HealthCare.gov's Cloud Computer System Cost Five Times as Much as Expected



The cloud computing contract for the federal government's Obamacare exchange came in a lot higher than originally planned, reports NextGov:

The government's contract with Terremark, Verizon's cloud division, had already quadrupled from $11 million when it was first awarded in 2011 to $46 million at the time of HealthCare.gov's disastrous launch in October 2013. That included a $9 million adjustment just days before launch when testing revealed the cloud could only support 10,000 concurrent HealthCare.gov users rather than the expected 50,000.

CMS ordered an additional $15.2 worth of cloud services from Terramark between the launch date, when most users were unable to access key portions of the site, and Nov. 30, when officials declared the site was performing at an acceptable level, according to a justification for other than full and open competition document posted on Thursday.

That contract adjustment paid for added cloud storage plus firewall upgrades, additional software and various other services.

Once again, it suggests that the federal government didn't know what they were getting into when the exchanges launched last October. Asked about the increased cost, a federal health official tells NextGov that "if the additional services were not added urgently, the exchanges would not function as designed and citizens would continue to have issues using the marketplace." In other words, the original plan had been for a system that wouldn't work. 

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  1. I thought it was an E-cig.

  2. how in the fuck do I get a government contract? You bid $11m and up it to 46 just by saying that what I already did didn't work so I need more money? Jesus, I bid flat rate jobs and I'm expected to deliver for my original price. What a sucker I am.

    1. You simply have to learn how to manage expectations.

      /Kathleen Sebelius

    2. The difference is, if you don't deliver the contractee can easily switch to another supplier.

      The *government* on the other hand has to go through a whole mess so they prefer to do the easy route and keep shoveling money at the already approved contractor.

      Its not like its *their* money, now is it?

      1. "The *government* on the other hand has to go through a whole mess so they prefer to do the easy route and keep shoveling money at the already approved contractor."

        Or the contractor is a connected Democrat.

    3. Step 1: Donate heavily to the Democrat party.

      Step 2: Donate heavily to labor unions, and employ as many union members as you can, even if you don't actually have anything for them to do.

      Step 3: Make a woman and/or a minority the president of your company. Even if you remain the actual president, for the sake of the paperwork you'll want to be low-profile (unless you're a woman and/or minority yourself).

      Step 4: Profit!

      I wish this was a satirical exaggeration, but it isn't.

      1. surely step 5 would be giving great customer service and awesome products at a reasonable price.

        Surely. Surely?

        1. Steps 1-3 preclude being able to do so because of overhead.

    4. Seems to me it was the developer that caused the need for the increase in servers by coding poorly.. At least, I hadn't heard about the scaling problems being caused by Verizon. Though Verizon was blamed for the site being down (despite the site also supposedly never being down according to some)..

      1. this is exactly what my take was. Terramark is an extremely good service provider at the very high end of their market. I find it difficult to believe that they couldn't deliver what they promised. I have visited their NOC in Miami and seen some of their customer's systems in action. They host international streaming video services that send soccer to customers in Latin America from that location. I was able to watch as server after server spooled up as customers began logging on to watch a World Cup soccer match. It was very cool to watch - whole racks of servers blinking on in quick succession - racks of SAN storage powering up automatically as demand grew. If they can handle hundreds of thousands of HD video streams, I think they can handle a little web app.

        I would definitely suspect that the web app and database were not properly optimized for large scale. It doesn't take a lot of traffic to jam up a poorly designed app. And no amount of hardware is going to get around all of the deadlocks a poorly designed application can throw off. It really only takes one badly designed stored procedure or set of triggers to bring an app to its knees when the traffic scales up. (yes, that is the voice of painful experience speaking)

        1. I suspect it's partly about how much information has to go in and out needlessly. The fact that you have to tell them who you are before you can browse prices and that the system refers to this userID for all it's information every time it does something, means a lot of to and fro.

          A system where you could just ask whatever query you want without needing to look up your details would be easier, and more useful.

