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Archive for the ‘RFP, Request for Proposals’ Category

Additional details of LR3’s $717,000 no-bid contract with LDED serve only to raise more questions than they answer

Posted in BESE, Contract, Contracts, Ethics, RFP, Request for Proposals, State Agencies on February 11, 2014| 17 Comments »

The more we look at that contract between the Louisiana Department of Economic Development (DED) and LR3 Consulting, the more unanswered questions arise.

LR3, you may remember from our Feb. 5 post, is run by Lionel Rainey, III, who also happens to be the PR spokesperson retained by those who wish to form their own city of the St. George area of East Baton Rouge Parish, separate and apart from the city of Baton Rouge.

If one didn’t know better (and we truly did not initially), Rainey could easily be taken as the leader of the movement since local television news reports on the pullout efforts invariably feature him reciting the proponents’ talking points. Turns out he’s just a hired gun.

(Proponents, by the way, don’t like the term pullout because, they say, the St. George area is not within the Baton Rouge city corporate limits in the first place, so technically, it is not a pullout or secession; it’s simply a movement to incorporate the currently unincorporated area as a city of its very own.)

Before LR3, there was 3 Lions Consulting which was awarded a three-year contract (July 1, 2012, through June 30, 2015) by DED to “establish a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements” for DED’s Louisiana FastStart program (LFS) at a contract cost of $699,999.

In other words, Contract No. 713974 called for 3 Lions to compile a data base of potential employees for Louisiana plants and businesses—the same thing that the Louisiana Workforce Commission had been doing and which it still does.

But barely three months into the contract and after being paid just under $31,000, Jeff Lynn, LFS executive director, sent a one-paragraph letter of termination to 3 Lions partner Stanley Levy, III. “In accordance with the terms of our contract…Louisiana FastStart hereby provides you with the required five (5) day written notice to terminate our agreement, effective Oct. 19, 2012…”

The reason given for the termination was a two-word message scribbled on DED’s performance evaluation: “Ownership change.”

Levy apparently had parted company with his partner, precipitating the contract cancellation. His 3 Lions partner? Lionel Rainey, III, who had incorporated his new business, LR3, only a month before. LR3 was subsequently awarded an even bigger three-year contract ($717,204) on Oct. 20, 2012, just one day following the termination date of the 3 Lions contract.

The LR3 contract, to run from Oct. 20, 2012 through Sept. 30, 2015, again calls for the “development, establishment and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

Through January 13 of this year, DED had paid LR3 $186,880.

But the LR3 contract, like that of 3 Lions before it, is broken into three yearly maximums of $217,204 the first year and $249,999 in each of the second and third years.

For 3 Lions, the payment maximums were $169,999 the first year and $249,999 in each of the second and third years.

This was done, according to DED Communications Director Gary Perilloux, so as to avoid the necessity of issuing a request for proposals (RFP) and thus avoid “competitive bidding or competitive negotiation.”

The issuing of service contracts is permissible so long as the “total contract amount is less than $250,000 per twelve-month period,” according to Title 39, Section 1494.1 of the Louisiana Revised Statutes which then goes on to say, “Service requirements shall not be artificially divided so as to exempt contracts from the request for proposal process.”

Section 1499 of the same title says, “The head of the using agency or the agency procurement officer shall negotiate with the highest qualified persons for all contracts for professional, personal, or those consulting services for less than fifty thousand dollars, or those social services qualifying under R.S. 39:1494.1(A) at compensation which the head of the using agency determines in writing to be fair and reasonable to the state (emphasis DED’s). In making this determination, the head of the using agency shall take into account, in the following order of importance, the professional or technical competence of offerers, the technical merits of offers, and the compensation for which the services are to be rendered, including fee. Negotiation of consulting services for $50,000 or more or social services not qualifying under R.S. 39:1494.1(A) shall be conducted in accordance with Part II, Subpart B hereof. [RFP]

To justify the contract, an undated letter was sent to Sandra Gillen, since retired as the Director of the Office of Contractual Review, by DED contracts reviewer Chris Stewart which certified that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But wait. Not so fast.

LouisianaVoice has found yet a third contract with Covalent, LLC, for an even larger amount–$749,997—awarded more than a month after the LR3 contract.

That contract, divided into three equal maximum payments of, wait for it… $249,999, calls for the “development, establishment, and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

In other words, Covalent’s contract calls for it to perform services which are identical to those of first 3 Lions and then of LR3.

And yes, there is that same letter from Chris Steward to Gillen’s successor, Pamela Rice which certifies that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But…but…what about the LR3 contract?

Good question. It looks as though someone misrepresented the facts with that certification. DED now has two firms performing services that appear to be duplications of work being done by LWC—and neither of the contracts which combine for almost $1.5 million, was awarded on a competitive bid basis.

