Great news: Obama administration awarded fixer contract for Healthcare.gov back end on a no-bid basis

posted at 10:41 am on November 25, 2013 by Ed Morrissey

I saw this over the weekend, but I honestly thought the no-bid contract for Novitas had been reported a long time ago. Actually, HHS and the Obama administration handed off the public-relations contract for ObamaCare on a no-bid basis, to politically connected friends of the White House, a revelation that came to light six months ago.  Reuters teed up the scoop on a Saturday, oddly:

Caught flat-footed by the challenges of building the financial-management and accounting parts of the U.S. government’s new online marketplace for health insurance, officials rushed to hire a familiar contractor without seeking competing bids, according to government procurement documents reviewed by Reuters.

The documents dated in August – less than two months before the opening of online marketplaces established by President Barack Obama’s landmark healthcare law – showed the agency in charge had only “recently learned” that building the financial management functions was “beyond (its) currently available resources.” …

The contract, valued at nearly $12 million, was awarded on August 9 to Novitas Solutions, according to the documents. Novitas has numerous contracts with CMS, including to administer doctor and hospital claims in the federal Medicare program for elderly Americans.

This relates to the surprise testimony of Henry Chao, the Deputy CIO at HHS who told Congress that the subsidy-payment systems of ObamaCare hadn’t even been built yet.  Chao tried to pass this off as an expected delivery schedule, but the panic no-bid contract to Novitas belies that spin.  HHS expected the back end to be complete by January 1, which is when insurers will need to be paid the subsidies to ensure coverage for millions of people who assume they have enrolled in an insurance plan.

The timing seems very strange indeed.  HHS had forty-two months to build this system after the passage of the Affordable Care Act in March 2010 to hit the October 1 deadline.  Why did they wait more than forty months to begin building the payment system that is absolutely critical to the system’s potential operation? And what can we expect to see from a massive, $12 million system that has to be delivered in less than four months, which to this day is still not complete?

Here’s a better question. Congress has held lots of hearings on the progress of ObamaCare.  Why didn’t anyone mention that the back end had been ignored to the point that HHS hadn’t even sent out RFPs for bids on the system? Lots of Obama administration officials testified that the project was proceeding on time for its October 1 rollout, starting with HHS Secretary Kathleen Sebelius. Now we find out that 40% of the system slipped through the cracks until well past the last moment, and CMS was forced to do a no-bid award to catch up.

The incompetence exposed by this disaster almost escapes the ability of adjectives to adequately describe it.  Obama should have fired Sebelius and a number of other people weeks ago to bring in more disciplined and competent executives.  Does the nuclear option detonated by Harry Reid last week make that more likely?

Kathleen Sebelius may become the biggest loser in the Senate’s approval of filibuster reform.

The Health and Human Services (HHS) secretary has kept her job despite the botched rollout of ObamaCare’s insurance exchanges, but it will now be easier for Obama to replace her.

After the Senate’s vote, confirming an executive-branch nominee now takes just 51 Senate votes. Some think that raises the likelihood Sebelius will soon be a former Cabinet member.

“The president’s hands were previously tied,” said John Hudak, a fellow in governance studies at the Brookings Institution, who wrote a piece on the topic Thursday.

“Now, he has more breathing room and he is able to fire whoever he wants at HHS. That’s a very, very appealing approach, whether it fixes the problems with ObamaCare’s rollout or not.”

I’m skeptical that the threat of a filibuster kept Obama from firing Sebelius.  Republicans would have allowed any reasonable replacement after the meltdown became exposed, simply to keep from providing Democrats from having an excuse to blame Republicans for the inevitable consequences still on the way.  Obama could have nominated former Senator Tom Daschle, whose tax woes derailed his appointment to Sebelius’ position nearly five years ago, and the Senate club would hardly have blocked his ascent, under the circumstances.  Obama is keeping Sebelius on board either out of a mistaken sense of loyalty or out of fear of admitting that the administration blew its chance on ObamaCare — which is one reason why Obama looks increasingly out of touch with reality.

Update: I knew this sounded familiar.  Jeryl Bier reported on it in September for The Weekly Standard, and tried following up last week.  “It sounds like Reuters isn’t getting any more cooperation from CMS or Novitas than I did, however,” Jeryl tells me via e-mail, but that’s no surprise.  Be sure to read Jeryl’s reporting, especially now that we have the context of Chao’s testimony.


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Ah the legacy (disaster) of this administration will be very interesting…..

redguy on November 25, 2013 at 10:44 AM

Obama is keeping Sebelius on board either out of a mistaken sense of loyalty or out of fear of admitting that the administration blew its chance on ObamaCare — which is one reason why Obama looks increasingly out of touch with reality.

