Government awards more contracts to company that created glitchy ObamaCare website

CGI Federal Inc, the company that created large parts of the error-plagued ObamaCare exchange website, which it says it is scrambling to fix, has recently been awarded several other government contracts.

Since the ObamaCare exchange website launched on Oct. 1, government officials have signed at least five different agreements with CGI totaling $7 million, according to, a government website that lists government contracts. The contracts were for computer and software development at the Department of Health and Human Services, the Department of Commerce, and the Environmental Protection Agency.

One contract, for instance, was signed Oct. 19 by Department of Commerce officials that gives CGI Federal $266,164 to provide "IT and Telecom Systems Development" for the Patent Office.


The Commerce Department did not respond to inquiries from about why they made the deal.

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But CGI Federal defended that contract, saying the contract signing this month was essentially a technicality and an extension of an existing contract.

“CGI continues to deliver technology services and support under an existing contract agreement with the U.S. Department of Commerce, Patent and Trademark Office,” Linda Odorisio, Vice President of Communications for CGI, told

“It is the type work that has contributed to CGI's solid history of delivery and service to its government clients for more than 35 years,” she added.

But critics say it is absurd to give the company more government money and work at a time when other work they have done for the government is going poorly.

“This is a typical example of government creating perverse incentives,” George Mason University economics professor Donald Boudreaux told “Unlike, say, a private homeowner who fires a contractor who does a poor job, the government rewards such poorly performing contractors with new work at lucrative rates.”

CGI Federal was paid $290 million for its work in creating the ObamaCare exchange, and it was the one contractor that administration officials said failed to meet some expectations.

“We’ve had some issues with timely delivery,” Marilyn Tavenner, the head of the Centers for Medicare and Medicaid Services, said in testimony to Congress last week.

Criticism of the contracts spans the political aisle.

“I think it’s a problem,” said Alice Chen, who supports ObamaCare and is executive director of Doctors for America. “I think you’d be hard-pressed to find someone who doesn’t.”

Health policy experts also criticized the contracts.

“CGI Federal has no real skillset and a lot of the projects they've worked on have failed,” Avik Roy, a senior fellow at the Manhattan Institute who attended congressional hearings on the ObamaCare exchange failures, told

But he added that the failure is no surprise, considering the bureaucratic way that contracts are awarded.

“In order to get through the procurement process of the federal government, you have to go through all these hoops -- it's a highly organized thing just to meet all the regulatory standards. And so the typical coders and programmers who would normally love to join a Google or a Facebook or whatever, they're never going to join a CGI Federal,” he said.

Roy added that government may be as much to blame as CGI Federal.

“I'm sure CGI Federal didn't do a great job, but they were heavily constrained in terms of what they could do, and a lot of the guidelines that they needed to move forward on the project they didn't get until the last minute,” he said.

A Senate Republican staffer reached by agreed with that.

“I think one reason they're behind is that the administration didn't issue regulations from between Labor Day and Election Day last fall… it made things much more complicated for the contractor,” he said.

In congressional testimony, CGI Federal’s Senior Vice President Cheryl Campbell said that CGI is working hard to make the system better and defended the company’s performance.

“From our perspective, as painful as it sounds -- I know that the experience has been a difficult experience -- the system is working.  People are enrolling,” Campbell told Congress in testimony on October 24, and also promised that things would get better.

“There is no question that there are problems. And we are working together to solve those problems,” she said.

The author of this piece can be reached at or on twitter at @maximlott.