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Obamacare glitches: Govt contract for troubled site swells

Tom Costello and Erin McClam

The government contract for the company that built the glitch-prone website for Obamacare has ballooned to three times its original cost, and some Republicans are demanding the resignation of the cabinet secretary who oversees it.

Since its launch, on Oct. 1, the site has been plagued by crashes as Americans try to log on and enroll for health insurance. The Obama administration has conceded that the launch has been rockier than it had hoped.

The U.S. arm of a Canadian company, CGI, had the biggest role of the many contractors that worked on the rollout. It won the contract in October 2011. At the time, it had an estimated cost of up to $94 million. By May of this year, that cost ceiling had swelled to $292 million.

The government says that the cost grew as more states lined up for Obamacare, President Barack Obama's signature health-care law.

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Last year, the Canadian province of Ontario fired CGI and canceled a $46 million contract, accusing the company of failing to build an online medical registry on time. CGI says that it is in talks to resolve that issue.

CGI has declined comment to NBC News for weeks on the troubled rollout. A Government Accountability Office report lists it as the largest contractor supporting exchanges for Obamacare, with $88 million paid through March 31.

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The White House says that the site,, has had 17 million unique visitors since Oct. 1—traffic it calls extremely high. It also says that 560,000 calls have been made to the program's call center.

"Health-care reform is more than a website," Jay Carney, the White House press secretary, told reporters Thursday. "Across the country, people are getting health insurance."

Tracking health care trip-ups

He added: "Although the glitches are unacceptable, so is the idea of leaving millions of Americans on their own, including families across the country who now have access to health care that they did not have."

The chairman of the Republican National Committee, Reince Priebus, has called for the resignation of Kathleen Sebelius, the administration's secretary of health and human services.

And the Republican-led House Energy and Commerce Committee will hold a hearing next week to examine what it calls Obamacare's troubled rollout. Sebelius has so far declined to testify, the committee said.

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"Secretary Sebelius had time for Jon Stewart, and we expect her to have time for Congress," said Rep. Fred Upton, R-Mich., and the committee chairman. Stewart grilled Sebelius earlier this month on "The Daily Show" for the glitches.

USA Today, citing technology experts, reported that the site was built using 10-year-old technology and may require constant fixes for the next six months and eventually an overhaul of the whole system.

Luke Chung, who owns a software and database programming company, told NBC News that the problems are serious.

"It doesn't work," he said. "It's supposed to get you a quote. It doesn't do that."

If it were his own product, he said, "I'd be embarrassed and I'd use language with my development team that couldn't be on the air. This is ridiculous."

But Gail Wilensky, a former director of Medicare and Medicaid who is now a health-care analyst, said that CGI was forced to deal with last-minute design changes ordered by the government, hampering CGI's ability to test the site.

Last June, a GAO report foreshadowed those problems, warning that the website might not be ready to go live, in part because of all the last-minute design changes.

(Read more: Low-Bamacare: Few enroll for Obamacare)

CGI has also helped establish some state websites that have received good reviews.

Based on Montreal, CGI has 69,000 employees in 40 countries, and is no stranger to large government contracts. Besides and the province of Ontario, CGI lists on its website customers as varied as New York City, California, the Defense Department and the State Department.

In the quarter that ended June 30, the company reported revenue of $2.5 billion, more than double the same quarter in the previous year.

—By Tom Costello and Erin McClam, NBC News.