The Campaign Spot

Oh, Hey, Healthcare.gov’s Cloud Cost More Than Five Times the Original Estimate

The president promised that Obamacare would bend the cost curve downward.

The cost curve for running the site is bending upward. Dramatically:

The cost of the computer cloud that supports back-end data sharing for HealthCare.gov and state Obamacare marketplaces grew to $60 million, more than five times its original value, by the time the troubled site was declared fully functional on Nov. 30, 2013, contracting documents show.

The government’s contract with Terremark, Verizon’s cloud division, had already quadrupled from $11 million when it was first awarded in 2011 to $46 million at the time of HealthCare.gov’s disastrous launch in October 2013. That included a $9 million adjustment just days before launch when testing revealed the cloud could only support 10,000 concurrent HealthCare.gov users rather than the expected 50,000.

CMS ordered an additional $15.2 worth of cloud services from Terramark between the launch date, when most users were unable to access key portions of the site, and Nov. 30, when officials declared the site was performing at an acceptable level, according to a justification for other than full and open competition document posted on Thursday.

Who could have seen this coming?

There are two compelling explanations for the exploding cost of the contract:

1) The Obama administration didn’t know what it was doing, and had no idea how much a project of this scale costs.

2)The Obama administration knew what it was doing, knew Congress and the public would find $60 million for a web site’s cloud data storage to be an exorbitant cost, and thus downplayed the costs until it was too late to do anything else.

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