Days after the Obama administration ended a contract with federal health insurance exchange contractor CGI Group Inc., state lawmakers are questioning whether Hawaii should do the same.
Already two states — Massachusetts and Vermont — that hired the embattled information technology contractor to build online marketplaces created by President Barack Obama’s Affordable Care Act are threatening to seek refunds and stop millions of dollars in payments, according to the .
The Hawai‘i Health Connector awarded CGI a $53 million four-year contract a year ago to build its online marketplace, but the lead website developer failed to meet an Oct. 1 launch date, and Hawaii was last in the nation to go live with health plans on the exchange. The Connector, operating with $204.3 million in federal grants that expire at year’s end, did not go live until Oct. 15 due to software problems that have stifled enrollment and continue to plague the system.
Lawmakers are adamant that Montreal-based CGI deliver what it promised or pay up.
"We should make CGI responsible to fully deliver for the state of Hawaii. If they come up short, I do believe the taxpayers deserve to get their money back," said Senate Health Committee Chairman Josh Green (D, Kona-Kau). "People should live up to their deadlines. I’ve called into question whether or not we’re getting our money’s worth. Time for a big change may be coming."
Rep. Angus McKelvey (D, West Maui-Maalaea-North Kihei), chairman of the House Committee on Consumer Protection and Commerce, said Tuesday that Connector officials are "aggressively pursuing" all options available to the state, including possible litigation to try to get "money back for nonperformance."
But after further talks Wednesday with Connector interim executive director Tom Matsuda, McKelvey said his previous statements about the Connector seeking damages were inaccurate.
A Connector spokesman said CGI hasn’t delivered on the contract, but that there were no plans to pursue damages at this point.
"We realize that we have a responsibility to use taxpayers’ dollars wisely. We are currently evaluating our options under the contract, so I really can’t say anything more than that," Matsuda said. "We have not made a decision on how we’re going to proceed. We are currently working with them to try to improve the system."
CGI is one of the world’s largest information technology firms, with 29,000 employees, including 70 who work in Hawaii out of a downtown Honolulu office.
"As the Hawaii Health Connector has indicated, its website has been up and running smoothly, successfully enrolling thousands of Hawaii residents," Linda Odorisio, CGI spokeswoman, said in a statement. "CGI continues to enhance Hawaii’s system, working with the Connector to meet their registration goals. Our team remains committed to Hawaii and our partnership with the Connector."
Lawmakers have also questioned why the Connector hired CGI to begin with. The website developer is the same company the state hired 14 years ago to build a tax collection system that officials say has never worked properly.
CGI was paid $87.5 million between 1999 and 2011 to modernize the state Department of Taxation’s collection system. Because of flaws in the system CGI built, the state is preparing to spend at least another $32 million to redo the project.
CGI has said it delivered on its obligations to the tax department, the system’s performance exceeded original projections and it performed effectively throughout its life cycle.