Posts Tagged ‘contract’

$3 Million Tourism Contract Approved By State Board, Funding Still In Limbo

By Sean Whaley | 2:14 pm July 13th, 2012

CARSON CITY – The state Board of Examiners today approved a $3 million contract with an out-of-state firm to spearhead tourism efforts in Nevada after being told the selection process was thorough and fair.

The board, with members Gov. Brian Sandoval and Attorney General Catherine Cortez Masto voting, approved the two-year contract with the California-based offices of Burson-Marsteller.

Approval came despite the fact that the contract remains in limbo. The Legislature’s Interim Finance Committee in June delayed approval of budgetary changes sought by the Department of Tourism and Cultural Affairs needed to pay the contract.

The budget changes were deferred after state Sen. Steven Horsford, D-Las Vegas, a candidate for the 4th Congressional District seat, questioned if the firm had any knowledge of Nevada. The Interim Finance Committee won’t meet again until Aug. 23.

Sandoval said he was satisfied that the selection process was proper. He also noted that Nevada has some preferences for Nevada firms competing for contracts, but that the provisions did not come into play to the selection process.

If there was a tie, for example, then a Nevada firm would get the nod, but there was no tie in this case.

“I’m confident in the process,” Sandoval said after the vote. “I think that it was a well-vetted process that was consistent with what the state has always done. It was consistent with the law. There was a committee that was comprised of both private sector experts in the area as well as experts within the state of Nevada that fairly graded each of the applicants.”

Nineteen firms, eight from in-state and 11 from outside Nevada, submitted proposals to secure the contract.

“I think that the entity that was selected will do well for the state of Nevada,” Sandoval said.

Claudia Vecchio, director of the Department of Tourism and Cultural Affairs, along with Greg Smith, state administrator and chief procurement officer of the Nevada State Purchasing Division, reviewed the selection process for the board.

The request for proposals was handled like any other such contract, with no special treatment provided to any firm, Smith said.

Vecchio defended the contract and selection process at the Interim Finance Committee meeting, noting that none of the four finalists were from Nevada, a fact which generated comment from at least one Nevada public relations firm.

Burson-Marsteller, with offices in Los Angeles and San Francisco, was the unanimous selection of an evaluation committee made up of Nevada tourism professionals, Vecchio said. The company will be working with Red Rock Strategies out of Las Vegas, she said.

The contract has been drawn up and signed by both parties, but it remains contingent upon approval of state officials.

Vecchio said the firm will provide national and international contacts that will benefit the state.


Audio clip:

Gov. Brian Sandoval says the selection process was fair and followed the law:

071312Sandoval :19 of the applicants.”



State Transportation Director Terminates $280K Contract After Concerns Raised About Cost

By Sean Whaley | 4:25 pm December 7th, 2011

CARSON CITY – A 22-month, $280,000 contract with a private sector individual to work as a liaison between the Department of Transportation and contractors seeking work with the agency has been terminated by Director Susan Martinovich.

Susan Martinovich, director of the Nevada Department of Transportation. / Nevada News Bureau file photo.

Instead, the department will look to its own staff to help in the goal of assisting contractors who want to bid on NDOT projects through the sometimes complex bureaucratic process, said agency spokesman Scott Magruder.

“At this point we have terminated the agreement and will not be bringing this forward to the board meeting next Monday,” he said. “And in order to help facilitate some of the new contractors through the system, we’re looking at maybe using some of the in-house people in our construction and records and management that maybe could help out on this effort.”

The decision to terminate the contract came after Martinovich met today with Gov. Brian Sandoval.

The contract with William “Buzz” Harris to serve as an ombudsman between the agency and bidders on contracts was approved in September by NDOT staff but was put on hold in November after concerns were raised by Sandoval and other members of the NDOT Board of Directors.

The contract was set for further discussion at the NDOT board meeting on Monday, but instead was terminated by Martinovich.

Harris is a former assistant executive director at the Nevada Associated General Contractors and was awarded the contract after a competitive review process.