He’s holding on to her for as long as he can. Once she’s fired he has no one left to blame. She’s his final line of defense against accountability.

Flange on November 25, 2013 at 10:48 AM

Obama doesn’t hire competence. Obama hires LOYALTY, remember all of the vetting troubles they have had with their nominees? He knows exactly what he is doing.

Is anyone surprised that we have not yet seen a “tell-all” book about the most lawless and corrupt administration in recent history?

Mord on November 25, 2013 at 10:52 AM

The timing seems very strange indeed. HHS had forty-two months to build this system after the passage of the Affordable Care Act in March 2010 to hit the October 1 deadline. Why did they wait more than forty months to begin building the payment system that is absolutely critical to the system’s potential operation?

Everyone, Democrat and Republican expected Obamacare to overturned by SCOTUS. It was never expected to be actually put into operation, that’s why nothing was done in regards to the website design and build until after the SCOTUS ruling that it was a tax.

Johnnyreb on November 25, 2013 at 10:54 AM

HHS expected the back end to be complete by January 1…

Ed –
You mean the websites aren’t working perfectly on day one fifty six ninety three?

verbaluce on October 1, 2013 at 10:18 AM

NotCoach on November 25, 2013 at 10:54 AM

I can hear Carney already: “I need to correct this notion that these are so called “no-bid” contracts. They are competitive one-stop marketplace best-bid contracts that are comprehensive and affordable, unlike the substandard scam bids that are produced by Tea Party anarchy.”

forest on November 25, 2013 at 10:56 AM

Word is Sebelius is tight with Valerie Jarrett. So Obama would need to get the OK to sack her. Probably not happening.

lorenzo on November 25, 2013 at 10:56 AM

I hate that picture

thebrokenrattle on November 25, 2013 at 10:58 AM

Does Jarrett’s son-in-law work for this company too? Or is it a another friend of Mooch?

Akzed on November 25, 2013 at 11:01 AM

Obama kept changing the law. He kept delaying many bad regulations until after the election that it created a rushed effort to complete it and the website.

HellCat on November 25, 2013 at 11:02 AM

Kathleen Sebelius may become the biggest loser in the Senate’s approval of filibuster reform.

They will try to spin the Nov 30 deadline as “met” for “the overwhelming number of users,” though how they can say so when the back end part of the system doesn’t even exist. The media will carry this for about a week into December before for deluge of screw ups and more cancellations swallow up the supposed success. That will consume the second and third weeks of December.

Watch for it: Sebelius gets canned at 5:00 pm, Tuesday, December 24, 2013.

BuckeyeSam on November 25, 2013 at 11:02 AM

No bid.
No competence.
No experience.
No website.
No accountability.

It’s almost as if we had amateurs in charge.

fogw on November 25, 2013 at 11:03 AM

Obama is keeping Sebelius on board either out of a mistaken sense of loyalty or out of fear of admitting that the administration blew its chance on ObamaCare — which is one reason why Obama looks increasingly out of touch with reality.

As noted, Sebelius is a close friend of Jarrett. But equally important, while incompetent, Sebelius is another very loyal ideologue who has no hesitation doing whatever is needed to further the ideology she shares with Obama and Jarrett.

At best, around mid 2014, a ‘soft-landing’ position will be found for Sebelius, similar to that which another incompetent Obama cabinet officer, Janet Napolitano, parachuted into. (Head of the University of California system.) Then Sebelius, with the thanks of the President, will parachute out into her own 7 figure salary job – well bribed to remain quiet.

Athos on November 25, 2013 at 11:04 AM

Depending on what the definition of is, is.

No one thought to ask if the backend was a separate contract. Don’t ask, don’t tell. No one wanted to tell the emperor it was only half done.

TerryW on November 25, 2013 at 11:05 AM

,,was this the company with the exec who was Moo-woookie’s best bud?

The War Planner on November 25, 2013 at 11:08 AM

When Republicans award no-bid contracts, we get never-ending screams of “HALLIBURTON!!!!!!!!!!!!!!!!!!“.

When Democrats do the same: we get

Reuters teed up the scoop on a Saturday, oddly:

Bitter Clinger on November 25, 2013 at 11:10 AM

Follow the money – most of the ObamaCare cash is going back to Obama in some way, shape, fashion or form.

1/2 billion for a website? Right……

Probably 2 million for the actual site and 498 Million in “administrative costs”……

This contract and the money needs to be a focus for Darrell Issa.

I would upend the IRS in pursuit to see where every dime went…..

We need to let the dems stew in the ObamaCare pot until they are well done.

redguy on November 25, 2013 at 11:11 AM

I hate that picture

thebrokenrattle on November 25, 2013 at 10:58 AM

Isn’t that the phone he didn’t know how to dial?

