CGI Loses Obamacare Contract to Accenture: Report

January 10, 2014

CGI Group Inc., the company that built the federal Obamacare website, will be replaced next month when its contract with the U.S. government expires, a person familiar with the decision said.

The Obama administration intends to sign a contract with Dublin-based Accenture Plc to complete unfinished work on and run the site, said the person, who asked not to be identified because the decision isn’t public. Montreal- based CGI fell as much as 3.8 percent in New York trading.

The Oct. 1 debut of the insurance exchange serving 36 of the 50 U.S. states was plagued by delays, error messages and hang-ups that prevented people from completing applications. Accenture, the second-largest technology-consulting company, led construction of California’s better-performing state system.

“We are working with our contract partners to make a mutually agreed upon transition to ensure that continues to operate smoothly for consumers,” Aaron Albright, a spokesman for the U.S. Centers for Medicare and Medicaid Services, said in an e-mail without confirming the decision.

A spokeswoman for CGI, Linda Odorisio, didn’t immediately respond to an e-mail seeking comment on the decision. Joanne Veto, an Accenture spokeswoman, declined to comment, saying the company is always in contact with prospective clients.

CGI declined 3 percent to $31.53 at 12:53 p.m. New York time, after earlier dropping to a low of $31.28. Accenture lost less than 1 percent to $82.62.

Diminished Role

The government-run insurance exchanges offer health plans and access to subsidies created by the 2010 Patient Protection and Affordable Care Act. CGI’s role in managing had been reduced following the botched rollout, with a unit of UnitedHealth Group Inc. brought in to oversee emergency repairs. Most Americans have until March 31 to select a health plan for 2014 coverage.

The government had spent $319 million building and its supporting technology as of Oct. 31, according to Albright’s agency. Marilyn Tavenner, the CMS administrator, and Kathleen Sebelius, the U.S. health secretary, each told Congress in hearings late last year that CGI had failed to meet expectations under its contract.

–With assistance from Peter Cook in Washington, Alex Barinka in New York and Gerrit De Vynck in Toronto. Editors: Romaine Bostick, Andrew Pollack

Topics USA New York

Was this article valuable?

Here are more articles you may enjoy.