A new report by the Government Accountability Office reveals the massive costs of Healthcare.gov—ballooning far beyond initial estimates, reaching $840 million in March 2014 and counting...
In a congressional testimony by GAO's William T. Woods released Thursday revealed the often quadrupled costs of development of the egregiously mismanaged site. TIME reports:
According to Woods’ testimony, the cost of building one part of HealthCare.gov increased from $56 million to more than $209 million between September 2011 and February 2014. Expenses for the associated data hub ballooned from $30 million to $85 million. Woods says that by March 2014, CMS reported “obligating $840 million for the development of HealthCare.gov and its supporting systems.”
Woods testified that federal officials delayed assessing the functionality of the site from March 2013 until September 2013, just a few weeks before the site went live nationwide—a window clearly too narrow to address any significant issues in such a complex system. In the panic leading up to and following the embarrassing launch of the site, Woods reported, federal officials began throwing money at the “glitch”-ridden system, repeatedly approving unbudgeted expenditures.
Woods said that the GAO found around 40 instances of additional spending, totaling $30 million, approved by CMS employees. “This is not to say the work was not necessary; however, the work was not approved properly,” said Woods.
GAO’s study found that CMS officials had opportunities to withhold “major funds” from contracts but decided not to, and after the initial failure, continued to overpay for contracted services, particularly to Accenture, to whom they paid almost twice the amount of the original contract:
To save HealthCare.gov after its failed launch, HHS hired the firm Accenture to continue work on the website. But that contract, too, has cost far more than planned. According to Woods’ testimony, the $91 million contract awarded to Accenture in January 2014 increased to $175 million by June 5.
