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This number may look big but remember average per head cost of a software engineer is about 230K/yr. Any software project that takes 3 years and requires ~1000 engineers would approximately cost similar amount.

On the side, I'd first hand experience with healthcare.gov to help someone else. I can imagine myriads of integration points between insurance companies, keeping track of their plans, state level requirements, credit checks, other govt agencies like social security, customer service backend etc. From my experience in working with this kind of complexities I think 200-300 engineers may be more than enough for 2 year execution plan. So still it's about 3X-4X waste when government gets involved.

PS: Per head cost needs to include base salary + bonuses + stock grants + hiring fees + employee events + office expenses + subsidized cafeteria + health benefits + 401K etc etc.




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