The three finalists for the contract to monitor the implementation of an Arkansas-based small-business health insurance exchange made presentations to a state board on Wednesday.
Records released this week revealed the finalists to be Reston, Va.-based Maximus; Atlanta-based First Data Corp.; and Chicago-based CSG Government Solutions. The bidders previously had been referred to in public by code names.
The firm selected for the monitoring contract will evaluate the work of Reston, Va.-based hCentive, which the board hired to build the small-business exchange and operate it through February 2018 for just under $7.2 million.
The board is expected to make a selection at its next meeting, next Wednesday.
Just before the presentations on Wednesday, some "Arkansas Health Insurance Marketplace" board members questioned the marketplace's practice of keeping the names of such bidders confidential during the early stages of bid evaluations and requesting revised cost proposals from the finalists.
Board member Chris Parker, a Little Rock lawyer, said the board should address the issues at its next meeting.
"I'm concerned about the way we have been operating, both on a matter of judgment and on a matter of law," Parker said.
Created by the state Legislature in 2013, the marketplace is using money from a $99.9 million federal grant to establish Arkansas-based health insurance exchanges for small businesses and individual consumers that would replace exchanges set up for the state by the federal government.
Such exchanges allow business owners and consumers to shop for coverage and apply for subsidies to help pay for it.
Supporters of establishing Arkansas-based exchanges say they could be tailored to better fit the state's needs.
According to news reports, Maximus was the lead contractor for Minnesota's health exchange, which was hobbled by technical problems after it opened for enrollment in 2013.
Minnesota ended its contract with Maximus last year and hired Deloitte Consulting to overhaul the exchange.
Maximus also conducted quality assurance for the Oregon exchange, which suffered from widespread technical failures. Oregon later switched to using a federally run exchange.
First Data was hired in January 2014 to assess the Oregon exchange. The company has also worked on exchanges in California, Idaho, Colorado and Connecticut and has provided consulting services to the Arkansas Health Insurance Marketplace and the state Insurance Department.
CSG Government Solutions has provided project management and quality assurance services to Mississippi's small-business exchange and also has worked on Rhode Island's exchange, company executives said.
On technical factors, the Arkansas Health Insurance Marketplace staff scored CSG the highest, followed by Maximus and First Data.
CSG also had the highest bid -- $622,468, compared with $489,400 submitted by First Data and $330,000 from Maximus.
Each company lowered its bid after the marketplace staff requested that each finalist submit a "best and final offer."
First Data's bid was lowered by 4.9 percent, CSG's was lowered by 2.9 percent, and Maximus' was lowered by 1.8 percent.
The marketplace's procurement rules call for the marketplace to negotiate contracts with the highest-rated bidder, then negotiate with the next highest-rated bidder if an agreement can't be reached with the first bidder.
The rules also allow the marketplace to use an "alternate procurement method" if it is more likely to maximize revenue, achieve specific business objectives or help fulfill statutory mandates.
Board member Annabelle Imber Tuck said she's concerned that the marketplace has consistently used an alternate method for negotiating with bidders instead of the one spelled out in the rules.
Parker questioned the board's practice of withholding information about the identity of finalists for contracts until the finalists make presentations before the board.
In denying requests for records related to the bids, the marketplace staff has cited an exemption to the state's Freedom of Information Act for records that "if disclosed would give advantage to competitors or bidders."
Before the names were revealed, marketplace officials also instructed staff and board members to refer to the companies by code names when discussing the bids in public meetings.
Parker said he worries that using the code names is "not just silly" but also "questionable" because it's not clear whether the names of the companies would be covered by the open-records law exemption.
Marketplace Executive Director Cheryl Smith Gardner said the marketplace's procurement strategy has allowed it to lower the cost of contracts. She said the procurement rules were adopted before she was hired a year ago and that it might be a good time to revisit them.
The board kept the rules broad to allow for more flexibility, but "maybe the flexibility hasn't been exactly how you envisioned it," Gardner said.
Metro on 03/12/2015