The Obama administration dreamed that its health insurance exchanges–the websites that were supposed to make it easy to buy health insurance–would function as smoothly as online consumer sites like Expedia or Amazon.com. But as head-scratching continues about how a famously web-savvy administration could have flubbed its Internet homework so badly, an examination by the Sunlight Foundation shows the administration turned the task of building its futuristic new health care technology planning and programming over to legacy contractors with deep political pockets.
One result: Problem-plagued online exchanges that make it all but impossible for consumers to buy insurance and hundreds of millions of dollars in the coffers of some of the biggest lobbying powerhouses in Washington.
Citing the government shutdown, the Health and Human Services Department will not release a list of the estimated dozen or more companies tasked with building the site. But Sunlight reviewed contract award information from USASpending.gov and FedBizOpps.gov, and found 47 organizations that won contracts from Health and Human Services or the Treasury Department to manage, support or service the implementation of the Affordable Care Act. Among them were top contractors like Northrop Grumman, Deloitte LLP, SAIC Inc. General Dynamics and Booz Allen Hamilton. All fiveof those companies provided information technology services to either the Centers for Medicare and Medicaid Services or the Internal Revenue Service, the two agencies tasked with building back components of the health insurance exchanges.
UPDATE: Scroll down for the list of contractors.
All but one of the 47 contractors who won contracts to carry out work on the Affordable Care Act worked for the government prior to its passage. Many–like the Rand Corporation and the MITRE Corporation–have done so for decades. And some, like Northrop Grumman and General Dynamics, are among the biggest wielders of influence in Washington. Some 17 ACA contract winners reported spending more than $128 million on lobbying in 2011 and 2012, while 29 had employees or political action committees or both that contributed $32 million to federal candidates and parties in the same period. Of that amount, President Barack Obama collected $3.9 million.
Because the government provides brief, partial descriptions of contracts in USASpending.gov, it is not possible to say which of the contractors with information technology contracts or project management contacts were involved in building the 36 federally run health insurance marketplaces, a responsibility tasked to the Centers for Medicare and Medicaid Services, known by the acronym CMS, or those assigned to develop the federal data hub, which would allow applicants to have their income and family size immediately verified by the Internal Revenue Service.
Media accounts note that CGI Federal, a longtime provider of IT services to the federal government, won the contract to build the exchanges. The federal data hub was also a source of problems for the act; state-built exchanges got an exemption from using it while the information it would verify was scaled back.
Sunlight contacted a number of vendors that won IT and related contracts to implement portions of the Affordable Care Act. A spokesperson for SAIC, whose contracts with the Internal Revenue Service included one for supporting income and family verification procedures required by the health care law, said it had no role in building the federal data hub. Similarly, PricewaterhouseCoopers said its contract from the Centers for Medicare and Medicaid Services, a multi-vendor award, to "analyze, evaluate and improve existing business processes and technology systems required under the Affordable Care Act," had nothing to do with the health insurance exchanges.
Vangent, the company that won a $28 million contract to run customer contact centers for CMS — fielding questions via telephone, mail, email and web chats — is a subsidiary of General Dynamics, a company best known for making submarines, Abrams tanks and ammunition. While it's not clear that Vangent was the company responsible, web chat responses for help for with the health insurance exchanges have been one of many targets of consumer ire.
There was no shortage of top flight consultants hired by Health and Human Services. Booz Allen Hamilton was awarded a $1.8 million task order to develop a plan to allow CMS to fully utilize electronic medical records. McKinsey & Company, the consulting firm that released a widely criticized study claiming that anywhere from 30 to 60 percent of large employers would drop employee health insurance because of the health care reform, had one contract potentially worth $13.8 million for project management planning with CMS. Deloitte LLP won a contract to support the IRS in its effort to "deliver world class implementation" of its technological requirements under the act.
The Deloitte LLP contract was to service the project managment office in the IRS, which had the responsibility of meeting the Affordable Care Act's requirements. That contract was awarded two months after the Government Accountability Office found fault with the way the IRS was managing implementation of the act.
