Healthcare.gov has to be a one of the largest over budget projects in the history of website projects. I'm speaking as a project manager and consultant...objectively. Not as a Democrat or Republican or as someone who even cares how Obamacare plays out because I don't. I'm speaking truly from a financial perspective and from 20+ years of IT project management experience and from many years of managing government program budgets on initiatives even bigger than the Healthcare.gov website.
Issues and partial rollout
We hear that they have 'scores' of developers working around the clock on this. We hear that they have 'hundreds' of people working on this 24/7 to get it up and running. There are currently approximately 300 issues they are trying to resolve. I know from experience that projects like this with many issues outstanding can create situations where you fix one issue and - as a result - two new ones show up. So they have my sympathy. One government official - the new administrative lead on the project - said that they will roll it out at about 80% functionality. It's funny to hear them say that and then to hear a technical lead from one of the contracts state that he doesn't even know how to develop something that is only 80% functional. I know it's government speak for they may not meet 800k daily capacity yet or the ability to handle 50k traffic at a time. Or that they will be able to handle signup now and the actual payments, etc. handling will come in a phase 2. I get that...but they could have stated it better.
The financial breakdown
Now let's look at this purely from a financial standpoint. I'm going to make assumptions based on what I've read along with about 15 years of experience working on and leading very large government projects and programs. Let's assume that the 'hundreds' of people working on it are about 200. And let's assume that 100 are working on it at any given time. And contractors do not come cheap - especially in a crisis situation working round the clock on a government project like this. I'll use $100/hour as a nice round number, but I do know that the $100/hour is likely very conservative for an hourly resource charge on a project like this. Most professional service organizations are charging $150-200 per hour. With these very conservative numbers I'm suggesting you get this...
$100/hour x 100 people x 24 hrs/day x 30 days = $7,200,000/month
That would mean that fixing the Healthcare.gov site, conservatively...possibly VERY conservatively...is likely costing about $7.2M per month. And I wouldn't be surprised if this number is as much as tenfold more. I'd be willing to bet my Pete Maravich rookie card and autographed Cheap Trick live at Budokan import album that the figure for the past 30 days is more like $25-30 million at least. Ouch. And now a government administration official is heading up the fix. Hmmm...get 'er dun.... This is a website project, for goodness sakes. A website. Lots of integrations and tie-ins, I realize. But what a horrible fiasco this has become.
I worked on one very large government project where we had to hire about 60 contractors to help us get the program up and running and our VP at the time stated that we couldn't throw money away faster if we were driving down the highway with a car full of cash and the windows rolled down.
Final thoughts
Throwing lots of bodies at a problem like this may sound like a proactive response, but it is often only minimally effective and the devastation it can bring upon the project's budget very quickly is unbelievable. It is truly a last resort type action.
I don't have real numbers to use - I'm sure we never will get real numbers and catastrophe's like this are usually hard to turn into true financial numbers anyway. But the average person hears 'hundreds of people working on it' and they think 'action!' But when you think about it a little deeper what it really says is too many people and far, far, far too much being spent on it. One day of the conservative number of people I was tossing out there (based, mind you, on the 'hundreds of people' the government says is working on it) would still cost us $240,000. That's $240k per day being spent fixing the Healthcare.gov website...conservatively. That type of information will never get to us. I could be off on these numbers...I'm only guessing based on what spokespeople say, but you and I both know that government spending is usually far more...not less...than we are thinking.
Issues and partial rollout
We hear that they have 'scores' of developers working around the clock on this. We hear that they have 'hundreds' of people working on this 24/7 to get it up and running. There are currently approximately 300 issues they are trying to resolve. I know from experience that projects like this with many issues outstanding can create situations where you fix one issue and - as a result - two new ones show up. So they have my sympathy. One government official - the new administrative lead on the project - said that they will roll it out at about 80% functionality. It's funny to hear them say that and then to hear a technical lead from one of the contracts state that he doesn't even know how to develop something that is only 80% functional. I know it's government speak for they may not meet 800k daily capacity yet or the ability to handle 50k traffic at a time. Or that they will be able to handle signup now and the actual payments, etc. handling will come in a phase 2. I get that...but they could have stated it better.
The financial breakdown
Now let's look at this purely from a financial standpoint. I'm going to make assumptions based on what I've read along with about 15 years of experience working on and leading very large government projects and programs. Let's assume that the 'hundreds' of people working on it are about 200. And let's assume that 100 are working on it at any given time. And contractors do not come cheap - especially in a crisis situation working round the clock on a government project like this. I'll use $100/hour as a nice round number, but I do know that the $100/hour is likely very conservative for an hourly resource charge on a project like this. Most professional service organizations are charging $150-200 per hour. With these very conservative numbers I'm suggesting you get this...
$100/hour x 100 people x 24 hrs/day x 30 days = $7,200,000/month
That would mean that fixing the Healthcare.gov site, conservatively...possibly VERY conservatively...is likely costing about $7.2M per month. And I wouldn't be surprised if this number is as much as tenfold more. I'd be willing to bet my Pete Maravich rookie card and autographed Cheap Trick live at Budokan import album that the figure for the past 30 days is more like $25-30 million at least. Ouch. And now a government administration official is heading up the fix. Hmmm...get 'er dun.... This is a website project, for goodness sakes. A website. Lots of integrations and tie-ins, I realize. But what a horrible fiasco this has become.
I worked on one very large government project where we had to hire about 60 contractors to help us get the program up and running and our VP at the time stated that we couldn't throw money away faster if we were driving down the highway with a car full of cash and the windows rolled down.
Final thoughts
Throwing lots of bodies at a problem like this may sound like a proactive response, but it is often only minimally effective and the devastation it can bring upon the project's budget very quickly is unbelievable. It is truly a last resort type action.
I don't have real numbers to use - I'm sure we never will get real numbers and catastrophe's like this are usually hard to turn into true financial numbers anyway. But the average person hears 'hundreds of people working on it' and they think 'action!' But when you think about it a little deeper what it really says is too many people and far, far, far too much being spent on it. One day of the conservative number of people I was tossing out there (based, mind you, on the 'hundreds of people' the government says is working on it) would still cost us $240,000. That's $240k per day being spent fixing the Healthcare.gov website...conservatively. That type of information will never get to us. I could be off on these numbers...I'm only guessing based on what spokespeople say, but you and I both know that government spending is usually far more...not less...than we are thinking.
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