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Cost Of Obamacare Contract Has At Least Quintupled

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Joseph Marks
Next Gov
February 24, 2014

The cost of the computer cloud that supports back-end data sharing for HealthCare.gov and state Obamacare marketplaces grew to $60 million, more than five times its original value, by the time the troubled site was declared fully functional on Nov. 30, 2013, contracting documents show.

While the site has performed generally well since that date, the massive cost increase is further evidence that officials were ill-prepared for HealthCare.gov’s launch and drastically underestimated the amount of technology and storage the site would require.

The government’s contract with Terremark, Verizon’s cloud division, had already quadrupled from $11 million when it was first awarded in 2011 to $46 million at the time of HealthCare.gov’s disastrous launch in October 2013. That included a $9 million adjustment just days before launch when testing revealed the cloud could only support 10,000 concurrent HealthCare.gov users rather than the expected 50,000.

CMS ordered an additional $15.2 worth of cloud services from Terramark between the launch date, when most users were unable to access key portions of the site, and Nov. 30, when officials declared the site was performing at an acceptable level, according to a justification for other than full and open competition document posted on Thursday.

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This article was posted: Monday, February 24, 2014 at 11:04 am





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