Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

FEDERAL MARKETPLACE: 

INADEQUACIES IN CONTRACT 

PLANNING AND PROCUREMENT 

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 CMS’s 

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 

CMS’s 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 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 1 

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) 2 

36 States—29 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 ACA’s 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. 

CMS’s Office of Information Services (OIS) ensures the effective 

management of CMS’s 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) 3 

of the Federal Marketplace, including working directly with the IT 

contractors. 

CMS’s Office of Acquisition and Grants Management (OAGM) serves as 

the lead for developing and overseeing CMS’s 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 offices—such as CCIIO and 

OIS—when 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) 4 

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 contract’s purpose, 

requirements, and estimated cost. Generally, OAGM then develops a 

“request for proposal” document to communicate the contract’s 

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 contract’s requirements, the company’s past performance, the 

company’s 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 CMS’s acquisition planning and procurement 

process. Appendix C provides a more detailed description of these steps. 

Chart 1: CMS’s Acquisition Planning and Procurement Process

 ____________________________________________________________ 

13 When we refer to proposals, this may also include any bids submitted under the “sealed 

bidding” 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
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 5 

CMS’s 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 CMS’s 

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 

Contract 

Category 

Selected 

Contract Types 

Entity that 

Assumes Risk 

for Cost Overrun 

Payment Structure Advantages 

Fixed-price Firm-fixed-price Contractor 

Payment of a fixed price 

that does not change 

based on contract cost 

Provides maximum incentive 

for the contractor to control 

costs and perform effectively 

CostCost-plus-fixed-fee Government 

Payment of allowable 

costs, plus a negotiated 

fee that is fixed at the 

beginning of the contract 

Supports contracting efforts 

that might present a risk to 

contractors, but provides the 

contractor only a minimum 

incentive to control costs 

reimbursement Payment of allowable 

Cost-plus-award-fee Government 

costs, plus a base 

amount and an award 

amount based upon a 

judgmental evaluation by 

Provides the contractor with 

an incentive to provide 

excellent performance 

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) 6 

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) 7 

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 OIG’s 

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. 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 8 

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 

contract’s 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) 9 

Data Sources and Collection 

We initially requested from CMS the contract files, contracting officer’s 

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 officer’s 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) 10 

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) 11 

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 

CMS’s 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) 12 

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. 

CMS’s former Chief Information Officer reported to OIG that CMS 

perceived CGI to be the project’s 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) 13 

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, CMS’s 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. 

CMS’s procurement decisions may have limited its 

choices for selecting Federal Marketplace contractors 

Although CMS’s 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) 14 

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 CMS’s 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 

contracts—2 key components of the Federal Marketplace—4 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 CMS’s 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 

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. 

Key 

Contract

Eligible 

Companies 

(ESD IDIQ)

Companies 

that 

Submitted 

Proposals

Technically 

Acceptable 

Initial 

Proposals

Technically 

Acceptable 

Final 

Proposals 

Company 

Selected 

for Award

FFM1 16 4 1 1 CGI

DSH 16 4 0 2 QSSI

RIDP 16 9 3 2 SAIC

EIDM 16 6 5 Not 

applicable1 QSSI

MIDAS 16 5 5 Not 

applicable1 IDL

FFM2 Not 

applicable2 0 Not applicable

Not 

applicable Accenture
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 15 

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 CMS’s 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 CMS’s 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 contract’s work on time. 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 16 

Chart 3: Number of Companies That Submitted Proposals for 54 Contracts

Source: OIG analysis of CMS contract and contracting officer’s 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. 

35

4

3

5

3

4

0 5 10 15 20 25 30 35 40

1 Company

2

3

4

5

From 6 to 17 Companies

Number of Federal Marketplace Contracts

Number of 

Companies That 

Submitted 

Proposals1 

2 

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) 17 

Instead, for these two contracts, CMS’s 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 CMS’s 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 Government’s 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 CMS’s 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. 

 
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 contract’s 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. 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 18 

 

 ____________________________________________________________ 

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) 19 

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. CMS’s 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 CMS’s 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. CMS’s 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, CMS’s 

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) 20 

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 

CMS’s 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) 21 

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) 22 

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. 
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 HHS’s and CMS’s 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 officer’s 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 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 24 

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 Policy’s 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) 25 

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 ACA’s 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) 26 

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 officer’s Program office staff that is responsible for monitoring the 

representative contractor’s 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 Government’s 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 CMS’s 

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) 27 

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 Government’s 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) 28 

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 CCIIO’s central repository 

for capturing, organizing, aggregating, and analyzing information 

related to CCIIO’s 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 CMS’s 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 ACA’s provisions related to 

private health insurance. 

