Bev Perdue Signs Executive Order To Give N.C. Firms Better Shot At State Business
Op-Ed From N.C. Gov. Bev Perdue:
Imagine this: A state agency is looking to buy ovens for a cafeteria, and an N.C. company in your hometown is competing for the contract.
But an out-of-state company comes in with the lowest bid at $100,000. Even if the N.C. company's bid is just a few dollars more, the out-of-state company wins the contract because state government chooses the low bid.
That means $100,000 in taxpayer money will go to a company outside North Carolina, money we could be investing to create jobs and grow businesses here at home.
I don't believe that makes sense for North Carolina. And when something in state government doesn't make sense for our people and our businesses, we must set government straight.
Last week, I took action to set government straight and help create jobs, jobs and more jobs in our state.
I signed an executive order to give preference to N.C. companies who compete to sell goods to state government - everything from binders to Bio-diesel fuel.
Remember that $100,000 contract that would have gone to an out-of-state company? Now, the N.C. company will have the opportunity to match the low bid and win the contract.
That means we're investing our tax dollars in North Carolina, and we're giving an N.C. company a better chance to grow and create jobs here at home.
Here's another example of how I set government straight to help create jobs.
State government offers many services to help small businesses thrive in North Carolina. But those services are spread out in different areas of state government.
A small business owner might get a headache just trying to figure out who to talk to for help on applying for a loan or developing a business plan. Those decisions could make the difference between staying in business or closing up shop, so it's good for North Carolina if our small businesses have an easy time finding help.
New N.C. Small Business Chief
So last week I announced I'm streamlining our many resources to help small business, and I'm putting them under the leadership of North Carolina's first Small Business Commissioner.
The Small Business Commissioner will take stock of all small business services in state government, he will look for ways to make them more efficient and he will reach out to small businesses to let them know where to go when they need help.
More than two-thirds of all new jobs come from small businesses, so it's critical that we do all we can to support them.
In these tough times, North Carolina can't afford to leave small businesses without the help they need to stay in business and grow. North Carolina can't afford to send taxpayer dollars to out-of-state companies when those dollars could be invested to create jobs here at home.
Setting government straight fixed that. And in the next several weeks I will continue righting the wrongs in state government to help create jobs, jobs and more jobs in North Carolina.
N.C. DHHS No-Bid Contracts Opens Door To Abuse
Op-Ed From the Dec. 26 Greensboro News-Record:
While saving money on the state's over-budget Medicaid program for the poor is laudable, trying to reach that goal by pushing no-bid service contracts can be a risky proposition.
With the General Assembly's blessing, the Department of Health and Human Services can circumvent, for six months, the competitive bid process. The rationale is that quickly finalizing contracts will help generate substantial savings during the recession.
However, that gives DHHS way too much discretion without sufficient oversight. Unless the agency's clients are properly served, any money saved will be a hollow accomplishment.
And questions are being asked about the $33 million Medicaid diabetes supplies pact with a company that relocated to Charlotte from Florida, where it left a trail of questionable business practices, lawsuits and bankruptcy.
Equally troubling are complaints from health professionals that Prodigy Diabetes Care's glucose testing meters may be confusing and less accurate than some other models. They fear that unless people enrolled in the program receive proper training, some may put off testing, which could lead to serious, costly health issues.
Letting contracts under a veil of secrecy inevitably leads to questions. Did the state get the best deal possible? What went into the decision-making process? Could another vendor have provided a superior product or service for less, had it also been notified? There's no way of knowing.
According to The News & Observer of Raleigh, a protesting competitor contends that the no-bid procedure clearly violates federal Medicaid rules. That ought to be easy enough for the state to determine - and promptly.
Ideally, heightened transparency should compensate when competition lags. But despite rumblings that this deal included a Prodigy promise to move production from China to Charlotte and create 150 jobs, the contract lacks specific incentives.
Even if company officials can adequately explain past problems, enough red flags are waving to justify closer DHHS scrutiny and proceeding cautiously. To protect taxpayers, checks and balances need to be in place.
State contracts first must assure clients that they're getting the highest level of service from reliable providers. Opening the process to all qualified bidders is the best way of doing it. To do otherwise understandably raises fears of favoritism and abuse.
No-Bid Deals Draw Criticism
NC State officials say the motivation behind a no-bid contract to provide diabetes supplies for people on Medicaid was the need to cut costs in difficult budget times.
But critics - from government watchdogs to health educators - say North Carolina may have been too quick to embrace such contracts after awarding the diabetes contract to a company whose owners have a troubled business history.
They also question whether the use of such contracts provides the sort of Transparency in government that Gov. Bev Perdue promised.
The NC State Medicaid office has signed Charlotte-based Prodigy Diabetes Care to a two-year contract to provide supplies for about 50,000 people on Medicaid who have diabetes.
Prodigy is run by two brothers, Ramzi Abulhaj and Rick Admani, who have been involved in a string of legal battles involving companies they started in Florida, including a Bankruptcy and Lawsuits Alleging Patent Piracy.
