Red Flags? Company behind ObamaCare site has checkered past
by Kelley Vlahos, October 23, 2013 FoxNews.com (excerpts)
While the company behind the dysfunctional HealthCare.gov was virtually unknown to the American public until this month, critics say the Obama administration should have known this multibillion-dollar firm had a checkered history with other government contracts.
In projects stretching from Canada to Hawaii, parent company CGI Group and its subsidiaries ran into complaints about its performance. And this was while, and in some cases before, CGI Federal was paid millions, along with other contractors, to create the ObamaCare website.
"The morning I heard CGI was behind [Healthcare.gov], I said, my God, no wonder that thing doesn't work," said James Bagnola, a Texas-based corporate consultant who was hired by the Hawaii Department of Taxation (DOTAX) in 2008.
CGI Technologies and Solutions, Inc., another subsidiary, had been responsible for overhauling the IT systems for the Hawaii tax department, and then, developing its new delinquent tax collection services. Not only was the software and implementation problematic, but the second contract, signed in 2009, paid CGI millions for work it did not complete, according to a state audit completed in 2010 on the matter.
Still, they hold contracts all over the Hawaii government. Hawaii's Health Connector, the state's new health exchange for providing insurance options under ObamaCare, hired CGI to build its website. Like HealthCare.gov, the Hawaii portal had immediate problems when it launched on Oct. 1, but those have since been rectified and so far, according to Health Connector officials who spoke with FoxNews.com, they are not blaming CGI.
Bagnola doesn't buy it, saying when they overhauled DOTAX's IT, "the system was broken all the time."
"I can't believe people continue to hire incompetency," he added.
The firm's performance was also called into question when parent company, CGI Group, was hired to design and execute a new $46.2 million diabetes registry for eHealth Ontario, part of the Canadian government health care system. That contract was canceled in September 2012 after a series of delays that rendered the system obsolete, according to news reports at the time.
"They did not meet the requirements of their contract which was faced with many layers of delays, which caused great angst among the health care providers who are trying to do their best," Frances Gélinas, a member of Ontario's provincial parliament, told the Washington Examiner, in an Oct. 10 report.
It was reported initially that Canadian taxpayers were not on the hook for the nearly $15 million already spent by CGI because a clause in the contract said that if CGI did not meet the deadlines, it wouldn't get paid. The registry was supposed to be up and running by June 2011. A later audit, however, found that the provincial government spent $24.4 million of its own money on the project before it was scrapped.
Meanwhile, the state of Vermont is reportedly considering whether to penalize CGI for not meeting its deadlines for designing and producing Vermont's health care exchange, Vermont Health Connect, which is also experiencing the same kind of glitches as the federal system. In that case, the state recently signed an amended $84 million contract with CGI -- just $9 million less than the one it signed with the federal government in 2011. In late September, VermontDigger.org reported that CGI failed to meet 21 deadlines this summer and the state could charge as much as $125,000 a day in penalties as a result.
Bagnola suggested that CGI has been shrewd politically, giving to both Democrats and Republicans at both the state and federal levels. In the case of Hawaii, Bagnola said the company was able to continue to work on the DOTAX contract despite repeated complaints from management and a "corrosive" environment in which government employees felt pitted against CGI staff. This was noted in the final 2010 audit.
"I don't have an ax to grind here, except I was just trying to do my job for this team and stop the state of Hawaii from being ripped off," he said.
According to campaign records at OpenSecrets.com, CGI Group contributed $345,600 to federal candidates and parties -- both Democratic and Republican -- during the 2011-12 cycle. Some $147,000 went to the Republican Governors Association; and $35,000 to the Democratic Governors Association. The company spent $400,000 in lobbying expenditures between 2011 and 2012.
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