Will HealthCare.gov Mess Spur Procurement Reform?

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A leading technology trade group is suggesting that the very public failings of the HealthCare.gov rollout should lead Congress and the Obama administration to get serious about procurement reform.

TechAmerica's Trey Hodgkins, senior VP, global public sector, held a teleconference and answered questions about how the Center for Medicare and Medicaid Services (CMS) procurement processstumbled so badly. TechAmerica is a trade association of companies in the communications and information technology industry.

"The root of everything that is wrong with HealthCare.gov is the government procurement process," Hodgkins said. "This horse-and-buggy process … just doesn't keep pace with innovation."

He said the current process is rooted in Cold War-era acquisition processes geared to large programs. In the Internet-driven, technology-based society of today, however, "innovation doesn't wait for Congress or the U.S. government. They are no longer drivers [of technology] in the U.S. economy."

[ Get more on Healthcare.gov's technical woes. Read Obamacare Rollout Hampered By Operating Rules Lag. ]

Hodgkins said TechAmerica's investigation of what has happened so far with the website found that the government used an indefinite delivery-indefinite quantity (IDIQ) vehicle issued in 2007, with multiple task orders placed against the contract in 2011 for the different elements of the website's functionality.

"The government in fact took over the role of taking those pieces and parts and making sure they functionedand were interoperable," he said. "I'm not sure a contract from 2007 was necessarily the best vehicle. Normally it would have been [issued] as a fair-and-open competition … that contributed to some of the challenges we're seeing today."

But he declined to offer an opinion on whether the website could be fixed. "We don't have that level of visibility into the specific programs."

Hodgkins said the government's emphasis has shifted to an emphasis on "lowest price, technically acceptable. I call that a fad, quite honestly," he said. "It's not contributing to taxpayers getting the best value."

He pointed out that acquisition professionals in the government are rewarded for sourcing decisions based on the lowest price, not on the successful outcome of the procurement. "There is a true disconnect between the [procurement and user] communities. The government end user frequently didn't get what they were looking for, and it doesn't provide the capabilities they were looking for," Hodgkins said. "That needs some significant attention in this review."

The last time there was an overhaul of government procurement regulations was in the mid-1990s -- when the Internet was barely off the ground. He pointed to the ways the world has changed since then, including the pervasiveness of the Internet and the development of a globally-driven economy with a supply chain that draws from companies all over the world.

Hodgkins also pointed the finger at the significant regulatory burden placed on the contracting community.

"The data collection and reporting requirements through September of this year -- and we believe these estimates are low -- add over $2 billion to the contracting community and just shy of a half-billion dollars to the government," he said.