System integration giant Accenture's takeover of the bungled HealthCare.gov website represents a technology "do over" that will likely result in hundreds of millions of dollars in additional spending to fix the website, according to a federal systems integrator CEO with knowledge of the project.
"Clearly there is going to be hundreds of millions of dollars spent on this do over," said a federal systems integrator CEO, who did not want to be identified. "That money has to come from somewhere. It is not just going to incrementally fall on top of the [federal] IT budget. This means other projects are going have to be stopped, cancelled or reduced in funding to get this thing fixed because it was a debacle. There are no free lunches when it comes to IT."
The federal systems integrator CEO was responding to the news that the Obama administration has awarded a $45 million one year contract to the federal services unit of Accenture, No. 3 on the SP500 with $29 billion in annual sales, to fix the Healthcare.gov website.
The $45 million is just for the "initial phase of the project, which includes a transition plan to define the work required," said Accenture in a press release announcing the deal. "The contract will be based on mutually agreed upon work plans, which will help define the final value of the one-year contract."
Accenture will replace $5 billion integrator CGI, No.17 on the SP500, which has been largely blamed for the bungled HealthCare.gov website project.
Accenture said it was selected for the project after a review of more than a dozen firms by the Centers for Medicare and Medicaid Services (CMS).
Accenture said that following a" transition period on the current program," the company will provide services to support the Federally-Facilitated Marketplace (FFM) to prepare for open enrollment in October 2014 including 24/7 support of the Healthcare.gov marketplace application, eligibility and enrollment functions, generation and transmission of enrollment forms, and features related to special enrollment periods, among other services."
Accenture said it also will develop "new capabilities" required for future phases of the Affordable Care Act.
CGI, for its part, said there has been a mutual agreement between it and the government for CGI to complete its work on the website "in line with the previously-scheduled February 2014 contract end date."
"The joint decision comes at a time when Healthcare.gov is performing well, due largely to CGI’s key role during the 'tech surge,'" said CGI in a statement sent to CRN. "We are proud that more than 400 CGI employees worked around the clock from October through December to deliver a consumer experience that works for a vast majority of Americans."
If the high-stakes Affordable Care Act information technology project would have been run properly from the get go, the Accenture contract would have been unnecessary, said the federal systems integrator CEO. Poor technology choices, as well as poor project management and oversight, were among the problems with the HealthCare.gov website rollout, according to the executive
"It was just a poorly executed project," said the executive. "Now they are going to do a big fix-it job, which means they are going to have to re-engineer it. It's a do over. There is more [IT] work that is going to be generated because of this do over."
That said, the executive praised the Obama administration's selection of Accenture. "Accenture is top-tier, cream of the crop," said the executive. "And they charge accordingly. Accenture has always done a stellar job for the federal government. If it can be re-engineered and fixed, they are a good one to do it."
The Accenture takeover of the project comes after the Obama administration brought in high-level Silicon Valley talent from the likes of Oracle, Google, and Red Hat. "They threw some of the best brains in the business at this to at least get it in working order at this point," said the executive. "Now they have to re-engineer the whole thing for the long term."
The HealthCare.gov debacle has the federal government looking more closely at high-stakes IT contracts, said the executive. "The lessons learned are you better get the right technology, you better scope the project properly, you better assign it to the right contractor and you better have damn good oversight on it for the entire job, including proper time to develop, prototype and test what you have done."
The HealthcCre.gov IT fiasco is destined to be a factor in the next presidential election, said the executive. "Normally, time would heal the wounds," he said. "This one it won't. You'll hear about this bungled job for the next several years, especially in the next presidential election."
The executive said Accenture will likely throw its top talent at the HealthCare.gov job, given the heavy scrutiny the company will face as it takes over the project. "The Monday morning quarterbacking will commence immediately," said the executive. "Accenture will get it done, and they’ll do it right. They are going to be very careful because they know they are going to be operating under a magnifying glass."
Accenture Federal Services CEO David Moskovitz said in a prepared statement that the company was "honored to be part of the team of technology and healthcare companies and government professionals helping the federal government meet the healthcare coverage needs of its citizens. Accenture will bring deep healthcare industry insight as well as proven experience building large-scale, public-facing websites to continue improving HealthCare.gov.”
THIS STORY WAS UPDATED ON JAN. 12, 2013