Office of Information Program office within CMS that ensures the effective 

Services (OIS) implementation and administration of CMS’s 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) 29 

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 

plan’s 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 contract’s 

purpose, requirements, and estimated cost. 

request for proposal A formal request by the Government communicating the 

Government’s 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) 30 

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) 31 

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) 32 

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) 33 

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 company’s strengths, weaknesses, and deficiencies. 

Using the findings from this report, the contracting officer must consider 

how each proposal conforms to the contract’s requirements, the cost 

evaluation, and the company’s past performance and ability to fulfill the 

technical requirements. The contracting officer’s 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) 34 

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) 35 

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 

OAGM’s 2014 Quality Assurance Plan, it will review the contract 

specialist’s and contracting officer’s 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 officer’s representative working file review. According to 

OAGM’s 2014 Quality Assurance Plan, it will also annually review a 

random selection of files from each contracting officer’s representative to 

ensure that the contracting officer’s 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 officer’s 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 officer’s representatives become more efficient and effective. 

HHS Quality Assurance Reviews of Contracts

In 2011, as part of HHS’s 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) 36 

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 HHS’s 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 

CMS—comply 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) 37 

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 

Contract 

Identifier Contractor Name Contract Number/ Order Number1 Description of Contract 

Start of 

Contract 

Period 

1 Accenture Federal 

Services LLC 

HHSM-500-2014-00191C/ 

No task order 

Federally facilitated marketplace system development 

and implementation 1/11/2014 

2 Aquilent Inc. HHSN-316-2012-00005W/

HHSM-500-2013-00074U 

Support Web site development, operations, maintenance, 

and training for CMS Web sites (such as 

HealthCare.gov), their components, and tools 

9/13/2013 

3 

Blast Design Studio 

Inc. dba Blast 

Advanced Media 

HHSM-500-2012-00080C/

No task order Online marketing services for HealthCare.gov 9/28/2012 

4 

Blast Design Studio 

Inc. dba Blast 

Advanced Media 

HHSM-500-2013-00153C/

No task order Online marketing services for HealthCare.gov 9/28/2013 

5 Blue Canopy Group 

LLC 

HHSN-316-2012-00120W/

HHSM-500-2013-00054U Services to perform security controls assessment testing 7/15/2013 

6 Booz Allen Hamilton 

GS-23F-9755H/ 

HHSM-500-2011-00011B/ 

HHSM-500-B0003 

 Exchange operational integration support 9/17/2012 

7 Carahsoft 

Technology Corp. 

GS-35F-0119Y/ 

HHSM-500-2013-00249G Application code analysis 6/8/2013 

8 Carahsoft 

Technology Corp. 

GS-35F-0119Y/

HHSM-500-2012-00066G Application code software 6/8/2012 

9 CGI Federal Inc. GS-35F-4797H/ 

HHSM-500-2010-00157G 

Information system to support the data collection for the 

internet Web portal and health benefit exchanges, 

development of the Health Insurance Oversight System 

(HIOS) 

4/15/2010 

10 CGI Federal Inc. GS-35F-4797H/ 

HHSM-500-2013-00236G IT development and data services in support of HIOS 4/15/2013 

11 CGI Federal Inc. HHSM-500-2007-00015I/ 

HHSM-500-T0007 Web site maintenance and support services 4/30/2010 

12 CGI Federal Inc. HHSM-500-2007-00015I/ 

HHSM-500-T0011 

Provide rate and benefits information system for the 

HealthCare.gov Plan Finder application 6/7/2011 

continued on next page
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 38 

Contract 

Identifier Contractor Name Contract Number/ Order Number1 Description of Contract 

Start of 

Contract 

Period 

13 CGI Federal Inc. HHSM-500-2007-00015I/

HHSM-500-T0012 

Federally facilitated marketplace system development 

and implementation 9/30/2011 

14 Corporate Executive 

Board 

GS-35F-0549W/

HHSM-500-2012-00186G Professional research Web-based subscription service 9/24/2012 

15 Creative Computing 

Solutions Inc. 

