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Health website provider defends record

– Accenture, the contractor urgently tapped to help fix the federal health-insurance website, is a favorite of corporate America but has a record that includes troubled projects and allegations of ethical lapses, a review of the consulting giant’s history shows.

At the University of Michigan, students and faculty members are protesting the school’s use of Accenture to help cut costs, citing a report by a committee of alumni and graduate students that said the firm has “a disturbing pattern of problematic past performance.”

In North Carolina, glitches in an Accenture-configured computer system contributed to massive backlogs for food-stamp recipients, leading the Obama administration last month to threaten to withdraw the state’s food-stamp funding.

Federal officials have also on occasion criticized the company’s integrity. The U.S. Postal Service Inspector General’s Office wrote in June that Accenture had “demonstrated an absence of business ethics” and said that the agency should consider terminating the firm’s more than $200 million in contracts. The office cited in part a 2011 settlement with the Justice Department in which Accenture paid $63 million to resolve allegations of what the government called “kickbacks” and “bid-rigging” in numerous federal contracts. The company denied wrongdoing in the case.

The Obama administration decided last month to select Accenture for the Affordable Care Act contract, perhaps the firm’s highest-profile job yet. Although the website has improved since its disastrous Oct. 1 launch, federal officials concluded that the previous contractor, CGI Federal, had not been effective enough in fixing the intricate computer system that underpins it, according to government documents and interviews.

Administration officials say that Accenture is uniquely qualified for the estimated $91 million, one-year contract because of its breadth of resources and experience in building major online systems for federal agencies such as the Census Bureau and the Education Department. The officials also cited the firm’s work on the California health-insurance marketplace, which has enrolled large numbers of residents in health plans despite suffering technical glitches.

“Accenture was selected to help us maintain the site’s high performance and make important enhancements as we prepare for next year’s open-enrollment period,” said Tasha Bradley, a spokeswoman for the Centers for Medicare and Medicaid Services.

Accenture, which is based in Ireland and operates throughout the United States, is a consulting and technology powerhouse with $28 billion in annual revenue.

It works with more than three-quarters of Fortune 500 companies, maintains a thriving U.S. government practice and has a generally solid reputation, analysts and IT experts say.

Accenture officials defended their past performance and commitment to ethics, pointing out that the firm has received strong ratings from industry analysts. In the United States alone, they said, the company has successfully worked on more than 1,000 federal, state and local projects in the past year.

“Accenture is known for taking on the most complex and mission-critical assignments and getting the job done,” said Jim McAvoy, a company spokesman. “We have long-term relationships with the world’s leading companies and our clients value our capabilities and our track record, and the quality of our work has been recognized.”

The firm’s federal subsidiary, Accenture Federal Services, was chosen by CMS over three other companies for in what one CMS document described as an “abbreviated” process. A CMS official said the agency did a thorough analysis of Accenture’s record.

But during the previous decade, nearly 30 Accenture projects in the United States and abroad have encountered problems, including technical malfunctions and cost-overruns, according to interviews, media accounts, government audits and other records.

“There is nobody in the government-contracting space with an unblemished record,” said Steven Schooner, a former senior federal procurement official who co-directs the government procurement law program at George Washington University.

“You assume everyone comes with baggage.

“The fundamental issue is, I hope the government did sufficient research to find out who the most qualified firms were and to weigh the positives and negatives.”