Apparently, Covalent is performing some work, though not nearly as much as LR3. From Jan. 3, 2013 through May 30, 2013, Covalent has been paid a grand sum of $35,465—and nothing since May 30. That’s a far cry from the $249,999 allowed under its contract.

All of which raises the obvious question: Why do these firms require such massive contracts and why did DED find it necessary to break them up in apparent violation of state statutes just so it could make the contract awards to whom it wanted?

And why did DED desire the services of Rainey over Levy to the point of cancelling the 3 Lions contract so it could award a second no-bid contract to Rainey’s new company? And why, only six weeks after awarding Rainey a $717,000 contract did DED contract with Covalent for $749,997 to perform the same services as Rainey?

What were the backgrounds of Levy and Rainey? And why did they terminate their partnership, especially when it cost Levy a nice, fat state contract?

For openers, LouisianaVoice found records that show LR3 was on the payroll of State Rep. John Schroder (R-Covington) since November of 2012 and has received $16,250 in 11 monthly payments of $1,250, one payment of $1,875 and another of $625. All payments were made at least a year after the 2011 elections.

3 Lions, before the dissolution, also appears have spread its services around. The firm received $5,600 from John Conroy in 2012 before Conroy dropped out of the Baton Rouge mayor’s race; $8,000 from State Treasurer John Kennedy, $34,000 from Board of Elementary and Secondary Education President Chas Roemer during Roemer’s campaign for re-election in 2011, and $52,600 from Secretary of State Tom Schedler during his 2011 campaign for re-election.

While Rainey and LR3 got the $717,000 contract with DED and a $20,000 contract with the Secretary of State’s office, Levy, with his new company, Fuse Media, has only managed a modest $49,825 post-LR3 contract to “develop a strategic communications plan, video series and animated PowerPoint slides for the Governor’s Office of Coastal Restoration.”

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Rejection by former supporters, appointees’ opposition and Alvarez & Marsal contract lies create perfect storm for Jindal

Posted in Budget, Contract, Contracts, Governor's Office, Higher Education, Legislature, Legislators, Politicians, RFP, Request for Proposals on January 20, 2014| 10 Comments »

Between the lies, former supporters separating themselves from him and promises of opposition by appointees, things aren’t looking up for Gov. Bobby Jindal.

Even some legislators who formerly were loyal lapdogs for the governor have learned that they have teeth and they are beginning to growl.

And from our perspective, it’s a beautiful day when Jindal and his misrepresentations are finally be called out for what they are: lies.

Commissioner of Administration Kristy Nichols was too busy to address a questioning reporter but her mouthpiece, Greg Dupuis, said she misspoke (a euphemism for lied) when she told legislators that a $500 million minimum savings was included in the verbiage of the 80-page request for proposals (RFP) for a contract was subsequently awarded to the consulting firm of Alvarez & Marsal at a price of $4.2 million. dt.common.streams.StreamServer

Instead, it turns out, the only mention of $500 million was contained only in the firm’s cover letter, which is not legally binding.

Now Nichols, apparently holding the fort down alone while her boss is on an industry-seeking trip to Asia, says the contract will be amended. http://theadvocate.com/home/8138286-125/jindal-administration-promises-to-amend

She said it, however, only after a barrage of criticism from legislators who expressed everything from disappointment to outright doubt to rare criticism—by Senate President John Alario (R-Westwego), no less—of Jindal’s secrecy in awarding the contract without informing lawmakers. http://theadvocate.com/home/8131113-125/much-vaunted-savings-not-included

Sometimes you need a fresh set of eyes,” said Ruth Johnson, assistant commissioner for statewide services.

Chief skeptic in residence C.B. Forgotston, however, dredged up some old Jindal campaign promises which tend to fly in the face of such logic.

Forgotston cited this Jindal utterance taken from his campaign brochure on state finances:

  • “Government spending is not just about writing checks to anyone and everyone. It is about being a responsible steward of the public’s money. It is about holding public officials and recipients accountable for the financial decisions they make on our behalf. It is about making sound fiscal priorities and sticking to them.

And extracted from that same brochure:

  • “RESPONSIBLY MANAGE AND ACCOUNT FOR SPENDING OF HARD-EARNED TAXPAYER DOLLARS:”
  • “Identify and recruit top-caliber cabinet secretaries.”
  • “All appointments must be talented, articulate, experienced managers that can consistently deliver desired outcomes while reducing costs wherever possible.”

The question then becomes, Forgotston said, “If the consulting report finds savings in the state departments under Jindal’s jurisdiction…we will hold Jindal accountable?