Bitter Clinger on November 25, 2013 at 11:12 AM

ObamaCare, designed to fail since Day One.

GarandFan on November 25, 2013 at 11:12 AM

The HA pictures of the Dummy in Chief are superb.

Be reminded that obama is “not particularly ideological”.

Schadenfreude on November 25, 2013 at 11:15 AM

He’s holding on to her for as long as he can. Once she’s fired he has no one left to blame. She’s his final line of defense against accountability.

Flange on November 25, 2013 at 10:48 AM

Very perceptive. I hadn’t considered this. If Obama brings in a new HHS secretary and s/he fouls this up as well Obama is going to be the one who gets blamed this time.

At best, around mid 2014, a ‘soft-landing’ position will be found for Sebelius, similar to that which another incompetent Obama cabinet officer, Janet Napolitano, parachuted into. (Head of the University of California system.) Then Sebelius, with the thanks of the President, will parachute out into her own 7 figure salary job – well bribed to remain quiet.

Athos on November 25, 2013 at 11:04 AM

Yeah, this was never in doubt, unfortunately. Sebellius made her sacrifice for The Cause and will be well rewarded.

Doomberg on November 25, 2013 at 11:15 AM

Obama could have nominated former Senator Tom Daschle, whose tax woes derailed his appointment to Sebelius’ position nearly five years ago, and the Senate club would hardly have blocked his ascent, under the circumstances.

Zeke Emanuel. Bet on it.

slickwillie2001 on November 25, 2013 at 11:18 AM

Totally corrupt administration headed by the Liar-in-Chief…

albill on November 25, 2013 at 11:19 AM

I hate every picture of the big dummy.

envycat on November 25, 2013 at 11:24 AM

Crickets……

cmsinaz on November 25, 2013 at 11:25 AM

He’s holding on to her for as long as he can. Once she’s fired he has no one left to blame. She’s his final line of defense against accountability.

Flange on November 25, 2013 at 10:48 AM

GWB called. He’d like to quibble with your comment. ;0

Happy Nomad on November 25, 2013 at 11:26 AM

Anti-Christ comes to mind………..

ultracon on November 25, 2013 at 11:27 AM

Nothing will be done by congress. There aren’t enough conservatives. McConnell and Boehner have proven they are all for the charade and none of the action.

Sebelius will stay because she can be the center of all the scorn and blame. If they remove her and things don’t improve focus will begin to shift more to the white house. Of course, her presence isn’t what is creating this chaos, it is the law itself but they can just leave her in place and continue to let everyone pile on.

JAGonzo on November 25, 2013 at 11:28 AM

He’s holding on to her for as long as he can. Once she’s fired he has no one left to blame. She’s his final line of defense against accountability.

Flange on November 25, 2013 at 10:48 AM

Exactly.

JAGonzo on November 25, 2013 at 11:29 AM

Why do you think Michelle’s hips pockets are bulging?

Schadenfreude on November 25, 2013 at 11:34 AM

No bid.
No competence.
No experience.
No website.
No accountability.

It’s almost as if we had amateurs in charge.

fogw on November 25, 2013 at 11:03 AM

One more

obamas’ pockets fully stuffed, billionaires based on absolutely nothing but two idiots hue.

Schadenfreude on November 25, 2013 at 11:35 AM

idiots’ hue (possessive)

Schadenfreude on November 25, 2013 at 11:36 AM

That doesn’t mean, however, that Bill Gates, his wealthy minions or any similar demographic should be able to dictate urban policy (or tax policy) for their own convenience.
 
urban elitist on November 16, 2013 at 5:58 PM

rogerb on November 25, 2013 at 11:36 AM

Everyone, Democrat and Republican expected Obamacare to overturned by SCOTUS. It was never expected to be actually put into operation, that’s why nothing was done in regards to the website design and build until after the SCOTUS ruling that it was a tax.

Johnnyreb on November 25, 2013 at 10:54 AM

Sorry, but that’s ludicrous. The Supreme Court decision was nearly a year and a half ago. I can almost excuse holding off on certain things until that hurdle was cleared, but that doesn’t explain why it still wasn’t ready to go by October 1.

Doughboy on November 25, 2013 at 11:37 AM

HHS had forty-two months to build this system after the passage of the Affordable Care Act in March 2010 to hit the October 1 deadline.

Yes, HHS had 42 months. They wasted all that time not writing the rules to govern how things would work. That’s why the people doing the software side of things never had a chance to make a functional system, regardless of how much money was thrown at the problem.

