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Obamacare no-bid Contract - Another Phony Scandal?

Updated on October 28, 2013

Kathleen Sebelius

No-bid Contracts equal corruption and waste.

By now most everyone is aware the initial launch of the Obamacare program website has been frustrating to most who have tried to enroll.

Now we are beginning to learn more about the details behind the Obama administration awarding a no-bid contract to CGI Federal to create the website.

A no-bid contract is officially known as a "Sole Source Contract" meaning only one company or individual is capable of providing the needed goods or services.

In the case of developing the Obamacare website, I suspect there were many companies with the knowledge and ability to bid on this job, but they were not given that opportunity.

The $678 Million dollar no-bid contract was awarded to CGI Federal with no competing bids being allowed. We now learn that Toni Townes-Whitley, a senior vice president at CGI Federal was a Princeton classmate of Michelle Obama and they are both members of the Association of Black Princeton Alumni. Toni Townes-Whitley has also been a regular contributor to the Obama campaigns.

Donna Ryan, president of CGI Federal visited the White House six times prior to being awarded the no-bid contract. In addition to receiving the $88 million contract for the website, CGI Federal has been awarded $422 million in other Obamacare related projects.

Despite complaints regarding the performance of CGI Federal, they were also awarded $11 Billion, yes Billion with a "B", contracts from Homeland Security and the Coast Guard for IT services.

CGI Federal is currently assisting the Department of Housing and Urban Development to distribute $1.7 Billion in aid relief to Hurricane Sandy Victims.

That isn't quite the end of the role CGI Federal plays with this administration. They were also awarded $15 million in contracts to the Environmental Protection Agency and $900 million in contracts to U.S. Agency for International Development to design and operate its IT security operations.


Again the reason for awarding a no-bid contract is there are no other companies or individuals who can provide the needed goods or services.

I would be very surprised if there were not at least dozens of companies who are equally or better qualified to handle a project of this magnitude. Why then was this contract given to CGI Federal with no competing bids?

Another valid reason for issuing a no-bid contract would be in times of emergency when the normal bid process would take far too much time. That was not the case with the Obamacare website. They had over 3 years to complete this job.

I smell a rat with the relationship between CGI Federal, Michelle Obama, and others in the Obama Administration. Kathleen Sebelius was paid huge wages to oversee this failed project and would have been fired immediately if this were a private business.

So far, Sebelius has not admitted fault and has refused to testify regarding this failed project and the huge amount of money that has been paid to CGI Federal.


Now there will be yet another round of Congressional hearings that will most likely end up like all the other recent hearings. Nobody will be fired, and CGI will continue to work for this administration. Heck, they might even add this one to the list of "Phony Scandals" that Obama has referred to many times.

Now the truth is that somebody in Washington approved and signed these no-bid contracts. It should not be classified information and should be easy enough to learn which individual put his/her signature on the paper.

I don't know about you but I am really tired of having my tax dollars stolen and wasted by this corrupt government. A no-bid contract is ripe with the possibility of financial kick backs to one or more individuals. Do any politicians have any personal connection with CGI Federal other than Michelle Obama? That might take some digging to find out but there are records available.

Was Kathleen Sebelius upset with the progress on the website but not allowed to do anything about it? It is entirely possible she was told to just let it go and keep her mouth shut if she wanted to keep her job.

Even if this is true, I doubt anything will come out in the Congressional hearings about this. That would require her to rat on some very high level people in government, or their relatives. I would be reasonably certain that her silence will be well rewarded by either promotion or retirement.

Has anyone besides Sebelius seen the detailed billing from CGI Federal? Were there any progress reports prior to the company being paid? Is Sebelius authorized to sign the checks we pay them with? Does the person who actually issues the checks review any of the bills submitted from the contractor?

As a contractor was CGI Federal required to post a performance bond to ensure timely and satisfactory completion of the project? If so, will the government be able to file a claim and collect any money due to poor performance and failure to meet the completion date? As a private contractor I could not even start a job without a performance bond.

How many no-bid contracts has CGI Federal been awarded we don't even know about?

From all appearances, this whole situation appears to be a classic case of corruption by association. Representatives Issa and Alexander have issued letters requesting Sebelius to provide them with documents by today or be subpoenaed by the House Oversight Committee.

Sebelius has claimed she didn't have time to answer any questions from Congress, but has been seen on many news and comedy shows on TV this past week. She is currently scheduled to appear before the House Energy and Commerce Committee on Oct. 30th to answer questions regarding the failed health care rollout.

I can't imagine that Obama himself is very pleased with this failed effort on his only major achievement since taking office in 2008. The question that remains to be answered is if Obama will be able to take any action against Sebelius and CGI Federal if his own wife played any role in picking CGI Federal to do this job? My guess is that he is caught in a very difficult position right now, and even Jay Carney may not be able to lie his way out of this one.

