CHARLESTON, W.Va. - A losing bidder challenging the outcome of a $248 million state contract may not have a "credible basis for its protest," an attorney for the state Department of Health and Human Resources said in a recent letter.
Atlanta-based Xerox is challenging a contract DHHR recently signed with California-based Molina Medicaid Solutions. The contract - which is perhaps the largest in state history - is for a new computer system to process claims for the state's 420,000 Medicaid recipients.
Molina runs the current system, but the state just signed a new agreement with the company to replace that aging system.
Xerox wants the state to cancel the new decade-long deal with Molina because of what Xerox alleges are "numerous flaws, inconsistencies, errors and conflicts" during a multi-year bidding process.
Attorneys for Xerox and Molina are now involved in a behind-the-scenes battle over Xerox's allegations and the release of what DHHR says are "many tens of thousands of documents" related to the bidding process. Xerox is seeking documents from the state to substantiate its allegations.
The two companies are arguing as a DHHR official reviewing the matter decides whether the department inappropriately awarded the contract to Molina. That ruling could come down in coming weeks.
But DHHR may already be dubious of Xerox's allegations that the bidding process was fatally flawed.
A DHHR attorney, Harry Bruner, said department officials believe Xerox may be trying to "protract this matter by requesting what appears to be so many irrelevant documents and running up the cost and wasting DHHR staff and management time."
"Xerox is also giving the impression to WVDHHR that it does not have a credible basis for its protest other than making mere allegations," Bruner wrote in a letter to Xerox's attorneys dated Jan. 23.
"WVDHHR" is another acronym for DHHR. Bruner is an employee of the state Attorney General's Office who represents DHHR.
A Xerox attorney appears worried that Jan. 23 letter may be a shot across the bow.