What We've Learned About Federal Contracting Through Healthcare.gov

The Healthcare.gov roll-out has been an epic debacle. If media reports are to be believed, just about everything that the Department of Health and Human Services (HHS) did for the project was wrong. From the limited procurement process, to the management structure, the scope and requirements, and the final testing, HHS is suffering from poor execution at every level.

Most of the media coverage seems to imply that the failure conditions are exceptional. Federal contracting insiders will admit, albeit quietly in some circles, that the only difference with Healthcare.gov is visibility. Set aside the scrutiny, and the Healthcare.gov failure is, unfortunately, quite common.

An early opinion piece in the Washington Post focuses on the original lead Healthcare.gov contractor, CGI Federal, and its ability to continue winning big projects despite past failures, including projects it conducted as American Management Systems (AMS). (Disclaimer: The author is a former AMS employee). The analysis even implies that current CGI executives had roles on some of the biggest historical goofs at the company, only to rise to the top of the organization. In the end, the piece begs the question of whether failure leads to success at CGI.

That theme of success through failure is only a symptom of much more systemic problems. I’ve discussed some of the challenges that government project managers face in prior postings, so I’ll focus more on the project/contractor dynamic in this series, specifically on how Federal contracting firms can grow through failure, why the government’s need for contracting firms perpetuates further need for contractors, and on how the government procurement process favors large conservative firms over smaller, more innovative and contemporary organizations. I’ll conclude with a discussion of how these factors all contribute to a repeated cycle of failure in government IT deployments and some suggestions of what the government can, but likely won’t, do about them.

Part 1: Lucrative Failure

Part 2: It’s Good to be a Contracting Firm

Part 3: The Definition of Madness

Part 4: Intervention and Rehab

Note: American Management Systems (AMS), the company that was purchased by CGI in 2004 and that eventually became CGI Federal, employed me from 1997 to 2004, the timeframe focused on in the Washington Post opinion piece. In fact, my last official day with the organization was the day after the purchase was publicly announced. While many of my old friends and colleagues continue to work for CGI Federal, I do not have any knowledge that any of them worked on the Healthcare.gov project. I never worked directly with any of the executives mentioned in the Washington Post piece, but I may have supported past projects that they were associated with. My opinions here are mine alone based on my history in U.S. and International government IT consulting and should not be attributed to any organization that I am or have ever been employed by. At the time that I’m writing this, I am not employed as a consultant and I’m willing to bet that this won’t be looked on favorably should I consider returning to the market.