It would appear that those we pay to watch out for this type waste of taxpayer funds are not doing a very good job. This is all taking place right before their eyes and none of them asked any questions that I am aware of. Could it be that many of the watchdogs were given treats to make them look the other way?

I'm not certain where this will fall on the list of Congressional Investigations. We still have not learned much of anything about Fast and Furious, Benghazi, or the IRS scandal. I am betting this investigation will turn out pretty much the same way.

Before you start your accusations, I do not hate Obama, Blacks, Hispanics, or Obamacare. As far as politicians go, I dislike all of them equally and feel we should start over with all new people.

I firmly believe that we now have so many rotten apples in the barrell the only choice we have is to dump it and start over with fresh apples.

I will be watching with great interest to see if any real facts come out of the Congressional hearing but have my doubts. Nothing has come from the other hearings so why would this one be any different?

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    • WillStarr profile image

      WillStarr 3 years ago from Phoenix, Arizona

      During the Bush years, the left and the media had a hissy-fit over a sole source award to Halliburton, even though it was generally acknowledged that it was in fact, the only company large enough to handle the job. They got a cost-plus contract.

      But now, those same folks are silent.

    • billybuc profile image

      Bill Holland 3 years ago from Olympia, WA

      Good job as always. I'm sitting this horse race out and gladly. As with all government programs, there are some major problems with it. My faith in the government, no matter who is the President, is slip, sliding away. :)

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      WillStarr - I believe they call that selective memory. I recall all the outrage over Halliburton getting that contract.

      However in this case, I have to believe there are many different companies who could have handled this job better and cheaper. But they are not connected to Michelle Obama so they didn't get to bid.

    • tsadjatko profile image

      TSAD 3 years ago from maybe (the guy or girl) next door

      I get it now...when BO says phoney scandals he means the scandals are propagated by phoney perps. He's a phoney, Sebelius is a phoney, Holder, Hil liar y, Lois Lerner all phoneys! I looked it up

      noun: phoney

      1. a fraudulent person or thing.

      synonyms: impostor, sham, fake, fraud, charlatan

      Now it makes sense. Oh, a hacker did this to glitch girl on the site and that is why they had to remove her pic.

      Thanks Mike for the great hub and giving me another opportunity to vent.

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      tsadjatko - Thanks for stopping by. I like the new picture of glitch girl. I have to wonder if the noun and the synonyms were created before politicians or after they came into being.

      Our entire congress is now just a group of crooks and liars who put on a good show for our benefit. When the curtain goes down after each act, they laugh their butts off about how stupid and gullible we citizens are. They divide up the money they were able to steal that day, do a short rehearsal for tomorrows show and head off to dinner. After good steaks and lots of booze on our tab, they slap each other on the back and head off to bed.

      They need a good nights sleep so they can remember if they are playing the role of good guy or bad guy tomorrow. One of them must stay behind to slip Jay Carney the list of lies he is to tell the press tomorrow.

      And that is the way it works in Washington.

    • breakfastpop profile image

      breakfastpop 3 years ago

      The rat you refer to is the size of one of those union blow-ups! Why we aren't screaming about this contract is beyond me. The Obama's picked a pal and a donating pal at that. Obama betrays us every second he breathes. Great hub. Up and awesome.

    • The Frog Prince profile image

      The Frog Prince 3 years ago from Arlington, TX

      Frustrating? Try almost impossible Mike. This administration is full of some of the most arrogant people I have ever seen in government. Dump the whole barrel as you say.

      The Frog

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      @Breakfastpop - We should be screaming about this contract, but so far all they are talking about is why the website didn't work. Little or nothing will be said or done about this waste of money or the way this company was given the contract. They just don't care and are putting on another show for us.

      @FP - It would be difficult if not impossible to sort the rotten apples out of the few remaining good apples. Our best move would be to throw them all out and get new apples.

    • breakfastpop profile image

      breakfastpop 3 years ago

      I agree Frog Prince.. Dump the rotten apples and star over. Our nation needs a breath of fresh air!

    • dahoglund profile image

      Don A. Hoglund 3 years ago from Wisconsin Rapids

      It is obvious that there are several companies far more able to do the job than the one hired. Probably some kids in a middle school science lab could.

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      The most disturbing part of this is the corruption involved in the contracts after shoving Obamacare down our throats.

    • Wayne Brown profile image

      Wayne Brown 3 years ago from Texas

      How can a company among many in this line of work receive the outrageously high award of $88 million dollars to create this website and then end up spending over $600 million without someone questioning what was going on here? Obviously, the Obama Administration has no oversight in terms of quality and performance...they are more interested in secrecy and conformance. It is also quite obvious that the word was put out across federal departments that all IT work was to be from a single source provider. This nation has an abundant level in resources in this area and there is absolutely no valid reason to forego the bidding process except the cronyism which you have highlighted here. Once again, here are the Obamas standing up on their high perch and thumbing their noses down at the little people with that never-ending taunt..."what you gonna do about it anyway?" Sadly, they are correct...we are not going to do a damned thing because those who represent us in Congress are absolutely gutless and terrified beyond belief of the race card. What a sham of a government we truly have today. ~WB

    • FitnezzJim profile image

      FitnezzJim 3 years ago from Fredericksburg, Virginia

      It looks like we might be heading for a new ultimate in Washington DC double talk - the phoney 'phoney scandal' scandal. Watch closely and be entertained while your tax dollars go into phoney investigations and phoney testimony. Somebody pass the balogna.