C.B. has a refreshing way of cutting through all the bureaucratic gooneybabble and getting right to the heart of an issue. http://forgotston.com/

Carrying his not-so-rhetorical question even further, should we hold Nichols accountable for the supposed oversight and subsequent lying…er, misstatement to the legislature about a mythical $500 million savings?

One former supporter of Jindal—both from a philosophical and financial perspective—seems to think so.

A funeral certainly is an unusual, if not inappropriate, place to discuss politics but with so many current and former elected officials on hand for the services of Wiley Hilburn, the retired former head of the Louisiana Tech journalism department, it was almost inevitable that the subject of Jindal would find its way into the idle conversation. Funerals and weddings are, after all, major social functions at which, if only in passing, acquaintances are renewed, ideas are exchanged and common ground is explored.

After the services Sunday, as guests were milling around in front of the Presbyterian Church of Ruston, one former supporter, in a brief but revealing conversation, was unrestrained in his disgust with Jindal. There was no subtlety or coyness, no mincing of words.

Without identifying the person, let it suffice to say that considerable money made its way from his bank account—and that of his company and family members (all legal, in case anyone wonders) into the campaign coffers of Jindal and now the good governor won’t even take his phone calls.

That will turn an ally into an enemy faster than just about anything else. No benefactor takes being ignored lightly and this man said as much on Sunday. “I thought (Mike) Foster was flaky and (Kathleen) Blanco had her moments,” he said. “But this guy….he forgot why he was elected the moment he walked through those doors. He’s completely turned his back on this state while he pursues something else, whatever that might be.”

This from a one-time staunch supporter.

One doesn’t have to consider long and hard what Jindal’s other options might be as he flits across the breadth and depth of the country in an attempt to line up support for a presidential run—a run that has about as much chance as a one-legged man in a tap dancing contest. Jindal would be far more appealing in a twerking marathon than a presidential campaign. New Jersey Gov. Chris Christie would have a better chance trying to cut in on commuters en route to Fort Lee during morning rush hour on the George Washington Bridge.

Of course, he is so obsessed with his quixotic quest that he doesn’t have a clue and those sycophants with whom he surrounds himself don’t have the stones to tell him. That or they are even more unrealistic in their rose colored glasses than he.

That arrogance could also prove to be a shocking lead-up to unpleasant surprises during his final two years in office as even some of his appointees—those from whom he demands unconditional loyalty and subservience—are muttering to themselves about a possible coup d’état.

Commenting on State Treasurer John Kennedy’s observation on last Friday’s Jim Engster Show on Baton Rouge’s public radio station that Jindal has gutted the budgets of higher education 67 percent since entering office, another attendee at Sunday’s funeral said, “We’re going to have to stand up against this guy. Higher ed can’t take any more hits.”

Of course, it remains to be seen if there will be follow through on the part of appointees and legislators.

But while they may have once been talking among themselves behind closed doors and never openly, they now are airing their complaints in a more public manner.

Like sharks circling in the waters, they may finally smell blood.

That could make the next two years both turbulent and interesting.

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Zounds and zowie! Jindal awards $34 million contract to firm that dropped the ObamaCare web page rollout ball!

Posted in Attorney General, Audit Reports, Auditor, Contract, Contracts, Governor's Office, Health Care, IT, OGB, Office of Group Benefits, Privatization, RFP, Request for Proposals on January 6, 2014| 16 Comments »

A company holding two state contracts worth $32.8 million was the lead IT contractor of the ill-fated Affordable Health Care enrollment web page rollout late last year, LouisianaVoice has learned.

CGI Technologies and Solutions, headquartered in Quebec Province, has experienced problems with other contracts in Canada and the U.S. even before the Obamacare debacle.

The largest tech firm in Canada, CGI also has offices in the Washington, D.C. area—Fairfax and Manassas, VA., Washington and Baltimore, and is part of the CGI Group which has 72,000 employees in 400 offices worldwide—many of those in India.

CGI Technologies and Solutions was awarded a $32.5 million contract with the Office of Community Development’s (OCD) Disaster Recovery Unit (DRU) on March 2, 2012 to provide computer software hosting, support and training for OCD’s Hazard Mitigation Grant Program (HMGP), small rental programs.

That contract is scheduled to run out on March 1, 2015.

CGI also has a $300,000 contract with the Office of Information Services to provide technical support for the Division of Administration’s (DOA) advanced financial system (AFS). That contract is set to expire on June 30.

The state also has a $20 million contract with Hunt Guillot & Associates of Ruston through OCD and DRU for grant management activities for infrastructure and other projects undertaken as a result of damages resulting from hurricanes Katrina, Rita in 2005 and Gustav and Ike in 2008.

