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HHS Extends Verizon Healthcare.gov Contract for $45 Million

In Case of 'Last Minute Delays or Issues'

12:08 PM, Jun 25, 2014 • By JERYL BIER
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In June 2013, even before the launch of Healthcare.gov, the Department of Health and Human Services (HHS) awarded a contract to Hewlett-Packard to replace Verizon's Terremark subsidiary as host for the Obamacare website and related Data Services Hub (DSH). However, as the March 31, 2014 date for the switch drew nearer, HHS signed a $58 million, seven-month extension with Verizon due to the debacle surrounding the launch of Healthcare.gov and the need to "stabilize the infrastructure." Now HHS has signed another extension to continue Verizon's services until March 31, 2015, if necessary, at an additional cost of up to $45 million.

The documents accompanying the notice say that CMS (Centers for Medicare and Medicaid Services) "anticipates fully transitioning" by the end of August, but if there are "last minute delays or issues" move to Hewlett-Packard, the contingency with Verizon may be necessary. The documents warn of dire consequences should the Hewlett-Packard transition be unsuccessful:

Failure to award this modification will greatly jeopardize the Marketplace program and result in system performance issues of healthcare.gov should the transition to the HP [Hewlett-Packard] HIM VDC [Health Insurance Marketplace Virtual Data Center] be unsuccessful.

The contract covers cloud computing, software, and the necessary technology infrastructure to keep the Obamacare Federal Facilitated Marketplace site functioning. 

Signatures on the Limited Source Justification indicate the process of extending the contract began in early May with the Chief Operating Officer of CMS eventually signing off on June 19.  

Open enrollment at Healthcare.gov is scheduled to begin on November 15, 2014 for coverage beginning in 2015.

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