Healthcare Business News

Urgent problems warranted Accenture's $90M no-bid contract, CMS says

By Joseph Conn
Posted: January 21, 2014 - 4:00 pm ET

Problems with were serious enough to justify awarding Accenture Federal Services a no-bid federal contract valued at about $90 million to fix the troubled site earlier this month rather than go through the normal competitive bidding process, according to a 10-page CMS Office of Acquisition and Grants Management document, “Justification for Other than Full and Open Competition” (PDF).

Normal, competitive procurement typically requires six to 12 months, time the government didn't have, “hence the need for approval of an award based on urgency,” the document said.

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The major problem was that without a functioning financial management platform for the site, the document said, “the entire healthcare reform program is jeopardized” by “significantly increasing” a number of risks, “potentially putting the entire health insurance industry at risk.”

Under the Affordable Care Act, lower income participants can receive advanced federal income tax credits to help offset the monthly cost of their health insurance premiums, a key feature in making private sector health insurance more affordable to these individuals and families.

The CMS “urgently requires” fixes to the federal computer system's “financial management platform,” the document says. The platform is needed to provide “stable and predictable financial accounting and outlook for the entire program through administration or risk adjustment,” it continues. It's also needed “to support the reconciliation calculation and validation with the IRS.”

The site essentially has to be able to confirm that tax credits are in place to pay premiums so insurers know they will get paid by enrollees receiving subsidies.

The CMS considered more than a dozen companies, comparing their abilities against criteria set by its consultant, Mitre Corp., the document said. Accenture's federal division was “uniquely qualified” because of its success in building similar systems, such as the California state health insurance exchange site, the document said.

Accenture's federal contracting record is not blemish-free, however, including in California, where its site, though successful thus far, has had some glitches of its own.

Accenture Federal spokeswoman Joanne Veto declined to comment on the document.

Follow Joseph Conn on Twitter: @MHJConn

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