcare.gov subcontractor under QSSI. CNSI’s contract on Louisiana’s Medicaid Management Information System (MMIS) was recently terminated by Gov. Jindal for alleged irregularities during the bidding process. News reports have chronicled a grand jury investigation.

But the patronage parade isn’t over. Our investigation has uncovered that the healthcare.gov user interface contract went to a small “garage startup” company, Development Seed. Their general manager is Dave Cole who is the former Obama administration executive in charge of whitehouse.gov. Our sources say Development Seed needed the insider connections of Cole to land the plum healthcare website contract.

While in the Obama administration, Cole was in-charge of whitehouse.gov. The site was successfully launched soon after the inauguration for less than $1 million. Cole then brought in a new vendor, Acquia, Inc and expensively revamped the already working site. According to federal checkbook data posted at openthebooks.com, just in 2012, the Executive Office of the President paid $6.4 million to this company and 2013 payments totaled $5.3 million.

Designing the national healthcare site is Teal Media, founded by the Design Manager of Obama’s 2008 Presidential campaign, Jessica Teal. Teal has alternated between claiming credit for their work on the site, and removing all online references to their work regarding healthcare.gov.

None of these schemes would surprise Illinois residents. The state may be the poster child for turning IT contracts into lucrative, opaque deals. The state’s last “successful” GOP governor, the revered Jim Edgar, was chased out of Springfield before an IT contracting scheme potentially could have cost him his career. The fact is, Obama learned the lessons of Illinois’ legalized-money-laundering-schemes well, and applied them in his own administration. The problems confronting the Federal Government’s rollout of Obama are mirrored in the Illinois experience.

The Federal government funds 90 percent of IT costs of implementing state-level Obamacare plans. The contracting schemes to upgrade state Medicaid Management Information Systems (MMIS) tend to resemble those being found at the national level.