The state signed a contract with the little-known company in October, two months after Prodigy was founded. Until word leaked about the no-bid contract, competitors, retailers and diabetes educators were unaware that state officials had been talking to Prodigy's parent company for months. People with diabetes on the government health insurance program did not know they would need to get new meters to monitor their blood glucose levels.
"We weren't given all the information up front," said Andy Ingram, owner of Home Assist Medical Equipment in Laurinburg.
"We were given information in bits and pieces," said Ingram, a retailer who will distribute the Prodigy equipment to patients. "We're finding things out after they actually occurred."
The Prodigy contract is one of several no-bid deals the state Department of Health and Human Services has signed in the last few months, using special powers granted last summer by the state legislature. Legislators hoped the state agency would save money by eliminating time needed to request and evaluate bids.
Bob Phillips, Executive Director of Common Cause North Carolina, said no-bid contracting practices should be reviewed and made consistent, and the reasons for eliminating competition made narrower and more clearly defined.
"I think it sends a bad signal to the public at a time when there is already a lot of suspicion about how open things are in state government," Phillips said. "I think the governor has made great strides. There still remain questions, and this just adds to that."
DHHS Secretary Lanier Cansler has said the department is pushed to squeeze savings out of the fast-growing Medicaid program. The contract with Prodigy is estimated to save the state $4.4million over two years.
"This contract is short term and allows savings of millions of dollars," Chrissy Pearson, a spokeswoman for Perdue, said in a written statement. "The secretary has confirmed with the governor that his department is monitoring closely the quality and accessibility of this product while protecting the quality of patient care."
Senate Minority Leader Phil Berger, an Eden Republican, said no-bid contracts should be exceptions and that agencies have an obligation in those cases to make sure the state is getting quality services at competitive prices.
In circumstances where agencies want to move quickly, it may be a good idea to seek informal bids from several companies to find the best deal, Berger said.
"We're talking about taxpayers' dollars," he said. "The obligation is to be very careful with that money."
Sen. William Purcell, a Laurinburg Democrat who helps write the budget for DHHS, has fielded complaints about Prodigy and has heard that the state might face a lawsuit from those who don't like the no-bid contract.
Legislators told DHHS to wring out savings in a time when more people are signing up for Medicaid but the state budget is shrinking.
"It's hard to tell them to save money, then say we don't like what you're doing," Purcell said.
North Carolina No-Bid DHHS Contracts Questioned
NC Health Care Advocates are questioning contracts the NC State Department of Health and Human Services awarded in recent months without competitive bidding.
Lawmakers allowed the no-bid contracts so DHHS could save time and money during a difficult budget year. Department officials maintain that the contracts are with companies with proven track records and can provide better value.
Still, some people question the fairness of the deals and the potential for conflicts of interest.
"No-bid contracts are bad government," said Adam Searing, director of the North Carolina Health Access Coalition, a group that advocates health care reform to benefit uninsured people.
Searing notes that DHHS Secretary Lanier Cansler was a lobbyist before Gov. Beverly Perdue picked him in January to run the state's largest agency. Three of the five no-bid contracts awarded in recent months have gone to clients of his former lobbying firm: two to the Carolinas Center for Medical Excellence and one to SAS Institute.
CCME's contracts, valued at $29 million total, are to review personal care services and outpatient therapies for determination of clinical necessity. DHHS officials estimate they will save the state at least $24 million.
SAS has an $800,000 subcontract on a $229 million Medicaid information systems contract that was awarded through a competitive bidding process in 2008.
DHHS spokesman Brad Deen said Cansler "has taken deliberate actions to abstain himself from dealings and negotiations involving former clients." He cited a June 9 memo Cansler issued to Deputy Secretary Allen Feezor in which Feezor and other officials were instructed to handle any contract decisions involving Cansler's former clients.
"I don't think, from what I've seen, anything untoward is going on from (Cansler's) perspective, but it gives the appearance of favoritism. That's the problem with these no-bid contracts," Searing said.
Another of the no-bid contracts went to Charlotte-based Prodigy Diabetes Care LLC, which makes diabetes testing equipment. Officials estimate the two-year, $27 million contract will save taxpayers $4.5 million.
Raleigh pharmacist Mike James said he never heard of Prodigy before its blood glucose meters started showing up on his shelves in recent months. Now, the company's monitoring products are the only ones that his customers on Medicaid can buy.
"It is concerning to me. We haven't seen any history on this product," James said.
Federal records show the owners of Prodigy previously ran a company called Vitalcare that filed for bankruptcy after getting sued for patent infringement. The FDA also issued safety warnings for Vitalcare's manufacturing plant in China.
Charlotte used incentives to convince Prodigy's parent company, Diagnostic Devices Inc., to move its headquarters and manufacturing to the Queen City. With the new state contract and tax incentives, the company has promised to add space and jobs.
James said the lack of a track history for Prodigy raises questions for him.
"Is the product going to be in the pharmacies as people need them because of the toughness in supply?" he said. "Is the product going to work efficiently?"
The fifth no-bid contract went to MedSolutions to reduce redundancies and inefficiencies in radiological imaging. The two-year, $230 million deal is expected to save the state $77 million, DHHS officials said.
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Sources: Fox News, WRAL, McClatchy Newspapers, Youtube, Google Maps
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