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Several Factors Hobbled MNsure From the Start

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Contract Negotiations Stall By the spring of 2012, the state still needed someone to build MNsure and was back at square one in the hiring process.

The state's initial approach of using multiple contractors to build different parts of the site proved too expensive and also took up valuable time. So MNsure officials returned to Virginia-based Maximus and New York-based Deloitte, two companies that had made bids to serve as the project's primary contractor.

Negotiations began with Deloitte, but the firm's price tag was $20 million over the state's budget, said MNsure legal counsel Mike Turpin.

Deloitte also didn't want to be responsible for the IBM Curam software, Turpin said. The firm insisted that IBM have its own contract with the state, effectively ensuring that Deloitte wasn't responsible for the Curam product.

Turpin said he wasn't sure why Deloitte resisted using the Curam software, but that "they certainly said there was a level of risk they weren't willing to accept, that they felt more comfortable with their own mix of [software] they presented."

Deloitte's concerns foreshadowed some of the troubles to come once MNsure went live. In December, Gov. Dayton sent the head of IBM a laundry list of problems stemming from the Curam software and demanded a fix.

In December 2013, Dayton, who had initially defended MNsure, blasted IBM's president for misrepresenting the Curam software's readiness. Indeed, the software the state licensed wasn't fully developed. Rather, it was being built as federal regulations about the health insurance exchanges were being issued in Washington. Dayton's letter identified 21 problems with the Curam software. A report issued in January by Optum, a subsidiary of Minnetonka-based UnitedHealth Group, found that the Curam software had 108 flaws - more than double any other vendor working on the project.

Ultimately, the contract negotiations with Deloitte fell apart and the state once again turned to Maximus, which signed a contract with the state in July 2012.

Deloitte declined requests to talk further about the negotiations, and Curam has said repeatedly that it is working with the state to fix those issues.

As contract negotiations dragged on MNsure lawyer Turpin said the project was losing time to make headway.

"Every week, every month that extended where we were in negotiations meant that we were not doing work on the ground to actually build the technology," Turpin said.

MNsure was "a three-year project," said Tom Baden, the Department of Human Services IT leader for MNsure. But by the time Maximus was on board, the state had less than a year-and-a-half to get MNsure up and running. Maximus' job was to oversee the construction of the website.

Feds Change The Timetable In early 2013, the state had to make a major adjustment. The federal government announced that MNsure had only a few months to make sure the site could perform 70 functions.

Wed, Mar 12 2014

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