The Hunt, Guillot contract was first issued for $18.2 million on Oct. 31, 2007—just 10 months after Gov. Bobby Jindal took office, and called for the firm to work in program design, the pre-application and application process, pre-construction and construction of projects related to hurricane recovery. That contract expired on Oct. 30, 2010, but the company was awarded a subsequent contract of $1 million on Dec. 1, 2009 which called for it to review applications for grant funds pursuant to the hazard mitigation grant.

It was not immediately clear how much, if any, overlap there might be between the CGI and Hunt, Guillot contracts, if one was intended to augment the other, or if the two are completely separate, unrelated contracts.

What is clear is that in April of 2013, less than a year ago, the Legislative Auditor issued a report which indicated the state could be on the hook for a minimum of $116 million and possibly as much as $600 million in improperly received or misspent disaster aid following Katrina and Rita.

http://www.nola.com/politics/index.ssf/2013/04/louisiana_on_for_misspent_road.html.

State auditors reviewed 24 loans to property owners through the state’s Small Rental Property Program. The state had allocated $663 million to the program and of the 24 cases reviewed, none had been flagged as problematic by OCD. Though only 24 cases were reviewed, more than 8,000 properties benefitted from the assistance program—increasing the likelihood that the total number and amount of improper payments could go significantly higher.

OCD Executive Director Patrick Forbes said rather than attempt to chase down homeowners to retrieve the misspent funds, he intends to change OCD regulations to provide more assistance to homeowners before “triggering the recapture of funds.”

Despite that statement of intent, a month after that audit report, on May 21, the administration issued a $600,000 contract to the Baton Rouge law firm of Shows, Cali & Walsh to “review and analyze Road Home files for overpayments, ineligible grantees, etc., (and to) negotiate and collect funds due to the state.”

Shows, Cali & Wash, meanwhile, has its own problems stemming from a federal judge’s findings that it manipulated evidence in a federal lawsuit by three death row inmates at the Louisiana State Penitentiary at Angola. https://louisianavoice.com/2014/01/03/baton-rouge-law-firm-with-3-million-in-state-contracts-faces-legal-sanctions-over-evidence-manipulation-in-angola-lawsuit/.

Meanwhile, the ObamaCare project—healthcare.com—disaster appears to have had caused a negative impact on employee morale at CGI, according to a staff worker who asked not to be identified. “There’s a lot of frustration,” he said. “People are getting sick, fainting in conference calls.”

Employee turnover is said to be high at CGI, making matters more complicated when trying to assemble a web page for the health-care exchange. Despite that, the upper management mentality at CGI appears to work toward establishing relations “so intimate with the client that decoupling becomes almost impossible,” according to one company profile. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/.

CGI was hired by the Hawaii Health Connector, that state’s new health exchange for providing insurance options under ObamaCare, to build its website and the state portal, like HealthCare.gov, had immediate problems when it launched on Oct. 1, 2013. http://www.foxnews.com/politics/2013/10/23/red-flags-company-behind-obamacare-site-has-checkered-past/.

“The morning I heard CGI was behind (the Obamacare web page development), I said, ‘My God, no wonder that thing doesn’t work,’” said James Bagnola, a Texas corporate consultant who was hired by the Hawaii Department of Taxation in 2008. “The system is broken all the time.” Bagnola said CGI was able to continue work on the Hawaii project despite repeated managerial complaints and a “corrosive environment” in which state employees felt pitted against CGI staff.

CGI’s contract to design and execute a new $46.2 million diabetes registry for eHealth Ontario, part of the Canadian government health care system, was canceled in September of 2012 after a series of delays that rendered the system obsolete.

The state of Vermont as recently as last October, meanwhile, was considering whether or not to penalize CGI for not meeting deadlines for designing and producing that state’s health care exchange as per an $84 million contract with the company.

It may be too early to say that there is an “ominous pattern” of inferior work product from CGI as claimed by some http://www.examiner.com/article/is-cgi-and-white-house-liable-for-obamacare-massive-site-failure and http://www.renewamerica.com/columns/fobbs/131028 but there can be no denial that the failed debut of the ObamaCare web page has cost taxpayers hundreds of millions of dollars.

Which raises the obvious question: What quality of work Louisiana is receiving from the firm? Considering last April’s findings of the Legislative Auditor in its examination of the Road Home program, that’s a fair question.

Contractors are being paid tens of millions of dollars to provide oversight of the grant programs in the hurricane recovery efforts. But what oversight is being provided of the contractors themselves? And if the contractors need oversight, why are they even in the equation to begin with?

How do we know they are doing the jobs they are being paid to do?

If we are to believe the auditor’s report, they well may not be giving the state a return on its dollar.