Even for a small project, you need 6 months to design, 6 months to implement, 6 months to test. HHS was still writing rules less than a year ago. And making changes after the design phase can really, really screw things up. Trying to design, implement and test simultaneously on the fly? That’s totally stupid for all but a small, in-house project.

taznar on November 25, 2013 at 11:49 AM

Tha Azzhole in Chief is campaigning in SF and LA today and tomorrow. He sure ‘cares’ about all the unemployed, uninsured and the soon to be dead, due to obama’care’.

Schadenfreude on November 25, 2013 at 11:50 AM

My increased competition on the insurance exchange in Kalifornia included ONE choice BSBC.

Obama just thinks that a monopoly is more competition.

All I can say is thank goodness the Obama regime did not no bid a contract to a competent company like Halliburton or the left would be howling.

jukin3 on November 25, 2013 at 11:50 AM

The contract, valued at nearly $12 million, was awarded on August 9 to Novitas Solutions, according to the documents.

Novitas is owned by a subsidiary of Blue Cross/Blue Shield of Florida.

BCBS of FL is looking to manage billions in medicaid managed care programs.

They have a vested interest in “helping” the gov’t besides the $12 million fee.

And where are the screams of Halliburton from our libtarded friends?

HumpBot Salvation on November 25, 2013 at 12:02 PM

No bid, sole source and done quickly… where is the 1.5 years of paperwork it takes to get such contracts in the rest of the federal government?

And why isn’t the House pulling the spending authority of those contract officers who have signed off on this stuff?

ajacksonian on November 25, 2013 at 12:23 PM

At DCCC fundraiser in Seattle, Pres Obama says “it’s understandable” some people “feel disturbed or concerned” about making progress.

– Mark Knoller

obama is the most transparent charlatanic thug of the USA, ever.

Schadenfreude on November 25, 2013 at 12:44 PM

HALLIBURTON!!!!!!!!!!!!!!!!!!
.
.
.
.
.
Needs to be repeated until they are sick of hearing it and hearing about it.

ExpressoBold on November 25, 2013 at 1:11 PM

Here’s a better question. Congress has held lots of hearings on the progress of ObamaCare. Why didn’t anyone mention that the back end had been ignored to the point that HHS hadn’t even sent out RFPs for bids on the system?

– Ed

Ed,
Here some even better questions. Why hasn’t anyone been prosecuted or even lost a job(and I don’t mean temporarily retired or moved ) over Benghazi,F&F,IRS,NSA,ACA … Or any of myriad scandals that Issa or some house panel has held hearings on?
OR
Why are gov bureaucrats now allowed to boldly lie and even in on case admit they lied while under oath?
OR
Is the hearing process a impotent joke that no one needs to take seriously with the current complicit MSM and GOPe?

BoxHead1 on November 25, 2013 at 1:19 PM

My increased competition on the insurance exchange in Kalifornia included ONE choice BSBC.

Obama just thinks that a monopoly is more competition.

All I can say is thank goodness the Obama regime did not no bid a contract to a competent company like Halliburton or the left would be howling.

jukin3 on November 25, 2013 at 11:50 AM

That’s a common experience. The REB’s LIE that the miserable exchanges would bring more competition is just that, another one of his dirty lies.

This one is not getting as much play as it should, and it would be easy for some real journalist to survey the market or a sampling of markets and see how many health insurance companies are offering plans per county before and after Obamacare was shat upon us.

slickwillie2001 on November 25, 2013 at 1:20 PM

onone – aan

BoxHead1 on November 25, 2013 at 1:22 PM

Even if Sebelius is not actively threatening blackmail to retain her position the White House will still be wary of forcing her out against her will because of what she knows and what she could reveal publicly. In particular, she is probably well aware of what Obama was told and when about the status of HealthCare.gov. If his own public statements on that subject have been lies she might out him. If she does not want to go they do not have any option but to keep her, she is in too prominent a position to have her Vince Fostered.

Jodka on November 25, 2013 at 1:56 PM

One of the great ironies in life is that every progressive wants to live in socialist paradise, but by definition they are all too lazy and unskilled to actually build it.

JeremiahJohnson on November 25, 2013 at 2:35 PM

Ref Jodka above:
” If she {Sebelius} does not want to go they do not have any option but to keep her, she is in too prominent a position to have her Vince Fostered. ”

Somebody might want to send her a tweet anyway, something to the effect of “AVOID FORT MARCY PARK” …. heh,heh,heh.

A_Nonny_Mouse on November 25, 2013 at 9:26 PM

They could have gotten those RFPs out and the contracts signed years ago if the Republicans hadn’t been so darned obstructive.
/

AesopFan on November 25, 2013 at 11:52 PM