Details from GAO Report on Fiasco: Launched “without verification that it met performance requirements”

July 30th, 2014

Tomorrow, the House will hold a hearing on the botched rollout of Here are the key findings from the GAO’s testimony.

  • The Centers for Medicare and Medicaid Services, the agency responsible for building the federally run insurance marketplaces, “issued task orders … when key technical requirements were still unknown.”
  • When the process began in 2011, CMS obligated $56 million for the federally run exchanges, Those costs swelled to $209 million.
  • Costs for the federal data hub, which coordinates records and personal information from several state and federal agencies to help the exchanges process applications, rose from $30 million to $80 million.
  • “New and changing requirements drove cost increases during the first year of development, while the complexity of the system and rework resulting from changing CMS decisions added to … costs in the second year,” GAO states.
  • CMS has paid $12.5 million to CGI Federal, the primary contractor for the site. CMS officials had problems with CGI’s work throughout the process, but the agency only withheld about 2 percent of its payments to the company.
  • CMS fired CGI in January and signed a new contract with Accenture. That contract has also seen major cost overruns—from an initial obligation of $95 million to more than $175 million.
  • Because CMS’s oversight of the contract with CGI was so poor, CMS officials inappropriately authorized more than $30 million in expenditures. GAO found 40 separate occasions on which work was approved incorrectly.
  • “CMS launched without verification that it met performance requirements,” GAO said, because the agency pushed back reviews of the site’s performance to just weeks before the Oct. 1 launch.

Basically, the web site was launched on October 1 even though it wasn’t even close to being ready:

Moreover, CMS delayed key governance reviews, moving an assessment of FFM readiness from March to September 2013—just weeks before the launch—and CMS did not receive required governance approvals. As a result, CMS launched without verification that it met performance requirements. …

As the October 1, 2013 deadline for establishing enrollment through the website neared, CMS identified significant performance issues involving the FFM contractor, but the agency took only limited steps to hold the contractor accountable.  …

In September 2013, CMS program officials became so concerned about the contractor’s performance that they moved their operations to the FFM contractor’s offices to provide on-site direction.

Some of the elements of the eligibility and enrollment module had not been provided, and the financial management module—which includes the services necessary to accomplish financial interactions with issuers—remained unfinished.