By all accounts, a professional service contract awarded by the town of Secaucus on Tuesday – for the second time in two months – will only reignite controversy surrounding the contract, not extinguish it.
On Tuesday the Secaucus Town Council awarded a professional service contract to U.S. Benefit Partners, a health brokerage firm located in town. The move ended the town’s long relationship with its previous health care broker, IMAC Insurance, located in Belleville.
“How am I not notified when they put this up for bids?” – Joseph Maurillo
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“I’ve been the broker here eight years,” Maurillo said. “How am I not notified when they put this up for bids?”
Bid v. bid
The trouble started back in January when Secaucus advertised for RFPs from companies that broker health care plans. Three companies, including U.S. Benefit Partners, submitted proposals by the late-January deadline. The ads were posted to the municipal website and to the League of Municipalities’ web site, the two venues Secaucus uses to advertise all of its public contracts.
The council awarded the contract to U.S. Benefit Health Partners, since it offered the lowest commission rate.
IMAC, which has been the town’s healthcare broker for the past eight years, according to Maurillo, did not respond to the RFP, perhaps because this was the first time in many years the council decided to go through a competitive bidding process for this work.
“He should have received a courtesy phone call,” Mayor Michael Gonnelli acknowledged. “But we’re not required to notify him, and as a matter of fact, this is a service the town isn’t required to competitively bid.”
When Maurillo learned the contract had been put up for bid, he apparently felt blindsided and struck back by filing suit in Hudson County Superior Court.
“Rather than to spend money on legal fees in this case, we decided it was best to just re-bid the contract with a short turnaround [deadline],” said Town Administrator David Drumeler.
A Hudson County Superior Court judge dismissed IMAC’s suit since the town was willing to remedy the situation by re-advertising its request for RFPs.
U.S. Benefit Partners resubmitted its original winning proposal.
Maurillo also submitted an RFP. But the company did something else, too.
According to one municipal source, IMAC also submitted a Freedom of Information Act request to get a copy of the winning proposal submitted by U.S. Benefit Partners. Armed with information regarding his competitor’s commission rates, this source said, Maurillo dropped his own rate to be lower than that of U.S. Benefit Partners.
Healthcare brokers, Drumeler explained last week, get paid a commission for their work that is based on a percentage of the town’s overall healthcare costs each year.
U.S. Benefit Partners, whose president is Joseph Morano, who was a 1st Ward Democratic Town Council candidate in 2009, offered a commission of 1.85 percent.
In previous years Secaucus paid IMAC a 2.50 percent commission for healthcare broker services. But after peeking at the competing bid, IMAC submitted an RFP that included a commission of 1.25 percent.
Still not satisfied
On Tuesday Maurillo asked the council why it awarded the contract to Morano’s firm if IMAC’s commission “fee was lower and…he doesn’t have any experience with government entities.”
Morano was selected, Town Attorney Anthony D’Elia told Maurillo, “because of his experience, his relationship with the Town of Secaucus, and [the fact that he is] a resident of the town…price was not the only factor considered.”
Maurillo told the Reporter he was still unhappy with the decision and the way the RFP process was handled, adding that he will consult with his attorney to see what options he has.
IMAC’s lawyer, Tom Schrivo did not return a phone call on Wednesday.
In response to Maurillo’s suggestion that his company had no experience with public sector healthcare contracts, Morano said Tuesday, “I’ve been in this business since 1989. I was a vice-president at Aetna, the largest healthcare company in the county, and I was responsible for government programs. While there, I worked with most of the public entities in the state of New Jersey.”
Morano, who started U.S. Benefit Partners in 2001, added that he also worked on a healthcare project in Iraq after the fall of Saddam Hussein.
“I think I have enough experience [working with the public sector],” Morano said.
The contract awarded last week expires at the end of the year. Mayor Gonnelli told Maurillo Tuesday that a new RFP will be advertised again in January 2012.
E-mail E. Assata Wright at awright@hudsonreporter.com.