    5. Easy, add Time and Materials to any fixed contract bid, then charge as necessary.

    6. Mr. Mackey: "No! Now you listen to me! [pounds his fist on the table] IntelliLink is a great idea, and we just need the Goddamned Gold Package! We are doublin' down!"


      I just bought some VZ stocks 🙂

  3. The news about Democratcare incompetence just never ends, does it?

    What with all the throwing good money after bad, we've got to be up to a *fourth* of the economy by now.

  4. See? All you assholes saying government cost 10 times more than it should are wrong. Not a dime to cut.

    1. I guess John Glenn was wrong when he looked around his capsule and thought that everything had been built by the lowest bidder.

      1. Well, lowest initial bidder.

  5. Once again, it suggests that the federal government didn't know what they were getting into when the exchanges launched last October.

    Suggests? It's so obvious that they are utterly incompetent it might as well be written in the sky.


    1. Nobody here wants to know what you do on your vacations.

    2. And now for something completely different.....


    3. Yeup ! Da But Hole Plugger is right.

      Back in the old days gas was $1.75 a gallon and Democrats wanted an investigation into Cheney's connection to the oil budiness.

      I thing it's about $3.25 now here in Houston. I'm sure the Democrat's investigation into high gas prices is gonna start any day now.


      Quick, change the subject, my benevolent Hero's Master plan is being denigrated.

      Or is that my Master's Heroic plan? Well either way, derp!

  7. It cost 5 times as much as *projected*.

    That means it only cost half as much as *expected*.

    See? It was a bargain.

  8. And it doesn't work, so there's that.
    I remember Donohue after Penske took American Motors' money to to make 'em look like a car company. His racer broke not even mid-way through a race and he said 'It's slow, but it doesn't last long, either'.

    1. Well...they DID win the manufacturer's championship in '71.

      Of course, that was after Penske lobbied AMC to build a series of blocks capable of being drilled for four-bolt mains.

      (full disclosure: I own a 1969 AMX)

      1. "Of course, that was after Penske lobbied AMC to build a series of blocks capable of being drilled for four-bolt mains."

        I remember a tech article that hinted Penske got AM to pretty much cast some SBC heads and blocks with the AM logo on there.

  9. CMS ordered an additional $15.2 worth of cloud services

    Clearly they should have spent more than 15 bucks.

    1. I caught that too. $15.20 sounds like a good deal.

      1. That was just the initial bid. It's actually 8 quadrillion now.

        1. Well, it is the user-millisecond rate.

          1. Inflation adjusted because FYTW

  10. HealthCare.gov's Cloud Computer System Cost Five Times as Much as Expected

    A planet where government projects end up costing many times more than originally budgeted?

  11. Politics is fun. Implementation is boring.

  12. I enjoy reading Covered.ca facebook posting, which isn't exactly full of glowing reviews.

    But the denial remains. Someone complained about the site shutting down for a day, and a faithful defender ridiculed him by saying "Let's just stop bus services if a bus doesn't arrive on time once".

    1. "Someone complained about the site shutting down for a day,"

      "Covered California's website back after 5-day shutdown"
      Imagine what Google's stock would do if it were down for a couple of hours.

    2. Only fascists expect the trains to arrive on time! /derp

  13. Sounds reasonable to me dude.

  14. I suppose that would depend on who was doing the expecting.

    None of this overspending surprises anyone with two brain cells to rub together.

  15. And if we ever get Obamacare repealed, we can always sell all that technology to Warren Buffet for "tree fity".

  16. 5x is the go-to number for how much more a government project will cost. I remember when they first started the Big Dig, I was like "OK, that's actually going to cost 3 to 5 x as much", and it ended up being 5x, and also they didn't finish.

    Interesting story, I heard on one libertarian forum, this guy (who works as a contractor, this is the forum poster) said he knew an electrician working on the big dig, his only job was to change light bulbs, so he had NOTHING to do, when he complained a couple of times, they eventually made veiled threats against his family.
    Fucked up

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