A $366 million pair of contracts to manage dental benefits for Arkansans on Medicaid received the blessing of state lawmakers Wednesday despite an ongoing lawsuit by a disqualified bidder for the work.
The state's chief procurement officer, joined by officials with the Department of Human Services, spent more than an hour offering assurances to a legislative committee that the procurement process had been followed fairly.
The meeting came a month after one of the bidders of the contracts, Boston-based DentaQuest, filed suit in Pulaski County Circuit Court alleging that Procurement Director Edward Armstrong wrongly disqualified the company after learning it was the subject of an out-of-state lawsuit.
Lawmakers on the Review Subcommittee of the Arkansas Legislative Council appeared comfortable with Armstrong's answers to their questions and voted to review the contracts. The action is a sign of the Legislature's approval of the deal, but it is nonbinding.
A committee co-chairman, Rep. Jon Eubanks, R-Paris, said it would have been the governor's prerogative to move ahead with the contracts had lawmakers decided against reviewing them.
The contracts are to begin Jan. 1, although Legislative and Government Affairs Chief Kelley Linck of the Human Services Department said the winners, Delta Dental in Sherwood and Florida-based Managed Care of North America, are ready to start laying groundwork in the state.
None of the companies were allowed to testify at Wednesday's meeting, which was closed to public comment.
Human services officials said they had not explored how much it will cost to delay authorizing the contracts until DentaQuest's lawsuit is resolved.
At the end of April, DentaQuest sought a temporary restraining order to halt the state from executing its contracts with the winning bidders.
The request, and the company's overall lawsuit, is pending before Pulaski County Circuit Judge Wendell Griffen.
DentaQuest originally scored the highest among four bidders for the dental benefits contracts, but was disqualified along with a lower bidder in February for failing to disclose lawsuits involving similar services they were providing in other states.
Those legal troubles were pointed out by the lowest-scoring bidder, Managed Care of North America, in a protest filed with the state.
In turn, DentaQuest filed its own protest pointing out that Managed Care had twice been fined $250 by the Texas Medicaid program.
But the Boston company's protest was never considered, Armstrong said, because it came after a 14-day time limit.
Armstrong presented that series of events and legal filings to legislators Wednesday. Afterward, officials with the company said they believed that they had not been fairly represented to the committee.
"The loss is to the Medicaid recipients. They are not receiving the highest-qualified vendor," said Lawless Barrientos III, the government affairs director for DentaQuest.
In their questions, several lawmakers appeared skeptical that errors were made in the procurement process that were severe enough to derail the contracts from moving forward.
Sen. Jim Hendren, R-Gravette, said that if lawmakers declined to review the contracts, they could set a precedent where losing bidders simply have to file a lawsuit to block the winners from taking over the job.
Only two lawmakers were heard voicing objections during the vote to review.
One of them, House Speaker Jeremy Gillam, R-Judsonia, said his concerns were not with the procurement process, but with leaving the state open to more litigation and delays should DentaQuest succeed in its suit.
"To wait a month or so to get a resolution would not have seemed detrimental," Gillam said.
In its lawsuit, DentaQuest asks for the contracts to be re-bid, or for the state to reimburse the company for the cost of preparing its bid and for lost profits.
Metro on 05/18/2017