Department of Health and Human Services
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
F M :
EDERAL  ARKETPLACE   
 
 
I C
NADEQUACIES IN  ONTRACT 
 
 
P P
LANNING AND  ROCUREMENT 
 
Daniel R. Levinson  
Inspector General 
 
January 2015 
OEI-03-14-00230   
   
EXECUTIVE SUMMARY:  FEDERAL MARKETPLACE:  INADEQUACIES IN 
CONTRACT PLANNING AND PROCUREMENT  
OEI-03-14-00230 
 
WHY WE DID THIS STUDY 
 
The Federal Marketplace at HealthCare.gov was designed to enable millions of Americans to 
select health insurance in a one-stop shop environment.  A project of this magnitude and 
complexity required the development, integration, and operation of multiple information 
technology (IT) systems and Government databases.  The Centers for Medicare & Medicaid 
Services (CMS) acquisition planning and procurement activities were among the first steps 
critical to ensuring the success of this project.  CMS awarded 60 contracts across 33 companies 
to perform this work.  The troubled launch of the Federal Marketplace at HealthCare.gov in 
October 2013 raised a number of concerns, including questions about the adequacy of CMSs 
planning and procurement efforts for this key project under the Affordable Care Act. 
 
HOW WE DID THIS STUDY 
 
We conducted a detailed review of documentation provided by CMS for the 60 Federal 
Marketplace contracts; selected 6 key contracts for indepth review; and interviewed Department 
of Health and Human Services (HHS) and CMS officials involved with contracting for the 
Federal Marketplace.  We also reviewed procurement regulations, manuals, guides, and 
procedures provided by both HHS and CMS for acquisition planning, contractor selection, and 
contracting oversight processes. 
 
WHAT WE FOUND 
 
When awarding the Federal Marketplace contracts, CMS did not always meet contracting 
requirements.  For example, CMS did not develop an overarching acquisition strategy for the 
Federal Marketplace or perform all required oversight activities.  Moreover, for a project of this 
size and importance, CMS missed opportunities to leverage all available acquisition planning 
tools and contracting approaches to identify and mitigate risks.  Specifically, CMS did not 
exercise the option to plan for a lead systems integrator to coordinate all contractors efforts 
prior to the launch of the Federal Marketplace.  The complexity of the Federal Marketplace 
underscored the need for CMS to select the most qualified contractors.  However, CMS did not 
perform thorough reviews of contractor past performance when awarding two key contracts.  
CMS also made contracting decisions that may have limited the number of acceptable proposals 
for much of the key Federal Marketplace work.  In addition, CMS selected contract types that 
placed the risk of cost increases for this work solely on the Government. 
 
WHAT WE RECOMMEND 
 
We recommend that (1) CMS ensure that acquisition strategies are completed as required by 
regulation, (2) CMS assess whether to assign a lead systems integrator for complex IT projects, 
(3) CMS ensure contract actions are properly documented, (4) CMS ensure that all contracts 
subject to oversight review requirements undergo those reviews, (5) HHS limit or eliminate 
regulatory exceptions to acquisition planning requirements, and (6) HHS revise its acquisition 
guidance to include specific standards for conducting past performance reviews.  HHS and CMS 
concur with all of our recommendations.
   
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................8 
Findings......................................................................................................10 
CMS did not adequately plan for the Federal Marketplace   
contracts .........................................................................................10 
Only two of the six key contracts underwent CMS Contract 
Review Board oversight prior to award .........................................12 
CMSs procurement decisions may have limited its choices for 
selecting Federal Marketplace contractors .....................................13 
When awarding two key Federal Marketplace contracts, CMS  
did not perform thorough reviews of contractor past  
performance ...................................................................................16 
For five of the six key contracts, CMS chose a contract type  
that placed the risk of cost increases solely on the Government ...17 
CMS estimated a total contract value of $464 million for the      
key contracts at the time of award .................................................18 
Conclusion and Recommendations ............................................................19 
Agency Comments and Office of Inspector General Response .....23 
Appendixes ................................................................................................25 
A:  Glossary of Selected Terms ......................................................25 
B:  HHSAR Exceptions to the Acquisition Plan Requirement ......30 
C:  CMS Acquisition Planning and Contract Procurement ............31 
D:  Contract Oversight Reviews  ...................................................34 
E:  Federal Marketplace Contracts  ................................................37 
F:  Detailed Methodology  .............................................................42 
G:  Contracting Vehicles Used for Federal Marketplace  
      Contracts  .................................................................................45 
H:  Agency Comments ...................................................................46 
Acknowledgments......................................................................................51 
 
   
   
OBJECTIVES 
1.  To determine what acquisition planning activities were performed for 
the Federal Marketplace at HealthCare.gov (hereinafter referred to as 
the Federal Marketplace). 
2.  To determine whether required procurement oversight activities were 
performed for Federal Marketplace contracts.  
3.  To describe the procurement process for selecting the contractors for 
the implementation of the Federal Marketplace. 
4.  To determine the extent to which past performance reviews were 
conducted when selecting contractors for the Federal Marketplace. 
5.  To review the estimated values developed at the time of award for 
Federal Marketplace contracts. 
BACKGROUND 
Federal Marketplace 
The Patient Protection and Affordable Care Act (ACA) required the 
establishment of a health insurance exchange (marketplace) in each  
State.1, 2  A marketplace is designed to serve as a one-stop shop where 
individuals can obtain information about health insurance options, 
determine eligibility for qualified health plans and insurance affordability 
programs, and select the plan of their choice.3  Appendix A provides a 
glossary of selected terms used in this report. 
For States that elect not to establish their own marketplaces, the Federal 
Government is required to operate a marketplace on behalf of the State.  
As of October 1, 2013, CMS operated the Federal Marketplace for  
 
 
 
                        ____________________________________________________________ 
1 P.L. No. 111-148,  1311(b), 1321(c) (March 23, 2010), as amended by the Health 
Care and Education Reconciliation Act of 2010, P.L. No. 111-152 (March 30, 2010).   
2 Centers for Medicare & Medicaid Services (CMS), Creating a New Competitive Health 
Insurance Marketplace.  Accessed at 
http://www.cms.gov/CCIIO/Resources/Marketplace-Grants/ on June 26, 2014.  The ACA 
uses the term exchanges to refer to State and Federal competitive marketplaces for 
insurance.  However, CMS now uses the term marketplaces to refer to these exchanges.    
3 Qualified health plans are private health insurance plans that each marketplace 
recognizes and certifies as meeting certain standards and covering a core set of benefits. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  1   
   
36 States29 States that use the Federal Marketplace and 
7 State-partnership marketplaces.4, 5 
Upon the launch of the Federal Marketplace in October 2013, consumers 
experienced difficulties navigating the Federal Marketplace at 
HealthCare.gov.  The Secretary of Health and Human Services (the 
Secretary) described the consumer experience with the Federal 
Marketplace as not acceptable, and stated that some contractors selected 
to build the Federal Marketplace had not met expectations.6 
In February 2014, CMS identified 60 contracts that were awarded to 
support the development and operation of the Federal Marketplace.7   An 
OIG report published in August 2014 found that CMS had obligated 
nearly $800 million for the Federal Marketplace under these contracts and 
paid $500 million as of February 2014.8, 9 
HHS Offices Responsible for Federal Marketplace Contracting 
Once the ACA was signed into law, HHS established the Office of 
Consumer Information and Insurance Oversight (OCIIO) within the Office 
of the Secretary in April 2010.  In January 2011, HHS moved OCIIO to 
CMS, making CMS the lead agency tasked with implementing the Federal 
Marketplace.  The Center for Consumer Information and Insurance 
Oversight (CCIIO, formerly OCIIO) within CMS oversees the 
implementation of the ACAs provisions related to private health 
insurance.  For the Federal Marketplace, CCIIO focused on developing 
policies and regulations, such as defining the criteria consumers need to 
meet to be eligible for health insurance premium tax credits. 
CMSs Office of Information Services (OIS) ensures the effective 
management of CMSs information technology (IT), and information 
systems and resources.  Within OIS, contracting officers representatives 
monitor contractors technical progress, provide technical direction, and 
perform technical evaluations.  OIS focused on the technical development 
                        ____________________________________________________________ 
4 In a State-partnership marketplace, HHS and the State share responsibilities for core 
functions.  
5 Fifteen States (including the District of Columbia) operated their own State-based 
marketplaces. 
6 Hearing before the U.S. House Committee on Energy and Commerce, 113th Congress, 
Affordable Care Act Implementation, October 30, 2013.  Statement of Kathleen Sebelius, 
HHS Secretary. 
7 We use the term contracts to collectively refer to new contracts, as well as task, 
delivery, and call orders placed under previously established contracts.   
8 An obligation is a definite commitment that creates a legal liability of the Federal 
Government for the payment of goods and services ordered or received.  An obligation is 
incurred, for example, when a contract is signed or an order is placed for goods and/or 
services.   
9 OIG, An Overview of 60 Contracts That Contributed to the Development and Operation 
of the Federal Marketplace, OEI-03-14-00231, August 2014. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  2   
   
of the Federal Marketplace, including working directly with the IT 
contractors. 
CMSs Office of Acquisition and Grants Management (OAGM) serves as 
the lead for developing and overseeing CMSs acquisition efforts and is 
responsible for awarding and administering CMS contracts.  Within 
OAGM, contracting officers have the authority to obligate Government 
funds, and enter into, administer, and/or terminate contracts.  OAGM is 
required to conduct its work in accordance with regulations set forth in the 
Federal Acquisition Regulation (FAR), the HHS Acquisition Regulation 
(HHSAR), and HHS acquisition policy directives. 
Acquisition Regulations 
The FAR is the primary regulation governing Federal agencies in their 
acquisition of supplies and services.  The FAR requires Federal agencies 
to perform acquisition planning for all acquisitions to ensure that the 
Government meets its needs in the most effective, economical, and timely 
manner.  Its guiding principles include promoting competition and 
conducting business with integrity, fairness, and openness.  Under specific 
circumstances, the FAR allows for contracting without full and open 
competition.10  For example, an agency can contract without full and open 
competition when its need for the supplies or services is of unusual and 
compelling urgency.  In addition to the FAR, multiple agencies have 
published supplementary acquisition regulations.  The HHSAR 
implements and supplements the FAR for HHS and provides the 
regulatory framework for conducting acquisitions across HHS. 
CMS Acquisition Planning and Procurement 
OAGM collaborates with CMS program officessuch as CCIIO and 
OISwhen a contracting need is identified, and these offices work 
together to develop and refine key planning documents.  The program 
office is responsible for preparing the necessary planning documents, with 
guidance from OAGM. 
The HHSAR requires the development of a written acquisition strategy for 
all major IT investments to document the overall acquisition approach for 
a project.11  The acquisition strategy contains information that guides 
acquisition decisions and allows for the identification of risks and ways to 
mitigate those risks.12  Additionally, certain contracts require a written 
acquisition plan, which describes methods for competition, provides a 
justification for the proposed contract type, contains budgeting and 
                        ____________________________________________________________ 
10 FAR Subpart 6.3.  
11 HHSAR  307.104-70, 307.104-71. 
12 HHS, HHS Instructions for Preparation of an Acquisition Strategy, p. 1.  Accessed at 
http://www.hhs.gov/asfr/ogapa/acquisition/policies/worktool.html on July 1, 2014. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  3   
   
funding information, and tracks the target and actual milestone dates 
throughout the acquisition process.  Appendix B contains a list of the 
HHSAR exceptions to the acquisition plan requirement. 
The program office develops and submits to OAGM a request for 
contract, which describes, among other things, the contracts purpose, 
requirements, and estimated cost.  Generally, OAGM then develops a 
request for proposal document to communicate the contracts 
requirements to prospective companies.13  The contracting officer at 
OAGM receives proposals from prospective companies and evaluates 
these proposals, taking into consideration how the proposal conforms to 
the contracts requirements, the companys past performance, the 
companys ability to fulfill the technical requirements, and the proposed 
cost.  The contracting officer can also utilize an acquisition team, 
including a technical evaluation panel (TEP), which assesses the strengths, 
weaknesses, and deficiencies of each proposal.  The contracting officer 
selects the contractor and awards the contract.  Chart 1 provides a general 
overview of the steps in CMSs acquisition planning and procurement 
process.  Appendix C provides a more detailed description of these steps. 
Chart 1:  CMSs Acquisition Planning and Procurement Process 
CMS program office begins acquisition planning activites
CMS program office develops an acquisition strategy for the 
project, if a major IT investment
Program office and contracting officer at OAGM develop a written 
acquisition plan for a contract, if required
Program office develops a request for contract and submits it to 
OAGM
OAGM releases a request for proposal to solicit proposals from 
prospective companies
Prospective companies submit proposals
Contracting officer and acquisition team review proposals
Contracting officer selects the contractor and awards the contract
 