GS-06F-0612Z/

HHSM-500-2012-00097G Security oversight support services 8/2/2012 

16 

DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2005-00001B/

HHSM-500-B0018 

Requirements engineering support services 5/20/2011 

17 

DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/ 

HHSM-500-B0006 

Requirements support for the enterprise eligibility service 

project 6/11/2012 

18 

DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/

HHSM-500-B0019 

Development of a comprehensive testing strategy 6/21/2013 

19 

DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/ 

HHSM-500-B0008 

Data model and requirements integration support 6/25/2012 

20 

 DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/ 

HHSM-500-B0007 

Strategic and technical support 6/21/2012 

21 

 DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/ 

HHSM-500-B0020 

Architecture support to develop a set of enterprise 

standards and engineering approaches 8/1/2013 

22 

 DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/ 

HHSM-500-B0003 

Requirements engineering support services 5/20/2012 

23 

 DEDE Inc. dba 

Genova 

Technologies 

GS-35F-0303M/ 

HHSM-500-2012-00021B/

HHSM-500-B0013 

Business and test data requirements integration 

engineering support 9/28/2012 

24 Deloitte Consulting 

LLP 

GS-10F-0083L/ 

HHSM-500-2012-00016G 

Market report card and operational dashboard 

development 1/24/2012 

25 FedResults Inc. GS-35F-0256K/ 

HHSM-500-2012-00038G GovDelivery digital communication suite 4/1/2012 

26 Global Tech Inc. dba 

eGlobalTech 

GS-06F-1088Z/ 

HHSM-500-2013-00052U Marketplace technical integration support 6/15/2013 

27 Global Tech Inc. dba 

eGlobalTech 

GS-06F-1088Z/ 

HHSM-500-2013-00046U 

Support for verifying Hub Web services and other Hub 

related components and provide testing integration 

support 

5/3/2013 

continued on next page
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 39 

Contract 

Identifier Contractor Name Contract Number/ Order Number1 Description of Contract 

Start of 

Contract 

Period 

28 Global Tech Inc. dba 

eGlobalTech 

GS-06F-1088Z/ 

HHSM-500-2014-00083U 

Technical interoperability and management support 

oversight and coordination of technical activities at the 

Exchange Operations Center for CMS 

11/25/2013 

29 Global Tech Inc. dba 

eGlobalTech 

GS-35F-0183T/ 

HHSM-500-2012-00154G 

Develop cloud-computing technical framework, 

architecture, and transitional solutions 9/24/2012 

30 Government 

Acquisitions Inc. 

HHSN263999900442I/ 

HHSM-500-2012-00014U 

Informatica enterprise license agreement and 

maintenance 8/2/2012 

31 Heitech Services Inc. GS-06F-0276Z/ 

HHSM-500-2011-00027U General systems design support services 7/25/2011 

32 Heitech Services Inc. GS-06F-0726Z/ 

HHSM-500-2012-00074G General systems design operations and maintenance 7/3/2012 

33 Heitech Services Inc. GS-06F-0726Z/ 

HHSM-500-2013-00275G General program system support 8/2/2013 

34 HP Enterprise 

Services LLC 

HHSM-500-2013-00014I/ 

HHSM-500-T0003 

Host production virtual data center and a disaster 

recovery virtual data center for its production exchange 

and Hub systems 

7/1/2013 

35 IDL Solutions Inc. HHSM-500-2007-00023I/ 

HHSM-500-T0001 

Development, operation, and maintenance of 

multidimensional insurance data analytics system 

(MIDAS), an analytics system that will be used to 

implement tasks mandated by the ACA 

9/27/2011 

36 Innosoft Corporation HHSM-500-2011-00071C/ 

No task order Application lifecycle management tool and support 8/15/2011 

37 L & M Policy 

Research LLC 

HHSM-500-2010-00015I/ 

HHSM-500-T0002 Consumer research enhancing Web tools 1/23/2012 

38 Lockheed Martin 

Services Inc. 

263-01-D-0054/ 

HHSM-500-2009-00002U Data center hosting 1/1/2009 

39 Maricom Systems 

Inc. 

HHSM-500-2007-00025I/ 

HHSM-500-T0005 

Support important aspects of CMS’s data management 

and systems capability 11/28/2011 

40 

Northrop Grumman 

Information 

Technology Inc. 

HHSM-500-2007-00014I/ 

HHSM-500-T0006 ACA integrated care data and applications 11/28/2011 

41 Onix Networking 

Corp. 

