Contractor Behind Site Protested Loss of a CMS Contract Year Before Award

The contractor behind received the $8.9 million contract to design, develop, and implement the rate comparison tool integral to the site a year after protesting another lost bid with the Centers for Medicare & Medicaid Services.


CGI Federal Inc., a Virginia-based wholly-owned subsidiary of CGI Group, Canada’s largest technology company, filed a protest over the award of a $230 million contract to develop a CMS information technology system to a Falls Church, Va., company.

CGI claimed that the “agency’s oral discussions regarding its cost proposal were misleading, thereby causing the protester to significantly increase its level of effort and total estimated cost,” according to the Government Accountability Office’s November 2010 denial of the claim. Computer Sciences Corp. was awarded the contract.

At the first review of the bids, CGI received “fair” marks from the evaluators for technical architecture and key personnel and staffing. By the second revision CGI’s mark for technical architecture had been raised to “very good,” but the staffing for the project was still rated “fair.”

The GAO decision said CGI proposed both higher labor rates and a greater number of labor hours to complete the project. “Regarding CGI’s contention that the agency failed to properly consider the performance risks associated with CSC’s low cost, the argument is without merit,” the review found. “…The agency reasonably found CSC’s costs to be realistic, and CGI has not identified or explained how any of the specific cost elements of CSC’s proposal, such as its labor hours, labor rates, labor categories, or indirect rates, were unrealistic.”


“Throughout its protest, CGI also argues that CMS held fundamentally misleading discussions with CGI regarding its cost proposal, which led CGI to significantly increase its costs in its third proposal submission–CGI increased its total cost by approximately $137 million–which then led to CGI being eliminated from the competition… The record reflects that the agency’s discussions with CGI regarding the costs in its business proposal were meaningful and not misleading.”

CGI also took issue with CMS rating its past performance as simply “good,” maintaining that it was exceptional.

“In addition, to the extent there were performance issues with one of its subcontractors, specifically [DELETED], which CGI had proposed to perform approximately [DELETED] of the work under the task order, CGI maintains that it had identified corrective measures to address the performance issues in response to discussion questions raised by CMS,” says the GAO decision.

“We have no basis to conclude that CMS’s assessment of CGI’s past performance as ‘good’ was unreasonable or otherwise improper. As noted above, CGI’s past performance ratings and those of its principal subcontractor, [DELETED], were mixed, ranging from ‘outstanding’ to ‘fair.’ Thus, in our view, a rating of ‘good’ was entirely reasonable. To the extent CGI advised CMS how it intended to address concerns with [DELETED] performance in the future, these future plans evidently did not affect CMS’s perception of past performance risk stemming from the fact that CGI proposed to use a subcontractor which had a prior history of only ‘fair’ performance.”


A year after the protest was denied, CGI announced that it had been awarded the CMS contract to develop the Center for Consumer Information and Insurance Oversight’s Rate and Benefits Information System to pull rate and benefits data from health insurance providers.

“Through RBIS, this information will be made available on the Department of Health and Human Services’ website, providing consumers with resources to make appropriate and affordable health and health insurance-related decisions,” CGI said at the time. “Consumers are able to review benefit, cost sharing, and basic price comparison information for the health plans locally available to them.”

The White House said today that “alpha teams” composed of CGI staff, CMS and healthcare providers’ own tech personnel were trying to fix the myriad problems with

CGI is no stranger to government business, with lucrative deals across many federal agencies and states.

Recent contracts include a $48.7 million deal to modernize electronic medical records for the New York State Office of Mental Health, a $38.75 million agreement with the state of California to implement its new centralized statewide voter registration database system, and a March deal with Vermont to “deliver the technology infrastructure” for that state’s healthcare exchange. Only about 1 percent of those expected to sign onto Vermont’s exchange have been able to do so as the site has been plagued with problems.


CGI has been the prime contractor for other states’ health exchanges as well, including Colorado. “Only 226 people enrolled in new healthcare policies in Colorado during the initial rollout, while over 18,000 have created an account,” Rep. Cory Gardner (R-Colo.) noted this week in a letter to Patty Fontneau, the executive director of Connect for Health Colorado.

In January, CGI announced a $7 billion indefinite-delivery, indefinite-quantity contract to deliver software and systems engineering to the U.S. Army Communications-Electronics Command. In November 2012 CGI won a $65 million contract to modernize the Navy’s nationwide recruiting system. That month was the re-launch of, redesigned by CGI as a multi-platform experience under a 2010 contract.

CGI’s client list in the federal government is extensive, including the Administrative Office of the U.S. Courts, Architect of the Capitol, Department of Energy, Department of Commerce, Department of Health & Human Services, Department of Housing & Urban Development, Department of the Interior, Department of Justice, Department of State, Department of Treasury, Department of Transportation, Environmental Protection Agency, General Services Administration, Library of Congress, Office of Personnel Management, Smithsonian Institution, U.S. Agency for International Development, U.S. Patent & Trademark Office, Department of Homeland Security, NASA, and the U.S. Coast Guard.


At the Department of Defense, CGI’s clients include the Air Force Materiel Command, Army Forces Command, Army Materiel Command, Army Reserve Command, Defense Information Systems Agency, Joint Strike Fighter Program Office, Naval Air Systems Command, Naval Sea Systems Command, Office of the Secretary of Defense, Space & Naval Warfare Systems Command, Marine Corps and U.S. Transportation Command.

The House Oversight and Government Reform Committee obtained information this week that just a month before the launch the Obama administration directed CGI to change the site’s design to conceal price comparisons from consumers who hadn’t registered.

“Given the information gathered by the Committee thus far, we are concerned that the Administration required contractors to change course late in the implementation process to conceal ObamaCare’s effect on increasing health insurance premiums,” states the letter from Chairman Darrell Issa (R-Calif.) and Subcommittee Chairmen John Mica (R-Fla.), James Lankford (R-Okla.), Jim Jordan (R-Ohio) and Blake Farenthold (R-Texas) to Steve VanRoekel, the Chief Information Officer, and Todd Park, the Chief Technology Officer, at the White House Office of Management and Budget. “We believe that the political decision to mask the ‘sticker shock’ of ObamaCare to the American people prevented contractors from using universally accepted and OMB-advocated IT ‘best practices’ in the development and roll out of this massive federal government IT project. When prudentdesign and programming decisions are subordinated to politics, the result is the chaotic mess we have today.”


“CGI officials told Committee staff that CMS officials and employees constantly mentioned the ‘White House’ when discussing matters with CGI. For example, CMS officials would routinely state: ‘this is what the White House wants,’” the letter continues.

“Moreover, CGI officials told Committee staff that the ability to shop for health insurance without registering for an account – a central design feature of the health insurance exchange – was removed ‘in late August or early September.’ Although, CGI officials were not able to identify who within the Administration made the decision to disable the anonymous shopping feature, evidence is mounting that political considerations motivated the decision”


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