 
                        ____________________________________________________________ 
13 When we refer to proposals, this may also include any bids submitted under the sealed 
bidding process. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  4   
   
CMSs Contracting Approach 
To meet its contracting needs, CMS may establish new contracts or place 
orders under previously established contracting vehicles.  Examples of 
contracting vehicles include indefinite-delivery-indefinite-quantity (IDIQ) 
contracts, blanket purchase agreements, governmentwide acquisition 
contracts (GWACs), and the General Services Administration (GSA) 
Federal supply schedules.   
Enterprise System Development (ESD) IDIQ contract.  CMS used the 
ESD IDIQ contract as a contracting vehicle for a number of the Federal 
Marketplace contracts.  In 2007, several years prior to the development of 
the Federal Marketplace, CMS created the ESD IDIQ contract to meet its 
ongoing needs for IT systems.  At that time, CMS conducted a full and 
open competition and awarded the ESD IDIQ contract to 
16 companies.  When placing an order against the ESD IDIQ contract, 
CMS may solicit proposals from these 16 companies.  According to CMS 
staff, when an IT need arises, the ESD IDIQ contract offers a streamlined 
approach for ordering services from companies familiar with CMSs 
systems and procedures.   
Contract Type Selection 
A variety of contract types are available to the Government to provide 
flexibility in acquiring goods and services.  The FAR defines two broad 
categories of contracts:  fixed-price and cost-reimbursement.  Table 1 
provides descriptions of selected contract types within these two 
categories and the advantages of each contract type. 
 
Table 1:  Descriptions of Selected Contract Types 
Entity that 
Contract  Selected  
Assumes Risk  Payment Structure  Advantages 
Category  Contract Types 
for Cost Overrun 
Payment of a fixed price  Provides maximum incentive 
Fixed-price  Firm-fixed-price  Contractor  that does not change  for the contractor to control 
based on contract cost  costs and perform effectively 
Supports contracting efforts 
Payment of allowable 
that might present a risk to 
costs, plus a negotiated 
Cost-plus-fixed-fee  Government  contractors, but provides the 
fee that is fixed at the 
contractor only a minimum 
beginning of the contract 
incentive to control costs 
Cost-
reimbursement  Payment of allowable 
costs, plus a base 
Provides the contractor with 
amount and an award 
Cost-plus-award-fee  Government  an incentive to provide 
amount based upon a 
excellent performance 
judgmental evaluation by 
the Government 
Source:  FAR Subparts 16.1, 16.2, 16.3, and 16.4. 
 
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  5   
   
Contract Review Board 
The Contract Review Board is a contract oversight mechanism 
implemented by OAGM.14  Under the Contract Review Board process, 
certain contract actions are reviewed to ensure compliance with agency 
requirements and to ensure that contract documents comply with 
established laws.  The reviews may be conducted presolicitation, 
preaward, and/or for certain contract modifications after award.  
Presolicitation and preaward Contract Review Board reviews are required 
for all contract actions greater than $50 million.  The Director of OAGM, 
i.e., the Head of Contracting Activity, may approve a waiver to exempt a 
specific contract from a Contract Review Board review.  Appendix D 
contains a detailed description of the Contract Review Board process, as 
well as a description of other CMS and HHS contract oversight 
mechanisms. 
Related Office of Inspector General Reports 
This report is one in a series that will address the planning, acquisition, 
management, and performance oversight of Federal Marketplace 
contracts, as well as various aspects of Federal Marketplace operations.  
The Office of Inspector General (OIG) will be issuing additional, indepth 
audits and evaluations that look at other aspects of contract management 
and performance for the Federal Marketplace. 
OIG released a report in August 2014 that provides descriptive and 
financial data on 60 contracts related to the development and operation of 
the Federal Marketplace.15  OIG found that nearly $800 million had been 
obligated for the Federal Marketplace as of February 2014.16 
Two OIG reports released in June 2014 examined (1) how the Federal and 
State Marketplaces ensured the accuracy of information submitted by 
applicants for enrollment in qualified health plans and for advance 
payment of premium tax credits and cost sharing reductions; and  
(2) selected Marketplaces internal controls for enrolling applicants.17  OIG 
found that Marketplaces faced challenges resolving inconsistencies 
                        ____________________________________________________________ 
14 Other contract oversight mechanisms include, but are not limited to, contract file 
checklists, prospective service acquisition reviews, and appropriations law compliance 
reviews. 
15 OIG, An Overview of 60 Contracts That Contributed to the Development and 
Operation of the Federal Marketplace, OEI-03-14-00231, August 2014. 
16 The estimated contract value is the value of the contract at the time of award and 
includes the base year and option years. 
17 OIG, Marketplaces Faced Early Challenges Resolving Inconsistencies With Applicant 
Data, OEI-01-14-00180, June 2014; OIG, Not All Internal Controls Implemented by the 
Federal, California, and Connecticut Marketplaces Were Effective in Ensuring That 
Individuals Were Enrolled in Qualified Health Plans According to Federal 
Requirements, A-09-14-01000, June 2014. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  6   
   
between applicants self-attested information and data received through 
the Data Services Hub or other sources, despite having policies and 
procedures in place.  OIG also found that not all internal controls were 
effective in ensuring applicants were enrolled in qualified health plans 
according to Federal requirements.  CMS concurred with OIGs 
recommendations to strengthen internal controls.   
OIG released a report in September 2014 that provided an overview of the 
results of three reviews of the security of certain information technology at 
selected Marketplaces.  Although CMS had implemented controls to 
secure HealthCare.gov and consumer personally identifiable information 
on the Federal Marketplace, OIG identified areas for improvement in its 
information security controls.18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                        ____________________________________________________________ 
18 OIG, Health Insurance Marketplaces Generally Protected Personally Identifiable 
Information but Could Improve Certain Information Security Controls, A-18-14-30011, 
September 2014. 
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METHODOLOGY 
Scope 
CMS identified 60 contracts that supported the development and operation 
of the Federal Marketplace as of February 2014.19  Appendix E provides a 
short description of these 60 contracts.  For these contracts, we reviewed 
the contracting process up to the time of award.   For our review of 
estimated contract values, however, we included postaward revisions to 
the estimated values through early 2014.  We reviewed information in the 
contract files for the 60 Federal Marketplace contracts provided by CMS.  
We also selected six contracts (hereinafter referred to as key contracts) for 
a more indepth review of the contract files.  Table 2 shows the six 
contracts selected for our indepth review. 
We used a combination of factors to select the six, including:  the 
contracts purpose, contract value, whether concerns were raised about the 
contract following the Federal Marketplace launch, and whether CMS 
identified the contract as key to the implementation of the Federal 
Marketplace.20 
Table 2:  Six Contracts Selected for Indepth Review   
Start of  Estimated 
Contract  Contract Description  Company Awarded Contract  Contract  Contract Value at 
Period  Time of Award 
Multidimensional insurance data 
MIDAS  IDL Solutions Inc. (IDL)  9/27/2011  $58,966,657 
analytics system 
DSH  Data services hub  Quality Software Services Inc. (QSSI)  9/30/2011  $68,740,877 
Federally facilitated marketplace 
FFM1  CGI Federal Inc. (CGI)  9/30/2011  $93,735,469 
system 
Science Applications International 
RIDP  Remote identity proofing  1/31/2012  $78,600,380 
Corporation (SAIC) 
EIDM  Enterprise identity management  QSSI  6/18/2012  $109,926,9561 
Replacement of the FFM1  Accenture Federal Services LLC 
FFM2  1/11/2014  $90,000,0002 
contract  (Accenture) 
   Source:  OIG analysis of six CMS contract files, 2014. 
    1 The estimated value of the EIDM contract was initially $104,926,956, but increased to $109,926,956 on the contract period start date.  
    2 The FFM2 letter contract was for $45 million, but the estimated value of the contract was $90 million. 
 
                        ____________________________________________________________ 
19 Not all of these contracts were awarded solely for the purpose of the Federal 
Marketplace.  Some contracts also provided services for State marketplaces or other CMS 
systems and programs.  In addition, some of these contracts were awarded by the HHS 
Program Support Center on behalf of OCIIO and later transferred to CMS.    
20 CMS provided OIG with a list of 18 contracts that it identified as key to the 
implementation of the Federal Marketplace. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  8   
   
Data Sources and Collection 
We initially requested from CMS the contract files, contracting officers 
representatives files, and financial information for all Federal 
Marketplace contracts awarded prior to December 31, 2013.  We 
subsequently requested these files for the FFM2 contract that was awarded 
in January 2014.  We specifically requested the files for this contract 
because it was the FFM1 replacement contract.  We also requested that 
CMS provide all HHS and CMS manuals, guides, and procedures related 
to procurement, acquisition planning, contractor selection, and contract 
management.  In addition, we asked CMS to indicate which contracts had 
undergone contract oversight reviews.   
We conducted structured interviews with high-level HHS and CMS staff, 
and with the contracting officer and contracting officers representative 
assigned to each of the six key contracts during the acquisition planning 
and contract procurement phases.  We asked staff to describe the 
acquisition planning and procurement activities for the Federal 
Marketplace, and challenges encountered during the initial phases of the 
Federal Marketplace. 
A more detailed description of our data sources, data collection methods, 
and data analyses is provided in Appendix F. 
Limitations 
Our review of contracting files was restricted to the contract 
documentation provided by CMS for the 60 Federal Marketplace 
contracts. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  9   
   
