Preventing the Next Obamacare Tech Fail

Firing CGI Federal treats a symptom and does nothing for the problem. So what would a real solution look like?

Rocky rollout: HealthCare.gov.
(C)2012 RICHARD A BLOOM
Dustin Volz Sophie Novack
Dustin Volz Sophie Novack
Jan. 16, 2014, midnight

A head has rolled, but the body re­mains broken.

In ter­min­at­ing CGI Fed­er­al’s role in Health­Care.gov, Pres­id­ent Obama fi­nally “fired” one of the parties re­spons­ible for Obama­care’s faulty web­site. That may ap­pease the chor­us of those call­ing on Obama to hold someone “ac­count­able,” but it does noth­ing to fix the un­der­ly­ing prob­lem: the sys­tem for se­lect­ing private con­tract­ors that picked CGI Fed­er­al in the first place.

“The worst thing we can do is de­clare vic­tory and go home,” said Stan So­lo­way, pres­id­ent and CEO of the Pro­fes­sion­al Ser­vices Coun­cil. “We may or may not have helped Health­Care.gov, but we’ve done noth­ing to fix the sys­tem­ic is­sue.”

IT ex­perts say that pre­vent­ing the next Health­Care.gov would re­quire a top-to-bot­tom over­haul of the way the gov­ern­ment picks and man­ages con­tract­ors, and that won’t be easy. Such re­form would re­quire bi­par­tis­an, bicam­er­al co­ordin­a­tion from a Con­gress that fre­quently fails to pass even the most straight­for­ward bills; and a sig­ni­fic­ant shift in cul­ture that brings gov­ern­ment man­age­ment of IT in line with rap­idly de­vel­op­ing tech­no­logy.

So what would it take to con­nect the best firms with the biggest fed­er­al con­tracts? Ad­voc­ates in the field identi­fy three ma­jor re­forms.

Step 1: Change who calls the shots

Gov­ern­ment needs to cre­ate a cent­ral­ized of­fice for de­velopers and de­sign­ers to test IT and re­spond to prob­lems as they sur­face, said Clay John­son, an IT-re­form cru­sader and former pres­id­en­tial in­nov­a­tion fel­low.

Such a ded­ic­ated team of tech-lit­er­ate people could com­mu­nic­ate with con­tract­ors dir­ectly about a pro­ject’s pro­gress and chal­lenges, help solve them, and, most im­port­antly, coun­sel the gov­ern­ment on which groups should be awar­ded con­tracts in the first place.

“There are plenty of people in­side of gov­ern­ment who know tech­no­logy and are really good with tech­no­logy,” John­son said. “But the prob­lem is that those people don’t have a lot of power on how these pur­chas­ing de­cisions get made.”

Step 2: A more trans­par­ent bid­ding pro­cess

Pro­cure­ment-re­form ad­voc­ates ad­di­tion­ally want to see con­tract­ing of­ficers make bids for IT con­tracts a more open pro­cess, where any­one — large con­sult­ing be­hemoths or in­nov­at­ive start-ups — can ap­ply for the right to do busi­ness. This seems like an easy fix, but the reas­on bid­ding wars are of­ten lim­ited is be­cause of a no-risk en­vir­on­ment for con­tract protests, in which losers can file a pe­ti­tion with the Gov­ern­ment Ac­count­ab­il­ity Of­fice against a win­ning con­tract even if their com­plaints are en­tirely mer­it­less.

John­son fa­vors im­ple­ment­ing “an NFL yel­low-flag rule” that would lim­it the num­ber of protests a po­ten­tial con­tract­or could file in any giv­en year. He also wants to ease the reg­u­lat­ory hurdles a com­pany needs to clear be­fore it can even be con­sidered a gov­ern­ment con­tract­or, as the cur­rent sys­tem in­centiv­izes bur­eau­crat­ic flu­ency over skills and po­ten­tial.

