A five-year $13 million contract to a politically connected firm drew fire at the caucus of the Hudson County freeholders, as part of an overall debate on how the county selects its vendors.
Correctional Health Services, which has a long history of doing business with the county and is represented by former members of the Hudson County administration, was technically the lowest bidder in a complicated new process for selecting vendors.
CHS, which has become one of the principle contractors for supplying medical and other services to the county’s Correctional Center, Juvenile Detention Center and psychiatric and geriatric facilities, was seeking to provide medical, dental and mental health services to the correctional facility under a relatively new provision in state law called "Competitive Contracting."
Under this provision, county officials are allowed to look at other factors beside the low bid in awarding the contract, including a company’s experience, financial resources to provide the services, and other conditions relevant to the contract such as the number of people a company can provide or the level of experts in a given area. In evaluating these contracts, the county had set up a board of county employees who votes on the qualifications of the vendors seeking the contract.
Freeholder Bill O’Dea, however, was concerned by the fact that many of the people doing the evaluation of CHS have, as county employees, worked with the firm before when the firm had county contracts, possibly prejudicing the voting in favor of CHS. He believed the committee evaluating the firms should have been made up of people who hadn’t worked with the bidders.
O’Dea and other freeholders had criticized the previous CHS contracts because the work was oddly divided between several contracts, disguising the true costs for medical services to the county. Although traditionally bid out, the two contracts for medical billing had disguised the actual total cost of the service so that some of the medical costs were included in a contract that was supposed to cover billing services. The freeholders requested that each item be broken out separately so that bidding costs would be more obvious and that county could vote each section independently if other bidders presented a cheaper rate.
In breaking out the various aspects of the medical and billing services, the county administrator’s office also switched to the new method of evaluation, allowing the contract to be awarded by the other criteria rather than just lowest bid.
O’Dea noted that CHS was actually not the lowest bidder in several of the areas, and pressed the administration to award part of the overall contract to one of the other firms bidding.
Although this was possible, County Administrator Abe Antun said the administration had decided treat the four aspects – dental, medical, mental and billing – as one contract, leaving CHS as the lowest bidder.
In defense of the process, Freeholder Barry Dugan noted that the yearly cost over five years under the newly proposed CHS contracts was lower than previous contracts with CHS.
"The system works," Dugan said. "We achieved what we set out to do in lowering costs to the taxpayers."
O’Dea, clearly dissatisfied with the decision to keep the contracts as one package, called the system flawed, allowing decisions to be made on subjective criteria. In scoring the company’s ability to do the contract, the selection committee of county employees even gave CHS high marks for low costs in areas where the competition had the lower bid.
"How can you give CHS points for cost in areas where its bid came in higher?" O’Dea asked.
Antun argued that the cost was only a portion of that score, and that a company’s financial status was also taken into consideration. Is the company fiscally sound enough to perform the contract? Which company is better situated in that regard?
"There are a lot of things that are taken into consideration," Antun said. "Not just the bid price."
The vote on the contract was scheduled for the freeholders’ regular meeting on Sept. 11, and the contract was expected to pass.
New voting machines proposed
The freeholders were expected to spend $4.8 million to comply with the 2002 federal "Help Americans Vote Act," which requires upgrading of old voting machines. The new electronic machines would replace the lever action machines currently in use in the county, and begin the process of joining a statewide voting registration system. The contract, which was on the agenda for the Sept. 11 freeholder meeting, would replace all of the machines currently in use around the county.
O’Dea and Freeholder Maurice Fitzgibbons wanted assurances that the new system would take into account possible future changes in the way people vote around the state, such as a possible electronic absentee ballot system that would allow a voter from one part of the state to vote in another part of the state.
"I don’t want to spend $5 million and find out that the system is out of date as soon as it is in place," O’Dea said.
Fitzgibbons said the current machines are more than 55 years old and that other counties, such as Passaic, replaced the lever system decades ago.
"They are on their second electronic machine system," he said, predicting that voting would likely make use of the Internet in the future, and that any new system put into place should take that into account as well. Fitzgibbons also asked if it was not possible to transmit final counts rather than rely on readouts at the machines that must be tallied by hand.
Antun, who had seen the new system in place, said the system had the capability of electronically transmitting data, but this would require the county and each municipal clerk’s office to be wired to receive such data.
"This contract does not do that," he said.