Is the new Healthcare.gov contractor worse than the first?

posted at 8:41 am on February 10, 2014 by Ed Morrissey

Has HHS gone from the CGI Federal frying pan into the Accenture fire? A month ago, the HHS unit responsible for Healthcare.gov dumped its original prime contractor and awarded the project to Accenture in a no-bid assignment, a move that raised eyebrows especially considering how little time was left in the enrollment cycle to get the web portal problems resolved. Now, a new Washington Post report raises even more eyebrows about the decision, given Accenture’s troubled history with federal contracts:

Accenture, the contractor urgently tapped to help fix the federal health-insurance Web site, is a favorite of corporate America but has a record that includes troubled projects and allegations of ethical lapses, a review of the consulting giant’s history shows.

At the University of Michigan, students and faculty members are protesting the school’s use of Accenture to help cut costs, citing a report by a committee of alumni and graduate students that said the firm has “a disturbing pattern of problematic past performance.” In North Carolina, glitches in an Accenture-configured computer system contributed to massive backlogs for food-stamp recipients, leading the Obama administration last month to threaten to withdraw the state’s food-stamp funding. …

“Past performance was a key criteria when evaluating Accenture’s potential to serve as the new contractor,’’ said the official, who spoke on the condition of anonymity to discuss internal decision making.

But during the past decade, nearly 30 Accenture projects in the United States and abroad have encountered problems, including technical malfunctions and cost overruns, according to interviews, media accounts, government audits and other records.

Those aren’t the only problems Accenture created, nor the most recent. In June of last year, just seven months before HHS would grant them the no-bid contract for ObamaCare, the Inspector General of the US Post Office recommended canceling all of Accenture’s contracts for “an absence of business ethics”:

The U.S. Postal Service should consider suspending or debarring one of its largest contractors, information technology firm Accenture, from future work because of the risk of fraud, the agency’s inspector general said in a newly released audit.

Accenture “has demonstrated an absence of business ethics, a lack of transparency and insufficient internal controls in its business dealings with the Postal Service,” according to the audit, which also cited Accenture’s $64 million settlement two years ago with the Justice Department to resolve kickback allegations stemming from its hardware and software recommendations to other agencies. Besides potentially cutting off future business to Accenture, the Postal Service should consider ending existing contracts, the IG said.

The audit comes six months after the inspector general concluded in a separate review that Accenture wasn’t attempting to fix its system for tracking actual contract costs in comparison with estimated costs and hadn’t fully addressed an earlier recommendation to periodically review its estimating system.Under a suspension, the firm would be barred from USPS contracting and subcontracting for one year; a debarment could last up to three years.

Several sources tell the Post’s Jerry Markon and Alice Crites that Accenture was “probably” the best choice to rescue Healthcare.gov, and that “past performance was a key criteria” in their selection. If that’s the case, then we’re in a lot more trouble than we think. The best option that the government had was a firm so ethically challenged and dogged with failure that the US Post Office wanted them fired? And how exactly does a no-bid process ensure that there were no better options, anyway?

If that’s true, then we have yet even more evidence that the federal government is uniquely incompetent to manage anything on this wide of a scale.


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Cripes!

With apologies to cmsinaz!

herm2416 on February 10, 2014 at 8:45 AM

See, what we really NEEEEEEEEEEEEEEEEEEEED is Single Payer.

Have the media and various study groups create the crisis, demand answers of the private sector, declare they can’t fix it, offer a government solution, have the media hail it as the best “solution” and then legislate more power for yourself and your friends in the D.C. Ruling class, repeat as necessary.

There you have it……Progressive control of the process in just a few sentences.

PappyD61 on February 10, 2014 at 8:45 AM

Perfect Fit

Privatize It on February 10, 2014 at 8:47 AM

And why aren’t the Republican leaders shouting this from the rooftops?

philosoph0123 on February 10, 2014 at 8:48 AM

How do you time and again, after winning two presidential elections — when you’re worse than one term Jimmy Carter — keep hiring incompetents. It’s a record that does not speak of dumb, blind bad luck, but at this point has to be intentional. It’s sabotaging a “free market”* solution in order to make the single payer alternative more palatable.

