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CMS Did Not Always Manage and Oversee Contractor Performance for the Federal Marketplace as Required by Federal Requirements and Contract Terms

Beginning on October 1, 2013, the Federal marketplace offered private insurance plans, known as qualified health plans, and enrolled individuals in those plans through its Web site or through other means. We reviewed 20 of 62 contracts that the Centers for Medicare & Medicaid Services (CMS) identified as awarded for the development, implementation, and operation of the Federal marketplace to determine the contract requirements for monitoring and overseeing contractor performance.

Contracting officers and contracting officer's representatives did not always manage and oversee contractor performance as required by Federal requirements and contract terms. CMS did not always comply with Federal regulations regarding designation and certification requirements for contracting officer's representatives. Also, contracting records did not always include all critical contract deliverables and other management and oversight documentation.

Because CMS did not always provide adequate contract management and oversight for Federal marketplace contracts, (1) contractor delays and performance issues were not always identified, (2) a contractor incurred unauthorized costs that increased the cost of the contract, (3) contracting officers in all Government agencies did not have access to contractor past-performance evaluations when making contract awards, and (4) critical deliverables and management decisions were not properly documented.

In addition, the Health and Human Services Acquisition Regulation and the Standards of Ethical Conduct for Employees of the Executive Branch may not have been complied with in connection with an employee who served as a member of the technical evaluation panel for one contract.

We recommended that CMS (1) direct contracting officers and contracting officer's representatives to comply with Federal regulations and contract terms by ensuring that all contract deliverables are received and are used in their management and oversight of the contract; (2) direct acquisition personnel not to authorize additional work on contracts until the work is approved by the contracting officer and properly funded; (3) direct contracting officers to prepare contractor past-performance evaluations at least annually and at the conclusion of the contract and electronically submit them to the Contractor Performance Assessment Reporting System; (4) direct contracting officers to designate and authorize contracting officer's representatives in writing and identify their specific duties, responsibilities, and limitations for each contract they manage and oversee; (5) provide appropriate training for contracting officer's representatives to enable them to gain experience and to achieve and maintain their appropriate level of acquisition certification; (6) maintain contracting files that adequately document contractor performance and CMS management and oversight of contracts; and (7) require all acquisition personnel to disclose their past-employment relationships for purposes of determining their eligibility to participate in making contract award decisions.

CMS concurred with our recommendations and described corrective actions it had taken or planned to take to address them.

Filed under: Center for Medicare and Medicaid Services