Are contracts simply being doled out by the Jindal administration with little or no vetting? When one looks at some of the other contracts awarded since 2008, there seems to be ample cause for concern.

All one has to do is study the administration’s smarmy record of questionable contracts, beginning with the hiring of Goldman Sachs to help write the request for proposals (RFP) for the privatization of the Office of Group Benefits (OGB). Who was the sole bidder on that project at the outset before the project was re-bid? Goldman Sachs. https://louisianavoice.com/2013/12/01/jindal-and-rainwater-preoccupied-with-ogb-privatization-missed-or-chose-to-ignore-obvious-cnsi-contract-red-flags/

And then there was the infamous contract with CNSI http://www.frontpagemag.com/2013/volpe/billionaire-swindlers-line-up-for-obamacare/

and the ensuing investigation by the FBI  https://louisianavoice.com/wp-content/uploads/2013/12/fbireportscnsi3.pdf

https://louisianavoice.com/wp-content/uploads/2013/12/dt-common-streams-streamserver1.pdf and the Louisiana Attorney General’s office https://louisianavoice.com/wp-content/uploads/2013/12/ldoj-interview-report-on-cnsi-from-0514121.pdf

There also is a series of contracts with Affiliated Computer Services (ACS), since absorbed by Xerox. ACS, once represented by U.S. Rep. Bill Cassidy’s sister-in-law Jan Cassidy who now works for the Division of Administration (DOA) as Assistant Commissioner in Procurement and Technology at an annual salary of $150,000). http://www.linkedin.com/pub/jan-cassidy/6/4aa/703

ACS also has its own string of problems as evidenced by stories from other states https://louisianavoice.com/2013/03/15/doa-hires-jan-cassidy-sister-in-law-of-cong-bill-cassidy-at-150000-previous-employers-records-are-less-than-stellar/ and with the Securities Exchange Commission http://www.sec.gov/litigation/litreleases/2010/lr21643.htm

Not to be outdone, Deloitte Consulting which helped the state in planning for a comprehensive consolidation of information technology (IT) services for DOA, was named winner of the state contract for “Information Technology Planning and Management Support Services,” according to an email announcement that went out to IT employees last September.

Never mind the fact that Deloitte Consulting has experienced a multitude of problems in North Carolina, California, Tennessee, and Virginia because of delays, false starts and cost overruns. https://louisianavoice.com/2013/09/05/surprise-surprise-gomer-deloitte-wins-it-contract-after-spending-year-consulting-with-state-on-consolidation-plan/

And yet this governor is so unyielding in his misguided belief that the private sector can perform any and every governmental function better than public employees that now, six years into his eight-year term, he has decided pay yet another contractor, the international consulting firm Alvarez & Marsal, $4 million to conduct an efficiency study to determine possible savings in state government.

Clueless, thy name is Jindal.

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As 2013 college football bowl season kicks off, Gov. Jindal reveals proposal for another controversial privatizaton plan

Posted in Boards, Governor's Office, Higher Education, Layoffs, LSU, Privatization, RFP, Request for Proposals on December 23, 2013| 23 Comments »

Just in time for the college football bowl season, Forbes magazine has rated the LSU football program as the fourth most valuable in the country, prompting an announcement by the Jindal administration to capitalize on the latest data.

With an estimated value of $105 million, the LSU programs ranks behind only the University of Texas ($139 million), Notre Dame ($117 million) and Alabama ($110 million) and ranks ahead of such traditional football powerhouses as Michigan, Florida, Oklahoma, Georgia, Ohio State, Nebraska, Auburn, Arkansas, Southern Cal, Texas A&M, and Penn State—5th through 15th, respectively.

http://www.forbes.com/sites/chrissmith/2013/12/18/college-footballs-most-valuable-teams-2013-texas-longhorns-cant-be-stopped/

Upon learning of the ranking, Gov. Bobby Jindal, always the political opportunist, immediately pressured the LSU Board of Stuporvisors to approve a request for proposals (RFP) aimed at the privatization of the LSU football program in time for the start of the 2014 season.

The board approved the plan without discussion or objection.

“We actually have been considering this opportunity for some time,” Jindal said. “The latest story by Forbes simply provides us with the opportunity to negotiate the most favorable contract for the people of Louisiana.”

Jindal said the timing is such that it will be impossible to issue the RFP before the Feb. 5 LSU Bayou Bash recruiting party but he said he felt logistical problems of dealing with new signees could be overcome with assistance from legal counsel Jimmy Faircloth.

“The fact of the matter is, long story short, at the end of the day, there are two things: the LSU football team is overloaded with unproductive players. Applying my well-known ‘do more with less’ mantra, the new team owners will drastically cut the excess fat from the program. All players who do not make the first team on either offense or defense will be dismissed from the team. The kickers and punters will come from the remaining 22 starters.”

