Why would a website cost $300 million?

[Asiantravel]

I would like to ask a question regarding technology and this is not meant to evolve or deteriorate into a political discussion which would obviously be off topic in this section.

I am only asking this question purely from a cost perspective.

I keep hearing about the Obama care website cost more than $300 million. I have often heard of websites costing tens of thousands of dollars to develop and perhaps occasionally I've heard of websites costing millions.

I don't think I have ever heard of any website costing hundreds of millions. Even if it ran totally smoothly or not afterwards is not the point.

I realise of course it is meant to cover many locations and functions but how can the developers justify charging this kind of money? Is it realistic in this day and age given what the website is meant to be achieving?

[GirlDrinkDrunk]

not cheap to build and maintain a database for an entire nation's healthcare.

not to mention the cost of all the people required to do so and then those who will administer the site once up and running.

besides the fact that websites arent websites anymore in the traditional static sense they are full blow software applications and take time to code.

then of course there is the bloat involved with ALL govt spending

Edited October 22, 2013 by GirlDrinkDrunk

[Guest]

I can only assume that there is whole collection of different systems and their integrations behind the site.

eg. The website is only the paint on the car while the real expensive stuff, like engine, gearbox and roads where the car is running, are on the background, but included in the price.

[lomatopo]

Government procurement procedures rarely yield low-cost solutions. See the $640 toilet seat.

CGI, a Canadian company, seems to be the primary contractor/supplier: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/

I suspect they'll get it working, the pent-up demand is truly amazing, as is the competitive nature of the exchanges.

[Chicog]

Government procurement procedures rarely yield low-cost solutions. See the $640 toilet seat.

CGI, a Canadian company, seems to be the primary contractor/supplier: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/

I suspect they'll get it working, the pent-up demand is truly amazing, as is the competitive nature of the exchanges.

I wouldn't necessarily bet on it, the UK spent BILLIONS trying to develop a medical system and they ended up writing it off, as did the contractors.

http://www.independent.co.uk/life-style/health-and-families/health-news/nhs-pulls-the-plug-on-its-11bn-it-system-2330906.html

[uptheos]

It's not easy to build a website that doesn't work properly.

[rakman]

Poor planning, lack of clear scope (scope creep), panic and "toss everything" at the project as the deadline nears and no testing.

Actually, large scale software projects only have a 6% chance of succeeding. I think generally government projects do even worse as the management style is to make the bureaucracy bigger rather than solve the problem.

[colin2]

The Thai government is Honestly Dishonest , but American government is Dishonestly Dishonest !.

[manarak]

I suppose the costs cover much more than just the website.

A healthcare computer system requires more a than redundant infrastructure, high security and fail-proof backup.

Then the data collection and consolidation, maintenance, etc.

300 million doesn't seem too expensive for me.

For perspective, the cost of just one F-22 interceptor aircraft is 361 million.

[Pib]

Lot of the Obamacare exchange (it's must more than just a website) cost estimates running rampant on the internet are just false for various political or misinformed reasons. Supposedly the contract award to build the Obamacare exchange system, which involves much more than just a website, is a little less than $94M. I'm guessing but I expect that also includes X-years of follow-on support. See this Link and it sublinks for more info.

[canman]

Government procurement procedures rarely yield low-cost solutions. See the $640 toilet seat.

CGI, a Canadian company, seems to be the primary contractor/supplier: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/

I suspect they'll get it working, the pent-up demand is truly amazing, as is the competitive nature of the exchanges.

I wouldn't necessarily bet on it, the UK spent BILLIONS trying to develop a medical system and they ended up writing it off, as did the contractors.

http://www.independent.co.uk/life-style/health-and-families/health-news/nhs-pulls-the-plug-on-its-11bn-it-system-2330906.html

And the Canadian company CGI failed and was fired from developing similar health exchange S/W in Canada

[qdinthailand]

Contractors!

[Morden]

It does seem to be rather a lot of money but we don't know much about the background functionality. It's obviously much more sophisticated than a simple website.

From my past experience of contracting for the building of highly functional computer systems the main causes of failure are the customer not being closely involved in the development and inadequate testing. The signs are that these two problems are behind the troubles encountered by Obamacare's system.

[simple1]

I can only assume that there is whole collection of different systems and their integrations behind the site.

eg. The website is only the paint on the car while the real expensive stuff, like engine, gearbox and roads where the car is running, are on the background, but included in the price.

Exactly, the cost of providing business process workflow automation with countless backend legacy systems would be huge. You can bet your house that once work started there would have been many challenges due to undocumented modifications in exisiting production applications. I noticed that the SI team are using Oracle Identity managment suite, this app alone would cost millions to license & implement. I also noticed their are 55 contracting organisations in the overall project, so the cost of project management would also be enormous and very difficult to manage. It's a very ambitious and complex IT project.

[Asiantravel]

Okay, but now it's becoming outrageous and ridiculous!

