Sep 18, 2015

Agency Mismanaged $600 Million in Contracts

Post by Freedom Partners

Nearly two years after the disastrous rollout of, a new government audit has found that the agency responsible for overseeing the site’s construction bungled over $600 million in contracts.

According to the report released this week by the Department of Health and Human Services Office of Inspector General, the Centers for Medicare and Medicaid Services (CMS) deliberately disregarded federal training rules, kept poor records and ignored gross incompetence that led to millions in additional costs.

The audit—the first documentation of oversight problems prior to the infamous launch of the website in October 2013—focused on 20 contracts worth over $605 million to eight companies. It details how CMS ignored a federal rule requiring employees who oversee especially expensive contracts to receive additional training. The report cites an unnamed employee who managed a $130 million contract while lacking the certification to handle contracts over $25,000. In one case, an employee simply didn’t realize that a contractor’s monthly reports were exceeding cost projections—leading to $28 million in cost

CMS hasn’t disclosed whether any employees had been terminated or disciplined. Amazingly, the agency’s contracting staff—which now numbers more than 400—still haven’t completed their training for handling large government contracts.

The fact that this giant government agency has wasted millions of dollars shouldn’t come as a surprise, but it should raise alarm. CMS is the same federal agency that has mismanaged the implementation of Obamacare. It is also charged with releasing financial analyses and enrollment reports on Obamacare, determining guidelines for health insurance coverage across the country, launching pilot health care programs, awarding millions in grants to organizations to promote Obamacare, determining payments for hospitals and handing out taxpayer-funded subsidies to insurance companies.

With CMS’s expansive role in the nation’s health care, it’s extremely disconcerting to learn of the agency’s ignorance of federal laws and recklessness with the tax dollars of hardworking Americans.

Meanwhile, as President Obama is threatening to veto the modest spending restraints put into place three years ago, waste and abuse continue to run rampant in Washington. This kind of incompetence is a good reminder that: 1. the federal government is not capable of running health care, and 2. if there is ever going to be any accountability for our tax dollars, Congress needs to keep the current spending caps under the Budgetary Control Act in place.