Magruder said the word ombudsman was a misnomer. The idea was not to resolve complaints but to assist contractors with the process, he said.

“Again we still feel that when a new contractor calls the department, they don’t just get shuffled around,” he said. “It’s kind of nice to have it all in one place that they could go, as we said, a facilitator, that could really help them through the process. Because there’s a lot of, I hate to use the word red tape, but that’s exactly what it is.”

Magruder said the department wants to make the process as friendly and open as possible. The more contractors bidding on a project, the better the price for the taxpayer, he said.

Sandoval said at the November meeting that the potential contract cost is well in excess of what even he earns as governor.

The $280,000 was the maximum of the contract based on a $100 hourly rate that would have covered Harris’ expenses as well.


Audio clips:

NDOT spokesman Scott Magruder says the contract has been terminated:

120711Magruder1 :07 meeting next Monday.”

Magruder says the agency will try to use in-house staff to assist contractors:

120711Magruder2 :13 on this effort.”

Magruder says NDOT wants to make it easy for contractors to deal with the agency:

120711Magruder3 :19 what it is.”



$280,000 NDOT Contract Put On Hold After Concerns Raised By Gov. Sandoval, Transportation Board Members

By Sean Whaley | 2:34 pm November 14th, 2011

CARSON CITY – A 23-month, $280,000 contract approved by the Nevada Department of Transportation for a private sector individual to work as a liaison between the agency and contractors seeking work has been put on hold because of concerns expressed by Gov. Brian Sandoval and other members of the NDOT Board of Directors.

The contract with William “Buzz” Harris to serve as an ombudsman between the agency and bidders on contracts was approved by the agency in September, but NDOT Director Susan Martinovich said it will be put on hold while concerns raised today at the board meeting are resolved.

The board was told the $280,000 is the amount that can be spent on the services provided by Harris from August through June 2013, but is not guaranteed. Harris, who was selected after a request for proposals was issued by the agency, would be paid $100 an hour under the contract, which would include most of his expenses.

Courtesy of NDOT.

But Sandoval, who serves as chairman of the NDOT Board of Directors, noted the potential contract cost is well in excess of what even he earns as governor.

Other members of the board also raised questions about the contract, including Lt. Gov. Brian Krolicki, who said such positions are usually filled internally by an agency rather that bringing in someone from the outside.

Attorney General Catherine Cortez Masto, also a member of the board, asked for information about who submitted proposals for the contract.

“My understanding is historically and traditionally an ombudsman position is contained within the respective department, and that person would have an encyclopedic knowledge of the operation,” Sandoval said. “With an external ombudsman, that person will in turn have to get a hold of somebody who is within the office to perhaps respond to those questions.”

There are a lot of unanswered questions that need to be answered in regard to the contract, including the cost, he said.

Harris is a former assistant executive director at the Nevada Associated General Contractors.

Assistant Transportation Director Richard Nelson, said the purpose of the contract is to provide a problem solver and facilitator for contractors seeking to do business with the agency. Harris has a good working knowledge of both the contracting business and NDOT, he said.

Reporting on the success of the program to NDOT is part of the contract as well, Nelson said.

“There is a lot of nuance to dealing with the department,” he said. “And a lot of times these new contractors don’t know what questions they should be asking. And we don’t want to see any contractor go under because they get balled up in the bureaucracy.”


Audio clips:

Gov. Brian Sandoval says he has concerns with the nature of the contract in addition to the cost:

111411Sandoval :23 to those questions.”

Assistant Transportation Director Richard Nelson, said the purpose of the contract is to provide a problem solver and facilitator for contractors:

111411Nelson :18 should be asking.”



Collective Bargaining Fight Again Shaping Up At Legislature

By Andrew Doughman | 1:20 pm May 13th, 2011

CARSON CITY – The Las Vegas Chamber of Commerce is pushing for major changes to the state’s collective bargaining law for public sector employees.

In an amendment to another bill that already passed the Senate, the  chamber said the changes will alleviate budget concerns for local governments and save taxpayers money.