Step 3: Com­pet­it­ive pay for top tal­ent

Pro­cure­ment re­form re­quires bet­ter com­pens­a­tion for con­tract of­ficers, who could eas­ily find much high­er wages work­ing in places like Sil­ic­on Val­ley — where the av­er­age de­veloper hauled in $118,900 in 2012, ac­cord­ing to a study by a Bay Area tech­nic­al-re­cruit­ment firm. That’s tens of thou­sands of dol­lars more than what sim­il­ar jobs in gov­ern­ment can of­fer, ac­cord­ing to data tracked by the Of­fice of Per­son­nel Man­age­ment, Glass­door.com, and oth­ers. Mon­et­ary in­cent­ives for suc­cess­ful pro­jects and in­vest­ments in train­ing work­shops for of­ficers are fre­quently-floated solu­tions.

So what’s stand­ing in the way?

Demo­crats and Re­pub­lic­ans gen­er­ally agree on the need for these kinds of re­forms, and the Health­Care.gov dis­aster ad­ded pres­sure to ac­cel­er­ate le­gis­la­tion that would pre­vent a sim­il­ar tech de­bacle from hap­pen­ing again. Yet a bi­par­tis­an bill that had mo­mentum at the end of last year has once again hit a wall in Con­gress.

The Fed­er­al In­form­a­tion Tech­no­logy Ac­quis­i­tion Re­form Act (FIT­ARA), co­sponsored by Reps. Dar­rell Issa, R-Cal­if., and Ger­ald Con­nolly, D-Va., would ad­dress some, but not all, of the con­cerns raised by pro­cure­ment-re­form agit­at­ors. The bill was passed in the House in June of last year, and was tacked on as an amend­ment to the Sen­ate’s an­nu­al de­fense reau­thor­iz­a­tion bill be­fore be­ing stripped off in Decem­ber. FIT­ARA — which would cre­ate an of­fice to co­ordin­ate IT product ac­quis­i­tion, boost au­thor­ity of the Chief In­form­a­tion Of­ficers Coun­cil, re­strain waste­ful spend­ing on IT ac­quis­i­tions, and re­quire agen­cies to more thor­oughly track and re­port their IT is­sues — is cur­rently lan­guish­ing in the Sen­ate Home­land Se­cur­ity and Gov­ern­ment­al Af­fairs Com­mit­tee.

A ma­jor ele­ment of FIT­ARA in­volves con­sol­id­at­ing au­thor­ity in a cent­ral chief in­form­a­tion of­ficer, which sup­port­ers say would have pre­ven­ted, or at least quelled, the man­age­ment is­sues that plagued the im­ple­ment­a­tion of the Af­ford­able Care Act. “The [Health­Care.gov] rol­lout didn’t have a pro­ject dir­ect­or,” Con­nolly said. “FIT­ARA ad­dresses that and chooses one per­son called CIO with the re­spons­ib­il­ity, ac­count­ab­il­ity, and flex­ib­il­ity of de­cision-mak­ing.”

The re­form meas­ures in­cluded in FIT­ARA have broad sup­port from both parties, both cham­bers, and the pres­id­ent, yet it seems am­bi­val­ence — not op­pos­i­tion — got in the way. Con­nolly said he is still op­tim­ist­ic that the bill will pass in the near fu­ture.

Yet the Sen­ate re­mains stuck, at least for the mo­ment. While the bill has passed eas­ily in the House, Con­nolly pre­dicts it will go through sev­er­al it­er­a­tions in the up­per cham­ber.

Even FIT­ARA’s sup­port­ers say the bill may not ac­com­plish everything, but it’s a start. “Fed­er­al IT re­form is an in­cred­ibly large is­sue,” said Caitlin Car­roll, a spokes­wo­man for Rep. Issa. “There are al­ways more things we could be do­ing; for now it’s a good step in the right dir­ec­tion.”

In the mean­time, there is little reas­on to ex­pect a change in how IT con­tracts are de­term­ined. Due to the tight time frame to build the re­mainder of the on­line sys­tem, the Cen­ters for Medi­care and Medi­caid Ser­vices used an “ex­ped­ited pro­cure­ment pro­cess” in their hir­ing of Ac­cen­ture, in ac­cord­ance with Fed­er­al Ac­quis­i­tion Reg­u­la­tion.

