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UPDATE 1-Accenture chosen as lead contractor on Obamacare website -U.S. govt

Saturday, 11 Jan 2014 | 5:25 PM ET

WASHINGTON, Jan 11 (Reuters) - Accenture has been chosen to replace CGI Federal as the lead contractor on the Obamacare enrollment website, which failed to work when it launched in October for millions of Americans shopping for insurance, the U.S. Centers for Medicare and Medicaid Services said on Saturday.

CGI Federal, a subsidiary of CGI Group , built the website, HealthCare.gov, which struggled with error messages and slow speeds for weeks after its launch. The glitches created a political crisis for President Barack Obama, threatening the roll-out of his signature healthcare law and emboldening its foes among Republican lawmakers to call for its repeal.

"As CMS moves forward in our efforts to help consumers access quality, affordable health coverage, we have selected Accenture to become the lead contractor for the HealthCare.gov portal and to prepare for next year's open enrollment period," the agency said in a statement.

CGI Federal said on Friday that its contract, which was originally awarded in 2011 and is scheduled to end Feb. 28, would not be renewed.

The Washington Post reported on Friday that Accenture will get a year-long contract worth about $90 million for the website.

Obama has said the fiasco with HealthCare.gov has made him want to overhaul the way the federal government buys technology services. Critics say the system favors large, established contractors such as CGI.

Although the site is vastly improved, technical glitches continue to bedevil enrollment. The improvements allowed more than 1.1 million people to shop for and enroll in insurance on HealthCare.gov by the end of 2013, far short of original hopes for early enrollment.

The deadline for signing up for 2014 health insurance under the Affordable Care Act is March 31, meaning the new contractor will take over at a time when the government needs the site to handle what it hopes will be a surge of last-minute sign-ups.

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