Healthcare Business News

Obama administration ousting CGI Federal as contractor

By Paul Demko
Posted: January 10, 2014 - 2:00 pm ET

CGI Federal, the lead contractor in building the problem-plagued federal website, is being dropped by the Obama administration.

As soon as next week, the federal government will instead enter into a 12-month contract worth roughly $90 million with Accenture to work on the online marketplace, the Washington Post and Bloomberg reported. Accenture was the lead contractor in building California's exchange website, which has been among the most successful in the country in signing up individuals for insurance coverage.

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A spokesman for the CMS declined to confirm the accuracy of the reports, but suggested that CGI is being ousted. “We are working with our contract partners to make a mutually agreed upon transition to ensure that continues to operate smoothly for consumers,” spokesman Aaron Albright said in a statement. “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. I can't confirm anything regarding ongoing contract negotiations.”

CGI Federal did not immediately respond to a request for comment from Modern Healthcare.

Accenture spokeswoman Joanne Veto would not confirm the details of the contract with the federal 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.

CGI was hired as the lead contractor in 2011, but its contract expires at the end of February. In October, following the disastrous launch of the website, Quality Software Services (QSSI) took over as the lead contractor. According to the Washington Post, QSSI is about to sign a contract ensuring that it will stay on for at least another year to oversee the project.

Since Dec. 1, when federal officials promised the technology would be functional for the “vast majority” of visitors, consumers have enjoyed a vast improvement in the performance of the site. That's reflected by a surge in enrollments through the federal exchange during December.

Federal officials reported that 2.1 million individuals had selected coverage through the state and federal exchanges through Dec. 24. That's still well behind the pace needed to meet the goal of 7 million enrollments by the end of the open-enrollment period March 31. An additional 3.9 million individuals have signed up for coverage through Medicaid and the Children's Health Insurance Program. The Obama administration is expected to release updated enrollment figures next week.

Follow Paul Demko on Twitter: @MHpdemko

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