Here’s what HealthCare.gov and the F-35 have in common

If you think of the most high-profile federal procurement debacles in recent memory, two things come to mind: the wildly over-budget F-35 Joint Strike Fighter program and now HealthCare.gov.

The differences between them, of course, are obvious. The health-care Web site's cost is microscopic compared with the scale of the F-35, which has already cost $87.5 billion and is expected to need another $12.6 billion annually until 2037. You could pay for the entire HealthCare.gov procurement process with the cost of two planes. With the F-35, there is a clear lead contractor in Lockheed Martin; it's hard for the company to avoid blame as have the several contractors involved in building the health-care site. A completely virtual product like a Web site requires different development processes than does a physical product with high capital costs, like an airplane.

Perhaps the most fundamental difference is deadlines: HealthCare.gov had a hard date when it was expected to be fully operational, while the F-35 program has dragged on for a decade longer than planned because the military had other systems it could use (even if it cost more to extend their lifespans).

Nonetheless, there are a few ways in which both projects reflect everything that's difficult and dysfunctional about how the U.S. government buys stuff. Here are a few main themes:

Leon Panetta kept the dream alive. (Reid Silverman/The Enterprise)
Leon Panetta kept the dream alive. (Reid Silverman/The Enterprise)

Limited competition

Both the HealthCare.gov main contractor job and the Joint Strike Fighter were competed -- to an extent. CGI Federal beat out three other bidders who'd been precertified on an omnibus Health and Human Services acquisition vehicle several years before, which meant that many newer, smaller players were shut out. And the F-35 was awarded to Lockheed in 2001 after a five-year competition with Boeing, but there was little ability to pull it back once the budget increases started to mount -- even when it breached a cost-containment law in 2010.

Too big to scrap

The F-35 is more than just a plane. In order to achieve economies of scale by replacing air power for three branches of the military at once, the Pentagon ordered up three versions of it -- which meant procuring thousands of aircraft at once. The program has tens of thousands of people working on it across the country, which locks in political support. And since the future of the U.S. military literally depends on these planes working, there was no threat of pulling the plug, even as costs escalated and design flaws surfaced.

Similarly, descriptions of the HealthCare.gov development process show that although people working on the site knew it wasn't coming together well, the success of the Affordable Care Act rode on the system's performance on Oct. 1, and no thought was given to restarting a flawed process that everyone knew wasn't going to work when it was supposed to.

Indefinite delivery, indefinite quantity

CGI Federal got its piece of the HealthCare.gov contract on an "indefinite delivery/indefinite quantity" basis, which allowed the contract to balloon from about $94 million to $196 million. Lockheed Martin's arrangements with the Pentagon are much more complicated, but the company has shown little regard for frugality, and it took the military a decade to impose any meaningful cost controls (which have finally started to bring the price of planes down).


How much the F-35 program is expected to cost over the years. (GAO)

Many demands

It's difficult to build a house when the blueprints keep changing. And that's exactly what happened to both the F-35 and HealthCare.gov.

The F-35, after all, not only had to satisfy three branches of the military -- it also had to work for the handful of U.S. allies that would also be placing orders for the planes. Year by year, politicians in countries like Canada, Italy, Japan, Australia and Norway would question aspects of the design, and make noises about buying fewer of them. The endless design changes added tremendous complexity, turning what was supposed to be a lightweight, next-generation fighter into a compromise vehicle with problems like an engine too heavy for the Navy to carry.

The same was true of HealthCare.gov, which was built under the cloud of an election and a Supreme Court decision that would determine whether it even got implemented, not to mention a political air war that delayed specifications until just a few months before the insurance exchange was supposed to launch. Late-stage changes in the specs of a system that's already monstrously complex make a hard job nearly impossible.

Too many pieces working together

In projects this large and complicated, the role of the "systems integrator" becomes very important. And in the case of the health-care exchange Web site, it's clear that someone should have done a better job of making sure that the user interface worked with the data hub, which worked with the back end -- bringing them together like a big Thanksgiving dinner that needs to all be served hot.

But sometimes it's hard to do much about pieces so disparate that their development speeds can't be predicted. With the F-35, besides the fact that components like the engine and sensor system were being built by different companies, the craft runs on a software system that has up to 24 million lines of code -- many times as large as for other aircraft. The Government Accountability Office knew in 2010 that it was way behind schedule but wasn't quite sure when it would be finished: Progress is "difficult to assess."

Moving before it's ready

In the late 1990s, the GAO did a series of reviews of commercial best practices for developing large, high-tech systems, in order to avoid the kinds of inefficiencies that had plagued weapons procurement in the past. "Making sure that new technology is mature -- that is, demonstrating that it works -- is the foundation for this approach," concluded the GAO's Louis Rodrigues, testifying on the joint strike fighter program in 2000.

Even then, the F-35 was supposed to be a model for acquisitions reform, but the military was already getting ahead of itself. Over the next decade, the Pentagon would ignore the GAO's advice and attempt to produce small numbers of planes at the same time they were being developed and tested. That resulted in flaws that, according to a report in Time, have so far cost $8 billion just to fix.

In some ways, it looks like the Joint Strike Fighter program and HealthCare.gov should have switched project management strategies: For the planes, the military should have completed the design and development process before testing and manufacturing, in the classic "waterfall" pattern, rather than trying to do it all concurrently. For the Web site, contractors should have designed and tested in iterative bursts, going from prototype to better prototype to, eventually, a final product that works.

Of course, there are many, many other examples of gigantic procurement failures that have real effects on peoples lives, with their own lessons for how the system could function better. The majority, though, probably have something to do with what brought down the programs everybody knows about.

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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