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      Wayne - It is indeed a pleasure to see you on here. I doubt that the committee will even touch on the outrageous cost for this project. They will instead spend days asking stupid questions about why it didn't work on the launch date.

      To me, the amount of money spent is far more important than if it was ready on time. Awarding a no-bid contract and approving all of the cost overruns just smells of corruption. If I were on this committee I would be demanding to see the detailed billing and have accountants go through it with magnifying glasses.

      I am guessing but would have to think that at least a few of our politicians profited nicely from this fiasco. I would be very interested in who authorized the payments and who signed the checks. I have to wonder if there will be any penalties against the company for failing to meet the requirements of their contract? It wasn't completed on time and didn't work. It seems to me they owe us some money.

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      Jim, your right. In today's questioning Charlie Rangel spent his time griping about Republicans not liking Social Security when it was first introduced. Of course he was wrong, and he was way off topic, but that is the type of idiot we have working for us in Washington. They will put on a great show but nothing will be accomplished.

    • B. Leekley profile image

      Brian Leekley 3 years ago from Kalamazoo, Michigan, USA

      Up, Useful, and Interesting. Yes, the handling by President Obama's administration of the Obamacare website seems to have been scandalous. That's a disappointment, given how important it was to get it right. President Obama has many pluses to his credit, including achieving Obamacare, but launching it with a poorly functioning website is not one of them. Another corruption scandal was when the State Department hired to conduct an Environmental Impact Study of the Keystone XL dirty oil pipeline a company that works for oil companies and belongs to the American Petroleum Institute, which lobbied for the pipeline. And there are examples of regulatory bodies in the government staffed by persons with backgrounds in the companies they are regulating, such as Monsanto. What is needed are politicians with both good sense and integrity. The mission of the government is to provide for the common defense and promote the general welfare. These days that means first and foremost regulating irresponsible and corrupt banks and corporations, mitigating their harm, focusing on turning back the global warming crisis, and expanding Medicare to include all Americans and to include more in its coverage. I have been favorably impressed thus far with Senator Elizabeth Warren, Representative Alan Grayson, Representative Dennis Kucinich, and Senator Bernie Sanders.

    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      B. Leekley - It is a given that our health care system was long overdue for an overhaul. I personally believe we could have fixed many of the broken parts of our current system rather than throwing it out and replacing it with Obamacare.

      I also feel strongly that we really need to impose term limits on Congress if we ever want to reduce the graft and corruption so prevalent in Washington today. There are a few that are really trying to do the right thing and have the best interests of the citizens in mind, but not nearly enough of them.

      The waste and outright theft of taxpayer money is out of control.

    • CMerritt profile image

      Chris Merritt 3 years ago from Pendleton, Indiana

      Hi Mike!

      Now this is just hearsay, but according Sean Hannity, he interviewed a Harvard grad, who is a very successful entreprenuer and an IT specialist for over 30 years experience, who stated that without a doubt he could develop a website to handle everything that is needed for the HC act. He said that three years was a ridicules amount of time and if he could not do it for UNDER 3 Million Dollars, he would be embarrassed.

      Another thing I will say, as have others already, but if this kind of lunacy have happened under the Bush Administration, the major media outlets would have exploded.

      This is a direct result of horrible leadership! There is no other logical reason to give.

      Thanks again Mike for being the common sense voice on hubpages!

      keep it going,


    • Old Poolman profile image

      Mike 3 years ago from Rural Arizona

      Chris - Great to see you stop by. You are correct, there are many companies who could have done this job better and cheaper. The problem was the other companies would most likely not have been prone to using financial kickbacks to get the contract.

      I really have to wonder how many millions we spent ended up in hands other than those of CGI? You can bet it was a considerable amount of money.

      In my opinion, they broke the law when they issued this contract without putting it out for bid. Will anyone call them on this? I doubt it.

      In the hearings yesterday and today, many of the liberals used their entire allotted time making campaign, and hate Republicans, speeches rather than asking questions. They should have been shut down but that didn't happen either.

      Just another circus side show for our benefit that will produce no results at all.

    • Mel Carriere profile image

      Mel Carriere 2 years ago from San Diego California

      I smell rats every time I step outside. There are so many rats everywhere that I feel like I have to carry a portable rat trap wherever I go. Waste, fraud and abuse characterizes government at the State, Federal, and local levels. I think we should sweep out both parties and start over again. Great hub!

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