Recommendations take aim at Nebraska contracting failures

Nebraska ought to evaluate the fee realism and reasonableness of bids to keep away from a repeat of the state’s troubled contract with a Kansas-based nonprofit to supervise little one welfare circumstances within the Omaha space, in response to a newly launched report.

Ikaso Consulting, which wrote the report, additionally advisable extra standardization in Nebraska’s procurement course of and extra readability about what is important and what might be negotiated in a bid.

In all, Ikaso supplied 33 suggestions to enhance the state’s contracting course of and practices after a five-month analysis. State lawmakers required the analysis after a legislative investigation discovered that the state has had a historical past of pricey procurement failures.

The newest was in 2019, when Saint Francis Ministries bought the job of managing metro-area little one welfare circumstances by underbidding the contract, then negotiated a 55% enhance in funds when monetary shortfalls practically pressured its Omaha operations to close down. In the meantime, the non-public company by no means met contract phrases or complied with state legal guidelines limiting caseload sizes. The contract has since been terminated.

Sen. John Arch of La Vista, who led the investigation into the Saint Francis contract and launched the invoice calling for the procurement analysis, mentioned he was happy by the end result.

He mentioned Ikaso had adopted a really thorough course of and had give you very particular suggestions. He mentioned the suggestions addressed the issues seen within the Saint Francis contract and in two earlier circumstances that he beforehand described as “procurement failures.”

“We intend to observe these suggestions,” Arch mentioned. “I’ll be personally introducing payments to try this.”

Jason Jackson, director of the Division of Administrative Providers, mentioned he was inspired that the report discovered Nebraska’s contracting processes are much like these of different states. The analysis in contrast Nebraska intimately with Colorado, Iowa, South Dakota and Missouri.

“Total, we discovered that the state’s procurement practices didn’t diverge considerably from nationwide requirements,” the advisor mentioned.

Jackson, who will stay DAS director underneath Governor-elect Jim Pillen, mentioned the division intends to work with the Governor’s Workplace and the Legislature to implement the suggestions.

One key advice requires the state to evaluate the fee realism and value reasonableness of a bid, that means whether or not the proposed value is low sufficient to recommend underbidding or excessive sufficient to recommend the state can be overpaying. The advice additionally known as for laws permitting the state to reject a bid that was not reasonable or affordable.

Within the case of Saint Francis, no state official questioned the Kansas nonprofit’s bid coming in at 40% lower than the state had been paying to the earlier contractor, regardless of issues raised by outdoors little one welfare advocates and specialists.

Saint Francis Ministries gained a five-year, $197 million contract, primarily based on a proposal that company officers later admitted had been underbid. Nebraska was later pressured to signal a brand new, emergency contract with Saint Francis to maintain the company working. The 25-month, $147.3 million contract erased the unique 40% value distinction.

Different suggestions name for Nebraska to find out which contract phrases and situations might be negotiated and that are required.

Saint Francis initially proposed a case administration mannequin that might not adjust to a Nebraska legislation limiting caseload sizes. Though the state insisted that Saint Francis conform to comply earlier than signing the contract, the shedding bidder questioned why the state accepted the bid in any respect.

A number of suggestions name for the state to standardize its procurement processes between DAS, which handles most procurement for the state, and particular person businesses, which deal with some procurement. The suggestions embrace standardizing the appeals course of.

Together with the Saint Francis contract, different notable procurement failures embrace the state’s 2007 contract to develop a significant Medicaid claims processing and knowledge system and a 2014 contract for a brand new Medicaid eligibility and enrollment system.

Within the first case, state officers signed a $45 million contract with FourThought Group, primarily based in Arizona. HHS officers terminated the contract in July 2009, after solely 15 months, saying the corporate “didn’t have the capability to ship the system they proposed.”

By then, the state had paid FourThought greater than $6.8 million in state and federal cash. Later in 2009, the state reached a settlement to pay one other $4.75 million.

Within the second case, state officers signed an $80 million contract with Wipro, primarily based in India. 4 years later, HHS officers ordered a evaluate of the mission after Wipro requested a fifth modification to its contract, which the state mentioned would have delayed completion of the mission by two years and added $28 million to the mission whole.

Officers concluded that there was no proof that Wipro had accomplished any a part of the mission, regardless of the corporate reporting it had put 200,000 hours into the mission. HHS terminated the contract in December 2018, after having paid Wipro $58.6 million.

The corporate filed a lawsuit alleging that Nebraska didn’t pay $15.5 million for work accomplished. The case continues to be pending.