California’s state government builds itself a $327 million web site

Buried in is the cost of building the Web site where some currently uninsured Californians will shop for health insurance: “Most of the money is committed to consultants, including Accenture, which has a $327 million contract to build and support the initial operation of the enrollment portal.”

One of the amazing things about Obamacare is that it preserves the state-by-state restrictions on competition among insurance companies. So instead of the government building a single $327 million web site that all Americans can use, each of the 50 state governments gets to build its own $327 million web site (though of course, from a technical point of view, there is no reason that a single web site could not offer 50 different views of the same database, each view customized to show options available in a particular state).

[Compare to the Google search engine company, built by two Stanford graduate students in their spare time. Google’s expansion was funded by $100,000 in August 1998 and $25 million in June 1999 (Wikipedia). was funded by Jeff Bezos’s parents and then with a $1 million second round (source).]

10 thoughts on “California’s state government builds itself a $327 million web site

  1. Fast forward 5 years (or however long Accenture’s contract runs). Headline:
    California Scraps $427 Million Insurance Portal
    State sues Accenture over mis-management; system still not complete

  2. So what’s broken here? Is somebody in bed with Accenture? What’s wrong with the purhcase process? What if a bunch of highly visible tech folks (here’s looking at you Phil) published an open letter that said, hey, this system is likely hugely overpriced and we’ll do it for xxx during nights and weekends? At those sorts of dollars I’m sure we can get plenty of big company devs to work on it in their spare time.

  3. But government spending stimulates the economy, unlike those greedy private sector companies, or something like that

  4. I don’t see how the hell you can spend $300 million on a web site.

    That suggests that California has the sort of corruption by infestation with party-hack professionals which gripped Canada’s Liberal Party when the Martin government spent a billion on the gun registry.

    In the case of the gun registry, I could have put the damn thing together in an afternoon using IBM’s DB-2 built-in wizard and Notepad. For the California job I might have taken a weekend and used some goddam IDE for a pretty front end.



  5. Allen: The state apparently has the $327 million to spend, so I’m not sure that there is anything broken. This is how Americans, voting democratically, have decided to spend their money. Californians also want to pay a fair number of retired state and local government workers, starting at age 50, more than the U.S. Secretary of Defense earns. Who are we to tell them that they are not spending money wisely? If a neighbor buys a $400,000 Rolls Royce, should I tell him that he would get to his destination just as fast in a used Honda Accord?

    Let’s hope that the currently uninsured Californians who choose to visit this site enjoy their annual shopping experience.

  6. Having been on several projects with Accenture (and its predecessor Andersen Consulting), I’ve lost the capacity for surprise at the audacity and performance of their salespeople. If there were $200M in it, they could (come up with the bribe money to) convince the King of the Eskimos that his ice needs could only be served by armies of recent second-tier graduates clutching “Java for Dummies” books with extensive highlighting in the first two chapters.

    Then the other shoe drops. They’ll probably get a site running, a year behind schedule. And it won’t have the functionality its users need, because the stakeholders responsible for approving work won’t have had access to it while in development or test. The civil servants will be resistant to approving mockups at first, but politically they won’t have a choice and eventually they’ll become as jaded as any other employee whose boss’s boss has been totally co-opted by Accenture boondoggles.

    It’s unclear whether Obamacare should be blamed for these shenanigans. They are a foreseeable result, but that seems to inspire pessimism about any big federally-mandated project.

  7. I may be just young and naive (mid-30s) but I don’t see this as an oh-well-people-will-be-idiots kind of situation. I don’t buy the Rolls Royce analogy, to me the analogy is, your neighbor who you actually kind of like gets conned by an unethical salesman into buying a 1990 Yugo for $400K. The next morning you look over and say hey, that car isn’t very good and it cost you way too much, check out my 2010 Honda Accord.

    Come on Phil how about that letter?!!! I assume Bay area techies are reading this thing?

  8. Allen: I am not sure that state governments want to get input from citizens on the subject of how they spend money. My home state of Massachusetts, for example, has a “Massachusetts Open Checkbook” site where supposedly one can see how the state spends money. Computer Sciences Corporation (CSC) brags that it implemented the Massachusetts Health Connector, the equivalent to California’s $327 million site. But it is impossible to find any spending between 2010 and 2012 to CSC other than for “Bioterrorism Hospital Preparedness”. Maybe the site was built some years ago and hasn’t required any maintenance from CSC? That seems unlikely because CSC brags about doing the hosting and a traceroute to shows the packets going to and Possibly CSC can live off the fees collected by the site when people make purchases? Nobody knows. The site itself does not publish a budget or explain how much it costs to run the bureaucracy.

  9. I think J. Peterson might have had it right. It may be less of a question of how much is spent than of whether the site ever works at all.

    In the projects I have worked on for governments the problem is that they really are more complicated than they seem. It usually turns out that no one knows how they are supposed to work, even the senior people in the department they are being written for.

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