Beyond the acrimony and debates about the wisdom of ObamaCare, there is bipartisan recognition that the Healthcare.gov website has been a disaster. That the government spent $500 million developing the dysfunctional site compounds the scandal, which will be examined in coming days as representatives from the companies responsible testify in Congress later today.
That the government could invest hundreds of millions of dollars in a dysfunctional website should not surprise. After all, it has done it once before. Beginning in the late 1990s, the Defense Department began investing in the Defense Travel System (DTS), a website which was to enable Defense Department travelers to book their flights, hotels, and rental cars online using pre-negotiated rates. It was supposed to save the government money since it would enable the government to cut out the middlemen otherwise aiding official travel.
By 2006, the government had spent $500 million on the system. Here is an assessment from the time, written by a young Josh Rogin:
The Defense Travel System has cost taxpayers almost $500 million in the past eight years. Lawmakers are vocal critics of the program, and many Defense Department executives, travel company officials and employees who are directed to use the system are dissatisfied with it… “It’s a fiasco,” said a senior DOD official who did not want to be identified because of the sensitivity of the topic. Each ticket booked through DTS requires the intervention of a commercial travel agent instead of being the touchless transaction system that DOD wanted, the senior official said. The intervention creates added fees and prevents travelers from making timely changes to existing reservations. Senior-level DOD officials are the people most affected by the transaction problems because they often travel on short notice. “You have a very dissatisfied, very senior-level user base, but you can’t change it because of the political realities,” the senior official said. Those realities include the way DOD manages the program and the contractors’ role in travel transactions.
Over the intervening seven years, the system hasn’t gotten much better. I use it frequently when I travel on government projects and, on a good day, it’s like using Expedia.com on a Commodore 64. Many military commands have had to hire permanent employees simply to handle DTS problems. Let’s put aside that tickets I could get on Expedia for $900 have cost $4,400 through the system: that’s a tremendous waste of taxpayer money but it’s more the fault of the bureaucrats who negotiate the airlines’ government contracts. Government tickets can be cancelled and changed without penalty, but simple quirks cost money: Several times I have changed or cancelled flights, only to notice that DTS rebooked the flights but charged for both new and old. Had I not pointed this out to DTS managers, the government simply would have paid the airlines double. Likewise, the DTS one-touch cancellation on travel authorizations still does not work.
Other problems are irritants: No one has updated realistic taxi fares limits in years, so what DTS allows for a taxi from Dulles airport to my home in suburban Maryland doesn’t conform to reality and regularly needs a supervisor’s override. Part of the reason it takes a huge time investment to book through DTS or file vouchers is that the system crashes inexplicably and saves work only periodically. True, unlike Healthcare.gov, DTS works at least 70 percent of the time, so I guess I should count my blessings. But I’m sure that DTS customers who read this blog can chime in with their own stories—I’ve seldom met a Defense Department employee who doesn’t have horror stories.
Why is government contracting so bad, and why does the government always settle for such sub-standard products? Here the problems are deeper. My colleague William Greenwalt last week had an insightful essay in the Wall Street Journal examining one problem, “The lunacy of fairness in government contracting.” He explains:
Earlier this year, in one of its first forays into government contracting, Amazon was awarded a large cloud-computing contract from the Central Intelligence Agency. However, IBM, one of the losing contractors, protested the award. The lawyers circled the wagons, and the Government Accountability Office overturned the contract award. What was Amazon’s mistake? It had the audacity to propose something better than what the government had originally requested. The CIA, to its credit, recognized the better solution and went for it. Isn’t that what the procurement process is supposed to do—get the best solution? Not in the Mad Hatter world of government contracting…
Healthcare.gov is a disaster. In the private sector, heads would roll if anyone spent a half billion dollars for such a dysfunctional product. That the government has now done the same thing twice, however, suggests the true fix must go beyond political posturing, and must begin to focus on some serious systematic reform.