*not really, but work with me here.

rbj on February 10, 2014 at 8:52 AM

Yeah, but if the kickbacks are good what’s the ethical problem?

viking01 on February 10, 2014 at 8:52 AM

There a tiny little company called IBM that might have had some good advice and experience…

oldroy on February 10, 2014 at 8:53 AM

Nothing to see here…..Christie!!!!
-lsm

cmsinaz on February 10, 2014 at 8:54 AM

herm :)

Aye carumba

cmsinaz on February 10, 2014 at 8:57 AM

Ok, which Princeton colleague of Mooch-elle’s works at Accenture?

Doughboy on February 10, 2014 at 8:58 AM

Second verse, same as the first!

Difficultas_Est_Imperium on February 10, 2014 at 9:01 AM

It is not in the best interests of the Obama administration or the Dems to have any part of Obamacare working before the mid terms.

Just let that sink in. They need to do everything in their power to stall and make it not work until December 2014, after that they need not worry too much for the next year or so.

If things start to come together and people see what they are going to have to actually pay, the Dems are doomed come November.

Johnnyreb on February 10, 2014 at 9:03 AM

If that’s true, then we have yet even more evidence that the federal government is uniquely incompetent to manage anything on this wide of a scale.

Accenture is an offshoot of Arthur Andersen- the accounting firm whose downfall came from their involvement with Enron’s books. It seems the legacy of shame continues.

Happy Nomad on February 10, 2014 at 9:04 AM

cms…..honestly, it was the FIRST word that came to mind!

herm2416 on February 10, 2014 at 9:06 AM

Well if the payments system isn’t finished O’care is in huge trouble.

Jay Galt on February 10, 2014 at 9:07 AM

It doesn’t matter who they get to do the work. The programming task–sitting in between a bunch of different databases with different formats and shuffling information from one to the other reliably–has been solved over and over and over again for decades; it’s really not that hard. The real problem is that it’s the government managing and setting the requirements for the work, which means the specifications are incomplete, vague and constantly changing, and the development processes are designed to divert blame rather than accomplish work. No company can do this work. Not IBM, not Microsoft, not Google, not Facebook… nobody.

Fabozz on February 10, 2014 at 9:12 AM

DC is the ultimate example of the peter principle at work.

look at the stooges that lord over us. Reid, Pelosi, Boehner, Biden, Geitner, Lew, and of course, a Kenyan dog eater.

obviously the replacement contractor for this abomination will be more incompetent but have given more money to the dems than any other potential replacement.

acyl72 on February 10, 2014 at 9:13 AM

And why aren’t the Republican leaders shouting this from the rooftops?

philosoph0123 on February 10, 2014 at 8:48 AM

They’re busy colluding with Barky in trying to destroy our borders and gut the concept of national sovereignty while they represent their true constituents – illegals and non-Americans the world over.

The GOP never intended to do squat about BarkyCare. They made that perfectly clear in Feb 2011, with an exclamation mark added with the Mittens nomination.

ThePrimordialOrderedPair on February 10, 2014 at 9:14 AM

And why aren’t the Republican leaders shouting this from the rooftops?

philosoph0123 on February 10, 2014 at 8:48 AM

They would rather endure the complete destruction of the country and unnecessary premature deaths of millions … than be called racists by the LSM.

What do I win? ;-)

ShainS on February 10, 2014 at 9:14 AM

Inspector General of the US Post Office recommended canceling all of Accenture’s contracts for “an absence of business ethics”:

For this administration, that’s not a bug it’s a benefit!

Vince on February 10, 2014 at 9:14 AM

Accenture is an offshoot of Arthur Andersen- the accounting firm whose downfall came from their involvement with Enron’s books. It seems the legacy of shame continues.

