IBM protests Accenture eligibility contract

IBM Corp. has protested a tentative award by the Texas Health and Human Services Commission of a contract for integrated eligibility and enforcement for Medicaid and other state health services to Accenture Ltd., state officials confirmed March 17.

IBM's protest comes amid allegations by two state lawmakers that Accenture may have obtained inside information, giving it an unfair advantage.

The exact nature of IBM's objection was not released because the protest, filed March 4, was marked "confidential and proprietary," said Jennifer Harris, an agency spokeswoman. IBM declined to comment on the protest.

The state must respond to the protest within 30 days of the date it was filed, Harris added.

Meanwhile, Democratic state Reps. Dawnna Dukes and Sylvester Turner wrote in a March 4 letter to Texas Health and Human Services Executive Commissioner Albert Hawkins that they had received "disturbing information" about the conduct of both state and contractor employees.

"It is our understanding that Accenture bragged to another vendor that they obtained copies of one of the prime vendors' proprietary technical architecture for the Integrated Eligibility proposal," the letter stated.

"We also understand that Accenture obtained inside information about a confidential internal memorandum about the Integrated Eligibility RFP and quoted the information verbatim in its proposal response," continued the letter.

Peter Soh, an Accenture spokesman, said the accusations set forth in the letter are baseless. "We have no reason to believe that Accenture violated any laws or procurement rules in the preparation of our eligibility proposal," he said.

Hawkins also issued a statement Wednesday responding to the allegations.

"I am confident that our recent request for proposals for call centers included a strong review and evaluation process that resulted in a level playing field for all vendors," he said.

Because of the size of the potential contract and the need to ensure public confidence in the final decision, Hawkins has asked the commission's inspector general to review the evaluation process.

He also said the state has not yet made a decision regarding whether to sign a contract with Accenture or any private vendor for services associated with modernizing Texas' eligibility system.

"We will not be able to make a final decision on whether a private proposal or the state's plan for call centers represents the best value for taxpayers without more discussions with the vendor," he said.

The commission announced the tentative award to Accenture Feb. 25.

Final award of the contract is contingent on several factors, including the determination that a contract for call center services is cost-effective, the successful negotiation of a contract for services and federal approval for parts of the contract that require it.

The RFP called for a vendor that would provide eligibility call services, maintain and support the Texas Integrated Eligibility Redesign System and broker programs for Medicaid managed care beneficiaries and beneficiaries of the Children's Health Insurance Program.

The value of the contract has not been revealed by the state, but is thought to range anywhere from $400 million to more than $1 billion.

Four contractors submitted proposals to the RFP, Harris said. Effective Teleservices Inc. of Nacogdoches, Texas, and BearingPoint Inc., of McLean, Va., were notified that their proposals would not meet the state's needs, leaving IBM and Accenture in the final running, according to Harris.