Ac­cord­ing to CMS of­fi­cials, this in­ter­im ap­proach lasts 12 months, and the agency ex­pects to con­duct a “full and open com­pet­it­ive pro­cess” dur­ing that time. The web­site could get a third change in lead­er­ship in its first year and a half.

CMS de­clined to com­ment on how man­age­ment or con­tract­or changes fit in­to the lar­ger goal of fed­er­al IT pro­cure­ment re­form, and it seems the two are largely sep­ar­ate, at least un­til more sus­tain­able changes are made.

“I fo­cus less on the con­tract­or chosen — that’s one is­sue. But the abil­ity of the fed­er­al gov­ern­ment to man­age whatever con­tract­or it chooses? That’s what’s want­ing,” Con­nolly said. “In­tern­ally, we need re­form. We need to step up our game.”

Step 1: Change who calls the shots

Gov­ern­ment needs to cre­ate a cent­ral­ized of­fice for de­velopers and de­sign­ers to test IT and re­spond to prob­lems as they sur­face, said Clay John­son, an IT-re­form cru­sader and former pres­id­en­tial in­nov­a­tion fel­low.

Such a ded­ic­ated team of tech-lit­er­ate people could com­mu­nic­ate with con­tract­ors dir­ectly about a pro­ject’s pro­gress and chal­lenges, help solve them, and, most im­port­antly, coun­sel the gov­ern­ment on which groups should be awar­ded con­tracts in the first place.

“There are plenty of people in­side of gov­ern­ment who know tech­no­logy and are really good with tech­no­logy,” John­son said. “But the prob­lem is that those people don’t have a lot of power on how these pur­chas­ing de­cisions get made.”

Step 2: A more transparent bidding process

Pro­cure­ment-re­form ad­voc­ates ad­di­tion­ally want to see con­tract­ing of­ficers make bids for IT con­tracts a more open pro­cess, where any­one — large con­sult­ing be­hemoths or in­nov­at­ive start-ups — can ap­ply for the right to do busi­ness. This seems like an easy fix, but the reas­on bid­ding wars are of­ten lim­ited is be­cause of a no-risk en­vir­on­ment for con­tract protests, in which losers can file a pe­ti­tion with the Gov­ern­ment Ac­count­ab­il­ity Of­fice against a win­ning con­tract even if their com­plaints are en­tirely mer­it­less.

John­son fa­vors im­ple­ment­ing “an NFL yel­low-flag rule” that would lim­it the num­ber of protests a po­ten­tial con­tract­or could file in any giv­en year. He also wants to ease the reg­u­lat­ory hurdles a com­pany needs to clear be­fore it can even be con­sidered a gov­ern­ment con­tract­or, as the cur­rent sys­tem in­centiv­izes bur­eau­crat­ic flu­ency over skills and po­ten­tial.

Step 3: Competitive pay for top talent

Pro­cure­ment re­form re­quires bet­ter com­pens­a­tion for con­tract of­ficers, who could eas­ily find much high­er wages work­ing in places like Sil­ic­on Val­ley — where the av­er­age de­veloper hauled in $118,900 in 2012, ac­cord­ing to a study by a Bay Area tech­nic­al-re­cruit­ment firm. That’s tens of thou­sands of dol­lars more than what sim­il­ar jobs in gov­ern­ment can of­fer, ac­cord­ing to data tracked by the Of­fice of Per­son­nel Man­age­ment, Glass­door.com, and oth­ers. Mon­et­ary in­cent­ives for suc­cess­ful pro­jects and in­vest­ments in train­ing work­shops for of­ficers are fre­quently-floated solu­tions.

So what’s stand­ing in the way?

Demo­crats and Re­pub­lic­ans gen­er­ally agree on the need for these kinds of re­forms, and the Health­Care.gov dis­aster ad­ded pres­sure to ac­cel­er­ate le­gis­la­tion that would pre­vent a sim­il­ar tech de­bacle from hap­pen­ing again. Yet a bi­par­tis­an bill that had mo­mentum at the end of last year has once again hit a wall in Con­gress.