FINDINGS 
CMS relied extensively on contractors to plan and build the Federal 
Marketplace.  As of February 2014, CMS obligated nearly $800 million for 
the Federal Marketplace under 60 contracts.  When awarding the Federal 
Marketplace contracts, CMS did not always meet contracting requirements.  
For example, CMS did not develop an overarching acquisition strategy for 
the Federal Marketplace or perform all required oversight activities.  
Moreover, for a project of this size and importance, CMS missed 
opportunities to leverage all available acquisition planning tools and 
contracting approaches to identify and mitigate risks.  Specifically, CMS did 
not exercise the option to plan for a lead systems integrator to coordinate all 
contractors efforts prior to the launch of the Federal Marketplace.  The 
complexity of the Federal Marketplace underscored the need for CMS to 
select the most qualified contractors; however, it did not conduct thorough 
past performance reviews of potential contractors.  Finally, CMS used 
contracting vehicles that may have restricted the number of technically 
acceptable proposals for much of the key Marketplace work and chose 
contract types that placed the risk of cost increases solely on the 
Government.   
CMS did not adequately plan for the Federal 
Marketplace contracts 
Although CMS developed operational objectives and project management 
plans for the implementation of the Federal Marketplace, it did not 
perform all required acquisition planning for the Federal Marketplace 
contracts.  CMS also did not avail itself of other acquisition planning tools 
that, although not required, may have strengthened its planning for the 
Federal Marketplace contracts. 
CMS did not develop the required acquisition strategy for the 
Federal Marketplace project 
The HHSAR requires that agencies develop a written acquisition strategy 
to describe the overall acquisition approach and document the factors and 
assumptions that will guide acquisition decisions for major IT projects.  
The development of an acquisition strategy allows for the identification of 
risks and consideration of tradeoffs needed to mitigate those risks.  
However, CMS did not develop the required acquisition strategy 
document for the Federal Marketplace project. 
The Director of OAGM acknowledged that there was no acquisition 
strategy for the Federal Marketplace.  Although acquisition strategies are 
required by the HHSAR, this official reported that CMS program 
managers were not aware of the requirement.  Another HHS official 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  10   
   
reported that one of the lessons learned from the Federal Marketplace 
project was the need for an overall acquisition strategy. 
HHS regulations did not require acquisition plans for most 
Federal Marketplace contracts 
Unlike the acquisition strategy, an acquisition plan addresses an individual 
contract instead of a project.  The acquisition plan serves as a guide for 
major decisions regarding how the contract will be competed, what 
contract type will be selected, how a contractor will be chosen, and when 
acquisition milestones will occur.  The HHSAR requires the creation of 
acquisition plans, but it establishes nine broad exceptions to this 
requirement.  For example, acquisition plans are often not required for 
task orders issued on agency-specific IDIQ contracts, regardless of dollar 
value.  Appendix B provides a list of the HHSAR exceptions.  Because of 
these exceptions, acquisition plans were not required for most Federal 
Marketplace contracts, including contracts for complex, high-risk work.  
Fifty-three of the sixty Federal Marketplace contracts, including the 
six key contracts, did not require acquisition plans.  These 53 contracts 
had a total estimated contract value of $1.3 billion.21   
CMSs contract files were often missing commonly required 
acquisition planning information 
For the seven contracts that required acquisition plans, only five contracts 
had acquisition plans in their contract files.  However, these acquisition 
plans did not all address certain planning elements, such as risks, 
constraints, and market research conducted.  In addition, four of the five 
acquisition plans were missing required signatures from CMS officials. 
Of the 53 contracts that did not require an acquisition plan, 30 were 
missing at least one fundamental piece of acquisition planning information 
from their contract files.  This information is commonly required even 
when contracts are exempted from the acquisition plan requirement.22   
This information includes documents such as an acquisition milestone 
schedule, a certified funding document, and an independent Government 
cost estimate.  Twenty-six of the contract files were missing an acquisition 
milestone schedule.  An acquisition milestone schedule introduces 
discipline into the planning process by identifying the points at which 
decisions must be made, and time factors that must be observed when 
action is critical to a successful acquisition.  Contract files for 
                        ____________________________________________________________ 
21 For each contract, the estimated contract value includes the estimates for the expected 
values for the base and option year amounts at the time of award. 
22 HHSAR  307.7101(c) states that this information (as applicable) shall be provided to 
the Chief of the Contracting Office for acquisitions other than those processed pursuant 
to an interagency agreement. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  11   
   
seven contracts were missing a certified funding document that contains 
official sign off that funds were available prior to the award of the 
contract.  These seven contracts had a total estimated contract value of 
$45 million.  In addition, contract files for three contracts were missing an 
independent Government cost estimate, which calculates the probable cost 
to perform services or deliver products under the contract. 
CMS did not plan for a lead systems integrator 
CMS missed the opportunity to plan for a lead systems integrator to 
coordinate the efforts of multiple contractors for the Federal Marketplace.  
CMS did not identify a systems integrator until after the October 2013 
launch of the Federal Marketplace.  CMS eventually assigned this role to a 
contractor, QSSI.  The 33 companies that were awarded the 60 Federal 
Marketplace contracts each had individual tasks to support the 
implementation of the Federal Marketplace, but there was no single 
point-of-contact with responsibility for integrating contractors efforts and 
communicating the common project goal to all 33 companies.   
CMSs former Chief Information Officer reported to OIG that CMS 
perceived CGI to be the projects lead integrator, but the company did not 
have the same understanding of its role.  This deficiency could have been 
addressed through more rigorous acquisition planning, such as clearly 
defining roles in an acquisition strategy and in descriptions of contractors 
work.  The CMS Administrator and Chief of Staff acknowledged that, in 
retrospect, the role of a lead integrator should have been given more 
consideration, as the Federal Marketplace project was too complex not to 
have an integrator.   
Only two of the six key contracts underwent CMS 
Contract Review Board oversight prior to award 
Oversight reviews by the Contract Review Board are intended to ensure 
compliance with agency requirements and to ensure that contract 
documents comply with established laws.  Although the six key contracts 
met the criteria for oversight by the Contract Review Board, only two of 
the six contracts were reviewed prior to award. 
Both the EIDM contract and RIDP contract had a presolicitation review by 
the Contract Review Board.  The EIDM contract also underwent a 
preaward review.  However, the preaward review for the RIDP contract 
was waived by the Acting Director of OAGM because there is not 
enough time left to perform [the review] and make the January 31, 2012 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  12   
   
task order award date... If the task order award is delayed, critical 
program milestones will not be met.23 
For the FFM2 contract, the contract file contained an approved Contract 
Review Board Waiver indicating that there was not enough time to 
perform the review and make the award by the required date.  The 
MIDAS, DSH, and FFM1 contracts were not reviewed by the Contract 
Review Board prior to being awarded in 2011, and approved waivers were 
not contained in these contracts files. 
Although the six key contracts were high-profile Federal Marketplace 
acquisitions with estimated values totaling almost $500 million at the time 
of award, their contract files did not contain documentation that any other 
types of CMS or HHS quality control reviews were performed prior to 
award.  In interviews with OIG, CMSs contracting staff indicated that 
they were not aware of any other types of quality assurance reviews that 
had been conducted for the six key contracts.  These other types of 
contract oversight reviews are described in Appendix D. 
CMSs procurement decisions may have limited its 
choices for selecting Federal Marketplace contractors 
Although CMSs contracting approaches were permitted under Federal 
regulations, its procurement decisions may have limited the number of 
qualified companies that competed for contracts and the number of 
technically acceptable proposals from which CMS could choose.  Of the 
60 Federal Marketplace contracts, only 5 were newly awarded contracts.  
Fifty-five of the sixty Federal Marketplace contracts were awarded as 
orders under previously established contracts.  Therefore, only companies 
that held previously established contracts were eligible to obtain these 
orders.  Furthermore, for one-third of the 60 contracts, CMS solicited a 
proposal for the contract from only one company.24  Appendix G describes 
the contracting vehicles CMS used to request proposals for the Federal 
Marketplace contracts awarded as orders. 
 
 
 
                        ____________________________________________________________ 
23 CMS, CRB [Contract Review Board] Waiver Request, January 24, 2012. 
24 Five of these twenty-two contracts were sole source procurements that required written 
justifications and approvals; the remaining 17 contracts were orders under a federally 
funded research and development center contract, orders under a blanket purchase 
agreement, or procurements under the Small Business Administration 8(a) Business 
Development Program.  One of these twenty-two contracts was a key contract. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  13   
   
For the six key contracts, few companies submitted proposals 
and even fewer submitted technically acceptable proposals 
CMS stated that there were tight timelines to implement the Federal 
Marketplace project, and its staff reported that these timelines had an 
impact on the procurement process for key contracts.  A CMS contracting 
officer, responsible for some of the key contracts, reported that the ESD 
IDIQ was a faster way to award the contract.  CMS decided to award five 
of the six key Federal Marketplace contracts as orders procured under its 
ESD IDIQ contract.   
Because of CMSs decision to use the ESD IDIQ contract, it could only 
solicit proposals from the 16 companies awarded the ESD IDIQ contract 
in 2007.  Only the RIDP contract had more than half of the 16 ESD IDIQ 
companies submit proposals.  For four key contracts, six or fewer ESD 
IDIQ companies submitted proposals.  In fact, for the FFM1 and DSH 
contracts2 key components of the Federal Marketplace4 of the 
16 ESD IDIQ companies submitted proposals. 
For three of the five ESD IDIQ contracts, TEP reviewers determined that 
no more than half of the proposals submitted for the contract were 
technically acceptable.  This further limited CMSs choices in selecting a 
company for the contract.  For key Federal Marketplace contracts, Chart 2 
shows that although CMS solicited proposals from the 16 ESD IDIQ 
companies, few of these companies submitted proposals, and even fewer 
submitted technically acceptable proposals. 
Chart 2:  Number of Companies that Submitted Proposals for Six Key Federal 
Marketplace Contracts 
Companies  Technically  Technically 
Eligible  that  Acceptable  Acceptable  Company 
Key  Companies   Submitted  Initial   Final   Selected 
Contract (ESD IDIQ) Proposals Proposals Proposals  for Award
FFM1 16  4  1  1  CGI
DSH 16  4  0  2  QSSI
RIDP 16  9  3  2  SAIC
Not 
EIDM 16  6  5 QSSI
applicable1
Not 
MIDAS 16  5  5  IDL
applicable1
Not  Not  Not 
FFM2 0 Accenture
applicable2 applicable applicable
 
Source:  OIG analysis of CMS contract files, 2014. 
1 The EIDM and MIDAS contracts were awarded based on the review of companies initial proposals. 
2 CMS did not solicit formal proposals from prospective companies prior to awarding the FFM2 contract.  It was awarded              
as a sole source contract.   
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  14   
   
Although 4 of the 16 ESD IDIQ companies submitted proposals for the 
FFM1 contract, TEP reviewers determined that only 1 proposal, from 
CGI, was technically acceptable.  The initial TEP report for this contract 
stated that the other three proposals would expose CMS to unacceptable 
levels of implementation and schedule risks.  These three companies 
proposals were still deemed unacceptable after revised and final proposals 
were reviewed, leaving CGI as the only option for the award.  Similarly, 
all four of the initial proposals submitted for the DSH contract had 
technical deficiencies and, after multiple rounds of revisions, CMS had 
only two companies from which to choose for the award. 
The only key contract not awarded under CMSs ESD IDIQ contract was 
the FFM2 contract, which was awarded to Accenture as a sole source 
contract.  The FFM2 contract file contained a Justification for Other than 
Full and Open Competition approved by the HHS Senior Procurement 
Executive and CMSs Head of Contracting Activity.  CMS stated that it 
urgently required a company to take over the work from CGI, the 
company awarded the FFM1 contract.25  Because of time constraints, CMS 
decided not to solicit proposals from companies for the FFM2 contract.  
CMS indicated in its justification that [a] normal competitive procedure 
of this magnitude normally requires between six to twelve months to 
complete... after the request for proposals is issued.  CMS awarded the 
FFM2 contract without competition less than 3 weeks after OIS requested 
the contract.   
For many of the remaining 54 Federal Marketplace contracts, 
CMS sought or received proposals from only one company 
For 35 of the remaining 54 Federal Marketplace contracts, CMS requested 
or received proposals from only 1 company.  The total estimated contract 
value of these 35 contracts was $658 million.  For 21 of the 35 contracts, 
CMS requested a proposal from only 1 company.  For an additional  
14 contracts, CMS requested proposals from multiple companies, but 
received a proposal from only 1 company for each contract.  CMS then 
awarded the contract to the one company that submitted a proposal.  Chart 
3 displays the number of prospective companies that submitted proposals 
for each of these 54 Federal Marketplace contracts. 
                        ____________________________________________________________ 
25 In January 2014, CMS awarded a letter contract to Accenture.  CMS stated in its 
contract documents that the Federal Marketplace developed by CGI had proven to be 
problematic and it did not believe CGI would have been able to deliver specific portions 
of the contracts work on time.  
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  15   
   
Chart 3:  Number of Companies That Submitted Proposals for 54 Contracts
From 6 to 17 Companies 4
5 3
Number of  4 5
Companies That 
Submitted  3 3
Proposals1 
2 4
1 Company 352 
0 5 10 15 20 25 30 35 40
Number of Federal Marketplace Contracts
 
Source:  OIG analysis of CMS contract and contracting officers representatives files, 2014. 
 1 For each Federal Marketplace contract, we counted the number of companies that submitted a proposal for that contract. 
 2 For 21 of these 35 contracts, CMS requested a proposal from only 1 company. 
 