He said that move alone would save the program millions of dollars in housing and meal costs as well as costs for extra uniforms, equipment, game tickets and tutors. Other cost saving measures to be initiated by the privatization move include the termination of medical treatment for injured players and suspension of any athletic department financial contributions to academics. “We have already seen that academics can do more with less; now they will have the opportunity to do even more,” he said.

Jindal said in his prepared statement that the 22 players will each be paid on a sliding scale beginning at $100,000 per year. “That should allow LSU to attract the very best starting players in the nation and prevent the raiding of the top two or three high school players that Louisiana produces each year by other colleges—especially by Nick Saban and Alabama,” he said.

“This move will represent a new gold standard of athletic competition,” he said.

He said that a player who is injured and unable to continue in a game will be replaced from a pool of about a dozen standby contract players who will be employed in administrative positions within the Department of Education. In some cases, players will be asked to play on both offense and defense as an example of his “do more with less” crusade.

“The fact that the new owners will schedule only home games also should help us move forward with all due speed,” he said.

Jindal said his latest plan represents a “bold new move” for LSU football. “This should allow us to win the BCS championship virtually every year,” he said. “That fact alone should dispel all arguments that privatization doesn’t work.”

Confidential sources confirmed that one unidentified administration official who raised questions about possible NCAA sanctions for paying players was summarily teagued, a claim that was immediately denied. “That person left on his own accord,” an administration spokesman said. “We had nothing to do with his decision to leave.”

“There is a reason the NCAA would take issue with our proposal,” Jindal said. “I don’t believe it’s a coincidence that the head of the NCAA is a former president of LSU and that he is envious of LSU’s success since his departure. If you recall, when Dr. Mark Emmert was at LSU he was the one who hired Nick Saban and because of that, he has a vested interest in the continued success of Coach Saban. So it’s understandable that he would be opposed to this move.”

Jindal then proceeded to verbally attack Emmert and the NCAA over the anticipated encroachment. “Dr. Emmert and the NCAA want to deny a voice to the very people who will be harmed by such ridiculous sanctions,” he said. “They are trying to muzzle fans who simply want to express their support for what will be the most successful football program in the history of intercollegiate athletics. The only thing our fans want is for the finest athletes in the nation to have the opportunity to escape failing programs.

“Dr. Emmert is attempting to tell our fans to sit down and shut up. That’s never going to happen. Despite whatever evolving legal argument the NCAA comes up with, the voices of hundreds of thousands of fans will be heard,” he said.

“I have already indicated that the NCAA’s effort to deny these kids the right to equal opportunity in football is both cynical and immoral,” Jindal continued. “They (the NCAA and Emmert) can’t have it both ways. Our fans know the real result of any NCAA action, should it be successful, would be to keep great football players in failing programs like those at Alabama, Auburn, Georgia and Florida.”

Key losses to Alabama “have pushed a significant number of players to go out of state,” Jindal said. “Threatened sanctions are another intrusion by the NCAA on players’ personal decisions. Players who wish to play for a premier program should not have to seek approval of Dr. Emmert or the NCAA. It is our moral obligation to ensure that every top player who we recruit has access to the best program available.

“America is a nation of opportunity and a quality football program opens the door to opportunity, no matter the social background of the player.

“We in Louisiana are rejecting the status quo because we believe every player should have the opportunity to succeed.”

He said the Tiger Athletic Foundation (TAF) has been contracted to help draft the RFP for the administration.

Insiders have intimated that TAF is likely to be the sole bidder on the project, although Spectacor Management Group (SMG), which operates the Mercedes Benz Superdome, the New Orleans Arena, Zephyr Field in Metairie and the Baton Rouge River Center, has not been ruled out.

Economic Development Secretary Stephen Moret said whoever wins the contract will receive generous tax incentives and exemptions “for bringing new jobs to Louisiana.”

Jindal said the privatization should save the state “approximately $500 million a year, give or take a few hundred million.”

(We wanted to hold off on this story until April 1, but we just couldn’t wait.)

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Jindal and Rainwater, preoccupied with OGB privatization, missed or chose to ignore obvious CNSI contract red flags

Posted in Contract, Contracts, Ethics, Governor's Office, OGB, Office of Group Benefits, Privatization, Public Records, RFP, Request for Proposals, Transparency on December 1, 2013| 13 Comments »

One probably can understand former Commissioner of Administration Paul Rainwater for not putting the kibosh on that ill-fated $194 million contract with CNSI in mid-2011. Rainwater was, after all, preoccupied at the time with Gov. Bobby Jindal’s priority project, that of privatizing the Office of Group Benefits (OGB).

