The Affordable Care Act website was outsourced to Canada and does not work well. This article explores how it can be fixed.
OUTSOURCING OBAMACARE
By Joel D. Joseph, Chairman, Made in the USA
Foundation
While the federal government was closed, the Affordable Care Act
rolled out http://www.healthcare .gov, the website for consumers
to shop for health insurance. Fourteen states have set up
exchanges that are working fairly well, but the federal website has
been a complete disaster. The primary Obamacare Internet exchange
contract went to the CGI Group, a Canadian consulting company that
has played a major role in administering Canada's single-payer
health care system.
Since Obamacare is the president's legacy legislation, I was
shocked to learn that the software used to sign up participants was
outsourced to Canada. The federal Buy American Act requires
the U.S. government to use domestic products and services.
Are there not any American companies who can build reliable
software?
U.S. software is the envy of the world. Canadian software
is not. Apple, Xerox, Microsoft, Google, Oracle and many
other American companies write excellent software and could have
written software for the President's signature healthcare law.
The software for the Blackberry was written in Canada.
Would you rather have an iPhone with its U.S. software or a
Blackberry with its Canadian software? Even Korean-based Samsung
uses Google's Android software for its cellphones. Consumers
prefer iPhone and Android software operating systems, and the
Blackberry has been relegated to the dustbin of history.
How CGI Got the Contract
The work on Healthcare.gov grew out of a contract for open-ended
technology services first issued in 2007 with an initial value of
only $1,000. An extension, awarded in September 2011 to build
Healthcare.gov, drew only four bidders.
That 2011 extension is called a "delivery order" rather than a
contract because it fell under the original 2007 agreement for CGI
to provide software services to the Centers for Medicare &
Medicaid Services, the lead Affordable Care Act agency. CGI
reported that it had received $55.7 million for the first year's
work to build Healthcare.gov.
CGI spokeswoman Linda Odorisio said there were three one-year
options, bringing the total potential value of the contract to
$93.7 million. By August, 2012, spending on the contract was
already close to that limit.
This year, the bills skyrocketed. The government spent $27.7
million more in April, an additional $58 million in May and another
$18.2-million in mid-September. According to U.S. government
records that brought the total spending for CGI's work on
Healthcare.gov to $196-million. Adding in potential options, the
contract is now valued at $292 million.
CGI's original 2007 contract was of a type called Indefinite
Delivery/Indefinite Quantity, federal records show. ID/IQ contracts
allow the government "to write a laundry list of things they can
order from the contractor," said Sarah Gleich, a government
procurement expert at Gibson, Dunn & Crutcher. "They'll write
incredibly broad descriptions of the work, like "telecom services,'
so you can't tell what they're ordering," she added.
The advantage of an ID/IQ contract is that it can be expanded
almost indefinitely without the government having to solicit new
bids for additional work. The disadvantage is that these contracts
destroy the competitive bidding system by rewarding existing
contractors with new work. CGI turned a $1,000 contract into $292
million with minimal competition.
What We Should Do Now
Democratic lawmakers and former administration officials have
proposed that the federal government get new contractors to fix
Healthcare.gov, including companies that built some of the more
successful insurance exchange sites in fourteen states that chose
to run the marketplaces on their own.
We should fire CGI immediately, and sue it for overcharging the
government for unsatisfactory software. CGI never should have been
awarded the contract in the first place, for a lack of true
competitive bidding and because it is a Canadian company.
Most computer software experts who studied CGI's software found it
to be substandard.
U.S. government officials have blamed the poor-performing CGI
software on massive traffic, but outside experts said it likely
reflected programming choices as well. "It's a bug in the system, a
coding problem," said Jyoti Bansal, chief executive of AppDynamics,
a San Francisco-based company that builds products that monitor
websites and identifies problems.
Bansal said, "Before you launch you run a lot of load testing
with twice the load of the peak, so you can go through and remove
glitches. I'm a very very big supporter of the health-care act, but
I don't buy the argument that the load was too unexpected."
Canadian provincial health officials last year fired CGI. CGI
was officially terminated in September, 2012 by the Ontario
government's health agency after the firm missed three years of
deadlines and failed to deliver the province's flagship online
medical registry. Ontario is Canada's most populous province with
about half of Canada's total population.
If Ontario can fire CGI for failing to deliver on time, the U.S.
government can and should do the same. Since Americans are
not required to have healthcare until January 1, 2014, we still
have time to fix healthcare.gov by opening up the process to true
competitive bidding by U.S. companies only.
CEO of California Association for Recycling All Trash, www.Calrecycles.com and CEO of Genuine-American Merchandise & Equipment, www.genuine-american.com, manufacturers of tennis equipment in the USA (Tennis Wellbow, Good Vibe vibration dampener and Mother Deuce: a children's book about tennis.www.genuine-american.com) Former Chairman, Made in the USA Foundation, economist and lawyer, author of 18 books and hundreds of articles.