When awarding two key Federal Marketplace 
contracts, CMS did not perform thorough reviews of 
contractor past performance 
CMS reviewed companies past performance for all six key contracts.  
However, for the FFM1 and DSH contracts, these performance reviews 
were limited.  These two contracts implemented important elements of the 
Federal Marketplace, such as allowing consumers to enter information into 
HealthCare.gov, determining eligibility for premium tax credits, selecting 
health plans, and transmitting data between the Federal Marketplace and 
Federal and State databases to confirm enrollee information. 
The FAR states that past performance should be considered when 
awarding orders under an existing contract, but it does not provide explicit 
procedures for conducting these reviews.  The HHSAR does not address 
past performance reviews, but HHS has provided guidance that reinforces 
the use of due diligence to assess past performance.26  This guidance also 
states that use of the Past Performance Information Retrieval System 
(PPIRS) should be considered when reviewing past performance. 
When conducting past performance reviews for four of the key contracts, 
CMS accessed performance information from PPIRS, or similar 
government performance databases.  In addition, companies were asked to 
submit past performance information for similar projects and references 
for CMS to contact.  However, for the FFM1 and DSH contracts, CMS did 
not use PPIRS or any other Government performance database to evaluate 
the past performance of the companies that submitted proposals. 
                        ____________________________________________________________ 
26 HHS, APM-2009-07, Guidance Regarding Generation and Use of Contractor Past 
Performance Information, released December 23, 2009. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  16   
   
Instead, for these two contracts, CMSs review involved providing three 
questions about past performance to CMS staff associated with other 
contracts awarded to the prospective companies.  These questions were 
sent to CMS staff 2 days before awarding the FFM1 and DSH contracts 
and pertained to only the companies work performed under CMSs ESD 
IDIQ contract.  Even though this level of review met the basic FAR 
requirement, it would not have identified performance issues on non-ESD 
IDIQ projects. 
For five of the six key contracts, CMS chose a 
contract type that placed the risk of cost increases 
solely on the Government 
CMS awarded five of the six key contracts as cost-reimbursement 
contracts.  Cost-reimbursement contracts place the risk of contract 
requirements changes, delay, and cost overruns with the Government.  
Because of these added risks, Federal regulations require a documented 
rationale for choosing a cost-reimbursement contract.  Contract files did 
not always contain specific and comprehensive rationales for why CMS 
selected this contract type.   
CMS selected a cost-plus-fixed-fee contract type for the FFM1 contract 
awarded to CGI, the DSH contract awarded to QSSI, and the MIDAS 
contract awarded to IDL.27  Files for these three key contracts did not 
include a detailed rationale for why this particular type of 
cost-reimbursement contract was selected.  These files also did not detail 
why it was in the Governments best interest to select a contract type 
under which it assumed the risk for cost increases.  Instead, there were 
general statements that fixed-price contracts could not be used because 
costs could not be defined accurately due to uncertainties with the required 
work.   
CMS selected a cost-plus-award-fee contract type when awarding the 
EIDM contract to QSSI and the FFM2 contract to Accenture.  Files for 
these contracts provided a thorough analysis in Determination and 
Findings documents, which were signed by CMSs Head of Contracting 
Activity, for why this contract type was in the best interest of the 
Government.  CMS justified using this contract type for the EIDM 
contract because it allowed CMS to change its priorities and provided the 
contractor with an incentive to maintain high-quality work at a reasonable 
cost to the Government.  Similarly, CMS stated that cost-plus-award-fee 
represented the best contract type for the FFM2 contract because it 
                        ____________________________________________________________ 
27 The contract type for the FFM1 and DSH contracts was cost-plus-fixed-fee for the base 
year and cost-plus-award-fee for the option years. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  17   
  
provides motivation for excellence in areas such as quality, timeliness, 
technical ingenuity, and cost-effective management.  
CMS estimated a total contract value of $464 million 
for the key contracts at the time of award 
During the procurement process, CMS determines a contracts purpose, 
requirements, and estimated cost.  CMS uses this information to establish 
the value of the contract at the time of award.  CMS originally estimated 
the contract value for the 6 key contracts to be $464 million.  As of early 
2014, CMS had updated the estimated value of these contracts to 
$824 million.  The updated contract value more than tripled for the FFM1 
contract awarded to CGI, from $58 million to $207 million.28  In addition, 
the value for the DSH contract more than doubled, from $69 million to 
$180 million.  The remaining 4 contract values increased between 1 and 
54 percent.    
            
The initial estimated value of a contract may increase after award for a 
number of reasons, including tasks added to the contract or increases in 
the cost of scheduled work.  CMS reported that contract requirements 
changed during the implementation of the Federal Marketplace, and that 
not all of these requirements were known at the time of award. 
 
 
   
                        ____________________________________________________________ 
28 These contract values do not include option years that CMS later decided not to 
exercise. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  18   
   
CONCLUSION AND RECOMMENDATIONS  
The Federal Marketplace at HealthCare.gov was designed to enable 
millions of Americans to select health insurance in a one-stop shop 
environment.  A project of this magnitude and complexity required the 
development, integration, and operation of multiple IT systems and 
Government databases.  CMSs acquisition planning and procurement 
activities were among the first steps critical to ensuring the success of this 
project.  CMS awarded 60 contracts across 33 companies to perform this 
work.  However, the problems following the October 2013 launch of the 
Federal Marketplace at HealthCare.gov raised questions about the 
adequacy of CMSs planning and procurement efforts. 
When awarding the Federal Marketplace contracts, CMS did not meet all 
requirements and did not leverage all available acquisition planning tools, 
oversight activities, or contracting approaches to identify and mitigate 
risks.  CMS did not develop an overarching acquisition strategy for the 
project, as required.  In addition, CMS did not plan for a lead integrator to 
coordinate all contractor efforts, and did not take all possible steps to plan 
for and oversee individual acquisitions.  Because CMS did not leverage all 
of these tools, it operated without a comprehensive roadmap when 
awarding the Federal Marketplace contracts. 
The complexity and significance of the Federal Marketplace underscored 
the need for CMS to have the opportunity to select the most qualified 
contractors.  CMSs procurement decisions may have limited its choices 
for selecting Federal Marketplace contractors.  In addition, CMS did not 
perform thorough reviews of contractor past performance when awarding 
two key contracts, but met only the basic regulatory requirement for these 
reviews.  Following the launch, CMS had to replace one of these 
contractors because of problematic performance.  Furthermore, CMSs 
choice of contract type for certain key contracts resulted in the 
Government shouldering the risk for cost increases.  
Although the Federal Marketplace was an unprecedented project with 
unique challenges, the experience of contracting for the Federal 
Marketplace has broader implications for Federal contracting.  
Government contracting personnel are continually faced with the 
competing demands of timeliness, fiscal responsibility, and attracting 
contractors that will provide outstanding performance.  The issues raised 
in this report demonstrate the need for HHS and CMS to make changes to 
strengthen their contracting processes.  To strengthen HHS and CMS 
acquisition planning and procurement processes for future projects, 
including ongoing work for the Federal Marketplace, OIG makes the 
following recommendations: 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  19   
   
CMS should ensure that acquisition strategies are completed 
as required by the HHSAR 
Pursuant to HHSAR Part 307.104-70, an acquisition strategy is a required 
component of the acquisition planning process for major IT systems.  It 
provides a comprehensive roadmap that will guide acquisition decisions 
and is a means of reducing potential diversions from program objectives 
that could have adverse cost, schedule, and technical consequences.  HHS 
has developed an acquisition strategy template that enables program staff 
to describe the overall approach for acquiring the capabilities to meet a 
program need at the beginning of the acquisition process, prior to 
developing acquisition plans for individual contracts.   
The acquisition strategy requirement has been in effect since 2009 and 
CMS did not develop an acquisition strategy to describe or guide its 
approach for acquiring contracts for the high-impact and high-expenditure 
Federal Marketplace project.  Going forward, CMS should ensure that 
acquisition strategies are completed for all major IT systems, as required 
by the HHSAR.   
In these acquisition strategies, CMS should consider ways to attract highly 
skilled IT contractors and develop contingency plans for when few 
companies submit technically acceptable proposals for contracts that are 
critical to the success of major IT investments.   
CMS should assess whether to assign a lead systems 
integrator for complex IT projects involving multiple 
contractors 
The task of implementing the Federal Marketplace required the 
coordination and integration of work by many companies.  However, CMS 
did not specifically designate a lead integrator until after the launch, and 
the CMS Administrator later acknowledged that this should have been 
given more consideration.  As part of its acquisition planning process, 
CMS should assess whether to assign a lead integrator for future IT 
projects with complex requirements that require the coordination of 
multiple contractors. 
CMS should ensure that contract actions are supported by 
required documentation 
Our review of the contract files for the 60 Federal Marketplace contracts 
revealed that certain pieces of documentation were missing from many of 
CMSs files, which were often paper rather than electronic files.  In 
October 2013, OAGM implemented a Contract File Organization policy 
that established requirements for creating an electronic contract file for 
new contract actions; completing all steps in the contracting process and 
completing an E-Contract File Checklist; and digitally signing the 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  20   
   
Checklist for review and approval of contract actions.  CMS should take 
advantage of its planned reviews of sampled contract files to ensure that 
contract files are complete and contract actions are fully supported.  
Specifically, CMS should determine whether approved Checklists are 
filled out completely and accurately, confirm the applicability of contract 
file documents, and determine whether appropriate documents are 
contained in the contract files. 
CMS should ensure that all contracts that are subject to its 
Contract Review Board requirements undergo these reviews 
CMS spends billions of dollars to fund the procurement of a wide range of 
supplies and services to support its programs.  With so much funding at 
stake, it is critical that CMS perform adequate contract oversight.  One 
mechanism CMS has in place to oversee contract actions is the Contract 
Review Board process.  However, the Contract Review Board reviewed 
only a few of the key Federal Marketplace contracts.  CMS should ensure 
all contracts that are subject to the Contract Review Board requirements 
undergo these reviews.  CMS should also consider limiting the use of 
Contract Review Board waivers for contracts that are instrumental to 
major initiatives.  
HHS should review the HHSAR to limit or eliminate certain 
exceptions to developing a written acquisition plan 
HHS is conducting a review of the HHSAR to reorganize these regulations 
and eliminate sections that are duplicative of the FAR.  As HHS revises 
the HHSAR, we believe it should take this opportunity to strengthen 
acquisition planning requirements.  We found that nearly all of the Federal 
Marketplace contracts did not require written acquisition plans; this 
includes all six key contracts.  Because an acquisition plan should address 
in a comprehensive manner the tactical details of how the acquisition will 
be executed, exceptions to formulating an acquisition plan should be rare.  
Therefore, HHS should review, and where possible, limit or eliminate the 
HHSAR exceptions to the acquisition plan requirement. 
HHS should revise its guidance to include specific standards 
for conducting past performance reviews of companies under 
consideration during contract procurement 
It is imperative that CMS conduct comprehensive reviews of companies 
past performance to ensure that it contracts with reliable companies.  In 
2009, HHS issued guidance to reinforce the need for due diligence when 
assessing past performance of prospective companies, making use of past 
performance information, and making decisions based on this information.  
However, the guidance does not explicitly set standards for the extent to  
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  21   
   
which contracting officers conduct these reviews.  HHS should revise the 
guidance to (1) improve the reporting of contractor performance and integrity 
information and (2) include outreach and research methods for evaluating 
timely and relevant information to ensure that awards are made to contractors 
with good performance records.     
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  22   
  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
HHS and CMS concurred with all of our recommendations.  CMS stated 
that it has moved aggressively to implement extensive contracting reforms 
and has appointed a task force to develop a program-wide view of the cost 
of the Federal Marketplace to strategically manage Federal Marketplace 
acquisitions.  According to CMS, the agency is enforcing a strict 
governance structure for contracts and is training a stronger acquisition 
workforce.  CMS also stated that it is using our report as an opportunity to 
make needed change.  The full text of HHSs and CMSs comments is 
provided in Appendix H. 
In its response to our first recommendation, CMS acknowledged the 
benefits of developing an acquisition strategy, and stated that it held a 
mandatory training session in August 2014 for program managers assigned 
to major IT investments with a specific emphasis on preparing acquisition 
strategies.  According to CMS, its major IT investment acquisition 
strategies will follow HHS guidance, be simple and clear, and will focus 
on broadening procurement options, improving acquisition oversight, and 
employing Federal Government best practices.   
CMS also stated that the value of a systems integrator was a key lesson 
learned from implementing the Federal Marketplace and that our second 
recommendation, assessing whether to assign a systems integrator, will be 
a CMS best practice when planning for a complex IT project.  
In response to our third recommendation, HHS and CMS stated that they 
are working to ensure that acquisition and program staff meet their 
required responsibilities.  HHS noted that it established acquisition 
Learning Communities to provide training, and CMS offers approximately 
140 acquisition training classes for contract officers representatives and 
program managers.  CMS also indicated that it is working to ensure that 
all required acquisition plans are prepared and submitted using the 
HHSAR template.  In response to our fourth recommendation, CMS stated 
that it will ensure full compliance with the requirements of the Contract 
Review Board policy.   
 
