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Audit details boondoggle of contracts worth $600 million

(AP Photo/Don Ryan, File)

(AP Photo/Don Ryan, File)

A new government audit of found failures in management, oversight, unauthorized costs, and sloppy documentation as the federal government rolled out the online marketplace.

The audit, from the Department of Health and Human Services, details the mistakes and offers several recommendations for improvement. The audit targeted the Centers for Medicare and Medicaid Services, the department responsible for federal health programs.

The federal government awarded about $600 million in contracts to build the site.

The succinct report title, “CMS Did Not Always Manage and Oversee Contractor Performance for the Federal Marketplace as Required by Federal Requirements and Contract Terms,” emphasizes corner cutting and inherent problems with the website launch.

The areas singled out to improve included federal regulatory compliance, approval oversight, understanding of responsibilities and limitations for employees, better training, disclosure on conflicts of interest, and contract record-keeping.

A certain lack of consequences for failure runs through the report. Bloomberg notes one instance:

In January 2012, for example, new federal rules required employees overseeing contracts worth more than $10 million to undergo 96 hours of training meant to prepare them to manage complex projects. CMS disregarded this requirement and allowed less qualified employees to oversee contracts worth as much as $50 million.

In other instances, leadership over some contracts changed rapidly. With quick leadership succession, compliance violations and deadlines were easier to overlook. One contract, Bloomberg notes, with CGI Federal had a $28 million cost overrun due to employee inexperience, and the issue wasn’t identified until management changed.

Former leaders of the relevant agencies, Kathleen Sebelius, the DHHS secretary and Marilyn Tavenner, the CMS chief, left their posts in 2014 and 2015, respectively.

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