A federal watchdog is throwing a red flag on a $60.2 million Hurricane Sandy Recovery contract New Jersey officials awarded to the Canadian firm behind the disastrous Obamacare Healthcare.gov web site.
CGI Federal lost its $93 million contract for Healthcare.gov after it crashed within hours of going live in 2013 and contained so many design flaws the Obama administration had to assemble an emergency team to make the Obamacare website minimally operable.
Five months before that widely publicized digital disaster, CGI won the New Jersey contract in a procurement process that the Department of Housing and Urban Development’s inspector general now says was rife with serious flaws.
New Jersey officials were required to comply with federal procurement rules because the $60.2 million was awarded as part of Washington’s $1.5 billion disaster recovery assistance to the state in the wake of Hurricane Sandy.
The contract was to design and operate the Sandy Integrated Recovery Operations and Management System for administering the federal funds. New Jersey officials claimed they complied with all applicable federal requirements in their selection of CGI.
But state officials “did not procure services and products for its system in accordance with federal procurement standards or comply with all federal cost principle requirements for supporting salary and wage compensation,” the IG said in a report made public late Friday.
“Specifically, it did not prepare an independent cost estimate and analysis before awarding the system contract to the only responsive bidder. It also did not ensure that option years were awarded competitively and included provisions in its request for quotation that restricted competition,” the report said.
“Further, it did not ensure that software was purchased competitively and that the winning contractor had adequate documentation to support labor costs charged by its employees,” it said.
