Obamacare

A Third of Obamacare's Federal Exchange Contracts Are Already Over Budget

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Whitehouse.gov

Earlier this summer, the Government Accountability Office reported that, all told, HealthCare.gov—Obamacare's federally run insurance exchange system—has cost about $840 million, with more expenses on the way as an army of tech contractors and the federal government continue to work slowly toward completion. 

Now, thanks to the Office of the Inspector General (IG) at the Department of Health and Human Services (HHS), we have some more detail on the costs and contracts associated with building the key technological infrastructure for the law. 

According to the report, which was released today,the total value of the 60 contracts associated with the build out of HealthCare.gov is about $1.7 billion, with contract values ranging from as little as $69,000 all the way up to about $200 million.

Those values could end up higher. In a footnote, the report explains that these are expected values, and that they could be more if "modifications" are made to the scope of work in the contracts. 

Given the state of the federal government's exchange, and the delays and cost overruns it has seen so far, it seems likely that the actual costs will end up being higher. Of the 60 contracts, 20 had already gone over budget by February of this year, according to the IG report. Seven of those 20 were over budget by at least 100 percent.

The back end of the exchange, which handles critical financial transactions between the government and the insurance industry, was supposed to be complete last year, then delayed until January of this year, then delayed further, and now isn't expected to be complete until sometime in 2015. 

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  1. The price of civilization seems to continuously run over budget.

  2. and nobody cares.

  3. You can’t professionalize if you don’t federalize!

    – Sen. Tom Daschle

  4. In a footnote, the report explains that these are expected values, and that they could be more if “modifications” are made to the scope of work in the contracts.

    With all due respect, when did “reporting” “expected values” become a thing?

    Why not just say (in a footnote, of course) “All these figures are essentially bogus, since we have little idea WTF we are doing.”?

  5. Months before Healthcare.gov launched, I predicted it would not be ready in time, and that there was a good chance it would never function as intended. So now finishing the back end is delayed until 2015. Ha. Don’t bet on it.

  6. “A Third of Obamacare’s Federal Exchange Contracts Are Already Over Budget”

    Then a third of ObamaCare’s federal exchange contracts are already racist.

  7. Of the 60 contracts, 20 had already gone over budget by February of this year, according to the IG report. Seven of those 20 were over budget by at least 100 percent.

    GOVERNMENT EFFICIENCY! (or something)

  8. LOL, US Politics, best politics money can buy lol.

    http://www.AnonCrypt.tk

  9. Ok, I do this for a living — Build business-oriented web-fronted databases that tie in to multiple back-office and b2b systems.

    It is hard. The tough part is usually getting requirements together. Processes are not fully documented, APIs are incomplete, people don’t know exactly what they want – or want something that doesn’t do what they need. Whatever. It is really tough. I don’t want to minimise the magnitude of the problem. Heck, they probably didn’t have enough time to put together a proper set of requirements, let alone do proper QA. Not when you have that many disparate companies and federal and state agencies involved. They had a damned hard task set before them.

    But you couldn’t legitimately spend a billion dollars trying to create a system like this if you tried. They must have read “the mythical man-month” and though “Right! If it takes one man a year, let’s get 365 men and get it done in a day!”

    I think my little 40 person team (including a dozen front-end developers and 3 DBAs, plus tech writers, project managers, system administrators and QA specialists) could have come closer to finishing one of these exchanges. And we’d have more than a billion dollars left over for the office party.

    1. Cyto, having developed software, been a business analyst & IS manager I can bet you would not have wanted any part of this mega cluster fu. From what I read in November about their process they did not even begin testing anything until early September 2013. They had not even planned for integrating & testing the many ( I think I read at last a dozen) backend databases.

      The success of a software project is exponentially inversely proportional to the number of people involved. The number of government people involved with this guaranteed a major disaster.

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