) has been selected as the lead contractor for the development of
the Obamacare enrollment website. Accenture will replace CGI
Federal, a subsidiary of
CGI Group Inc.
), which previously developed healthcare.gov for The Centers for
Medicare and Medicaid Services. The initial phase of the
contract is valued at approximately $45.0 million
The decision to discontinue CGI's services was primarily due to
error messages and slow speeds, which marred the website in its
initial days. Moreover, the disruption hampered the process of
completing applications online. As a result, insurance sign-ups
were delayed in 36 U.S. states, which created a political crisis.
The federal government has reportedly not renewed the CGI
contract, which is set to expire on Feb 28, 2014 and had an
option to extend work for another 18 months.
Accenture's services will help the federal government to gear up
for the second open enrollment period due in Oct 2014. Its
technical expertise will be utilized to offer extensive support
for the marketplace application, enrollment and eligibility
functions, and various other processes related to enrollment.
Accenture will also develop large scale public websites to offer
improved healthcare.gov services and deliver critical health
information to a larger number of healthcare providers in a
Accenture's rich industry expertise is expected to enable it to
manage the grand scale of the Obamacare program. Of late, the
company has also been able to improve its customer base, bookings
and performance in the insurance, banking and healthcare sectors.
This also reflects strong demand for Accenture's services, which
is in turn favorable for its long-term growth prospects.
However, increasing competition from companies like
Cognizant Technology Solutions Corp.
), a strained spending environment and exposure to Europe remain
Currently, Accenture has a Zacks Rank #2 (Buy).
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