October 23, 2013

Unlike Halliburton in the Bush 43 Era, No-Bid Nature of CGI’s Obamacare Contract Is a Media-Kept Secret

In 2003, Halliburton Company received a great deal of scrutiny from the establishment press over certain no-bid contracts obtained in connection with the Iraq War. Examples, two of which are from the Associated Press, are here, here, and here. A Google News Archive Search on “Halliburton no-bid” not in quotes allegedly returns 1,760 items (Google’s counter is suspect, but the list extends to at least 19 pages, or well over 190 items, including multiple items in some listings).

In 2010, the Washington Times was virtually alone in reporting that the Obama administration, despite presidential candidate Barack Obama’s campaign promise never to entertain such deals, had entered into a no-bid contract with KBR, a former subsidiary of Halliburton, “worth as much as $568 million.” It turns out that CGI, the Canadian company which is the lead firm in the design and rollout of HealtCare.gov, also has a no-bid contract with the federal government. But an AP search on “CGI no-bid” (not in quotes) comes up empty. A Google News search on the same string (not in quotes) returns only four times, none of which are establishment press outlets.

The AP has mentioned CGI — barely, in a story on upcoming House hearings by Ricardo Alonso-Zaldivar and Alan Fram:

On Thursday, the House Energy and Commerce Committee will line up contractors, including CGI Federal, the lead developer of the website, and QSSI, which designed a back-room operation known as the federal data services hub. The hub is integral to verifying applicants’ personal information and income details, and the administration says it is working as designed.

… CGI vice president Cheryl Campbell said the administration was the “quarterback” of the entire effort.

Richard Pollock at the Washington Examiner, on the other hand, had meaningful details over a week ago, incudling (no story about the Obama administration is without it) a tieback to the Bush 43 administration (bolds are mine):

Feds reviewed only one bid for Obamacare website design


Federal officials considered only one firm to design the Obamacare health insurance exchange website that has performed abysmally since its Oct. 1 debut.

Rather than open the contracting process to a competitive public solicitation with multiple bidders, officials in the Department of Health and Human Services’ Centers for Medicare and Medicaid accepted a sole bidder, CGI Federal, the U.S. subsidiary of a Canadian company with an uneven record of IT pricing and contract performance.

CMS officials are tight-lipped about why CGI was chosen or how it happened. They also refuse to say if other firms competed with CGI, or if there was ever a public solicitation for building Healthcare.gov, the backbone of Obamacare’s problem-plagued web portal.

Instead, it appears they used what amounts to a federal procurement system loophole to award the work to the Canadian firm.

CGI was one of 16 companies that had been qualified by HHS during President George W. Bush’s second term to deliver, without public competition, a variety of hardware, software and communication products and services.

… (in 2007) CGI became eligible for multiple awards without public notice and in circumvention of the normal competitive bidding procurement process.

The multiple awards were in the form of “task orders” for projects of widely varying size. Over the life of the CGI contract — which expires in 2017 — the IT firm can receive awards worth anywhere from the “$1,000 to $4 billion,” according to a contracting document provided by CGI to the Washington Examiner.

This is apparently the route chosen by CMS officials in awarding the Obamacare Healthcare.gov website design contract to CGI.

How cute of Obama’s HHS to use a Bush era “task order” arrangement to clear the way for a no-bid contract for what was supposed to be the administration’s signature achievement.

How typical that the press is failing to recognize the existence of the no-bid arrangement. In many of the Halliburton-related instances a decade ago, there was no other firm with the capabilities required. Obviously, there are plenty of IT firms in competition with CGI.

Cross-posted at NewsBusters.org.



  1. have a typo:

    “— even though, unlike in many of the Halliburton-related instances, there was no other firm with the capabilities required.” –> I think you should say “where there was no other firm…”

    Comment by netsailer — October 24, 2013 @ 7:28 am

  2. Clarified. Thanks.

    Comment by Tom — October 24, 2013 @ 7:49 am

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