Rivals protest N.C. Medicaid system award to ACS

EDS Corp. has fired a powerful verbal broadside at its health services rival Affiliated Computer Services Inc. in an effort to sink the award to ACS of a Medicaid replacement system contract in North Carolina.

In an April 23 protest letter filed with the N.C. Department of Health and Human Services, EDS of Plano, Texas, charged that ACS' system does not meet the state's basic standards for the system and would result in implementing a dated solution with greater operating risk.

Unisys Corp. of Blue Bell, Pa., which also lost the competition, has filed its own protest, but details were not available.

"We bid a new state-of-the-art Medicaid system that meets or exceeds North Carolina's required technical architecture, while ACS bid a legacy system that has not been modified over the past 25 years," Ricky Pope, EDS' North Carolina MMIS proposal manager, told Washington Technology.

The state awarded the five-year, $171 million contract to Dallas-based ACS April 8.

EDS, Unisys and ACS have large practices that build and operate most of the nation's Medicaid management information systems.

Harvey Braswell, group president and chief executive officer of ACS's state healthcare solutions, said the company will transport the latest MMIS technology the company has from a large Medicaid project in Georgia.

"We are out there with leading edge technology in Georgia that no one had tried before," Braswell said, adding, "We have the most comprehensive Web front-end system in the world."

As a sign of its commitment to the program, Braswell noted the state has assigned 70 employees to work alongside ACS to implement the new system.

"I believe the state is going to have a very successful implementation," Braswell said.

In its protest letter, EDS claimed:

  • ACS' proposed system design doesn't comply with mandatory requirements for both the solicitation and North Carolina's statewide technical architecture.

  • The state's evaluators recognized that many aspects of ACS' offering were "weak" and did not comply with the request for proposal.

  • Industry experts have rated some features of ACS' solution as inferior.

  • Many of ACS' proposed key personnel lack the minimum experience as required in the solicitation.

  • The location of ACS' integrated test facility and maintenance and modification staff doesn't meet the solicitation's geographic requirements.

  • ACS failed to complete the solicitation's mandatory pricing tables.

  • The perceived price advantage is largely illusory, given, in part, that the ACS' proposal was based on a noncompliant design.

  • The evaluators were wrong to deviate from the criteria stated in the solicitation in violation of applicable state and federal regulations.

The state has notified ACS that the contract is in effect and that a decision to grant or deny the protests will be made within 30 to 60 days.

The N.C. Department of Health and Human Services will hold separate bid protest meetings for EDS and Unisys, said Debbie Crane, a department spokeswoman. No date for those meetings has been set, she said. Unisys could not be reached for comment.

Braswell denied that ACS's contract won't meet the state's geographical requirements. He said the company plans to hire between 200 to 250 new employees in the state to support operations. To house the operations, the company plans to expand an existing call center in Henderson, N.C., and to sign leases for new properties in Cary and Raleigh next month, he said.

Braswell said that protests for healthcare systems go in cycles. Sometimes competitors are in the mood to protest when they lose, other times they aren't. "EDS has been in there 27 years and they hated to lose that business, he said.

(Posted 2:39 p.m. and updated 3:39 p.m. April 30)

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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