Obamacare and Belarus– Follow the Money?

Bill Gertz, one of the leading national security reporters in the United States, broke the story that the Obamacare web software was developed in part in Belarus.   Belarus became an independent country in 1991.  While on paper the country is supposedly democratic, in fact it operates as a kind of dictatorship where the military, police, government and media are controlled.  The OECD calls the country “un-free.  The U.S. relationship to Belarus is somewhat strained, but Belarus has been a way-point for supplies to the ISAF in Afghanistan.

Gertz raised the issue of possible backdoors planted in the software for the Obamacare system.  A backdoor would make it possible for personal information stored on an Obamacare site to be secretly collected by an intruder or hacker.  No one has yet determined whether the software provided has been corrupted, but as Gertz reported, U.S. intelligence agencies warned DHS of the potential risk and news reports say that DHS is investigating the HealthCare.gov web software.  In addition to the government web site, the same software is also being used by all American medical insurance companies and most medical facilities in the U.S.

There have been numerous reports and complaints that the Obamacare websites lacked security.  The lack of security is a major design flaw.  On top of the design problem, the system has been plagued with technical problems.  Sloppily made software can account for many errors, but clumsy backdoors inserted into otherwise operable software can also cause multiple points of failure when the system operates.

Why would software development be outsourced to a foreign country?  The reason is cost.  Belarus is a low cost provider of software services, with prices that are far below costs in the United States.

The U.S. government when it writes a contract agrees in advance to how services are priced.  Usually the standard is provided by the GSA.

Below you will find a comparison of costs for software programming in Belarus and U.S. GSA pricing:

Average software development rates for Belarus in 2010 were:

  • 29 USD/hour – Project Manager
  • 26 USD/hour – Senior developer
  • 22 USD/hour – Middle developer
  • 18 USD/hour – Junior developer

GSA Hourly Rates

Applications Software Subject Matter Expert $141.41
Business Systems Analyst $65.66
Database Admin (DBA) $80.81
Desktop Support Engineer $50.51
ERP Software Subject Matter Expert $237.37
Help Desk Support $38.38
Junior SQA Engineer / Software Quality Assurance $39.39
Network Administrator $56.57
Principal Software Engineer $116.16
Project Manager $63.64
Release Engineer $111.11
Senior Business Systems Analyst $110.10
Senior Database Admin (DBA) $126.26
Senior Network Engineer $101.01
Senior Project Manager $116.16
Senior Software Engineer $85.86
Senior SQA Engineer $70.71
Software Engineer $68.69
Software Programmer/Analyst $80.81
SQA Engineer $50.51
Technical Writer $73.74

Clearly there is a huge difference between U.S. prices and those in Belarus.

The Obamacare website, developed by the company CGI, cost $630 million.   This is a staggering price, and could be one of the largest expenditures ever for any health insurance system.

The CGI contract was a sole source contract.  After much controversy, CGI was fired and another contractor, Accenture, was hired for one year at $91 million.  In all these contracts there was no competition and little or no visibility on the contract parameters.  Thus, for example, we don’t know if the contract permitted subcontracting outside of the United States, and we don’t know if foreign contracting was allowed, whether the contractor was still able to charge DHS at GSA rate levels.

One would think that the Justice Department, as well the the DHS Inspector General, should be examining the CGI contract and considering how charges were made for contract performance.

Don’t hold your breath on any investigation, though.  There is no sunshine in Obamacare.





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