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Government to drop lead contractor of health care site

Jan. 10, 2014 - 06:00AM   |  
By Kelly Kennedy, USA TODAY   |   Comments
GTY 458182091 A POL GOV USA FL
Certified Enrollment Specialist Marlene Nesmith tries to use the website as it reads, ' has a lot of visitors right now!' (Joe Raedle / Getty Images)

WASHINGTON The government announced Friday it is changing contractors for the troubled website, ditching lead contractor CGI Federal.

The company has been linked to many of the problems surrounding the launch of the federal health care exchange Oct. 1, which President Obama called "screwed up."

"We are working with our contract partners to make a mutually agreed upon transition to ensure that continues to operate smoothly for consumers," Aaron Albright, spokesman for the Centers for Medicare and Medicaid Services, said in a statement to USA TODAY. "We continually evaluate our needs and remain focused on ensuring consumers have access to affordable, quality coverage, and more than 1.1 million already have enrolled in a private plan in the federal marketplace."

The government plans to replace CGI on the $90 million contract with Accenture probably early next week, The Washington Post reported. The initial launch of the website left people unable to navigate the system because of frozen pages, applications "stuck" in the system so people could not log in, and long wait periods as the site was overwhelmed by visitors. The site was fixed by Nov. 30, and people are able to enroll while experiencing low error rates and waiting periods, government officials have said.

Accenture is a management consulting, technology services and outsourcing company, which has worked with states to create local exchanges, including California's exchange. While California's site had initial bugs, it quickly smoothed things out. This week, California announced its exchange had more than 550,000 unique visits from Dec. 29 to Jan. 4, with about 93,000 new enrollment applications begun just in one week. Before the Dec. 23 deadline for coverage to begin Jan. 1, the site had enrolled more than 400,000 people.

Joanne Veto, an Accenture spokeswoman, declined to comment Friday on whatever discussions the company may have had with the government. "Accenture Federal Services is in discussions with clients and prospective clients all the time, but it is not appropriate to discuss new business opportunities we may or may not be pursuing," Veto said.

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The Department of Health and Human Services has sent numerous signals of its unhappiness with CGI. Last month, it put out a call for for businesses that could address concerns at, asking small businesses to describe experience that compared to the skills needed to create the website.

STORY: Government seeks health website tech help

"This appears to signify the possible displeasure with some of the current IT vendors and the hope that CMS will lure in more IT contracting talent," Scott Amey, general counsel for the Project on Government Oversight, said at the time.

HHS Secretary Kathleen Sebelius also last month asked her agency's inspector general to review the website's development.

CGI's stock immediately felt the impact of the reports, dropping 3% Friday in midday trading.

STORY: CGI falls on report it is losing deal

In October, Cheryl Campbell, senior vice president of CGI Federal, told the House Energy and Commerce Committee that her company was not responsible for the technology that allowed users to create new accounts and that caused the bottlenecks in the system. She said slow response times in GCI's technology were due to too many visitors at the site.

The same week Campbell testified, the White House brought in Jeffrey Zients, former acting director of the Office of Budget and Management, to oversee the site until it was fixed. The government also announced that QSSI, a division of UnitedHealth Group, would serve as a general contractor to oversee the effort.

During the same hearing, Andrew Slavitt of Optum/QSSI said his company had found problems in the code, and that all of the contractors, as well as the government, had been informed of those problems.

Slavitt said his company had been paid $85 million for their work on the site. CGI Federal had been paid $211 million.

Follow @KellySKennedy on Twitter.

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