Actually Accenture is Arthur Andersen rebranded. I worked for them as a web developer a few years ago in California on one of the few gov contracts they had that was successful. They basically used the revenues from that success to subsidize the failed contracts in the rest of the state like CALpers I am by no means a defender of their practices but sadly they are one of the better gov contractors out there, but that says much more more about how bad the gov procurement process is than how good they are sadly. There are a lot of contractors that have a near 100% fail rate of going over budget or not delivering on time.

My experience and knowledge on that project is why I predicted before the law was passed that there was no chance healthcare.gov would be delivered and working on time.

JoshuaH on February 10, 2014 at 9:15 AM

For the idiots that support single payer, are these the buffoons you want running your healthcare? You know you’re a moron when you think government is the answer.

Flange on February 10, 2014 at 9:17 AM

ShainS on February 10, 2014 at 9:14 AM

Heh. We both responded to the same “older” comment at the same time … almost. I got you by a hair this time!

ThePrimordialOrderedPair on February 10, 2014 at 9:18 AM

Fabozz on February 10, 2014 at 9:12 AM

Fabozz is exactly right.

I did large systems software IT development for 25 years, and this project — like most large-scale ones — is what’s commonly known in the industry as a “Death March.”

Quite the apropos term …

ShainS on February 10, 2014 at 9:19 AM

Heh. We both responded to the same “older” comment at the same time … almost. I got you by a hair this time!

ThePrimordialOrderedPair on February 10, 2014 at 9:18 AM

Heh.

Just couldn’t let that softball thrown by philosoph0123 go by without takin’ a swing! ;-)

ShainS on February 10, 2014 at 9:22 AM

Well if the payments system isn’t finished O’care is in huge trouble.

Jay Galt on February 10, 2014 at 9:07 AM

Payments are made directly to the insurer. So in reality there is no need for a payment system.

In reality there was no need for healtcare.gov. All signups could be done directly with insurers or through private exchanges which existed before ObamaDoesn’tCare. i.e. einsurance.com

Dasher on February 10, 2014 at 9:28 AM

Ditto herm :)

cmsinaz on February 10, 2014 at 9:28 AM

Don’t be so quick to jump on the bandwagon here. This whole story sounds like someone with an axe to grind. I work in the same general workspace as Accenture (basically they’re a competitor) but none of the details in this story rise to the level of outrage.

Come on… some student campus group protests leads the list of examples of wrongdoing?

30 projects with cost overruns in the past decade? Believe me, that’s a pretty good track record considering the number of projects they do in a global business environment.

$64M settlement with the justice department? They obviously got caught pushing the boundaries of the regulatory statutes. I don’t know the details but you can be pretty sure that it’s not as cut and dried as you would read from this story. The company I work for was caught up in a similar fiasco a few years back.

TXclassic on February 10, 2014 at 9:29 AM

Politico blaming Koch Brothers for the O’Care disaster:

Obama told Senate Democrats at a meeting at Nationals Park last week that he knows his health care law will be used as the “No. 1 attack tool” on Democrats by the Koch Brothers, citing the conservative billionaires by name, according to Sen. Dick Durbin (D-Ill.).

Of course, they reported no such citation in the story, but who’s surprised.

Rovin on February 10, 2014 at 9:33 AM

No bid.

It’s the “Chicago way”. How else do you pay back your friends?

GarandFan on February 10, 2014 at 9:33 AM

My wife’s company has had regular contact with Accenture, when she first heard this she said, “They hired WHO? Oooohhhh boy.”

Bishop on February 10, 2014 at 9:36 AM

Inspector General of the US Post Office recommended canceling all of Accenture’s contracts for “an absence of business ethics”

An absence of business ethics is just an absence of ethics in the business setting. Understood that way, it’s much easier to recognize that the flock has all the same species of bird in it.

Dusty on February 10, 2014 at 9:37 AM

For the idiots that support single payer, are these the buffoons you want running your healthcare? You know you’re a moron when you think government is the answer.

Flange on February 10, 2014 at 9:17 AM

If gov’t is the answer, then it was a really stupid question.

