Documents: Healthcare.gov Narrowly Avoided Repeat of Last Year's Debacle

    Less than four weeks before the launch of 2015 open enrollment for Obamacare, the government agency that runs Healthcare.gov suddenly realized the Marketplace site was heading for a repeat of last year's debacle. Documents show that on October 19, the Centers for Medicare and Medicaid Services (CMS), a division of Health and Human Services (HHS), learned that a shortage of computer storage would "cause long outages and slow response times" leading to "a poor user experience." An emergency, no-bid contract for $1.8 million was quickly awarded to Terremark (a subsidiary of Verizon) for 100 terabytes of additional storage plus various computer licenses.
    Since the order was needed in such a hurry, the government decided to skip the usual bidding process mandated for such a contract, a practice that has not been uncommon in the development of Healthcare.gov to date. The Limited Source Justification that was required and subsequently approved internally at CMS spelled out the consequences of delay in stark terms:

    The documents do not disclose how long installation and configuration of the new equipment would take. However, shortly after the problem was discovered on October 19, Healthcare.gov was shutdown for "weekend maintenance" on a Wednesday, October 22. It remains unclear if this shutdown was related to the inadequacies CMS discovered, and CMS did not return an email at the time requesting comment.
    Terremark/Verizon is actually the outgoing contractor for Healthcare.gov. The government announced in June 2013 that Hewlett-Packard would be replacing Terremark/Verizon. However, launch problems and other delays led to numerous extensions on the Terremark/Verizon contract. Most recently, as THE WEEKLY STANDARD reported in September, CMS disclosed that the Terremark/Verizon system would continue to host Healthcare.gov through 2015 open enrollment with the new Hewlett-Packard system acting only as backup and as a "development environment".
    By most accounts, the current open enrollment period is proceeding with few of the problems experienced in the fall of 2013. CMS has undergone some reorganization in the past year, but at least some of the steps spelled out by former HHS director Kathleen Sebelius are still unfulfilled. In a December 2013 press appearance, Sebelius announced her intention to create a Chief Risk Officer position at CMS to, in part, oversee future IT (information technology) planning and purchases such as the one described above and prevent unpleasant surprises. However, the position is still vacant and both CMS and HHS have disregarded numerous inquiries about the status of Sebelius's commitment.


Note: A version of this post first appeared at The Weekly Standard.

Healthcare.gov Extends Verizon Contract: $58M for Seven Months

    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.