Late last year the Wall Street Journal reported that Hewlett-Packard was replacing Verizon's Terremark subsidiary as the host of the federal government's Obamacare website, Healthcare.gov, when Terremark's contract expired in March 2014. However, the Department of Health and Human Services recently awarded a $58 million, 7-month "Cloud Computing Logical Follow On" contract to Terremark to aid in the transition to Hewlett-Packard, saying that "[f]ailure to award this order will greatly jeopardize the Marketplace program anbd result in system performance issues of healthcare.gov."
HHS documents explain the need for the extension as follows:
The documents justifying the Limited Source contract were signed by Centers for Medicare and Medicaid Services contracting officers in late January, and were ultimately approved by new Chief Operating Officer Tim Love on February 19.
The award to Terremark is the latest in a string of contracts and contract modifications for the company related to Healthcare.gov. The most recent was reported just weeks ago that increased the value of Terremark's original contract to $60 million.
Note: A version of this post first appeared at The Weekly Standard.