The award of a lucrative contract to run the state’s self-insurance program is subject to a new round of protests from unsuccessful bidders.
The decision by Commissioner of Administration Kristy Nichols comes in response to an appeal by a disgruntled bidder on a contract awarded to Memphis, Tennessee-based Sedgwick Claims Management Services. York Risk Services Group — the current contractor — protested Sedgwick’s selection, claiming Jindal administration bias.
Nichols, in reviewing York’s appeal, found that the state Office of Risk Management had failed to complete a memo justifying Sedgwick’s selection — part of the award process. She directed the office to complete the “selection memorandum,” then allow all proposers to protest Sedgwick’s selection, thereby starting the contract award appeals process once again.
Sedgwick had been scheduled to start an $80 million, three-year contract on July 1. York’s proposal was $6.5 million less than Sedgwick’s.
York will stay on board until Aug. 1 for a “transition period,” at which time Sedgwick will assume the work under a six-month emergency contract while the dispute is being resolved, Division of Administration spokesman Gregory Dupuis said.
The contract is for private administrative services associated with investigating, adjusting and paying claims for lines of insurance provided by the Office of Risk Management and for loss prevention services.
York lawyers argued that Sedgwick was granted opportunities not provided to other proposers, giving the firm “a decidedly unfair advantage.” They complained the firm was allowed to negotiate items beyond the request for proposal and “in the midst of the interviews.”
“The bias of the evaluation team to Sedgwick throughout the scoring process taints the outcome to such an extent that it merits rescission if the Commissioner is unwilling to disqualify Sedgwick for the material defects in its proposal,” according to the appeal.
York lost an appeal to the Office of State Procurement before it took its case to Nichols. If Nichols had rejected the appeal, the company had the option of taking the issue to state district court. Now, the protest sequence begins anew with the ability of York as well as two other companies that sought the business to weigh in. Richmond, Virginia-based MC Innovations LLC and Danville, Illinois- based CCMSI were the other unsuccessful proposers.
“York will be allowed to present a second protest on the same grounds asserted in the present appeal, or other grounds, based on the completed record,” Nichols wrote York’s attorneys.
York does business in Louisiana through one of its companies, Mandeville-based FARA. It has had the risk management contract since 2010.