IT Reshoring News

October 30, 2013

Why Doesn’t Work: Offshore Development, Rushed Programming

Why is failing? Turns out the contractor who developed was rushed by the federal government, and spent millions on offshore developers for the site. We believe these factors ruined the new site's chances and wasted taxpayer money.
The new website is a catastrophe.  Users are reporting errors by the thousands: failed applications, duplicate records, and crashes.

Why is the website working so poorly?

It turns out that two parties are responsible.

1. CGI Group – A Canadian IT contractor with U.S. subsidiaries (the subsidiary CGI Federal developed for almost $94 million).  Many of their developers are in India.

Meet CGI Federal: The Washington Post

From the Post article: "According to, CGI Federal got a total of $678 million for various services under [a Government-Wide Acquisition Contract] – including the $93.7 million job."

Also from the article: "CGI Group has 72,000 employees in 400 offices worldwide – many of them in India – and 11,000 in the United States, with D.C.-area locations in Fairfax, Manassas, Washington, and Baltimore."

We must ask the question:  How many of their offshore developers worked on

We've pointed out the serious issues involved in outsourcing before, in our white paper The Argument for Reshoring American IT (PDF).  Research shows that offshore workers are prone to low productivity, lack of accountability, and slow communications on projects.  Are any of these what we need for a service supporting healthcare for millions of Americans?  Was there no qualified development company in the United States that could handle this project?

Along with the website itself, related data services from other contractors bring the total project spend to at least $174 million taxpayer dollars.

2. The U.S. Government
According to the Post article, CGI Federal isn’t the only one to blame here.  The federal government used a closed bidding process for contracting development, with only a few organizations bidding.  CGI Federal was the primary contractor.

However, CGI only had 6 months to build the site.  The Department of Health & Human Services (HHS) dithered on final specifications, only giving CGI the go-ahead to start development in the spring of 2013.

Given a 6-month development rush and an unknown number of offshore developers, it's no surprise that the website is unable to do its job.

The site has been lambasted by IT experts in the Wall Street Journal, who "examined the website at the request of The Wall Street Journal [and] said the site appeared to be built on a sloppy software foundation.  Such a hastily constructed website may not have been able to withstand the online demand last week, they said."

SOLUTION:  Next time use open bidding, U.S. developers and reliable programming standards.  Open bidding on federal projects would have netted more responses (and a longer vetting process), but it's very likely the winning bid would be much less expensive, more efficient and in no danger of offshore disruptions.

Plus the site might actually work.