This column has been updated with new information
How much did the troubled HealthCare.gov actually cost?
It may be much less than you’ve heard.
Given the vagaries of the federal contracting system, this is not an easy question to answer. But that has not stopped some people from speculating that the total is $500 million or more.
That may be a reasonable figure, but the more we looked into this, the more it seemed a bit high.
As Kaitlin Devine at the Sunlight Foundation has noted, government spending is bundled into large contracts that last for years, making it difficult to pinpoint exactly what is spent for what project. For instance, CGI Federal, generally regarded as the main contractor for healthcare.gov, has one such contract that was signed three years before the Affordable Care Act was signed into law — and lasts until 2017.
Devine methodically searched through all of the task orders for the CGI Federal contract, highlighted in blue what she guessed was related to the health-care Web site — and came up with a figure of just $70 million. (Still, we should note, a news release issued by CGI in 2011 touted a contract of $93 million over two years.) [See update below]
Of course, a Web site is just the Internet portal. There’s also the entire backbone of the exchanges, such as the data hub created by Optum/Quality Software Services Inc., a unit of UnitedHealth Group. In a June report, the Government Accountability Office said that as of March 31, $55 million had been obligated to QSSI for the data hub.
GAO says it does not have any updated figures, however.
The GAO report also lists a number of other contracts related to supporting the federal exchanges, totally $394 million, but the figure includes projects unrelated to the Web site, such as call centers. The long list of contracts in the appendix of the GAO report does not give enough detail to fully determine which contracts are directly related to the Web site, though at a glance you could reduce the total to at least $350 million.
Finally, some would argue that the salaries of government workers who worked on the project should also be included. That figure is especially fuzzy since these workers were already part of the agency.
So here’s where we stand.
A conservative figure would be $70 million. A more modest figure would be $125 million to $150 million. Or one could embrace the entire project, as outlined by GAO, and declare that it is at least $350 million.
At this point, we have not reached a firm conclusion, and we find it telling that officials in the administration and on Capitol Hill are not able to provide a definitive answer either. We will continue to monitor this question and expand this column as necessary. But in the meantime, readers should be wary of many cost estimates uttered by lawmakers.
Update: Testimony on Capitol Hill and discussions with CGI officials have yielded updated numbers.
CGI Federal has been paid $112 million for its work on the Web site so far, which is certainly higher than the $70 million mentioned above. Moreover, the federal government has obligated $196 million, so the tab could certainly run that high if CGI submits the bills.
In the testimony, a reference was made to the fact that the TCV (total contract value) was $292 million. That is the least important number, as in effect it is like a credit card limit. What is more important is what has been already spent or obligated.
QSSI indicated that its contract had been funded to $85 million, though at this point we are not sure if that is obligated or TCV funds. (Recall that GAO said that $55 million had been obligated.)
To sum up: The floor for spending on the Web site to date appears to be at least $170 million, with an upward potential of nearly $300 million.
Update, Oct. 30: In testimony on Capitol Hill, Health and Human Services Secretary Kathleen Sebelius said, in response to a direct question: “Congresswoman, we have spent about $118 million on the website itself, and about $56 million has been expended on other IT to support the web.”
That adds up to $174 million.
Update, Nov. 19: Please read our new column on this issue.
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