307wolverine on February 10, 2014 at 9:38 AM

The media is doing a disservice to the American public by not researching and giving the public all the bad news about Ocare, but hey at least we know what Christie ate for breakfast.

BelleStarre on February 10, 2014 at 9:42 AM

If gov’t is the answer, then it was a really stupid question.

307wolverine on February 10, 2014 at 9:38 AM

That’s why liberals push the idiotic notion that there are no stupid questions.

Flange on February 10, 2014 at 9:46 AM

I bet if we see the donor contributions for the principals at Accenture then we have all the answers we need.

goflyers on February 10, 2014 at 9:54 AM

Yeah, but if the kickbacks are good what’s the ethical problem?

viking01 on February 10, 2014 at 8:52 AM

…pretty certain…that’s what’s going on!…no consequences the first time!

KOOLAID2 on February 10, 2014 at 10:18 AM

My experience and knowledge on that project is why I predicted before the law was passed that there was no chance healthcare.gov would be delivered and working on time.JoshuaH on February 10, 2014 at 9:15 AM

Concur with your assessment, not that I worked for them but am familiar.

AH_C on February 10, 2014 at 10:37 AM

Anyone Obama hires is going to be incompetent. His ego won’t allow anyone to outshine Teh Won.

ConstantineXI on February 10, 2014 at 10:56 AM

Mickey Mouse couldn’t get it done, so in fine government fashion, they hired Team Goofy to fix it.

-west

mr_west on February 10, 2014 at 10:59 AM

I tried to resist but can’t help but comment on this. A couple have pointed out that Accenture is/was Anderson Consulting and that said firm was involved in the Enron scandal. That’s partly true. The part of Anderson Consulting that did IT consulting was not the ACCOUNTING arm that got in trouble with Enron. Accenture was created to split off from the dying husk of the accounting firm.

I happen to work in this industry too (29 years) but not for Accenture ever. Speaking from experience, huge projects will nearly always fail or go over budget. Why? Companies win contracts by coming in at the lowest bid, most often. That means making some rosy assumptions that simply aren’t realistic often times. In other words, they bake the estimates to fit the amount of money the customer is willing to spend. When the project gets going, reality hits and they either start to cut corners to stay within the estimates (which leads to error-ridden software) or they overrun the time estimates and costs, delaying the project delivery. The HC.gov bid was not necessarily “lowest bid” in this case, but it was fixed in some ways. They were given 30 months and needed to fit everything into that box. They were given X dollars and had to fit into that box. Reality hit and they delivered error-ridden software.

No complex integration project (which this is) is ever simple. There are likely dozens of integration points and wide divergence in data formats. There is no such thing as a single, common electronic health care records (EHR) system today. There are several. Each insurance company has their own package (or one the purchased) and they are likely incompatible from company to company. Standards exist but are not that widely adhered to. It ISN’T simple and 30 months (probably less due to politics) was not enough time to get it done properly. BTW, I don’t work for CGI either and I’m not an apologist for them. They knew they were in a hole to start and didn’t want to rock the boat for fear of looking bad. The point is, HHS forced an unrealistic set of requirements on the vendor (CGI) and the vendor didn’t push back as they should have. They took the money and ran with it knowing all along it was not possible to deliver.

Accenture does the same thing and it all comes down to unrealistic expectations of the customer (like HHS) and the willing enablement of those expectations by low-bidding companies that seek to just win contracts, then try to deal with the issues later. The truth is all this information technology stuff costs more in time and money than people are willing to accept. They are looking for the cheap way out and there is no cheap way out.

BillyWilly on February 10, 2014 at 11:01 AM

Actually Accenture is Arthur Andersen rebranded.

Accenture broke off from Andersen before Andersen’s audit problems, and for a while Accenture competed against Andersen Consulting. Accenture was lucky, since it didn’t get tainted with the Andersen name’s problems.

