A committee on Tuesday narrowed the list of companies competing for the contract to supply the technology for an Arkansas-based health-insurance exchange for small businesses from six to two.
The Arkansas Health Insurance Marketplace, a nonprofit organization subject to legislative oversight, is keeping the names of the companies secret until Jan. 23, when the full marketplace board of directors will hear presentations from the two finalists and select the winning bid, marketplace spokesman Heather Haywood said.
At Tuesday's meeting, an evaluation committee made up of staff members and the board's information technology committee used Southeastern Conference athletic mascots as code names for the six companies that submitted bids.
Over the objection of an Arkansas Democrat-Gazette reporter, the evaluation committee excluded the reporter and two other visitors from observing the meeting inside the small conference room where the committee gathered.
The reporter and visitors were allowed to listen to the meeting on a speakerphone from a larger, nearby conference room at the marketplace's offices in the Prospect Building in Little Rock.
Cheryl Smith, the marketplace's director, said the smaller conference room didn't have enough space for members of the public.
But during the meeting two board members who weren't present when the meeting began, showed up and were allowed inside the room. Steve Faris arrived about a half-hour after the meeting started, and Chris Parker, who had been participating earlier by phone from another location, arrived about an hour and a half into the two-hour meeting.
By excluding the reporter and public from the meeting room, the marketplace board committee appears to have violated the Arkansas Freedom of Information Act, said Robert Steinbuch, a law professor at the University of Arkansas at Little Rock who is considered an expert on the public meeting and open records law.
While he didn't know of a court ruling on the issue, Steinbuch said the "logic and the language" of the law indicates that the public has "the same right to observe all of the interactions of the members of the public body that each member of the public body itself has."
"If indeed there is a physical meeting, then members of the public have a right to attend the physical meeting," Steinbuch said.
State Sen. David Sanders, R-Little Rock and chairman of a legislative committee monitoring the marketplace, said he spoke to marketplace staff members after the meeting who told him a larger number of board members than usual attended the meeting in person, rather than by conference call, leading to the lack of space.
"I don't think it was anything necessarily nefarious," he said.
He added that he's been pleased with the procurement process so far.
"It's very encouraging to see the level of work going into this, because this is a very serious matter."
Through the speakerphone, John Norman, the marketplace's director of operations, could be heard saying during the meeting that he was "underwhelmed by all of the responses" from companies and "shocked" by their estimated costs for supplying the exchange technology.
"Across the board, what I came to the realization of is that each of them have their own issues and concerns," Norman said. "It's going to be tough to look and feel completely comfortable with any of the vendors."
The two companies selected as finalists -- code-named the Commodores and the Gators -- have experience working on exchanges in other states, marketplace staff members could be heard saying during the meeting.
Smith said she had heard complaints from other states about each company's performance in meeting deadlines and staying within budget. But she said those complaints shouldn't disqualify the companies.
"I would rather have somebody who has proven functionality, who has warts and figure out how to get around those warts" than a company without a record of achieving results, Smith said.
The companies' estimated costs weren't disclosed, but Norman said the Gators' estimated cost was 1.8 times the cost submitted by the lowest bidder.
The Commodores' cost estimate was 6.27 times higher than the lowest bidder, he said.
Smith said she would contact both companies to get them to submit their "best and final offers."
"I think these were all overbid," Smith said.
Created by the state Legislature in 2013, the Health Insurance Marketplace is working to build insurance exchanges that would replace the ones set up for the state by the federal government. Supporters of Arkansas-based exchanges say they could be tailored to better fit the state's needs.
Enrollment in Arkansas' planned small-business exchange is scheduled to start in October for coverage that would start in 2016.
For individual consumers, enrollment would begin in 2016 for coverage that would start in 2017.
Last month, the marketplace was awarded a $99.9 million federal grant to establish the exchanges and operate them for one year. After the first year, each exchange is expected to be supported by user fees that will replace a federal 3.5 percent premium fee now assessed on non-Medicaid plans offered through the federal exchanges.
In its grant application, the marketplace estimated the cost of building the technology for the small-business and individual exchanges at up to $78 million.
Under Act 1500, passed by the Legislature in 2013, the marketplace board is subject to the state Freedom of Information Act.
The law requires public boards to hold meetings in public except under certain circumstances, such as executive sessions to discuss certain personnel matters.
The law also requires many types of state and local government records to be available to the public. The marketplace has denied Democrat-Gazette requests for records identifying the bidders for the small-business exchange contract, citing an exemption for records that "if disclosed would give advantage to competitors or bidders."
According to a book on the Freedom of Information Act by University of Arkansas at Fayetteville law professor John Watkins and former UALR law school professor Richard Peltz, the right to attend a meeting "is subject to reasonable restrictions, such as a limited seating capacity or procedural regulations aimed at ensuring that an agency's business is conducted in an orderly manner."
But Steinbuch said Tuesday, "I'm never sure what room is so filled to capacity that it can't fit one standing journalist in the background."
He added that providing an auditory feed of a meeting doesn't provide the same access.
"There's inherently nonverbal communication between members of the public body that you simply won't have access to," Steinbuch said.
A Section on 01/14/2015