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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