Not to defend any of these guys, but the Post article could have been written about most or all of the large accounting/consulting outfits. These are huge organizations with lots of moving parts, often on multiple continents, with overworked partners and changing staff following ambiguous, incomplete, and poorly conceived government guidelines.

bobs1196 on February 10, 2014 at 11:10 AM

The best option that the government had was a firm so ethically challenged and dogged with failure that the US Post Office wanted them fired? And how exactly does a no-bid process ensure that there were no better options, anyway?

If that’s true, then we have yet even more evidence that the federal government is uniquely incompetent to manage anything on this wide of a scale.

Why wouldn’t it be true?

Let’s remember that the entire premise, intent, and goal around the ACA was NOT to fix the challenges in this country’s healthcare industry. The ACA is all about a massive expansion of the power and control of the federal government, the seizure of 1/6th of the national economy, expanding the welfare state and dependency on that state, and funding a huge expansion of wealth redistribution in the name of ‘social justice’ and ‘fairness’.

Given that, it doesn’t make a bit of difference who is supposed to build the website because all that represents is a diversion from the real intent and goal.

But by all means, let’s continue the sham-wow show and outsource more jobs overseas through Accenture…

Athos on February 10, 2014 at 11:17 AM

Something tells me I’ll be able to post this for a long time to come:

Ed –
You mean the websites aren’t working perfectly on day one two three four five six seven eight nine ten eleven twelve thirteen fourteen fifteen sixteen seventeen eighteen nineteen twenty twenty-one twenty-two twenty-three twenty-four twenty-five twenty-six twenty-seven twenty-eight twenty-nine thirty thirty-one thirty-two thirty-three thirty-four thirty-five thirty-six thirty-seven thirty-eight thirty-nine forty forty-one forty-two forty-three forty-four forty-five forty-six forty-seven forty-eight forty-nine fifty fifty-one fifty-two fifty-three fifty-four fifty-five fifty-six fifty-seven fifty-eight fifty-nine sixty sixty-one sixty-two sixty-three sixty-four sixty-five sixty-six sixty-seven sixty-eight sixty-nine seventy seventy-one seventy-two seventy-three seventy-four seventy-five seventy-six seventy-seven seventy-eight seventy-nine eighty eighty-one eighty-two eighty-three eighty-four eighty-five eighty-six eighty-seven eighty-eight eighty-nine ninety ninety-one ninety-two ninety-three ninety-four ninety-five ninety-six ninety-seven ninety-eight ninety-nine one hundred one hundred one one hundred two one hundred three one hundred four one hundred five one hundred six one hundred seven one hundred eight one hundred nine one hundred ten one hundred eleven one hundred twelve one hundred thirteen one hundred fourteen one hundred fifteen one hundred sixteen one hundred seventeen one hundred eighteen one hundred nineteen one hundred twenty one hundred twenty-one one hundred twenty-two one hundred twenty-three one hundred twenty-four one hundred twenty-five one hundred twenty-six one hundred twenty-seven one hundred twenty-eight one hundred twenty-nine one hundred thirty one hundred thirty-one one hundred thirty-two one hundred thirty-three
verbaluce on October 1, 2013 at 10:18 AM

(H/T NotCoach)

There Goes the Neighborhood on February 10, 2014 at 11:36 AM

I think this is the key quote:

“Past performance was a key criteria when evaluating Accenture’s potential to serve as the new contractor,’’ said the official, who spoke on the condition of anonymity to discuss internal decision making.

You notice the “official” didn’t specify what type of “past performace” was being evaluated. Knowing the Crony Capitalist nature of this administration, it involves lots of campaign donations.

TomJefferson on February 10, 2014 at 1:32 PM

Anyone who knows anything about IT consulting could have told you about this a long time ago. Accenture has long been known for over-architecting software designs, over-staffing on expensive lead developers, over-charging on rates, over-inflating timelines and over-extending the projects with feature-creep and maintenance. At one time they had less than a 5% success rate on projects, measured on meeting timelines, features and cost. Although I’ve heard they’ve gotten a little better.

It’s no wonder they love government projects…

dominigan on February 10, 2014 at 1:32 PM

second verse same as the first,
a little bit louder and a little bit worse

burt on February 10, 2014 at 5:14 PM