Obamacare agency rushed in contractor without bids, documents show

Sat Nov 23, 2013 2:39pm EST
 
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By Sharon Begley

NEW YORK Nov 23 (Reuters) - Caught flat-footed by the challenges of building the financial-management and accounting parts of the U.S. government's new online marketplace for health insurance, officials rushed to hire a familiar contractor without seeking competing bids, according to government procurement documents reviewed by Reuters.

The documents dated in August - less than two months before the opening of online marketplaces established by President Barack Obama's landmark healthcare law - showed the agency in charge had only "recently learned" that building the financial management functions was "beyond (its) currently available resources."

The Centers for Medicare & Medicaid Services (CMS) documents shed more light on the problems facing the agency as it worked on the marketplaces established by the law commonly called Obamacare and on its revelation this week that at least 30 percent of the marketplace is still being built.

Those problems and others have been revealed by congressional oversight investigators who released emails and outside reports that paint an administration scrambling to meet the technological challenges of the marketplace - and usually failing to do so.

CMS spokeswoman Joanne Peters said on Friday and on Saturday that representatives of the agency were unavailable to comment on the contract or on an estimate of when the financial management part of the marketplace is expected to be finished.

Although the consumer-facing part of the marketplace, the HealthCare.gov website, opened for enrollments on Oct. 1, CMS had a goal of Jan. 1, 2014 for the financial components of the system to be operational.

"The prospect of a delay...even for a few days, would result in severe consequences, financial and other," CMS said in a "justification and approval" document explaining the lack of competition for the contract.

The contract, valued at nearly $12 million, was awarded on Aug. 9 to Novitas Solutions, according to the documents. Novitas has numerous contracts with CMS, including to administer doctor and hospital claims in the federal Medicare program for elderly Americans.   Continued...