U.S. drops contractor for work on Obamacare website
January 10th, 2014
12:13 PM ET
11 months ago

U.S. drops contractor for work on Obamacare website

Updated 1:32 p.m. ET, 1/10/14

(CNN) - The Obama administration has cut ties with CGI Federal for its work as the main contractor on the Obamacare website, a source familiar with the decision told CNN.

The contract was up and not renewed, the source said.

The Centers for Medicare and Medicaid Services, the federal agency charged with overseeing development of the website, said in a statement that it was working with its "contract partners" to ensure a "mutually agreed upon transition."

The flawed launch of the website in October was a big political setback for President Barack Obama.

Fixes since have resulted in improved performance of the online portal, where consumers can shop for health coverage.

The politically charged health care law, the Affordable Care Act, aims to allow millions of Americans without coverage to access insurance.

More than 2 million people had signed up so far under Obamacare at the end of 2013 with about half enrolling through the federal marketplace, officials said.

A number of states also have their own portals and other programs to sign people up for coverage.

CGI couldn't immediately be reached for comment.

It was lead contractor for building the problematic front-facing side of HealthCare.gov, a job with an original two-year contract valued at nearly $100 million.

The company came under fire following the webstie's difficult launch as users experienced major problems accessing the site, creating profiles and selecting insurance plans.

During testimony before Congress in October, CGI Senior Vice President Cheryl Campbell denied any wrongdoing by her company, telling legislators that it was not "unusual to discover problems" in a system with so many concurrent users that would need to be addressed after going live.

As part of Obamacare implementation, CGI is also performing exchange work in California, Colorado, Hawaii, Illinois, Massachusetts, Kentucky, New Mexico and Vermont, according to the company's website.

Officials in several of those states have also expressed dissatisfaction with CGI's performance.

Based in Canada, CGI presents itself as the world's fifth largest independent IT and business process services company.

The company has experience in health care IT as a partner to some of the Canadian Ministries of Health and as a provider of secure electronic medical records in Europe.

Its U.S. government contracting branch, CGI-Federal, has done more than $2.5 billion in business with more than two dozen government agencies since 2001, according to a search at USASpending.gov.

This includes nearly a billion dollars of work with the Health and Human Services Department, CMS's parent agency, as well as the Pentagon.


Filed under: Health care • Obamacare
soundoff (99 Responses)
  1. MickeyOregon

    So this is what happens when you have a no-bid contract which is awarded to a crony that has failed epically with other government contracts and you hand over $634 MILLION (US$) to do a job which developers from FACEBOOK and AMAZON and GOOGLE said should have cost around $3M but no more than $5M, and which a team of students did in a weekend just to show it could be done. The Obamas' friends couldn't create a system that worked in YEARS. And you all seriously think that the Federal bureaucracies are the best to trust? Ineffective. Non-efficacious. Unaccountable.

    January 10, 2014 01:39 pm at 1:39 pm |
  2. Harry

    Follow the money trail on this company and see which TeaParty darling they took bribes from to sabotage the program.

    January 10, 2014 01:40 pm at 1:40 pm |
  3. Garrett from Texas

    What the story doesn't go into is how the US based portion of CGI, which helped bring the contract into existence, employes a relative of Michelle Obama's.

    January 10, 2014 01:40 pm at 1:40 pm |
  4. acurat

    Blame the developer! That will do it! Move the blame for the incompetent management to the devlopers – that is how you get the bad news off your back. Typical of the politicians. I just bet it is their mismanagement (e.g. late change requests) that killed them.

    January 10, 2014 01:42 pm at 1:42 pm |
  5. Frank

    I worked in a large Government contracting firm for a while, and I can tell you that the reason the website was so bad was that 80 of that 100 million went to managers who sit around, flip some view graphs, go to meetings, and pay themselves 500k a year and up. The engineers who actually had to do the work likely shared 4 employees to 1 computer, had to work 80-100 hours a week to get the site up, and were paid 50-60k a year for the 2 years they worked there before they were laid off or quit due to burnout.

    January 10, 2014 01:43 pm at 1:43 pm |
  6. Harold Read

    As CGI is laughing all the way to the bank! Thanks ObamaBots for stimulating the CANADIAN economy!

    January 10, 2014 01:43 pm at 1:43 pm |
  7. roccotaco

    Obama needs to admit that the obamacare is a terrible failure and drop the whole darn thing. Help the poor with insurance yes but stop hurting those who work and have a policy that they can barely afford now–how shameless is this?

    January 10, 2014 01:46 pm at 1:46 pm |
  8. current state of the union

    JJ, man are you dense! You do know you can get the truth about every issue you just mentioned, but then you'll sound stupid to even you

    January 10, 2014 01:46 pm at 1:46 pm |
  9. Dave

    Michelle Obama's Princeton classmate is executive at company that built Obamacare website.
    First Lady Michelle Obama's Princeton classmate is a top executive at the company that earned the no-bid contract to build the failed Obamacare website.
    Toni Townes-Whitley, Princeton class of '85, is senior vice president at CGI Federal, which earned the no-bid contract to build the $678 million Obamacare enrollment website atHealthcare.gov. CGI Federal is the U.S. Arm of a Canadian company.
    Townes-Whitley and her Princeton classmate Michelle Obama are both members of the Association of Black Princeton Alumni.
    Toni Townes, '85, is a onetime policy analyst with the General Accounting Office and previously served in the Peace Corps in Gabon, West Africa. Her decision to return to work, as an African-American woman, after six years of raising kids was applauded by a Princeton alumni publication in 1998.
    George Schindler, the president for U.S. And Canada of the Canadian-based CGI Group, CGI Federal's parent company, became an Obama 2012 campaign donor after his company gained the Obamacare website contract.
    On the government end, construction of the disastrous Healthcare.gov website was overseen by the Centers for Medicare and Medicaid Services (CMS), a division of longtime failed website-builder Kathleen Sebelius' Department of Health and Human Services.
    CGI Federal did not immediately return a request for comment.