Report: Total Cost of Obamacare Website to Exceed $1 Billion

http://www.breitbart.com/Big-Government/2013/10/24/report-obamacare-cost-1-billion

[h90]

not cheap to build and maintain a database for an entire nation's healthcare.

not to mention the cost of all the people required to do so and then those who will administer the site once up and running.

besides the fact that websites arent websites anymore in the traditional static sense they are full blow software applications and take time to code.

then of course there is the bloat involved with ALL govt spending

yes that explains the first 30 Million

270 Million to go....

[Satcommlee]

I don't think Godaddy at $15 a month was really an option for them.

[sustento]

Government procurement procedures rarely yield low-cost solutions. See the $640 toilet seat.

CGI, a Canadian company, seems to be the primary contractor/supplier: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/

I suspect they'll get it working, the pent-up demand is truly amazing, as is the competitive nature of the exchanges.

I wouldn't necessarily bet on it, the UK spent BILLIONS trying to develop a medical system and they ended up writing it off, as did the contractors.

http://www.independent.co.uk/life-style/health-and-families/health-news/nhs-pulls-the-plug-on-its-11bn-it-system-2330906.html

That was doomed to failure from the start. GPs are independent contractors and can choose whatever system they want for their surgeries. Trying to hang them all off a spine was never going to work. I don't know how many different GP systems there are nowadays but when I was installing them for a living there were over 130.

[lomatopo]

I found this hand-drawn system diagram...

More about CGI...

Meet CGI Federal, the company behind the botched launch of HealthCare.gov

Over the past few weeks, if you've been paying attention at all to the unfolding disaster of people trying and failing to sign up for Obamacare online, one name keeps coming up: CGI Federal, the IT contractor that has orchestrated most of the Healthcare.gov Web site. By most accounts, it's been a complete train wreck, for reasons both technical and bureaucratic. Here's what you need to know about the company at the center of it all.

How did CGI land the Healthcare.gov contract?

CGI Federal's winning bid stretches back to 2007, when it was one of 16 companies to get certified on a $4 billion "indefinite delivery, indefinite quantity" contract for upgrading Medicare and Medicaid's systems. Government-Wide Acquisition Contracts — GWACs, as they're affectionately known — allow agencies to issue task orders to pre-vetted companies without going through the full procurement process, but also tend to lock out companies that didn't get on the bandwagon originally. According to USASpending.gov, CGI Federal got a total of $678 million for various services under the contract — including the $93.7 million Healthcare.gov job, which CGI Federal won over three other companies in late 2011.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/

Edited October 25, 2013 by lomatopo

[lomatopo]

Report: Total Cost of Obamacare Website to Exceed $1 Billion

Mice-nuts.

Total spending on health care in 2011 was $2.7 Trillion.

The war in Iraq has had an estimated cost of between $800 billion and $2 Trillion.

[adweb00]

I can just see it now obamas flash health care website with its constant PHP errors cause just like the contracts for the war the company doing the job probably has 1 designer who uses joomla for any PHP back ends ha ha ha How do i get my business in the running for obamas next one ha ha ha

Sent from my iPhone using Thaivisa Connect Thailand mobile app

[JSixpack]

Here's why:

http://www.jec.senate.gov/republicans/public/index.cfm?a=Files.Serve&File_id=8e6dbf03-ca4a-44be-9de4-a100c43fb5c8

[adweb00]

Here's why:

http://www.jec.senate.gov/republicans/public/index.cfm?a=Files.Serve&File_id=8e6dbf03-ca4a-44be-9de4-a100c43fb5c8

There is someone making a nice win off this ha ha Amazon or idiot bays databases would be bigger than that easily so in scheme of things is a big job don't get me wrong but not big enough to justify that price tag!!

Sent from my iPhone using Thaivisa Connect Thailand mobile app

Edited October 26, 2013 by adweb00

[JSixpack]

Here's why:

http://www.jec.senate.gov/republicans/public/index.cfm?a=Files.Serve&File_id=8e6dbf03-ca4a-44be-9de4-a100c43fb5c8

There is someone making a nice win off this ha ha Amazon or idiot bays databases would be bigger than that easily so in scheme of things is a big job don't get me wrong but not big enough to justify that price tag!!

Sent from my iPhone using Thaivisa Connect Thailand mobile app

You have NO idea what you're talking about. Duh.

Next.

[Asiantravel]

ah now everything is clear simply jobs for the boys?

Nothing to do with efficiency and getting value for money for the American people

Where is the outrage by Americans ?

And they say Thailand is corrupt !! sheesh

Michelle Obama’s Princeton classmate is executive at company that built Obamacare website

http://dailycaller.com/2013/10/25/michelle-obamas-princeton-classmate-is-executive-at-company-that-built-obamacare-website/

Edited October 27, 2013 by Asiantravel

[h90]

It does seem to be rather a lot of money but we don't know much about the background functionality. It's obviously much more sophisticated than a simple website.

From my past experience of contracting for the building of highly functional computer systems the main causes of failure are the customer not being closely involved in the development and inadequate testing. The signs are that these two problems are behind the troubles encountered by Obamacare's system.