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  23   
   
HHS concurred with our fifth recommendation that it review the HHSAR 
to limit or eliminate certain exceptions to developing a written acquisition 
plan.  HHS stated that it is preparing to release revised regulations for 
public comment that will state that a written acquisition plan is required 
for all acquisitions exceeding the simplified acquisition threshold, and will 
supplement the FAR by outlining the required content of an acquisition 
plan.  
HHS and CMS concurred with our sixth recommendation about having 
specific standards for conducting past performance reviews.  HHS plans to 
enhance its past performance guidance and has taken steps to implement 
the Office of Federal Procurement Policys July 10, 2014, memorandum, 
Making Better Use of Contractor Performance Information.  This 
memorandum included additional consideration when evaluating and 
using contractor past performance information, and in sharing this 
information with agency leadership.  HHS stated that it has plans to assess 
the use of past performance in selecting contractors by reviewing a 
representative sample of solicitations quarterly, and is monitoring 
contractor performance databases for compliance on a quarterly basis.
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  24   
   
APPENDIX A 
Glossary of Selected Terms 
This glossary is not intended to be a comprehensive source of technical or 
regulatory definitions.  Rather, it provides basic definitions for a general 
understanding of contracting terms used in this report.   
acquisition plan  A formal, written plan that allows agencies, e.g., CMS, to 
document the proposed acquisition approach for a particular 
contract.  Serves as a mechanism to review, approve, and 
document acquisition decisions and create a guide for the 
implementation of those decisions. 
acquisition strategy  A document required by HHS that describes an overall 
acquisition approach and documents the factors and assumptions 
that guide acquisition decisions for major IT projects. 
appropriations law  An HHS review to ensure that a contract is properly funded, and 
compliance review  ensure that particular acquisitions exceeding a dollar threshold 
($10 million for CMS contracts) comply with appropriation laws 
and regulations. 
blanket purchase  A simplified method of filling anticipated repetitive needs for 
agreement (BPA)  supplies or services by establishing an agreement with qualified 
companies.  BPAs provide opportunities to negotiate improved 
discounts, reduce administrative costs, and reduce procurement 
lead time. 
Center for Consumer  Program office within CMS that oversees the implementation of 
Information and Insurance  the ACAs provisions related to private health insurance. 
Oversight (CCIIO) 
Centers for Medicare &  Agency within HHS that operates the Federal Marketplace at 
Medicaid Services (CMS)  HealthCare.gov. 
contract  A mutually binding legal relationship obligating a contractor to 
furnish the supplies or services and the Government to pay for 
them.  For the purposes of this report, a contract collectively 
refers to new contracts as well as task, delivery, and call orders 
placed under previously established contracts.   
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  25   
   
Contract Review Board  A CMS process consisting of a two-tiered review and approval 
process:  tier 1 involves a review of the contract file to ensure 
compliance with agency and HHS requirements; tier 2 is a more 
indepth review of specified contract actions to ensure, in part, that 
contract documents comply with laws and established policies, 
procedures, and sound business practices, and that the contracting 
officer is aware of (and takes corrective action to address) any 
deficiencies and questions. 
contracting officer  Person that has the authority to enter into, administer, and/or 
terminate contracts and make related determinations and findings.
contracting officers  Program office staff that is responsible for monitoring the 
representative  contractors technical progress and providing technical direction, 
among other tasks. 
cost sharing reductions  Cost sharing reductions help qualifying individuals with  
out-of-pocket costs, such as deductibles, coinsurance, and 
copayments. 
Department of Health and  The Governments principal agency for protecting the health of 
Human Services (HHS)  all Americans and providing essential human services. 
data services hub (DSH)  Contract awarded to Quality Software Services Inc. for the 
contract  purpose of building a mechanism to permit transmission of data 
between the Federal Marketplace and Federal and State databases 
to confirm enrollee information.    
enterprise identity  Contract awarded to Quality Software Services Inc. to design, 
management (EIDM)  build, operate, and maintain an enterprise identity and access 
contract  management infrastructure to include integration with  
third-party online identity proofing and multifactor 
authentication services. 
enterprise system  An Indefinite-Delivery-Indefinite-Quantity (IDIQ) contract 
development (ESD) IDIQ  awarded in September 2007 to 16 companies to meet CMSs 
ongoing needs for IT systems.   
estimated contract value  The expected value of the contract at the time of award.  This 
estimate includes the base year and any option years. 
exchanges  Term used in the ACA that refers to State and Federal 
Marketplaces that facilitate the purchase of qualified health plans. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  26   
   
Federal Acquisition  The Federal regulations governing the acquisition of supplies and 
Regulation (FAR)  services that apply to all Federal Executive agencies. 
full and open competition  Situation in which all responsible sources, e.g., companies, are 
permitted to compete for a contract award. 
federally facilitated  Contract awarded to CGI Federal Inc. for the purpose of building 
marketplace (FFM1)  an IT system that would allow consumers to enter information 
contract  into HealthCare.gov, determine eligibility for premium tax 
credits, and select health plans. 
FFM2 contract  Contract awarded to Accenture Federal Services LLC to replace 
CGI Federal Inc. as the contractor for the federally facilitated 
marketplace system (FFM1). 
governmentwide  A contract established by a single agency for Governmentwide 
acquisition contract  use. 
(GWAC) 
GSA Federal supply  Indefinite-delivery-indefinite-quantity (IDIQ) contracts available 
schedules (FSS)  for use by Federal agencies worldwide.  These long-term 
contracts assist agencies with procuring a vast array of supplies 
and services directly from quality commercial suppliers. 
Head of Contracting  Official with authority, for example, to establish CMS policy, 
Activity  appoint contracting officers, and make approvals and 
determinations above the contracting office level.  
HHS Acquisition  Regulations that implement and supplement the FAR, and provide 
Regulation (HHSAR)  the regulatory framework for conducting acquisitions across 
HHS.  
indefinite-delivery- A contract type that provides for an indefinite quantity of services 
indefinite-quantity (IDIQ)  for a fixed time.  Generally used when the Government cannot 
determine above a specified minimum the precise quantities 
and/or delivery times of supplies or services that it will require 
during the contract period. 
independent government  The Governments estimate of the probable cost to perform 
cost estimate (IGCE)  services or deliver products under a Federal contract. 
insurance affordability  Programs including premium tax credits and cost-sharing 
programs  reductions for those who enroll in a qualified health plan. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  27   
   
key contracts  Six contracts selected for indepth review for this report.   
major IT investment  HHS defines a major IT investment as an IT investment that 
applies to one or more of the following:  (1) has total planned 
outlays of $10 million or more in the budget year; (2) is for 
financial management and obligates more than $500,000 
annually; (3) is designated as critical to the HHS mission or the 
administration of HHS programs, finances, property, or other 
resources; or (4) has life-cycle costs exceeding $50 million. 
marketplace  A health insurance exchange designed to serve as a one-stop 
shop where individuals can obtain information about health 
insurance options, determine eligibility for qualified health plans 
 
and insurance affordability programs, and select the plan of their 
choice.   
multidimensional  Contract awarded to IDL Solutions Inc. to evaluate, design, 
insurance data analytics  implement, and test the initial Multidimensional Insurance Data 
system (MIDAS) contract  Analytics System, which will serve as CCIIOs central repository 
for capturing, organizing, aggregating, and analyzing information 
related to CCIIOs mission. 
obligation  A definite commitment that creates a legal liability of the 
Government for the payment of goods and services ordered or 
received.  An obligation is incurred, for example, when a contract 
 
is signed or an order is placed for goods and/or services. 
Office of Acquisition and  Office within CMS that leads development and oversight of 
Grants Management  CMSs acquisition planning efforts, and is responsible for 
(OAGM)  awarding and administering CMS contracts. 
Office of Consumer  Office originally in the HHS Office of the Secretary, later moved 
Information and Insurance  to CMS and renamed CCIIO, which was responsible for 
Oversight (OCIIO)  overseeing the implementation of the ACAs provisions related to 
private health insurance. 
Office of Information  Program office within CMS that ensures the effective 
Services (OIS)  implementation and administration of CMSs IT, information 
systems, and resources, including, but not limited to, the Federal 
Marketplace project. 
option   Provision in a contract that gives the Government a unilateral 
right to extend the term of a contract. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  28   
   
Patient Protection and  Legislation that, among other things, required the establishment 
Affordable Care Act  of a health insurance exchange (marketplace) in each State. 
(ACA) 
premium tax credit  A tax credit provided by the ACA that reduces the cost of a health 
plans premium to help eligible individuals afford health coverage 
purchased through a marketplace.   
procurement  Acquisition functions and duties, such as:  determining contract 
type, awarding a contract, and determining contractor 
responsibility. 
prospective service  HHS review of certain high-dollar and high-risk contracts to 
acquisition review  ensure that acquisitions are cost-effective and comply with 
statutory and regulatory requirements. 
qualified health plan  Private health insurance plans that each marketplace recognizes 
and certifies as meeting certain standards and covering a core set 
of benefits. 
request for contract  A document drafted by a program office and submitted to OAGM 
that describes, among other things, a prospective contracts 
purpose, requirements, and estimated cost. 
request for proposal  A formal request by the Government communicating the 
Governments needs and asking offerors to submit a proposal to 
fulfill those needs (also called a request for quote). 
remote identity proofing  Contract awarded to Science Applications International 
(RIDP) contract  Corporation (SAIC) for the purpose of increasing security and 
providing authentication services. 
sole source contract  A contract for the purchase of supplies or services that is entered 
into or proposed to be entered into without competition and with 
only one source, i.e., one company.   
technical evaluation panel  Panel that assesses the strengths, weaknesses, and deficiencies of 
(TEP)  technical proposals submitted by prospective companies against 
the technical evaluation factors in the solicitation. 
 
