Lessons From The ACA Health Insurance Marketplace Failure

One can’t pass a single day it seems without seeing in the news coverage of the problems with the Affordable Care Act’s Health Insurance Marketplace (HIM). But what is perhaps most surprising is not that the web site had problems, but that people are surprised that it had problems. The current process of managing and acquiring federal IT is largely broken and the failure of the HIM is simply the newest reminder of that dysfunction. We can just go down the list of past high-profile failures, including the delayed launch last year of USAjobs.gov, the FBI’s Virtual Case Files program, the Census Bureau’s handheld PC debacle, and the FAA modernization.

There are several reasons for this dysfunction. First, the contracting process does not work as it should. Larded up with an accretion of rules and requirements from past scandals and failures, only the most intrepid firms are able to manage the labyrinth called federal contracting. Moreover, as Congress has tried to use federal contracting to fulfill social policy goals that should be addressed with other policy tools, agencies must give preferences to a wide variety of businesses—small businesses, women-owned businesses, minority-owned businesses, veteran-owned businesses, disabled-owned businesses, and the like. There are even firms that market their IT services to the federal government because they have managed to affiliate themselves with Native American tribes in Alaska who because of Congressional action, have a special exemption from some procurement rules, making it easier for government agencies to contract with them. Federal procurement decisions should be decided on the basis of the best combination of price and quality. Unfortunately, these set-asides are sacred because no elected official wants to be seen as against (fill in the blank for selected group).