Bluefield Daily Telegraph, Bluefield, WV

January 7, 2013

Xerox protests W.Va. computer contract award


Associated Press

CHARLESTON, W.Va. (AP) — Xerox is protesting West Virginia officials' decision to award a $248 million computer contract to another company.

The company wants the Department of Health and Human Resources to cancel the contract awarded to Molina Medicaid Solutions. The contract, which the DHRR signed with Molina in December, is for a new computer system to process claims for the state's 420,000 Medicaid recipients. Molina operates the existing system, the Charleston Daily Mail (http://bit.ly/V1zxRj ) reported Monday.

Xerox claims a $10.5 million deal with the state in 2011 to upgrade the existing system gave Molina an unfair advantage in bidding for the new contract.

"In other words," wrote Charleston lawyer Carte Goodwin, a former U.S. senator who is representing Xerox, "the state cut a side deal with Molina to pour its foundation, and then asked the remaining vendors to bid on the cost of building the entire house."

A DHHR spokeswoman said the upgrade was required by the federal government.

During the negotiations on the upgrade agreement, Molina officials had special access to two senior DHHR officials who were deciding which company would win the new contract, Xerox alleges.

Xerox also said the DHHR rebid the contract in 2011 after it inadvertently gave Molina access to Xerox's trade secrets.

DHHR spokeswoman Marsha Dadisman says the department is reviewing Xerox's protest.

"As this is a protest directed at the state, we cannot comment on this," Molina spokeswoman Sunny Yu told the newspaper in an email.

In March, the DHHR threw out the bids again after Legislative Auditor Aaron Allred raised concerns about a private consultant who helped develop the agency's contract bidding process while working for a company listed by a vendor as a subcontractor during the second round of bidding.

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