    January 10, 2014 01:47 pm at 1:47 pm |
  10. CC333

    Tampa Tim I wish the ACA actually helped Americans. The ACA has caused further damage to Americans who were struggling to get healthcare.Higher costs, higher deductibles, and less quality care has just created more American's without care. I hoped for real change not more damage. I can't even hope for Medicare as Senator Reid wants to steal more money from the program to fund unemployment. I see years ahead of no healthcare, thanks but not thanks.

    January 10, 2014 01:49 pm at 1:49 pm |
  11. More Cowbell

    The incompetence went wayyyy above and beyond the contractor of the website.

    January 10, 2014 01:49 pm at 1:49 pm |
  12. Uncle Al

    "I had a guaranteed military sale with ED-209. Renovation program. Spare parts for 25 years. Who cares if it worked or not?" Dick Jones, Robocop, 1987.

    January 10, 2014 01:50 pm at 1:50 pm |
  13. Greenspam

    I thought Republicans told us that the website can't be fixed, how come it got fixed in 2 months?

    January 10, 2014 01:51 pm at 1:51 pm |
  14. Another Voice

    The contractor will just be replaced with another one that will have the same problems as long as the specifications are unclear or constantly changing. Design first, program second - not the other way around.

    January 10, 2014 01:52 pm at 1:52 pm |
  15. G. T. Simpson

    It was widely reported and confirmed CGI had ties with Michelle Obama – thus the reason for the NO BID contract! And they screwed up royally – big time! Yet no one was held accountable – which is par for the course in the Obama administration! No one is ever held accountable, not Obama, not Holder, not Susan Rice, not Clapper, not Selibus – not anyone! The Obama administration is the most corrupt and incompetent administration in history.

    January 10, 2014 01:52 pm at 1:52 pm |
  16. sjjj

    So, the Canadian contractor hired by the US President, and paid for by American tax dollars, was nothing but a big failure? Maybe instead of Obama pointing fingers at large companies who "outsource" to other countries, he should point those fingers back at himself? How many Canadians got paid/employed working for this company? Those could have been Americans getting jobs/paid instead!

    January 10, 2014 01:53 pm at 1:53 pm |
  17. foreverflag

    I guess Michele's friends made enough money on this deal. When are the taxpayers going to hold this administration responisble for misuse of public funds?

    January 10, 2014 01:54 pm at 1:54 pm |
  18. Richard

    Barry and Michelle friends got their moneys worth, they dont care. The US Taxpayers get to eat the cost of them being friends.

    January 10, 2014 01:56 pm at 1:56 pm |
  19. Anonymous

    nice, they get paid and walk away from the mess they created, while the subcontracters get to deal with the problem. I wouldn't have dropped them until the finishe dthe job at their expense

    January 10, 2014 01:57 pm at 1:57 pm |
  20. Kman66

    Greenspam, you are SO desperate not to have to admit that Obama was lying and the Republicans were telling the truth. They said that the law cannot be fixed, and they are right, as time will make perfectly clear. They actually all said that they
    were sure the website would get fixed. Nice try though.

    January 10, 2014 01:58 pm at 1:58 pm |
  21. callmecrazy

    OK so when someone IS held accountable the administration is still incompetent. You folks are never satisfied.

    January 10, 2014 02:02 pm at 2:02 pm |
  22. justin philpot

    well they made their billions time to move on to another obama based scam of the American tax payer.

    January 10, 2014 02:02 pm at 2:02 pm |
  23. WhatEver

    As an I.T. contractor, I think the ax should keep swinging. Yes, the contractor royally screwed up. I say this because the contractor did not go back against management(Department of Health) and tell them their constant changes would push the project back due to the out of scope requirements. Management was a huge contributer of this project being a failure out the door.

    Precise requirements from the beginning were not provided.
    The end goal kept changing position.

    Trust me when I say this, this opinion has nothing to do with politics. And has everything to do with someone that works in I.T. and seen projects forced to go live when they were not ready.

    January 10, 2014 02:03 pm at 2:03 pm |
  24. critical thinking

    Horse is out, NOW close the barn door. Yeah, I trust that they will do an excellent job in providing health care when we evolve to a one payer system.

    Fast forward....Doctor the patient is dead..hmmm well administer the expense drugs and bill the govt.

    January 10, 2014 02:04 pm at 2:04 pm |
  25. Kman66

    Greenspam, when you get to the point where you will lie for the team, defy all logic and say absolutely any ridiculous thing in the world rather than admit an obvious error on behalf of your party, you are not longer a benefit to the country, you have become a disease. Your pathetic statement that "I thought the Republicans told us it couldn't be fixed" is so obviously deceptive it makes you look extremely childish, stubborn and foolish. Almost as much as the genius above whop is claiming the tea party bribe CGI to sabotage the website. You guys need to gain some some class, and FAST!

    January 10, 2014 02:04 pm at 2:04 pm |
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