Government did a poor job on HealthCare.gov. A private firm might’ve been worse.

During the circular firing squad of contractors, politicians and bureaucrats blaming each other for the HealthCare.gov meltdown, one question has repeatedly surfaced: Who was really in charge of overseeing the dozens of contractors making pieces of the giant system? Who was ultimately responsible for ensuring it all functioned well together?

Much of the blame has fallen upon CGI Federal, the contractor that was paid the most for its work, and was charged with constructing the backend of the site. But CGI points out — loudly — that the Centers for Medicare and Medicaid Services was actually the "lead systems integrator," which is a technical term for the entity responsible for wrangling projects so big that they amount to a "system of systems."

By many accounts, CMS didn't play that role very well, delivering requirements so late that testing didn't begin until a couple weeks before the Web site was supposed to launch. And now, since they all say they delivered on their scopes of work as promised, no one contractor can be held accountable for the fact that the site still failed. Some people, like New York University contracting expert Paul Light, think keeping the management in-house was a key point of failure.

So would it have made sense to have one contractor actually in charge of pulling the whole thing together? The problem is, the federal government has tried outsourcing that role before — with equally disastrous results.

"There was a trend about 10 years ago towards hiring a contractor to be the lead systems integrator, and the government got burned in a couple of famous cases," says Dan Gordon, who served as administrator of Federal Procurement Policy until January 2012. "The result was, there was so much criticism that a lot of people said the government should be doing the lead integration." Now, he says, having a contractor run the show is even seen as "inappropriate."

Here's what he's talking about. Through the 1990s and 2000s, the Department of Defense in particular saw an increase in the dollar value of contracts awarded, but a decrease in the number of staff available to administer them:


(School of Public Policy, University of Maryland)

So the Defense Department decided to have big private companies run its biggest contracts. Here are a few examples of how that worked out:

— Integrated Deepwater System Program: This 25-year, $24 billion contract to replace most of the Coast Guard's equipment was handed to a partnership between Northrop Grumman and Lockheed Martin to administer in 2002. After numerous delays, cost overruns, conflicts of interest and equipment failures, the Coast Guard took back control in 2007.

— Future Combat Systems: In 2003, the Army handed a $17.5 billion contract to Boeing and SAIC for new manned and unmanned combat brigade systems, managing 550 different contractors. After multiple restructurings, scrutiny of high fees and questions around conflict of interest, the contract was canceled in 2009.

— SBInet: In 2006, the Department of Homeland Security contracted with Boeing to provide a $1.9 billion integrated border security program, with information technology systems to better deploy border control agents. The contract was canceled in 2011 because of cost overruns and lax oversight of subcontractors.

The biggest problems with letting contractors have so much control is that the government had a hard time finding out how much much money was being spent in what ways — and the contractor still wasn't accountable for the outcome. The performance of lead systems integrators came under so much criticism that Congress passed laws limiting their use for military procurement, and contracts including them dropped off a cliff:

(Defense Acquisitions University)
(Defense Acquisitions University)

Now, it's true that HealthCare.gov was actually a smaller project than those massive defense systems. But there was a lot of history behind the Department of Health and Human Services' decision to manage it themselves, even if it could have ultimately been done a lot better.

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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