State officials and the contractor for the Vermont Health Connect website have agreed on a new schedule for launching missing functions that includes additional financial penalties for missed deadlines.
Under the amended contract signed Tuesday, tech giant CGI must deliver "change of circumstance" functionality by May 21. By July 2, small business functionality must work. Failure to deliver by those dates will result in penalties in addition to the $5 million in "liquidated damages" the state has already claimed for CGI's incomplete work.
"We really were trying to define an achievable road map and pair it with payment provisions and financial accountability so that we have an achievable plan and one that preserves for the state accountability for the success of that plan," Department of Vermont Health Access Commissioner Mark Larson said Thursday.
Vermont Health Connect, the state's online health insurance marketplace required under the federal Affordable Care Act, launched in October with serious deficiencies. Users are still unable to edit their information, and small businesses must enroll directly with the state's insurers because the website is not functional for them.
The ability to make online payments for premiums was finally added in early March. Officials said the revised contract should help result in a fully functional exchange site this summer.
Commerce Secretary Lawrence Miller, tapped by Gov. Peter Shumlin in January to assist the beleaguered exchange team, said the previous contract with CGI "contemplated getting through development by October and everything being neat and clean."
But late last year, after reviewing the state's options, Miller and others began negotiating with CGI on a new contract that would help complete the project. Despite calls by Republicans to dump CGI, state officials determined that developing a new path with the firm was the best solution.
"It was really clear, talking to other organizations and folks who have done this before, that the disruption of change, trying to change contractors, greatly exceeded the risk of negotiating a revised agreement and a revised path to done," Miller said.
Massachusetts and the federal government have opted to drop CGI in favor of other tech firms. Other states are working with their contractors to redefine tasks and goals.
"When I've talked to people around the country, they are doing a combination of amendments to contracts and replacement of vendors," Miller said. "Everybody's taking a slightly different approach. We did not consult with other states on the specifics of this."
Both sides "were pretty well firm on what was important to them," according to Miller, but main components of the negotiated amendment "were not in substantial conflict."
"Both parties wanted to finish the work, and both parties recognized that this would be done in stages now," he said.
With the mandated October launch in the rearview mirror, state officials and CGI developed a schedule that reflects the time and resources it will take to launch the delayed elements of Vermont Health Connect.
"We are no longer on the schedule that was defined by Congress. We are now on the schedule that is defined by the project's needs, and first among those is a quality solution that will provide a good experience for Vermonters," Miller said.
After agreeing on the sequence of so-called key deliverables, CGI developed a plan and time frame for completing them, according to Miller.
"It's aggressive. I think they would tell you it's aggressive because they understand that it's important to deliver these functionalities as soon as possible," he said.
The launch dates laid out in the contract are targets and could change.
"I would rather delay a little bit to be certain that an implementation is going to be successful than go to a date certain. All plans are great until you hit the real world," Miller said.
Under the agreement, the plans come with new requirements. If CGI misses deadlines for the four remaining key deliverables, the state will receive a 12.5 percent discount up to $2 million. Each of the four deliverables has been assigned a cost.
CGI can "earn" back some pay, however, depending on how quickly it completes each task after a missed deadline. Completion within seven days will allow for a 50 percent reduction in the penalty. Completion within 14 days will allow CGI to earn back 25 percent of the penalty, and completion within 28 days will allow for a 10 percent reduction in the penalty.
If CGI meets the final deliverable - small business functionality - on time and has already completed all other tasks, it can earn back 50 percent of any accrued penalties.
The new penalties are intended to provide incentive for CGI to meet the state's target dates, Miller said. The state has already maxed out the financial penalties provided in the previous contract.
State officials also pushed for more stringent acceptance criteria. Previously, CGI was considered to have completed a task if it worked in a testing environment. Now, tasks will be considered completed only after they go live.
"We're buying a business solution, not just an IT solution," Miller said. "We want it deployed. We want to see it working - all the features that were promised - and we want to see no negative impact on the system as it was."
The agreement also requires CGI to "maintain levels of staffing adequate to complete the new key deliverables." And it calls on both the state and the company to "improve upon project governance."
Larson said staffing and governance clauses will help draw back workers from the crisis mode that emerged after the October launch.
"This amendment doesn't change the expectation about what work will be done, and it doesn't change the expectation about how much will be paid," Larson said. "It really documents the work that's left to do, provides the sequencing of that work, attaches the remaining dollars left to the delivery of those functions and provides for the state some financial surety that the work will be done in total and also an incentive for it to be done on time."
A spokeswoman for CGI could not be reached for comment Thursday.