You may remember the controversy surrounding the OGB privatization push. First, the state brought in Goldman Sachs to help write the specifications of the request for proposals (RFP) for the privatization scheme and then (drum roll please) Goldman Sachs was the only bidder at $6 million.

After Goldman Sachs subsequently withdrew in a dispute over the issue of indemnification, Blue Cross Blue Shield of Louisiana finally got the bid but in between all that, there was that $49,999.99 contract to Chaffe and Associates for a study that failed to produce the results sought by the administration—not to mention questions about the possibility of the existence of two Chaffe reports. https://louisianavoice.com/2011/06/20/was-leaked-chaffe-report-real-or-a-doa-misdirecton-ploy/

Then there was the little matter of Rainwater’s own confirmation hearings and that of a new OGB director before the Senate and Governmental Affairs Committee that almost certainly demanded much of Rainwater’s attention.

But the confirmation hearing for Bruce Greenstein as Secretary of Health and Hospitals by the same committee a week later should have served as a red flag and should have set off all sorts of alarms within the Jindal administration—beginning with Rainwater.

https://louisianavoice.com/2011/06/09/jindals-appointees-arrogant-bureaucrats-or-simply-a-multitude-of-misunderstood-misbehavin-miscreants/

The warnings were clear and the track record of CNSI was readily available. Apparently no one in this administration ever heard of vetting a company before awarding it the largest single contract in the state’s history.

That, it turned out, was a mistake of monumental proportions.

The details of the awarding of the contract to Greenstein’s former employer now reads like some kind of Tom Clancy espionage novel—complete with secret communications, bid-rigging, lavish entertainment of state officials, death threats, creative accounting principles, money laundering, ghost employees, payments of non-existent loans, posh homes of questionable ownership, possible tax evasion, and claims of an ancestral link between Gov. Jindal’s Indian heritage and CNSI’s Indian ownership. dt.common.streams.StreamServer

Throw in the fact that CNSI is one of the subcontractors working on the Obamacare website, and you’ve got all the makings of a real suspense story.

To say the CNSI story is complex would be to belabor the obvious which is all the more reason that Jindal and Rainwater should have taken a closer look at the qualifications of CNSI before committing to such a contract.

It turns out that every state might want to take a long, hard look at CNSI’s credentials now that the company is in position to bid on billions in new contracts with individual states that, in order to receive new grants for expanded Medicaid rolls, will be required to update outdated IT systems in order to more readily share data. Michael Volpe recently had a story that dealt with that very issue in Frontpage Mag. http://www.frontpagemag.com/2013/volpe/billionaire-swindlers-line-up-for-obamacare/

In examining CNSI, these states might wish to begin with Maryland where CNSI’s problems began as far back as 2001. In was that year that Maryland hired CNSI to develop its new web-based Main Medicaid Claims System for the processing of $1.5 billion per year in Medicaid Claims. CNSI has submitted the lower of two bids for the project. The company’s $15 million bid was exactly half the $30 million bid by the other company. Experts say the state should have known right then that the low number of bidders and the disparity between bids were red flags.

CNSI, it turned out, had zero experience in developing Medicaid claims systems. It was given 12 months to develop the system, which was finally put online in January of 2005, three years late.

Problems occurred almost immediately. The company’s costs quickly grew to $25 million but even worse for the state, there were an unusually high number of rejected claims from the outset and the number of suspended claims quickly reached 300,000—a rejection rate of about 50 percent—and by June the number had grown to 647,000, representing about $310 million in back payments to medical providers. Some facilities had to close their doors because of non-payments while others had to take out loans to keep their doors open and others simply stopped seeing Medicaid patients altogether.

In 2008, South Dakota awarded CNSI a $62.7 million contract for a new Medicaid processing system. By 2010—nearly a year before Louisiana hired CNSI—work was halted on the project after costs had grown to $80 million and the system was still two to three years from completion.

A year ago, the Southeast Michigan Health Information Exchange (SEMHIE) filed suit against CNSI over a $1.8 million contract to develop a Social Security e-Disability project for SEMHIE. One of the stipulations of that contract was that any software developed for the project would become the property of SEMHIE. The lawsuit says that SEMHIE “repeatedly, both orally and in writing,” demanded delivery of the software but that CNSI has refused to turn over the software or even to communicate with SEMHIE.

SEMHIE says it had been negotiating to provide the Michigan Health Information Network (MHIN) with the software but that CNSI’s refusal to turn it over resulted in MHIN’s termination of the agreement, thereby costing SEMHIE “substantial” revenue.

The latest twist in the CNSI saga is that the State of Arkansas has, on the basis of the FBI investigation of CNSI’s contract with Louisiana, disqualified CNSI from doing business with that state.