   
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  29   
   
APPENDIX B 
HHSAR Exceptions to the Acquisition Plan Requirement  
HHSAR Part 307.7101(a): 
307.7101 Policy. 
(a) An AP [acquisition plan] is required for all acquisitions, to be placed 
by an HHS contracting office, expected to exceed $500,000 (inclusive 
of options) with the following exceptions: 
(1) Letter contracts, 
(2) Unsolicited proposals. 
(3) Regulated utility services available from only one source. 
(4) Proposals under the Small Business Innovative Research (SBIR) 
and Small Business Technology Transfer (STTR) programs. 
(5) Acquisition of commercial items/services  see FAR 2.101, 
including orders placed under FSS [Federal Supply Schedule] 
contracts meeting the definition of a commercial item/service, and 
not exceeding $5.5 million [$11 million for acquisitions as 
described in FAR 13.500(e)]. 
(6) Task orders or delivery orders of any dollar amount placed under 
(i)  An IDIQ [indefinite-delivery-indefinite-quantity] contract, 
other than a GWAC [governmentwide acquisition contract]; 
or 
(ii)  A BPA [blanket purchase agreement], provided there is an 
approved acquisition planning document for the original 
action, and there is no significant deviation from that plan. 
(7) Orders of any dollar amount placed under HHS-wide strategic 
sourcing vehicles.  
(8) Contract/order modifications that 
(i)  Exercise options; 
(ii)  Only provide additional funding; or 
(iii) Make changes authorized by the Changes clause. 
(9) Assisted acquisitions processed pursuant to an interagency 
agreement.  However, the OPDIV must comply with the 
requirements specified in 317.5 Interagency Agreements under the 
Economy Act and 317.70, Multi-agency and Intra-agency 
Contracts. 
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  30   
   
APPENDIX C 
CMS Acquisition Planning and Contract Procurement  
The FAR governs how Federal Executive agencies can acquire supplies 
and services with appropriated funds.  The FAR also describes what 
information and documentation should be contained in contract files.  In 
addition, agencies may develop procedures to supplement and implement 
the FAR provisions.  As such, acquisitions by HHS also must conform to 
regulations set forth in the HHSAR.29   
Acquisition strategy and planning.  Acquisition planning activities 
generally begin when the program office, e.g., OIS, identifies a need.  
With guidance from the contracting office, i.e., OAGM, the program office 
prepares the necessary acquisition documents.  According to the HHSAR, 
program and project managers responsible for major IT capital 
investments shall prepare a written acquisition strategy using the HHS 
acquisition strategy template.30  The HHS Instructions for Preparation of 
an Acquisition Strategy state that:  
[t]he primary function of an acquisition strategy is to document 
the factors, approach, and assumptions that will guide acquisition 
decisions related to the investment.  The development of an 
acquisition strategy allows for identification of risks and 
consideration of tradeoffs needed to mitigate those risks.31   
HHS has also identified the acquisition strategy as a focus for acquisition 
assessments and an area for improvement.32   
In addition to the acquisition strategy, some contracts also require a 
written acquisition plan.  An acquisition plan must follow instructions set 
forth in the FAR and HHSAR.  Examples of the contents required in an 
acquisition plan include:  a description of how competition will be sought, 
promoted, and sustained throughout the course of the acquisition; a 
discussion of what contract types may be selected for each contract 
contemplated; and budgeting and funding information.  According to the 
                        ____________________________________________________________ 
29 HHSAR, 48 CFR ch. 3. 
30 HHSAR  307.104-70. 
31 HHS, HHS Instructions for Preparation of an Acquisition Strategy, p. 1.  Accessed at 
http://www.hhs.gov/asfr/ogapa/acquisition/policies/worktool.html on July 1, 2014. 
32 HHS, Acquisition Policy Memorandum No. 2009-05, Acquisition Strategy 
Requirements and Template, July 29, 2009.  Accessed at 
http://www.hhs.gov/asfr/og/acquisition/policies/apm2009-05acq_strategy_guid07-29-
2009.pdf on July 1, 2014. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  31   
   
HHSAR, HHS staff must review and certify the acquisition plan.33  An 
acquisition plan also must contain a schedule that tracks the target and 
actual dates of milestones throughout the acquisition process.   
Under the HHSAR, certain contracts are exempt from the acquisition plan 
requirement, including letter contracts and task orders placed under IDIQ 
contracts.34, 35, 36  However, even contracts exempted from the acquisition 
plan requirement are required to have certain acquisition planning 
documents, such as an acquisition milestone schedule, a certified funding 
document, and an independent Government cost estimate.37   
Request for contract and contract competition.  During the next phase of 
contract acquisition, the program office develops and submits a request for 
contract to the contract office.  Using the information from this request for 
contract, the contracting officer considers the appropriate contract type 
and determines how competition requirements will be met.   
Generally, agencies must promote and provide for full and open 
competition of contracts (or obtain competition to the maximum extent 
practicable) using sealed bids, competitive proposals, or a combination of 
competitive procedures.38  There are several exceptions to this 
requirement, including contracts awarded using the simplified acquisition 
procedures, contract modifications, and certain task orders placed under 
existing IDIQ contracts.  In the case of the latter, competition is limited to 
the companies that were originally awarded the IDIQ contract.  
Contracting without providing for full and open competition is also 
acceptable when supplies or services are available from only one source, 
or when there is an unusual and compelling urgency for certain supplies or 
services.  The contracting officer must provide written justification for 
                        ____________________________________________________________ 
33 The review and certification of the acquisition plan is the responsibility of the head of 
the sponsoring program office (typically a Division Director or equivalent), Project 
Officer, Funds Certification Official, contracting officer, and other signatories in 
accordance with agency policies.  See HHSAR  307.7104. 
34 A letter contract is a written preliminary contractual instrument that authorizes the 
contractor to begin immediately manufacturing supplies or providing services.  FAR 
 16.603-1. 
35 HHSAR  307.7101(a).  Orders developed under a GWAC are not exempt from the 
acquisition plan requirement.  A GWAC is a contract established by a single agency for 
Governmentwide use.  
36 IDIQ contracts provide for an indefinite quantity of services for a fixed time and are 
used when the Government cannot determine above a specified minimum the precise 
quantities of supplies or services that it will require during the contract period.  Accessed 
at http://www.gsa.gov/portal/content/103926 on July 1, 2014.  
37 HHSAR  307.7101(c) states that this information (as applicable) shall be provided to 
the Chief of the Contracting Office for acquisitions other than those processed pursuant 
to an interagency agreement. 
38 FAR  7.102; FAR  6.101. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  32   
   
most contracts awarded using procedures other than full and open 
competition.39 
Request for proposal and proposal evaluation.  Requests for proposals 
communicate Government requirements to prospective contractors and 
solicit proposals.  The contracting officer is responsible for developing the 
request for proposal, which must include:  a description of the supplies or 
services requested and the related specifications, requirements for quality 
assurance and reliability, the required time and method of delivery or 
performance, and factors that will be used to evaluate the proposals.40   
After prospective contractors submit proposals, proposals are evaluated to 
determine companies ability to perform the work.  At CMS, a TEP may 
evaluate proposals on the basis of factors such as the cost estimate, past 
performance information, and technical approach.  The TEP then rates 
proposals based on criteria established in the request for proposal. 
TEP panelists are required to provide a report with complete written 
documentation of each companys strengths, weaknesses, and deficiencies.  
Using the findings from this report, the contracting officer must consider 
how each proposal conforms to the contracts requirements, the cost 
evaluation, and the companys past performance and ability to fulfill the 
technical requirements.  The contracting officers goal is to select the 
contractor that provides the best value to the Government.41    
 
 
 
 
 
 
 
 
 
 
 
 
                        ____________________________________________________________ 
39 FAR  6.303-1. 
40 FAR  14.201-2; FAR  15.203(a)(4). 
41 FAR  14.408-1; FAR  15.302. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  33   
   
APPENDIX D 
Contract Oversight Reviews 
According to the HHSAR, the Head of Contracting Activity for each 
agency is responsible for establishing procedures for the review and 
approval of proposed contract actions to ensure that:  (1) contract 
documents comply with law, established policies and procedures, and 
sound business practices; (2) contract awards properly reflect the mutual 
understanding of the parties; and (3) the contracting officer is informed of 
deficiencies and items of questionable acceptability and takes corrective 
action.42  Within CMS, the Director of OAGM, i.e., the Head of 
Contracting Activity, is responsible for meeting these HHSAR 
requirements.   
OAGM Quality Assurance Reviews of Contracts 
Contract Review Board review.  OAGM has a formal Contract Review 
Board policy to fulfill its responsibility required under HHSAR Part 
304.71.  OAGM revised this policy most recently in February 2011.43  The 
Contract Review Board process consists of a two-tiered review and 
approval process that may be conducted presolicitation, preaward, and/or 
for certain contract modifications, after award.  Presolicitation and 
preaward reviews must take place for all contract actions greater than 
$50 million, as well as for IDIQ contracts.  However, the Head of 
Contracting Activity in OAGM may approve a waiver to exempt a specific 
contract from a Contract Review Board review. 
During the Tier 1 review, the contract specialist and contracting officer 
review the contract file to ensure compliance with agency and HHS 
requirements.  The Tier 2 review is a more indepth review of specified 
contract actions to ensure, in part, that contract documents comply with 
established laws and that the contracting officer is aware of (and takes 
corrective action to address) any deficiencies and items of questionable 
acceptability.  Prior to the solicitation or award of the contract, the 
contracting officer must address any Contract Review Board findings or 
recommendations by providing documentation of the supporting rationale 
for any decision(s).   
Contract file checklists.  Effective October 1, 2013, OAGM implemented 
a Contract File Organization policy.  This policy created a consolidated list 
                        ____________________________________________________________ 
42 HHSAR  304.71. 
43 A 2009 GAO report found that the Contract Review Board process had not been fully 
implemented and that many contracts selected for Contract Review Board review had not 
actually undergone review.  GAO, Centers for Medicare and Medicaid Services:  
Deficiencies in Contract Management Internal Control are Pervasive, October 2009, 
GAO-10-60. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  34   
   
of all required contract actions needed to award, modify, and administer a 
contract and also provided a comprehensive approach for creating and 
maintaining electronic contract files.  As part of this policy, checklists are 
used to ensure that contract actions are executed consistently across 
OAGM.  There are checklists for preaward actions, postaward actions, and 
modifications.  Each checklist details what documents must be contained 
in the contract file and is required to be digitally signed once contract 
actions have been reviewed and approved.44   
Contract specialist and contracting officer file review.  According to 
OAGMs 2014 Quality Assurance Plan, it will review the contract 
specialists and contracting officers contract files to test the effectiveness 
of the new Contract File Organization policy, as well as other internal 
controls that are in place.45  Each year, a minimum of 60 active and 
previously awarded contracts will be selected for review.  The contract 
files will be reviewed to determine compliance with policies, procedures, 
and regulations and see that all required contract steps/actions are taken.   
Contracting officers representative working file review.  According to 
OAGMs 2014 Quality Assurance Plan, it will also annually review a 
random selection of files from each contracting officers representative to 
ensure that the contracting officers representative is properly monitoring 
contractor performance.  Contracts considered highly visible, or having 
the potential to be high risk to CMS, will be targeted to ensure that CMS is 
not vulnerable from a program management perspective.  A random 
selection of additional contracts will also be chosen for review.  Reviews 
of files from contracting officers representatives will be conducted, in 
part, to identify OAGM improvements that could be made regarding 
acquisitions, and to identify tools that could be provided to help 
contracting officers representatives become more efficient and effective. 
HHS Quality Assurance Reviews of Contracts 
In 2011, as part of HHSs overall strategy to evaluate its acquisitions and 
ensure that contracts awarded are properly funded, HHS implemented 
prospective service acquisition reviews and appropriations law compliance 
reviews.   
Prospective service acquisition review.  These reviews are completed to 
ensure that certain high-dollar and high-risk contracts are reviewed prior 
to award.  The goal of the reviews is to ensure that acquisitions are 
cost-effective and comply with statutory and regulatory requirements.  
                        ____________________________________________________________ 
44 The level of approval required is determined by the total potential value of the contract.   
45 CMS/OAGM, 2014 Quality Assurance Plan. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  35   
   
Contracts for advisory services, such as legal services, as well as contracts 
for IT services can undergo a prospective service acquisition review.46       
Appropriations law compliance review.  Appropriations law compliance 
reviews are a type of prospective review and are part of HHSs strategy to 
ensure that contracts are properly funded in compliance with laws and 
regulations.  These reviews are an additional safeguard to ensure that 
particular acquisitions exceeding a dollar threshold$10 million for 
CMScomply with appropriation laws and regulations.  The types of 
acquisitions required to undergo an appropriations law compliance review 
include research and development, data collection to support management, 
and special studies.47   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                        ____________________________________________________________ 
46 HHS, APM-2011-02, HHS Prospective Service Acquisition Reviews, released 
June 3, 2011.  Accessed at http://www.hhs.gov/asfr/ogapa/acquisition/apm2011-
02_060311.html on May 4, 2014. 
47 HHS, APM-2011-04, Appropriations Law Compliance Reviews, released 
October 6, 2011.  Accessed at http://www.hhs.gov/asfr/ogapa/acquisition/apm2011-
04_100611.html on May 4, 2014. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  36   
   
APPENDIX E 
Federal Marketplace Contracts 
Table E-1 provides a description of the 60 contracts awarded for the 
development and operation of the Federal Marketplace.  The six key 
contracts in this report are highlighted in the table.  
 
