Healthcare Business News IT contract: Any takers?

By Virgil Dickson
Posted: July 17, 2014 - 2:30 pm ET

The CMS is officially kicking off its search to determine which company will serve as the technology vendor for, while saying the search does not indicate dissatisfaction with Accenture, which currently holds the contract.

On Wednesday, the CMS released an 84-page solicitation (PDF) saying it is seeking a contractor "capable of working under aggressive time constraints" to successfully fulfill the requirements of the scope of work. These duties include providing analysis, design, development, testing, implementation, documentation, services, maintenance and support for the federal exchange.

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Accenture was hired on a $90 million one-year contract in January to take over control of the site from CGI Federal, the company that built The site struggled after its launch in October because of serious technology problems. Accenture's contract with the agency doesn't end until January 2015, but the new contract would start "at least two months prior to the start of the 2015 open-enrollment period," according to the solicitation document. Open enrollment for 2015 starts Nov. 15, 2014.

Responses to the request for proposals are due August 18. The total potential duration of the contract is up to five and half years, according to the solicitation.

"This is a routine part of the process set forth by federal guidelines in order to prepare us for the contract's January expiration," said Aaron Albright, a CMS spokesman, regarding Accenture holding the contract. "Because of the tight timeframes required to build out additional functionality to support future phases of the program, we used an expedited procurement process that requires us to put this workup for a full and open re-competition within a year."

The release of the RFP comes three months after the agency explored the idea of giving the contract to a small company, defined as an entity with annual revenue under $25 million. That would have taken Accenture, which earned $7.13 billion in 2013, out of the running.

But Albright said his agency decided to not put any size restrictions on companies bidding for the contract.

One expert praised that decision. "Given the critical importance of and the significant role that it plays in facilitating the access of millions of American to affordable health insurance, I think the risks of switching to a new, smaller contractor would outweigh its possible benefits," said Niam Yaraghi, a fellow in the Brookings Institution's Center for Technology Innovation.

If the agency hires a new contractor, Accenture would help train the new vendor's staff during a 60-day transition period before relinquishing operational control over, according to the notice.

Experts said it's hard to say whether Accenture should be kept on as contractor for "It's difficult to say what direction this procurement could go as there is little insight into how Accenture is currently performing with the current requirements of their contract," said Dan Schuyler, senior director for exchange technology at consultancy Leavitt Partners.

"The press has reported fewer problems related to since January, which suggests that Accenture is doing something right," said Vivian Ho, the chairwoman in health economics at Rice University's Baker Institute. "In addition, there are large fixed costs for a consultant building a system like Therefore, Accenture should be able to submit a bid which is lower than its competitors."

Whatever company wins the contract, there needs to be greater transparency about any lingering or new IT problems with the site, especially because so many people are uploading personal information to it, said Michael Gregg, CEO of IT security firm Superior Solutions.

"External oversight is key in knowing how personal information is being handled and if it has been properly secured," Gregg said. He testified to Congress in January that the site had security risks.

A spokeswoman for Accenture said the company would not discuss the CMS' solicitation.

Follow Virgil Dickson on Twitter: @MHVDickson

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