The Saga of the State’s Biggest Contract
Last year, after seeking bids the state took its $171 million Medicaid billing contract – its biggest contract – away from EDS and gave it to rival ACS (both of Texas).
EDS sued and said among other things that the bids weren’t handled fairly and ACS couldn’t deliver what it promised. The state fought EDS tooth and nail and won.
Guess what?
Department of Health and Human Service Secretary, Carmen Hooker Odom, just told ACS she may “cancel the contract in 10 days because of missed deadlines.” The new computer system was supposed to be completed next month. Instead it is more than a year behind schedule (News and Observer, 06-07-06).
Worse, ACS wants another $42 million to finish the job. The state refused and now state officials say work on the system has suddenly slowed and “ACS has ceased to substantially perform its obligations.”
This is the company the state fought tooth and toenail to give the contract to.
ACS blames the state for the whole problem. According to them, “If they’re not approving documents, they’re causing a situation that is impossible…. If one party is keeping the other party from performing, the party that’s at fault has to pay damages.” Apparently ACS thinks a fair settlement would be for the state to pay it another $42 million and the state disagrees.
That sounds like a fertile breeding ground for another lawsuit.
So we have EDS still running the state Medicaid billing system and ACS building a new system that is a year (and $42 million) behind schedule. EDS has already sued the state and ACS may end up suing.
What more can happen?
The Saga of the State’s Biggest Contract
Last year, after seeking bids the state took its $171 million Medicaid billing contract – its biggest contract – away from EDS and gave it to rival ACS (both of Texas).
EDS sued and said among other things that the bids weren’t handled fairly and ACS couldn’t deliver what it promised. The state fought EDS tooth and nail and won.
Guess what?
Department of Health and Human Service Secretary, Carmen Hooker Odom, just told ACS she may “cancel the contract in 10 days because of missed deadlines.” The new computer system was supposed to be completed next month. Instead it is more than a year behind schedule (News and Observer, 06-07-06).
Worse, ACS wants another $42 million to finish the job. The state refused and now state officials say work on the system has suddenly slowed and “ACS has ceased to substantially perform its obligations.”
This is the company the state fought tooth and toenail to give the contract to.
ACS blames the state for the whole problem. According to them, “If they’re not approving documents, they’re causing a situation that is impossible…. If one party is keeping the other party from performing, the party that’s at fault has to pay damages.” Apparently ACS thinks a fair settlement would be for the state to pay it another $42 million and the state disagrees.
That sounds like a fertile breeding ground for another lawsuit.
So we have EDS still running the state Medicaid billing system and ACS building a new system that is a year (and $42 million) behind schedule. EDS has already sued the state and ACS may end up suing.
What more can happen?