CGI Had Pre-Existing Conditions



CGI Federal, the Canadian company behind, was originally awarded the $93 million contract to build the website in September 2011. The CGI contract is now worth $293 million, and the firm has come under intense scrutiny due to the technological failings of the health care website. CGI acquired American Management Systems (or, AMS) for $858 million in March 2004. AMS was a government consulting firm, advising on financial, healthcare, and communications. Although the company had several high points, prior to being acquired, issues arose from a contract with the State of Mississippi that bears resemblance to the issues that surrounded

Speaking to the Washington Post, a former CGI employee who was involved in the contracting process connected the dots between CGI and Obamacare to AMS and Mississippi. “Should CMS have recognized that, ‘Okay, here’s CGI Federal. It’s a new company, but, oh, my God, it looks a lot like the AMS from yesterday,’” the official asked. “Yes. I would consider that dropping the ball.’’

Another official said that the track-record of AMS, and since it had acquired AMS, CGI, could have taken the company out of the running for the website, “and probably should have.” Mississippi State Tax Commission approached AMS to create a tax website for the state. The state ended the contract, and began the lawsuit when the promised results did not materialize. In 1999, when Mississippi canceled the $11.2 million contract, $6 million had been paid. In 2000, a judge awarded $474.5 million to Mississippi in actual and punitive damages resulting from AMS.

According to employees who spoke to the Washington Post, CGI had presented a “technically superior” proposal for The proposal, and the fact that the company had been pre-screened, and approved in 2007 by then-President George W. Bush, made it an attractive option when the Obama Administration found themselves racing the clock in 2011 to have the website built. “There was very great time pressure,” one person familiar with the matter said.

A review of CGI did not include past short-comings, including delayed and or failing systems with a computer system built for the state of Hawaii. With past issues set aside, and the perception of a “superior” product, CGI was awarded the contract over International Business Machines, Computer Sciences Corp., and Quality Software Services, the three other firms who had applied. Shortly after the lawsuit settlement negotiation was announced, Gartner — a research and advisory company – published analysis of the Mississippi vs AMS case. ”Gartner has forecast high failure rates for these types of projects when they do not set clear and measurable objectives. When projects experience delays and complications, project management becomes much more challenging for the contractor and can magnify the risks of governments’ shortage of IT skills and their program management limitations.”

Real Clear Politics cited stronger leadership as a way to avoid another fiasco. The ideas echoed those written by Gartner over a decade ago. “The more requirements that are laid out, the more clear those requirements are, the better it is for any IT company in their ability to meet those requirements,” one IT industry insider said.

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