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Three states are reconsidering, while one ends, contracts with maker

Booklets outlining health insurance options for Californians is seen at a Senior Information & Resource Fair in South Gate, California September 10, 2013 . The event included a discussion of how the Affordable Care Act, also called "Obamacare" will impact senior citizens and what insurance plans will be available to them. With just weeks until a centerpiece of the health care reform law launches, the task of spreading the word about new health insurance marketplaces will fall to local navigators and counselors employed locally but funded by federal grant money. AFP PHOTO / Robyn BeckROBYN BECK/AFP/Getty Images Robyn Beck/AFP/Getty Images

Three states are reevaluating contracts with CGI Group, the firm behind whose contract the Obama administration ended last week. Another, North Carolina, just ended a contract with CGI to build a tax processing system.

In a brochure, the firm says it is implementing health exchanges in seven states — California, Colorado, Hawaii, Kentucky, Massachusetts, New Mexico and Vermont.

Here’s where the three states reconsidering CGI contracts, and North Carolina stand with the company:

North Carolina

After shelling out nearly $65 million to CGI over five years, North Carolina is ending its relationship with the IT firm. The contractor had been developing a tax system for the state, which officials from both sides said has already helped to identify $320 million in savings or unpaid taxes, WRAL reports. Including payments to other contractors, the state has spent $85 million on the system which it plans to rebid. Missed deadlines and the fact that the system didn’t quite meet the state’s needs forced officials to reconsider, The News & Observer reports. In a release, CGI described the decision as mutual.


In light of the Obama administration’s decision, state lawmakers in Hawaii are weighing whether that state should do the same, according to the Honolulu Star Advertiser. Hawaii also paid CGI more than $85 million over more than a decade to build a tax system that Hawaii News Now describes as having been “plagued with problems and crashed from time to time.” The contract to run the health exchange Web site was for $53 million.


State officials ordered an independent review of problems with the Massachusetts’s health insurance marketplace Web site, the Massachusetts Health Connector. And all options are on the table, Health Connector Board Chairman and Secretary of Administration and Finance Glen Shor said at a board meeting last Thursday.

“[The review] will inform us about CGI’s continuing roles and responsibilities and, among other things, it will help inform us about the level of damage done and the appropriate approach to accountability,” he said, according to The Republican. A report due out on Friday will assess the Web site’s quality and problems, costs and will weigh in on CGI’s future role with the exchange.


A similar review will examine the troubled rollout of the Vermont exchange’s Web site, which Gov. Peter Shumlin in a speech last Tuesday said “limped out of the gate and is only now hitting its stride.” The contractors hired for the site — CGI being the main one — “have underperformed at every turn,” he added. Shumlin vowed to establish an independent review, with some GOP lawmakers pushing for a local firm to take the reins, according to VTDigger.

Niraj Chokshi is a general assignment reporter for The Washington Post.

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