HHS Buys $2.5 Million Worth of IT Equipment for Obamacare’s Final Enrollment Month

Gov’t Changes Contract Again, in ‘preparation of anticipated traffic’

March 11, 2014

The Department of Health and Human Services (HHS) ordered $2.5 million worth of IT equipment to prepare for "anticipated traffic" during the last month of open enrollment on, according to contract documents released on Thursday.

The Centers for Medicare and Medicaid Services (CMS) announced additional changes to its contract with Verizon Terremark, which is responsible for the cloud computing software that exchanges information on the Obamacare data hub.

CMS has already awarded $59.9 million to the company. The agency initially estimated the cost for Terremark’s IT support at $10.8 million, but has since altered the contract 15 times.

The latest three changes came last month. They added more IT infrastructure in "preparation of anticipated traffic" for the open enrollment deadline on March 31.

A contract for "Cloud Computing Infrastructure Expansion" detailed the thirteenth and fourteenth changes the administration has made in its deal with Terremark.

"CMS required additional cloud computing services and support over and above that contemplated at the time of the award," the document said.

The first change—"Modification 00013"—was required to "improve performance of the Marketplace" at a cost of $890,383.94.

"Modification 00014" was awarded on Feb. 17, providing cloud computing service and storage. The services cost $1,514,012.02.

"CMS executed Mod 00014 to obtain technology infrastructure and software requirements in preparation of anticipated traffic increase for the last month of open enrollment," the agency said.

The agency also placed an order for a firewall upgrade, which included $56,782 worth of CISCO equipment. The additional services and equipment cost $2,461,177.96 overall.

"CMS could not have anticipated the need to add these additional services," the agency said. "The modification was needed to obtain on-site support at the [Exchange Operations Center] XOC to improve efficiencies and communications with other Exchange contractors."

"CMS experienced a surge of traffic on the website and exceeded the maximum limits on the number of concurrent users," they said. "CMS believed if the additional were not added urgently, the Exchanges would not function as designed and citizens would continue to have issues using the Marketplace."

The agency said it could not order the equipment under the normal competitive bidding process because it must implement the law. "CMS is not in a position to take the time to compete the added capacity requirements and successfully implement the exchange program as mandated by law"

With the most recent additions, Terremark’s contract for IT support has reached $62,409,776.87.

The administration is in its final push to encourage Americans to sign up for insurance on, and is holding events to target "women bloggers" and young Hispanic women this week. Much of its focus has been on getting young people to sign up, with poor results.

Roughly four million people have signed up for health insurance through Obamacare as of late February, still well short of the administration’s goal of 7 million.