"Xerox is concerned that these 'impressions' you are referring to suggest DHHR may be pre-judging the merits of Xerox's protest," Xerox attorney Carte Goodwin wrote to Bruner on Jan. 30.
"In closing, as it has the right to do, Xerox has filed a lawful protest to a procurement process that has numerous flaws, inconsistencies, errors and conflicts," the letter said. "And as it has the right to do, Xerox has filed a lawful public document request."
Xerox's protest, filed in late December, was just the latest twist in a bidding process that has dragged on for nearly two years at DHHR. The contract has been bid out three times because of problems with two initial bids.
Xerox alleges Molina won the new $250 million contract in part because Molina cut a multi-million dollar "side deal" with DHHR to upgrade the current computer system. Xerox said that as a result of this upgrade, Molina was able to underbid Xerox and two other companies. Xerox says Molina had access to Xerox trade secrets because of an error by DHHR. Xerox also alleges Molina representatives had special access to DHHR staffers during the bidding process.
In turn, Molina says it is the victim of an "evidence-free smear campaign" by Xerox, which is one of Molina's competitors in a lucrative market.
In a separate Jan. 30 letter to the head of DHHR's purchasing office, Xerox said the state should bid out the contract yet again.
Xerox cited a move by state lawmakers and Gov. Earl Ray Tomblin's office to strip DHHR of special purchasing authority the department was given in 2009.
The special authority allowed DHHR officials to sidestep normal purchasing procedures on certain Medicaid-related contracts, including the computer system contract. Now, following the problems with the computer contract and a legislative audit of DHHR, Tomblin's office and members of the Legislature want to change the law again to make sure DHHR has to send its contracts through the normal process.
Xerox says this reversal proves DHHR has not been able to adequately manage its own affairs and suggests that the new contract Molina was awarded was the result of a flawed bidding process.
"This impending statutory change raises a fundamental question," Xerox said. "If (DHHR)'s inability to fairly administer this very important . . . procurement has prompted legislative action to strip the agency's independent purchasing authority, then how can the award (of the contract) - the largest contract in state history - be permitted to stand?"