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Report (OEI-03-14-00231)

08-26-2014
An Overview of 60 Contracts That Contributed to the Development and Operation of the Federal Marketplace

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Summary

WHY WE DID THIS STUDY

The Patient Protection and Affordable Care Act required the establishment of a health insurance exchange (marketplace) in each State. For States that elect not to establish their own marketplaces, the Federal Government is required to operate a marketplace on behalf of the State. A marketplace is designed to serve as a one-stop shop where individuals can obtain information about their health insurance options, determine eligibility for insurance affordability programs, and select the plan of their choice. CMS operates the Federally Facilitated Marketplace (Federal Marketplace). CMS relied-and continues to rely extensively-on contractors to operate the Federal Marketplace. This report is the first in a series that will address the planning, acquisition, management, and performance oversight of Federal Marketplace contracts, as well as various aspects of Federal Marketplace operations. This report provides descriptive and financial data on 60 contracts related to the development of the Federal Marketplace at HealthCare.gov.

HOW WE DID THIS STUDY

CMS identified 60 contracts ("the contracts") related to the development and operation of the Federal Marketplace. Not all of these contracts were awarded solely for the purpose of the Federal Marketplace. To determine the estimated value of the contracts and the amount obligated for the contracts as of February 2014, OIG analyzed contract, order, and modification documentation provided by CMS for the 60 contracts. We calculated the total obligation and expenditure amounts related to the Federal Marketplace portions of each contract by summarizing the financial accounting transactions that CMS identified as related to the Federal Marketplace for each contract. These financial accounting transactions (obligations and expenditures) include all transactions that CMS processed through its Healthcare Integrated General Ledger Accounting System (HIGLAS) as of February 28, 2014, that CMS had provided to us as of June 18, 2014.

SUMMARY

The 60 contracts related to the development and operation of the Federal Marketplace started between January 2009 and January 2014. The purpose of the 60 contracts ranged from health benefit data collection and consumer research to cloud computing and Web site development. The original estimated values of these contracts totaled $1.7 billion; the contract values ranged from $69,195 to over $200 million. Across the 60 contracts, nearly $800 million has been obligated for the development of the Federal Marketplace as of February 2014. As of that date, CMS had paid nearly $500 million for the development of the Federal Marketplace to the contractors awarded these contracts.

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