And then there are the surveys, studies and reports. The National Opinion Research Center, a Chicago-based polling organization that also does the Survey of Consumer Finances, a Federal Reserve report that measures the assets and indebtedness of Americans, got a $300,000 task order from CMS for a study that “may be of assistance to the department in determining future needs” due to the impact of the Affordable Care Act. NORC’s lobbying firm, Drinker, Biddle & Reath, reported spending $200,000 in 2012 to lobby Congress and the Office of Management and Budget on funding for health and social science research and data. George Washington Universtiy won a contract to study the act's impact on vaccine programs, while the University of California won a $12,000 contract to report on how minority women fare under the act.
Sunlight's survey does not include awards to contractors that built the 14 state exchanges. For example, Xerox Corp. won a $72 million contract to help build Nevada’s exchange and one for $68 million to do the same in Florida. Not only is Xerox building the online marketplaces for some states, it's also offering insurers the means to “fully take advantage of the nearly 30 million new members that will be shopping for health care on these exchanges.”
Peter Olsen-Phillips contributed to this report.
Correction: The chart below initially attributed a Quality Software Services Inc. contract with CMS to the wrong agecy. Also clarifies staus of the federal data hub, which was not shelved but scaled back.
USASpending.gov data dowloaded as of October 1, 2013.
Contractors working on the ACA
Download full data chart here
|Company||Contract Award Amount||Agency||Lobbying, 2011-12||Contributions, 2012 cycle|
|Accenture||2,136,175.98||IRS & CMS||5,590,000||1,188,644|
|A. Reddix & Associates||0||HHS||0||0|
|Booz Allen Hamilton||2,668,754.00||IRS & CMS||0||415,488|
|CDM Group||0||Office of Asst. Sec. for Health Except Centers||50,000||1,000|
|Client/Server Software Solutions (CSSS.net)||3,880,000.00||IRS||0||0|
|Computer Sciences Corp.||4,024,384.42||Office of Asst. Sec. for Health Except Centers||3,112,000||683,349|
|Deloitte Consulting||12,921,093.80||IRS & CMS||0||0|
|George Washingotn Univeristy||51,274.00||CMS||0||309,238|
|ICP Systems LLC||499,952.00||CMS||0||0|
|Information Systems Consulting Group Inc.||6,270,789.18||IRS||0||0|
|International Business Machines||4,999,999.00||IRS||9,740,000||955,642|
|Intertribal Council of Arizona||97,500.00||Indian Health Service, HHS||0||0|
|IQ Solutions Inc.||520,000.00||Office of Asst. Sec. for Health Except Centers||0||0|
|JSI Research and Training Institute||15,500.00||Office of Asst. Sec. for Health Except Centers||0||1,250|
|KAT Video Productions||106,181.84||CMS||0||0|
|Macro International Corp.||2,584,665.00||CDC||0||15,000|
|Maximus Federal Services Inc.||43,163,074.00||CMS||655,500||621,722|
|McKinsey & Company||13,767,707.00||CMS||0||960,846|
|National Opinion Research Center||297,889.00||Office of Asst. Sec. for Health Except Centers||200,000||0|
|Porter Novelli Public Strategies||11,670,603.00||CMS||0||6,900|
|Quality Software Services Inc (United Health Group)||68,339,812.00||CMS||6,360,000||3,609,103|
|Rand Corporation||1,044,531.00||Office of Asst. Sec. for Health Except Centers||0||77,285|
|Research Triangle Institute||404,255.00||Office of Asst. Sec. for Health Except Centers||0||10,850|
|Science Applications International Corp.||1,772,131.61||IRS||4,207,000||1,210,011|
|Social and Scientific System Inc.||293,280.00||CDC||0||3,700|
|Thomson Reuters Healthcare Inc. (now Truven Health Analytics)||0||CMS||465,000||175,328|
|University of California (SF)||12,000.00||Office of Asst. Sec. for Health Except Centers||1,570,000||3,363,813|
|Urban Institute||1,988,575.00||Office of Asst. Sec. for Health Except Centers||0||50,484|
|Vangent (General Dynamics)||28,237,831.00||CMS||22,348,085||2,403,354|
|Verizon Business Network Services||1,193,916.00||IRS||30,910,000||4,167,997|
|Weber Shandwick||3,477,364.00||Office of Asst. Sec. for Health Except Centers||0||0|