Report: Feds Awarded $58M to Group Involved With Obamacare Website That It Already Fired

The Obama administration awarded a contract extension valued at around $58 million to a firm that it already fired for its role in the infamously glitchy healthcare.gov website.

The Centers for Medicare and Medicaid Services and Verizon Terremark “signed a contract extension in late January for cloud computing services, even though the federal agency overseeing HealthCare.gov had already selected HP Enterprise Services last July to take over the work,” the Washington Post reported, citing a posting on the federal contracting Web site that first appeared Thursday.

One of Terremark’s data centers suffered power outages in October, which later contributed to the embarrassingly error-plagued rollout of the Obamacare website. One of the outages even happened at the exact moment Health and Human Services Secretary Kathleen Sebelius was testifying before Congress about the site’s many glitches.

The original contract between Terremark and the U.S. government was supposed to expire this month, the Post notes.

But the government has decided instead to keep the company on for at least another four months to help “aid the transition to HP.”

“The follow-on contract with Terremark includes options that could extend the work an additional three months, which would bring its total value to $58 million,” the Post notes, adding that the “contract justification said some of the transition work, after some delays, didn't get started until December and January.”

CMS spokesman Aaron Albright explained the contract extension in an emailed statement “CMS is undertaking the necessary activities to transition the data center over to HP… As such, we extended Terremark’s contract term in order to ensure a successful transition between the two contractors. HP and Terremark will work together so that the site runs smoothly for consumers during the remaining weeks of open enrollment.”

A CMS spokesperson did not immediately respond to TheBlaze’s request for comment.

--

Follow Becket Adams (@BecketAdams) on Twitter