GS-35F-5519H/ 

HHSM-500-2012-00103G Purchase Google site search licenses 9/19/2012 

42 ProTelecom LLC HHSM-500-2009-00005I/ 

HHSM-500-T0014 Video teleconferencing equipment 3/28/2013 

continued on next page
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 40 

Contract 

Identifier Contractor Name Contract Number/ Order Number1 Description of Contract 

Start of 

Contract 

Period 

43 ProTelecom LLC HHSM-500-2009-00005I/ 

HHSM-500-T0015 Video teleconferencing equipment and maintenance 9/12/2013 

44 Quality Software 

Services Inc. (QSSI) 

GS-06F-0148Z/ 

HHSP-233-2010-00588G Enterprise architecture support for the Exchange 9/24/2010 

45 Quality Software 

Services Inc. (QSSI) 

HHSM-500-2007-00024I/ 

HHSM-500-T0007 Data Services Hub 9/30/2011 

46 Quality Software 

Services Inc. (QSSI) 

HHSM-500-2007-00024I/ 

HHSM-500-T0010 Enterprise identity management and credential services 6/18/2012 

47 Quality Software 

Services Inc. (QSSI) 

HHSM-500-2007-00024I/ 

HHSM-500-T0008 Provide technical testing expertise and support 1/17/2012 

48 Quality Technology 

Inc. 

GS-06F-0653Z/ 

HHSM-500-2012-00123G Operational Support Center for CMS 9/25/2012 

49 

Science Applications 

International 

Corporation (SAIC) 

HHSM-500-2007-00020I/ 

HHSM-500-T0001 

Enterprise service for remote identity proofing and 

multi-factor authentication 1/31/2012 

50 Scope Infotech Inc. HHSM-500-2013-00109C/ 

No task order 

Integration support and system development for 

Exchange collaboration tools 4/15/2013 

51 Spann & Associates 

Inc. 

GS-35F-0235M/ 

HHSM-500-2013-00334G Information systems security support 9/25/2013 

52 SphereCom 

Enterprises Inc. 

GS-35F-0437N/ 

HHSM-500-2011-00001B/ 

HHSM-500-B0001 

Information systems security support 3/1/2011 

53 SphereCom 

Enterprises Inc. 

GS-35F-0437N/ 

HHSM-500-2011-00001B/ 

HHSM-500-B0003 

Information systems security support 7/15/2011 

54 Terremark Federal 

Group Inc. 

GS-35F-0073U/ 

HHSP-233-2011-00177G 

Cloud computing services for the health insurance 

Marketplace 4/1/2011 

55 The Mitre 

Corporation 

HHSM-500-2012-00008I/ 

HHSM-500-T0015 Acquisition and systems engineering support services 9/27/2013 

56 The Mitre 

Corporation 

TIRNO-99-D-00005/ 

HHSM-500-2011-00014U 

Security engineering, integration, and enterprise 

vulnerability management 6/13/2011 

57 The Mitre 

Corporation 

TIRNO-99-D-00005/ 

HHSM-500-2009-00021U Security test and evaluations for CMS systems 7/28/2009 

58 The Mitre 

Corporation 

TIRNO-99-D-00005/ 

HHSM-500-2011-00036U Broad systems engineering support 9/26/2011 

continued on next page
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 41 

Contract 

Identifier Contractor Name Contract Number/ Order Number1 Description of Contract 

Start of 

Contract 

Period 

59 The Mitre 

Corporation 

TIRNO-99-D-00005/ 

HHSP-233-2010-00138W IT modernization support 9/28/2010 

60 TurningPoint Global 

Solutions LLC 

GS-06F-0672Z/ 

HHSM-500-2012-00008U 

Independent verification and validation services support 

for the Federal Exchange 5/15/2012 

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. 

agreements to fill anticipated repetitive needs for supplies and services. 

CMS can utilize blanket purchase 

 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 42 

APPENDIX F 

Detailed Methodology 

Data Sources and Collection 

Document and information request. We requested from CMS the contract 

files and contracting officer’s 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 

contract’s 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 

officer’s 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 HHS’s 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 officer’s 

representatives’ files to determine whether they contained other types of 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 43 

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 contract’s 

contracting officer and contracting officer’s 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 CMS’s 

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 officer’s 

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) 44 

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) 45 

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 

Contracting Vehicle Number of 

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 Service’s 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 officer’s 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 GWAC’s predecessor. 
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 firstof-its-kind online Marketplace to determine consumer's eligibility for coverage and insurance 

affordability programs and enroll them in coverage beginning January 1, 20 14. To accomplish 

this, CMS awarded contracts and task orders for the development and support ofthe Federallyfacilitated 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 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 46 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 47 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 48 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 49 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 50 
 

Federal Marketplace: Inadequacies in Contract Planning and Procurement (OEI-03-14-00230) 51 

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. 
 

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 OIG’s 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.