Maximus seeks arbitration on Texas eligibility project

Maximus Inc. wants to go to arbitration to resolve grievances it has with Accenture Ltd. over a subcontract on the groundbreaking Texas integrated eligibility project. Accenture is the prime contractor on the project.

Maximus' action comes on the heels of an announcement this week by the Texas Health and Human Services Commission of a new strategy for its integrated eligibility and enrollment services program.

Under the new strategy, the state plans to reduce Accenture's prime contract value by $356 million. The five-year engagement was initially valued at $899 million when awarded in June 2005. The new contract value is $543 million.

Maximus of Reston, Va., said in a statement issued late Thursday that it was not party to the establishment of the final strategy despite having been engaged in ongoing negotiations with Accenture to reduce the overall scope of Maximus' role on the project.

The new strategy lets the state keep some functions the commission originally agreed upon that the private sector would perform, reduces the terms of the contract and changes management of the children's health insurance program, called CHIP.

The revised strategy reduces Maximus' role and requires it to transition its work on CHIP to Accenture.

CHIP eligibility determination, which the commission regards as less complex than most other social services benefits, has been handled by the private sector since the program's inception in 2000. State officials, however, cited several ongoing performance issues since Maximus took over CHIP from Affiliated Computer Services Inc. in November 2005.

The most serious issue involved unnecessary letters to CHIP applicants requesting more information, the commission said in its statement. A review found that, in some cases, the information was either on the original application or had been received by the subcontractor and not attached to the case properly or within required timeframes. This issue led the state to undertake manual checks to ensure that families were not inappropriately disenrolled.

Maximus could not immediately be reached for comment on its subcontract performance.

Among the claims that Maximus has submitted for arbitration are that Accenture attempted to misappropriate its intellectual property and made unfounded assertions that Maximus had breached its obligations with respect to CHIP operations under the subcontract. Maximus also has several other claims it wants resolved.

Accenture spokesman Peter Soh said it is the company's policy not to comment on pending legal actions. However, the company believes that Maximus' allegations are totally without merit, he said.