 Table E-1:  Description of the Contracts Awarded for the Federal Marketplace  
Start of 
Contract  Contract Number/  
Contractor Name  Description of Contract  Contract 
Identifier  Order Number1 
Period 
Accenture Federal  HHSM-500-2014-00191C/  Federally facilitated marketplace system development 
1  1/11/2014 
Services LLC  No task order  and implementation 
Support Web site development, operations, maintenance, 
HHSN-316-2012-00005W/
2  Aquilent Inc.  and training for CMS Web sites (such as  9/13/2013 
HHSM-500-2013-00074U 
HealthCare.gov), their components, and tools 
Blast Design Studio 
HHSM-500-2012-00080C/
3  Inc. dba Blast  Online marketing services for HealthCare.gov  9/28/2012 
No task order 
Advanced Media 
Blast Design Studio 
HHSM-500-2013-00153C/
4  Inc. dba Blast  Online marketing services for HealthCare.gov  9/28/2013 
No task order 
Advanced Media  
Blue Canopy Group  HHSN-316-2012-00120W/
5  Services to perform security controls assessment testing  7/15/2013 
LLC  HHSM-500-2013-00054U 
GS-23F-9755H/ 
6  Booz Allen Hamilton  HHSM-500-2011-00011B/     Exchange operational integration support  9/17/2012 
HHSM-500-B0003 
 Carahsoft  GS-35F-0119Y/   
7  Application code analysis  6/8/2013 
Technology Corp.  HHSM-500-2013-00249G 
Carahsoft  GS-35F-0119Y/
8  Application code software  6/8/2012 
Technology Corp.  HHSM-500-2012-00066G   
Information system to support the data collection for the 
GS-35F-4797H/  internet Web portal and health benefit exchanges, 
9  CGI Federal Inc.  4/15/2010 
HHSM-500-2010-00157G  development of the Health Insurance Oversight System 
(HIOS) 
GS-35F-4797H/ 
10   CGI Federal Inc.  IT development and data services in support of HIOS  4/15/2013 
HHSM-500-2013-00236G 
HHSM-500-2007-00015I/ 
11   CGI Federal Inc.  Web site maintenance and support services  4/30/2010 
HHSM-500-T0007 
HHSM-500-2007-00015I/  Provide rate and benefits information system for the 
12   CGI Federal Inc.  6/7/2011 
HHSM-500-T0011  HealthCare.gov Plan Finder application 
continued on next page 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  37   
   
Start of 
Contract  Contract Number/  
Contractor Name  Description of Contract  Contract 
Identifier  Order Number1 
Period 
HHSM-500-2007-00015I/ Federally facilitated marketplace system development 
13   CGI Federal Inc.  9/30/2011 
HHSM-500-T0012    and implementation 
Corporate Executive  GS-35F-0549W/
14  Professional research Web-based subscription service  9/24/2012 
Board  HHSM-500-2012-00186G  
Creative Computing  GS-06F-0612Z/
15  Security oversight support services  8/2/2012 
Solutions Inc.  HHSM-500-2012-00097G  
DEDE Inc. dba  GS-35F-0303M/ 
16  Genova   HHSM-500-2005-00001B/ Requirements engineering support services  5/20/2011 
Technologies  HHSM-500-B0018   
DEDE Inc. dba  GS-35F-0303M/ 
Requirements support for the enterprise eligibility service 
17  Genova   HHSM-500-2012-00021B/  6/11/2012 
project 
Technologies  HHSM-500-B0006 
DEDE Inc. dba  GS-35F-0303M/ 
18  Genova   HHSM-500-2012-00021B/ Development of a comprehensive testing strategy  6/21/2013 
Technologies  HHSM-500-B0019   
DEDE Inc. dba  GS-35F-0303M/ 
19  Genova   HHSM-500-2012-00021B/  Data model and requirements integration support  6/25/2012 
Technologies   HHSM-500-B0008 
 DEDE Inc. dba  GS-35F-0303M/ 
20  Genova   HHSM-500-2012-00021B/  Strategic and technical support  6/21/2012 
Technologies   HHSM-500-B0007 
 DEDE Inc. dba  GS-35F-0303M/ 
Architecture support to develop a set of enterprise 
21  Genova   HHSM-500-2012-00021B/  8/1/2013 
standards and engineering approaches 
Technologies   HHSM-500-B0020 
 DEDE Inc. dba  GS-35F-0303M/ 
22  Genova   HHSM-500-2012-00021B/    Requirements engineering support services  5/20/2012 
Technologies   HHSM-500-B0003 
 DEDE Inc. dba  GS-35F-0303M/ 
Business and test data requirements integration 
23  Genova   HHSM-500-2012-00021B/ 9/28/2012 
engineering support 
Technologies   HHSM-500-B0013   
Deloitte Consulting  GS-10F-0083L/  Market report card and operational dashboard 
24  1/24/2012 
LLP  HHSM-500-2012-00016G  development 
GS-35F-0256K/ 
25  FedResults Inc.  GovDelivery digital communication suite  4/1/2012 
HHSM-500-2012-00038G 
Global Tech Inc. dba  GS-06F-1088Z/ 
26  Marketplace technical integration support  6/15/2013 
eGlobalTech  HHSM-500-2013-00052U 
Support for verifying Hub Web services and other Hub 
 Global Tech Inc. dba  GS-06F-1088Z/  
27  related components and provide testing integration  5/3/2013 
eGlobalTech   HHSM-500-2013-00046U 
support 
continued on next page 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  38   
   
Start of 
Contract  Contract Number/  
Contractor Name  Description of Contract  Contract 
Identifier  Order Number1 
Period 
Technical interoperability and management support  
 Global Tech Inc. dba  GS-06F-1088Z/  
28  oversight and coordination of technical activities at the  11/25/2013 
eGlobalTech   HHSM-500-2014-00083U 
Exchange Operations Center for CMS 
 Global Tech Inc. dba  GS-35F-0183T/   Develop cloud-computing technical framework, 
29  9/24/2012 
eGlobalTech   HHSM-500-2012-00154G  architecture, and transitional solutions 
 Government  HHSN263999900442I/   Informatica enterprise license agreement and 
30  8/2/2012 
Acquisitions Inc.   HHSM-500-2012-00014U  maintenance 
GS-06F-0276Z/  
31  Heitech Services Inc.  General systems design support services  7/25/2011 
HHSM-500-2011-00027U 
GS-06F-0726Z/   
32  Heitech Services Inc.  General systems design operations and maintenance   7/3/2012 
HHSM-500-2012-00074G 
GS-06F-0726Z/   
33  Heitech Services Inc.   General program system support  8/2/2013 
HHSM-500-2013-00275G 
Host production virtual data center and a disaster 
HP Enterprise  HHSM-500-2013-00014I/ 
34  recovery virtual data center for its production exchange  7/1/2013 
Services LLC  HHSM-500-T0003 
and Hub systems 
Development, operation, and maintenance of 
HHSM-500-2007-00023I/  multidimensional insurance data analytics system 
35  IDL Solutions Inc.  9/27/2011 
HHSM-500-T0001  (MIDAS), an analytics system that will be used to 
implement tasks mandated by the ACA  
HHSM-500-2011-00071C/ 
36  Innosoft Corporation  Application lifecycle management tool and support  8/15/2011 
No task order 
L & M Policy  HHSM-500-2010-00015I/ 
37  Consumer research enhancing Web tools  1/23/2012 
Research LLC  HHSM-500-T0002 
Lockheed Martin  263-01-D-0054/ 
38  Data center hosting  1/1/2009 
Services Inc.  HHSM-500-2009-00002U 
Maricom Systems  HHSM-500-2007-00025I/   Support important aspects of CMSs data management 
39  11/28/2011 
Inc.  HHSM-500-T0005  and systems capability 
Northrop Grumman 
HHSM-500-2007-00014I/  
40  Information  ACA integrated care data and applications  11/28/2011 
HHSM-500-T0006 
Technology Inc.  
Onix Networking  GS-35F-5519H/ 
41  Purchase Google site search licenses  9/19/2012 
Corp.    HHSM-500-2012-00103G 
HHSM-500-2009-00005I/ 
42  ProTelecom LLC  Video teleconferencing equipment  3/28/2013 
HHSM-500-T0014 
continued on next page 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  39   
   
Start of 
Contract  Contract Number/  
Contractor Name  Description of Contract  Contract 
Identifier  Order Number1 
Period 
HHSM-500-2009-00005I/ 
43  ProTelecom LLC  Video teleconferencing equipment and maintenance  9/12/2013 
HHSM-500-T0015 
Quality Software  GS-06F-0148Z/  
44  Enterprise architecture support for the Exchange  9/24/2010 
Services Inc. (QSSI)  HHSP-233-2010-00588G 
Quality Software  HHSM-500-2007-00024I/ 
45  Data Services Hub  9/30/2011 
Services Inc. (QSSI)  HHSM-500-T0007 
Quality Software  HHSM-500-2007-00024I/ 
46  Enterprise identity management and credential services  6/18/2012 
Services Inc. (QSSI)  HHSM-500-T0010 
Quality Software  HHSM-500-2007-00024I/ 
47  Provide technical testing expertise and support  1/17/2012 
Services Inc. (QSSI)  HHSM-500-T0008 
Quality Technology  GS-06F-0653Z/   
48  Operational Support Center for CMS  9/25/2012 
Inc.   HHSM-500-2012-00123G 
Science Applications 
HHSM-500-2007-00020I/   Enterprise service for remote identity proofing and 
49  International  1/31/2012 
HHSM-500-T0001  multi-factor authentication 
Corporation (SAIC) 
HHSM-500-2013-00109C/  Integration support and system development for 
50  Scope Infotech Inc.  4/15/2013 
No task order  Exchange collaboration tools 
Spann & Associates  GS-35F-0235M/ 
51  Information systems security support  9/25/2013 
Inc.  HHSM-500-2013-00334G 
GS-35F-0437N/ 
SphereCom 
52  HHSM-500-2011-00001B/  Information systems security support  3/1/2011 
Enterprises Inc. 
HHSM-500-B0001 
GS-35F-0437N/ 
 SphereCom 
53  HHSM-500-2011-00001B/  Information systems security support  7/15/2011 
Enterprises Inc. 
HHSM-500-B0003 
Terremark Federal  GS-35F-0073U/    Cloud computing services for the health insurance 
54  4/1/2011 
Group Inc.  HHSP-233-2011-00177G  Marketplace 
The Mitre  HHSM-500-2012-00008I/  
55  Acquisition and systems engineering support services  9/27/2013 
Corporation  HHSM-500-T0015 
The Mitre  TIRNO-99-D-00005/  Security engineering, integration, and enterprise 
56  6/13/2011 
Corporation  HHSM-500-2011-00014U  vulnerability management 
 The Mitre  TIRNO-99-D-00005/   
57  Security test and evaluations for CMS systems  7/28/2009 
Corporation   HHSM-500-2009-00021U 
 The Mitre  TIRNO-99-D-00005/   
58  Broad systems engineering support  9/26/2011 
Corporation   HHSM-500-2011-00036U 
continued on next page 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  40   
   
Start of 
Contract  Contract Number/  
Contractor Name  Description of Contract  Contract 
Identifier  Order Number1 
Period 
The Mitre  TIRNO-99-D-00005/   
59  IT modernization support  9/28/2010 
Corporation  HHSP-233-2010-00138W 
TurningPoint Global  GS-06F-0672Z/   Independent verification and validation services support 
60  5/15/2012 
Solutions LLC  HHSM-500-2012-00008U  for the Federal Exchange  
Source:  OIG analysis of CMS contract files, 2014. 
1 For some contracts, we have provided both a contract number and a blanket purchase agreement number.  CMS can utilize blanket purchase 
agreements to fill anticipated repetitive needs for supplies and services. 
 
