Arkansas Department of Corrections Secretary Lindsay Wallace speaks with members of the Arkansas Legislative Council on Sept. 20, 2024. (Screenshot from livestream)
The Arkansas Legislative Council gave final approval Friday to a $235.5 million Department of Corrections medical contract that prompted lawmakers to request action be taken to ensure procurement rules comply with state law.
The contract reviewed by lawmakers this week represents the first two years of a potential ten-year $1.6 billion contract with Wellpath to provide comprehensive medical, dental, pharmacy and mental health services for inmates and offenders in the custody of the Department of Corrections.
Some lawmakers tried to hold the contract at Tuesday’s ALC Review subcommittee meeting over concerns that pricing was not considered for all five vendors who submitted bids during the procurement process.
Corrections officials explained that their Request for Proposals (RFP) process included awarding technical scores to all five proposals. The three vendors who scored the highest advanced to the next round, at which point pricing was considered.
Lawmakers voiced concerns that the process circumvented state law by not factoring in the costs provided by all vendors. Sen. Bart Hester, R-Cave Springs, prompted the cost discussion Tuesday, saying he was told Wexford Health, a vendor that did not receive one of the top three technical scores, had submitted a lower bid than Wellpath.
Arkansas lawmakers advance contested corrections department medical contract
Corrections Secretary Lindsay Wallace on Friday said officials reviewed the bids of the other two vendors this week and they were not lower than the lowest-scoring vendor. She noted that Wexford’s bid was more than $430 million higher than the successful vendor during the possible 10-year term of the agreement.
Officials on Tuesday discussed an RFP provision that prohibited opening pricing for vendors scoring less than 300 points on the technical proposal instead of the provision that provided only the top three technical proposals would be interviewed, Wallace said. The RFP contained both provisions, which resulted in the department only considering the top three technical scores for progressing to oral interviews, she said.
While it was confusing, Wallace said the department didn’t receive questions related to that during the process and no vendor filed a protest. The language in this RFP mirrored what was used in a 2022 medical RFP, at which time only vendors with the top three technical scores were interviewed, she said.
Officials were caught off guard by lawmakers’ line of questioning Tuesday, Wallace said. She apologized for the “poor explanation” that led to confusion.
“I believe we did a very poor job on Tuesday explaining to you how this process worked,” she said. “I always strive to follow and meet the intent and the spirit of the law, and I pride myself on maintaining open lines of communication with you all … while we might have left the impression that we did not consider price, it was considered during the process.”
Tanya Freeman with the Office of State Procurement said Tuesday that the corrections department used a traditional RFP process that “abides by procurement law.” However, she noted, in recent years OSP has shifted to the Most Advantageous Proposal (MAP) process, which does allow agencies to consider costs proposed by all vendors.
On Friday, Wallace said the corrections department did use the MAP process to procure a contract with an auditor approved by lawmakers earlier this year. The department is also currently drafting an inmate communications contract using the MAP process, she said.
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Sen. Jimmy Hickey, R-Texarkana, on Friday referenced a year-long study by lawmakers that resulted in amending state procurement law through Act 696 of 2017. After reviewing the corrections department’s Wellpath contract this week, Hickey said he doesn’t believe the rules promulgated and approved in 2019 line up with the law.
To address the issue, Hickey on Friday made a multipart motion to rescind the review and approval of the rules concerning RFP procurement processes as approved by ALC on Aug. 23, 2019; to allow RFPs that are operating under the rescinded process as of Friday to continue, but require that they be flagged when presented to ALC’s Review subcommittee; and to request that ALC’s Executive subcommittee contract with a consultant to ensure the rules are in compliance with state procurement law and recommend needed revisions.
“These other agencies, if they’re using this procurement process, I believe that the state could actually be losing millions upon millions of dollars just because of the process that this rule is allowing them to do right now,” Hickey said.
After a discussion among members and Bureau of Legislative Research staff over whether ALC had the authority to enact the multipart motion, lawmakers unanimously approved Hickey’s request on a voice vote.
Sen. Mark Johnson, R-Little Rock, said large contracts may need another layer of review by the General Assembly and said it should be looked at in the 2025 legislative session.
“This looks like a good start, and I think we’ll all agree it’s not the end of it,” Johnson said.
The new Wellpath contract is set to take effect in October. The company has been providing interim services since the end of its previous contract in 2022. That contract concludes at the end of September.
SUPPORT NEWS YOU TRUST.