But the really interesting details of the CNSI contract and the company’s links to former employee Greenstein, who was DHH Secretary at the time the contract was awarded, can be found in a series of interviews conducted by the FBI in Maryland FBIReportsCNSI in which two former employees, Vice President and Corporate Counsel Matthew Hoffman and Vice President of Accounting and Finance Jeffrey Weisenborne, reported bookkeeping irregularities, falsification of asset statements to bankers, the purchase of secret homes in Maine, Michigan and Washington State which were not carried on the CNSI books, non-existent loans for which the four CNSI partners received monthly payments, the hiring of CNSI partners’ family members who did no work, bid-rigging, and threats to Hoffman that he would be killed if he disclosed company misconduct. dt.common.streams.StreamServer

The Louisiana Attorney General’s office also conducted an interview with a CNSI employ who originally was a contract employee but who was subsequently hired full time by the company. The employee, identified only as Kunego, which was said to be a pseudonym, was conducted on May 10—11, 2012.

He testified that CNSI’s bid was structured so that it could “shave off” about $40 million from its bid, thus allowing the company to win the contract after which it could get the terms of the contract changed. “In many states this alone would lead to disqualification of the CNSI proposal,” he said. Additionally, he said DHH “front-loaded” the contract, meaning CNSI got money up front because “CNSI was close to being insolvent and needed this change to keep them afloat.”

Kunego said in January of 2011 he and CNSI officials were in North Dakota to prepare their pricing for the Louisiana proposal when they were told by CNSI cofounder and CEO Bishwajeet Chatterjee that the number they had to beat was under $199 million. “This indicated that CNSI officers knew ahead of time the dollar amount that they had to propose to win the contract,” he said.

“After the contract was awarded and during the protest period, Greenstein went to DC (Washington) and was picked up by CNSI officers and entertained to dinner,” the witness said.

He said that during the Greenstein confirmation hearings, CNSI Vice President of Government Affairs Creighton Carroll “was very concerned that the Senate committee would subpoena their phone records.” Carroll told Kunego that they deleted many text messages between CNSI officers and Greenstein “to avoid them being subpoenaed.” Moreover, he said Carroll used his wife’s cell phone for most of the “off channel communications” with Greenstein.

Also during the Greenstein confirmation hearings, CNSI’s lobbyist Alton Ashy was texting Greenstein in an effort to help him with his answers to questions being asked by committee members.

Kunego said that when Greenstein worked for CNSI he lived in a CNSI-owned townhome and that he “got the impression from Chatterjee that Greenstein had ownership in CNSI.” He said 80 percent of CNSI is owned by the four founders—Chatterjee, Chief Strategic Officer Adnan Ahmed, Chief Financial Officer Jaytee Kanwal, and Chief Administrative Officer Reet Singh—while the remaining 20 percent is owned by 23 different people.

The Attorney General report quoted Kunego as saying Jindal has “an India to India ancestor-driven background and network of connectors that brought CNSI and Jindal together” (a characterization the governor’s office labeled as “insulting”) and that “Jindal’s public persona does not jive (sic) with what is going on at DHH.” LDOJ Interview Report on CNSI from 051412

Finally, we have to raise a couple of other questions here about the sequence of events that don’t exactly shine the best light on the Jindal administration.

Was the timing of the personnel change in the Division of Administration (DOA) coincidental or was it somehow tied to the pending investigation?

Rainwater was brought over to the governor’s office on Oct. 15, 2012, to serve as Jindal’s Chief of Staff and has not been heard from since while Deputy Chief of Staff Kristy Nichols left the governor’s office to move across the street to the Claiborne Building to take over Rainwater’s former duties.

In January, the FBI served a subpoena on DOA for all records pertaining to the CNSI bid and contract, including the RFP. And while Jindal certainly knew of the subpoena (and if he did not know, Nichols should be run off by a mean, biting dog for not informing her boss), the subpoena did not become public knowledge until early March. Once the news broke, Jindal acted with all deliberate speed (and yes, that’s sarcasm) to announce the termination of the contract, saying his administration would “not tolerate corruption.”

A week after that, Greenstein announced his resignation, but incredibly, was allowed to remain on the job for another month.

So, did the administration initiate the personnel change at DOA in October in anticipation of the FBI and Attorney General investigations and the subpoena that would come down in three months?

Why did the administration try to keep a lid on the news of the subpoena for some two months and cancel the CNSI contract only when the subpoena’s existence became public knowledge?

And most important: why was Greenstein allowed to remain on the job for a full month after news of the subpoena and the cancellation of the CNSI contract?

Something here just doesn’t pass the smell test.

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