 
   
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  41   
   
APPENDIX F 
Detailed Methodology 
Data Sources and Collection  
Document and information request.  We requested from CMS the contract 
files and contracting officers representatives files for all Federal 
Marketplace contracts awarded prior to December 31, 2013.  We 
subsequently requested these files for the FFM2 contract (awarded in 
January 2014).  The contract files include documentation such as the 
contracts award and modifications, acquisition plan, request for proposal, 
negotiation memoranda, TEP reports, and Determination and Findings 
memoranda (if applicable).  We also requested all CMS emails related to 
these contracts. 
We also requested that CMS provide all HHS and CMS manuals, guides, 
and procedures related to contract procurement, acquisition planning, 
contractor selection, and contract management.  Lastly, we asked CMS to 
indicate which of the 60 Federal Marketplace contracts had undergone 
contract oversight reviews, e.g., Contract Review Board reviews, the dates 
the reviews were completed, and whether any reviews were waived.   
Interviews.  We conducted structured interviews with high-level HHS and 
CMS staff.  We also interviewed the contracting officer and contracting 
officers representative who were assigned to the six key contracts during 
the acquisition and procurement phases.  We asked staff to describe the 
acquisition policies and planning strategies, extent of communication and 
coordination among various divisions involved with planning, and factors 
involved with evaluating and selecting the Federal Marketplace 
contractors.  Lastly, we asked staff to describe any challenges encountered 
during the acquisition planning and contract procurement process of the 
Federal Marketplace contracts.   
FAR and HHSAR.  We identified certain requirements in the FAR and the 
HHSAR relevant to acquisition planning and contract procurement. 
Data Analysis 
Acquisition planning for the Federal Marketplace.  Using information 
collected through interviews, contract files, and related policy and 
procedure documents, we evaluated HHSs acquisition planning process 
for the Federal Marketplace project.  We reviewed the interview responses 
and documents provided by CMS to determine whether the 
HHSAR-required acquisition strategy was developed.  We analyzed the 
FAR and HHSAR requirements to identify which of the 60 Federal 
Marketplace contracts did not require an acquisition plan.  For these 
contracts, we reviewed the contract files and contracting officers 
representatives files to determine whether they contained other types of 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  42   
   
acquisition planning information.  Specifically, we determined whether the 
contract file contained an acquisition milestone schedule for the base 
award, a signed certified funding document dated prior to award, and an 
independent Government cost estimate for the base award.  For the 
contracts that required an acquisition plan, we reviewed the acquisition 
plan to determine the extent to which certain planning areas were 
addressed.   
Contract oversight reviews.  For each of the six key contracts, we 
reviewed the contract files and any additional documentation provided by 
CMS to determine whether it conducted any type of quality control 
review, including, but not limited to, a Contract Review Board review.  
We also reviewed the interview responses provided by each contracts 
contracting officer and contracting officers representative about the types 
of quality assurance reviews performed on the contract.   
Procurement of the Federal Marketplace contracts.  We used the contract 
files to determine how many of the 60 Federal Marketplace contracts HHS 
and CMS procured as an original contract or as an order under a 
previously established contract.  We identified the type of previously 
established contract used to procure the order.   
We also determined the number of Federal Marketplace contracts for 
which CMS sought services from only one company and the number of 
contracts for which only one company submitted a proposal for CMSs 
consideration.  For these contracts, we summed the total estimated 
contract value at the time of award.48  For the six key contracts, we also 
determined the number of proposals that were deemed technically 
acceptable.   
For the six key contracts, we reviewed various documents in the contract 
files to determine how CMS evaluated proposals.  We also analyzed 
interview responses from the contracting officers and contracting officers 
representatives to gain additional insight into the rationale for selecting 
these contractors.  We reviewed HHS policies and procedures and the 
FAR requirements related to proposal review and contractor selection.  
Contract value and type for the six key contracts.  We identified the 
estimated contract value listed in the base award for each of the six key 
contracts.  We also reviewed the most recent modification CMS provided 
and determined the most up-to-date contract value for each of the six key 
                        ____________________________________________________________ 
48 The total estimated contract value is an expected value.  This amount may be less, for 
example, if option years are not exercised.  This amount may be more, for example, if 
modifications are made to the contract that increase the cost of the contract. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  43   
   
contracts and calculated the difference between the original and updated 
amounts. 
We reviewed contract files for the six key contracts and relevant FAR 
requirements regarding contract file documentation to determine the 
rationale for choosing contract type.  We determined whether the files 
contained explanations for selecting the contract type and reviewed these 
explanations. 
Challenges.  We reviewed interview responses and CMS documents to 
identify challenges and barriers encountered during the acquisition 
planning and procurement of the Federal Marketplace contracts.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  44   
   
APPENDIX G 
Contracting Vehicles Used for Federal Marketplace Contracts 
Table G-1 displays the contracting vehicles that CMS used for the 
55 Federal Marketplace contracts (including 5 key contracts) that were 
awarded as orders under previously established contracts.    
Table G-1:  Contracting Vehicles CMS Used for the 55 Federal Marketplace Contracts 
Awarded as Orders Under Previously Established Contracts  
Number of 
Contracting Vehicle 
Contracts 
General Services Administration (GSA) IT Schedule 70 (Federal Supply Schedule)1  11 
CMS Enterprise System Development (ESD) Indefinite-Delivery-Indefinite-Quantity (IDIQ)  10 
GSA 8(a) Streamlined Technology Acquisition Resources for Services (STARS) II Governmentwide 
Acquisition Contract (GWAC)2  8 
CMS Professional Requirements Engineering Services Blanket Purchase Agreement  7 
Internal Revenue Services Federally Funded Research and Development Center (FFRDC)   4 
CMS Video Teleconferencing (VTC) IDIQ   2 
GSA Alliant Small Business GWAC   2 
CMS Consumer Research and Communication (CRC) IDIQ  1 
CMS Enterprise Business Planning Group (EBPG) Blanket Purchase Agreement  1 
CMS FFRDC   1 
CMS Information Security Program Support Blanket Purchase Agreement 1  1 
CMS Requirements Engineering Support Services Blanket Purchase Agreement  1 
CMS Virtual Data Center (VDC) IDIQ  1 
GSA Mission Oriented Business Integrated Services (MOBIS) Schedule 874 (Federal Supply 
Schedule)  1 
National Institutes of Health (NIH) Information Technology Acquisition and Assessment Center 
(NITAAC) Chief Information Officer Solutions and Partners 2 Innovations (CIO-SP2i) GWAC  1 
NIH NITAAC Chief Information Officer Solutions and Partners 3 (CIO-SP3) GWAC  1 
NIH NITAAC CIO-SP3 Small Business GWAC   1 
NIH NITAAC Electronic Commodities Store III (ECS-III) GWAC   1 
Source:  OIG analysis of CMS contract files and files from the contracting officers representatives, 2014.   
1 Two of the 55 Federal Marketplace contracts are orders placed under the CMS Information Security Program Support Blanket Purchase 
Agreement.  However, one of these orders was procured simultaneously with the Blanket Purchase Agreement itself using the GS IT 
Schedule 70 (Federal Supply Schedule).  For the purposes of this table, we counted this contract as using the GS IT Schedule 70 
contracting vehicle.   
2 Two of these contracts used the GSA 8(a) STARS GWAC, the GSA 8(a) STARS II GWACs predecessor. 
 
 
 
 
 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  45  APPENDIX H 
Agency Comments 
DEPARTMENT OF HEALTH & HUMAN SERVICES  Office of the Secretary 
Washington DC 20201 
NOV 14 2014 
TO:  Daniel R. Levinson 
Inspector General. Office ofthe Inspector General 
FROM:  Ellen G. Murray 
Assistant Secretary for Financial Resources and ChiefFinancial Officer 
Office' ofthe Assistance Secretary for Financial Resources 
Marilyn 'Tavenner 
Administrator, Centers for Medicare and Medicaid Services 
SUBJECT:  HHS Comments on OIG Draft Report: Federal Marketplaces: Inadequacies in 
Contract Planning and Procurement, OEI-03-14-00230 
The Department ofHealth and Human Services (HHS) appreciates the opportunity to review and 
respond to the recommendations identified in the OIG's draft report Federal Marketplace: 
Inadequacies in Contract Planning and Procurement, OEI-03-14-00230. HHS recognizes the 
need to continually improve its contract management and responds to the recommendations 
below. 
After the enactment ofthe Affordable Care Act in March 2010, the HHS and the Centers for 
Medicare and Medicaid Services (CMS) faced a unique and difficult challenge-establish a first
of-its-kind online Marketplace to determine consumer's eligibility for coverage and insurance 
affordability programs and enroll them in coverage beginning January 1, 2014. To accomplish 
this, CMS awarded contracts and task orders for the development and support ofthe Federally
facilitated Marketplace (FFM) and the Federal Data Services Hub (the Hub). Those contracts 
included developing technical requirements, building the application, performing security 
monitoring and testing, and securing the infrastructure needed to support the FFM and the Hub. 
A vast majority ofthe contracts and task orders did not have performance issues and delivered 
quality services or products on time and within budget. 
CMS has moved aggressively to implement extensive contracting reforms, bring in new 
leadership to oversee Marketplace operations, hire a systems integrator, and end our largest  . 
contract with CGI and move to a new type ofcontract with Accenture that rewards performance 
and reduces risk to the federal government. CMS is working to ensure effective management of 
the Marketplace with a focus on clear lines ofauthority, prioritization ofrequirements and 
deliverables, and metric-driven quality reviews for its Healthcare.gov contracts and for contracts 
across the agency. A task force has been appointed to develop a program-wide view ofthe cost 
ofthe Marketplace in order to strategically manage Marketplace acquisitions. Additionally, 
CMS is enforcing a strict governance structure for contracts and is training a stronger acquisition 
workforce. CMS has brought in new leadership to oversee the Marketplace, with an eye on 
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ACKNOWLEDGMENTS 
This report was prepared under the direction of Robert A. Vito, Regional 
Inspector General for Evaluation and Inspections in the Philadelphia 
regional office, and Linda M. Ragone, Deputy Regional Inspector General.  
Amy Sernyak and Stephanie Yeager served as the team leaders for this 
study.  Kevin McAloon and Joanna Bisgaier served as lead analysts.  
Other Office of Evaluation and Inspections staff from the Philadelphia 
regional office who conducted the study include:  Tara Bernabe, Edward 
Burley, Tanaz Dutia, Courtney Fanslau, Maria Johnson, Nancy 
Molyneaux, and Stefanie Vance.  Central office staff who provided support 
include Heather Barton, Althea Hosein, and Christine Moritz.  
We would like to acknowledge the contributions of other Office of 
Evaluation and Inspections regional office staff, including Teresa Dailey, 
Christopher Galvin, Jennifer Karr, and Brielle Treece.   
We would like to acknowledge the contributions of Office of Counsel to 
the Inspector General staff, including Juliet Hodgkins and Elizabeth 
Holahan. 
Federal Marketplace:  Inadequacies in Contract Planning and Procurement (OEI-03-14-00230)  51   
   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.