The Fed­er­al In­form­a­tion Tech­no­logy Ac­quis­i­tion Re­form Act (FIT­ARA), co­sponsored by Reps. Dar­rell Issa, R-Cal­if., and Ger­ald Con­nolly, D-Va., would ad­dress some, but not all, of the con­cerns raised by pro­cure­ment-re­form agit­at­ors. The bill was passed in the House in June of last year, and was tacked on as an amend­ment to the Sen­ate’s an­nu­al de­fense reau­thor­iz­a­tion bill be­fore be­ing stripped off in Decem­ber. FIT­ARA — which would cre­ate an of­fice to co­ordin­ate IT product ac­quis­i­tion, boost au­thor­ity of the Chief In­form­a­tion Of­ficers Coun­cil, re­strain waste­ful spend­ing on IT ac­quis­i­tions, and re­quire agen­cies to more thor­oughly track and re­port their IT is­sues — is cur­rently lan­guish­ing in the Sen­ate Home­land Se­cur­ity and Gov­ern­ment­al Af­fairs Com­mit­tee.

A ma­jor ele­ment of FIT­ARA in­volves con­sol­id­at­ing au­thor­ity in a cent­ral chief in­form­a­tion of­ficer, which sup­port­ers say would have pre­ven­ted, or at least quelled, the man­age­ment is­sues that plagued the im­ple­ment­a­tion of the Af­ford­able Care Act. “The [Health­Care.gov] rol­lout didn’t have a pro­ject dir­ect­or,” Con­nolly said. “FIT­ARA ad­dresses that and chooses one per­son called CIO with the re­spons­ib­il­ity, ac­count­ab­il­ity, and flex­ib­il­ity of de­cision-mak­ing.”

The re­form meas­ures in­cluded in FIT­ARA have broad sup­port from both parties, both cham­bers, and the pres­id­ent, yet it seems am­bi­val­ence — not op­pos­i­tion — got in the way. Con­nolly said he is still op­tim­ist­ic that the bill will pass in the near fu­ture.

Yet the Sen­ate re­mains stuck, at least for the mo­ment. While the bill has passed eas­ily in the House, Con­nolly pre­dicts it will go through sev­er­al it­er­a­tions in the up­per cham­ber.

Even FIT­ARA’s sup­port­ers say the bill may not ac­com­plish everything, but it’s a start. “Fed­er­al IT re­form is an in­cred­ibly large is­sue,” said Caitlin Car­roll, a spokes­wo­man for Rep. Issa. “There are al­ways more things we could be do­ing; for now it’s a good step in the right dir­ec­tion.”

In the mean­time, there is little reas­on to ex­pect a change in how IT con­tracts are de­term­ined. Due to the tight time frame to build the re­mainder of the on­line sys­tem, the Cen­ters for Medi­care and Medi­caid Ser­vices used an “ex­ped­ited pro­cure­ment pro­cess” in their hir­ing of Ac­cen­ture, in ac­cord­ance with Fed­er­al Ac­quis­i­tion Reg­u­la­tion.

Ac­cord­ing to CMS of­fi­cials, this in­ter­im ap­proach lasts 12 months, and the agency ex­pects to con­duct a “full and open com­pet­it­ive pro­cess” dur­ing that time. The web­site could get a third change in lead­er­ship in its first year and a half.

CMS de­clined to com­ment on how man­age­ment or con­tract­or changes fit in­to the lar­ger goal of fed­er­al IT pro­cure­ment re­form, and it seems the two are largely sep­ar­ate, at least un­til more sus­tain­able changes are made.

“I fo­cus less on the con­tract­or chosen — that’s one is­sue. But the abil­ity of the fed­er­al gov­ern­ment to man­age whatever con­tract­or it chooses? That’s what’s want­ing,” Con­nolly said. “In­tern­ally, we need re­form. We need to step up our game.”

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