A simple webpage like that would be 3000-30.000 USD.

With the reasonable background things it can be a couple of millions, but not 300 million.

I think the reasons are:

No exact planing because the regulations weren't fixed when they started and than the regulations changed and are way too complex.

Additional you have customer who don't even understand the questions and not much testing.

Two ways to fix it:

a) scrap the complete Obamacare and make it simple and logic and not that terrible mess it is now-->Start from zero.

or

b ) Make a html webpage with a formmail.cgi for 300 USD. Customer can put in their data. That they will be called back, sent information material and called again...walked thru everything on the phone and get their options per mail again. So it can be started. Based on that information, step by step a webpage is built that based on the experience on the phone requests more and more information.

But in my opinion the complete Obamacare isn't a system to help the people, it is a system for corruption....give money to insurances and other companies. Else they could have just copied one of European working healthcare systems.

[h90]

ah now everything is clear simply jobs for the boys?

Nothing to do with efficiency and getting value for money for the American people

Where is the outrage by Americans ?

And they say Thailand is corrupt !! sheesh

Michelle Obama’s Princeton classmate is executive at company that built Obamacare website

http://dailycaller.com/2013/10/25/michelle-obamas-princeton-classmate-is-executive-at-company-that-built-obamacare-website/

Yes everyone who is posting "in a western country blablabl" should read that.....

Beside that it is a mega business for private insurance companies. If you want to make a socialist system you must do it a socialist way with a government insurance.

So it is just the worst of both systems....Either complete stupid or corrupt.

[Asiantravel]

It does seem to be rather a lot of money but we don't know much about the background functionality. It's obviously much more sophisticated than a simple website.

From my past experience of contracting for the building of highly functional computer systems the main causes of failure are the customer not being closely involved in the development and inadequate testing. The signs are that these two problems are behind the troubles encountered by Obamacare's system.

A simple webpage like that would be 3000-30.000 USD.

With the reasonable background things it can be a couple of millions, but not 300 million.

I think the reasons are:

No exact planing because the regulations weren't fixed when they started and than the regulations changed and are way too complex.

Additional you have customer who don't even understand the questions and not much testing.

Two ways to fix it:

a) scrap the complete Obamacare and make it simple and logic and not that terrible mess it is now-->Start from zero.

or

b ) Make a html webpage with a formmail.cgi for 300 USD. Customer can put in their data. That they will be called back, sent information material and called again...walked thru everything on the phone and get their options per mail again. So it can be started. Based on that information, step by step a webpage is built that based on the experience on the phone requests more and more information.

But in my opinion the complete Obamacare isn't a system to help the people, it is a system for corruption....give money to insurances and other companies. Else they could have just copied one of European working healthcare systems.

but its not $300 million anymore it 1 BILLION !

[oakweb]

118 Million, and it could easily cost that much if it was a team under contract

it's not like putting up a simple site, you have multiple servers and contracts, multiple developers, developer managers, etc

you are basically creating a company from scratch, websites like that just don't pop from thin air

[nikster]

It does seem to be rather a lot of money but we don't know much about the background functionality. It's obviously much more sophisticated than a simple website.

From my past experience of contracting for the building of highly functional computer systems the main causes of failure are the customer not being closely involved in the development and inadequate testing. The signs are that these two problems are behind the troubles encountered by Obamacare's system.

A simple webpage like that would be 3000-30.000 USD.

With the reasonable background things it can be a couple of millions, but not 300 million.

I think the reasons are:

No exact planing because the regulations weren't fixed when they started and than the regulations changed and are way too complex.

Additional you have customer who don't even understand the questions and not much testing.

Two ways to fix it:

a) scrap the complete Obamacare and make it simple and logic and not that terrible mess it is now-->Start from zero.

or

b ) Make a html webpage with a formmail.cgi for 300 USD. Customer can put in their data. That they will be called back, sent information material and called again...walked thru everything on the phone and get their options per mail again. So it can be started. Based on that information, step by step a webpage is built that based on the experience on the phone requests more and more information.

But in my opinion the complete Obamacare isn't a system to help the people, it is a system for corruption....give money to insurances and other companies. Else they could have just copied one of European working healthcare systems.

Agreed.

The question is, how do you start such a project? What they did was doomed to fail, you start by designing a comprehensive solution for everything from scratch, then throw in every feature you can think of, and you end up with an unmanageable mess. I am sure there was waste and corruption involved, but I doubt that explains the cost overrun that takes something that should perhaps cost $10M and makes it cost $300M, or even $1Bn.

b - is the way to go. Do the simplest thing possible, involve lots of manual labor, then automate those things that need automation. This is how people who don't have the money would do it. On a shoestring.

Couldn't be any worse than what actually happened.

Now they have sunk $300M there will be a lot of resistance to doing what must be done: Throw it all away and start over. Because otherwise you'll spend another $3Bn and 3 years fixing up that steaming pile of junk.

Watch what happens... I bet it'll be the latter... they will try to fix it to save the initial investment, and end up spending 10x as much.

Edited October 30, 2013 by nikster