Red flags overlooked in choosing health website creator

CGI Federal, the company responsible for building the problem-plagued website for the Affordable Care Act, won the job because of what federal officials deemed a "technically superior" proposal, according to government documents and people familiar with the decision.

Not considered in the 2011 selection process was the history of numerous executives at CGI Federal, who had come from another company that had mishandled at least 20 government projects more than a decade ago. But federal officials were not required to examine that long-term track record, which included a highly publicized failure to automate retirement benefits for millions of federal workers.

The continued scrutiny comes as the website faces a rush of applicants ahead of Monday night's deadline for Americans to sign up for health insurance to be assured coverage effective Jan. 1.

By 2011, CGI Federal had been cleared to do government work at the Centers for Medicare and Medicaid Services (CMS), the agency overseeing the rollout of the new health-care law.

The company had been included in a pool of prescreened, approved contractors in 2007, during the Bush administration, and only firms in that pool were later allowed to bid for the Affordable Care Act work. It was at that earlier time that the problems at American Management Systems, the Virginia IT contractor acquired by CGI, would have figured into the assessment of CGI Federal, experts say.

In hindsight, one former CMS official said, the AMS record "could well have knocked [CGI Federal] out of the competition, and probably should have."

Critics have repeatedly asked how CGI Federal got the contract. There has been wide speculation that the firm was selected because of political ties to the Obama administration.

But a review of internal documents and interviews with former and current federal officials show that the selection process was walled off from politics.

Career officials at CMS focused in 2011 on the proposals submitted by four bidders, examining technical competency and cost while giving relatively little attention to past performance. Since 2007, CGI Federal had won 17 other CMS jobs under the prescreened contract, worth several hundred million dollars.

The review of CGI Federal concluded there was "no evidence of performance risk," according to a CMS document, portions of which were read to the Washington Post by a person familiar with the contracting process.

CGI Federal won the $93 million contract, now worth $293 million, in 2011.

At the time of the earlier selection process in 2007, CGI Federal was still relatively new to federal contracting. It had grown out of CGI Group's acquisition in 2004 of AMS, which had a recent history of troubled projects, including a Philadelphia school computer system that sent paychecks to dead people and a Mississippi tax system so dysfunctional that a jury awarded a $474 million verdict against the firm.

Three former CMS officials said in interviews that the AMS problems should have raised red flags.

"Should CMS have recognized that 'OK, here's CGI Federal. It's a new company, but, oh, my God, it looks a lot like the AMS from yesterday'?" asked one former CMS official who like others interviewed spoke on the condition of anonymity. "Yes. I would consider that dropping the ball."

Tasha Bradley, a CMS spokeswoman, said in a statement that the agency "adheres by a long-established contracting process where expert, career contracting officials evaluate and award contracts based on criteria outlined in the contract solicitation, including past performance, technical expertise and proposed contract value."

CMS declined to comment on specific questions about how closely CGI Federal's past performance was evaluated and whether that review looked at AMS.

Former AMS executives have defended that company's performance, and CGI officials have rejected any comparison with AMS's earlier failures.

The federal online marketplace that is selling health plans in 36 states has been functioning better recently, but officials are still working to fix lingering problems, including errors in enrollment records sent to insurance companies. CGI Federal remains intimately involved in the project, writing computer code in attempts to fix various aspects of the system.

Linda Odorisio, a CGI vice president, said the company "contributed to the significant improvements made to the system over the last two months, resulting in more than half a million Americans enrolling in just the first three weeks of December."

For those who want coverage effective Jan. 1 under the Affordable Care Act, the sign-up deadline is 11:59 p.m. Monday.

Consumers who have put off selecting policies are expected to jam websites and call centers, trying to beat the deadline.

The administration added 800 staffers

at its call centers, bringing the total to more than 12,000 trained customer reps.

Officials say they believe they will be able to handle the volume and capacity.

For those who sign up no later than Monday, most insurers will make coverage retroactive to Jan. 1

if the first month's premium is paid anywhere from Dec. 31 to Jan. 10.

The period for people seeking individual insurance to enroll continues through March 31.

- McClatchy NewspapersEndText