The chamber’s plan includes eliminating binding arbitration, allowing elected officials to create the final contract. Binding arbitration is the last step labor and management use when they cannot agree on a contract. A third-party group looks at both proposals and chooses one.

Sam McMullen, lobbyist for the Las Vegas Chamber of Commerce, said that these provisions make local governments more accountable to the contracts they choose.

The amendment would also allow local governments to renegotiate contracts automatically if revenues fall 5 percent or more for two consecutive years.

George Ross, also a lobbyist for the chamber, said that this provision would give government a tool to address economic downturns. Otherwise, he said, they could be contractually obligated to give their employees pay raises as the economy droops toward recession.

The amendment would also remove the eligibility of public sector managers and supervisors to negotiate their contracts and require newly negotiated contracts apply to the beginning of the prior contract expiration.

All of these changes, the chamber argued, would save taxpayers money.

The original Senate Bill 98, sponsored by Sen. Joe Hardy, R-Boulder City, would require mediation prior to arbitration and free a third-party arbitrator from having to choose one of the final offers presented. It sparked no controversy and received a unanimous vote during a Senate vote.

The amendment came as a surprise to legislators. Assemblywoman Teresa Benitez-Thompson, D-Reno, called it a “kamikaze amendment.”

The chamber lobbyists acknowledged the short notice, but said they wanted to resurrect the issue after other similar bills died.

Ross called the Legislature’s session a “Where’s Waldo” hunt for money. He said state employees and teachers earn at or below the national average while local government employees – through advantageously bargained contracts – earn more.

“We know we can’t attack that totally and instantly in one or two years, but we’d like to attack the conditions that made that happen,” Ross said.

Others, however, said that the proposals would not be fair.

“If you have two people talking and one of them gets to make the final decision every time, that’s not a negotiation, that’s a conversation,” said Assemblywoman Peggy Pierce, D-Las Vegas, of the section of the amendment eliminating binding arbitration.

Rusty McAllister, a lobbyist for firefighters, said that ending binding arbitration “boils down to collective begging” for workers.

The issue of collective bargaining has been important this session as Democrats work against the clock to pass a $1.2 billion tax package by June 6, when the Legislature is scheduled to end.

Assembly Republicans issued a set of policy reform demands including collective bargaining that they say would need to be met before they consider taxes.

Gov. Brian Sandoval has also said repeatedly that he will veto a tax increase. Therefore Democrats need to stay unified and find two Assembly Republicans and three Senate Republicans to join them in voting to override the governor’s veto.

The Las Vegas Chamber of Commerce has also called for changes to the state’s collective bargaining laws as a precursor for their own endorsement of tax increases.

Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, said she would hold a second hearing for the bill since legislators were given no advance notice of the amendment.

That hearing seems certain to bring out the troops for what could be a testy hearing between public sector labor unions and local governments.

“I’m telling any local government official who is listening, you better get your representatives up here,” she said, calling for local governments to provide information to the committee. “For those local governments who do not get that to me by Monday, I will call you out so that the press knows who is not willing to give out that information.”




Audit Revealing “Double Dipping” Employees Spurs Legislation

By Andrew Doughman | 6:19 pm March 8th, 2011

CARSON CITY – Speaker Pro Tempore Debbie Smith, D-Sparks, wants better reporting on state contracts with consultants.

She said an audit last December proved that lax reporting requirements had allowed many consultants to profit from taxpayers as they escaped legislative scrutiny.

She asked the auditing staff how she could improve oversight of consultants. They recommended removing references to consultants in favor of defining “contract” broadly. So that is what Smith wrote into her bill.

“People figure out loopholes and somebody abuses them, and that’s bad for everybody,” Smith said.

Salaries earned by current and former state employees working as contractors for state agencies, a practice called “double dipping,” was the subject of a critical Legislative Counsel Bureau audit released late last year. The audit identified 51 current and former state employees working at 14 different agencies as contractors doing work similar to their duties as state employees during the audit period of fiscal years 2008 and 2009.

A Nevada News Bureau inquiry probed into allegations that one of those employees was earning $350 per hour.

Smith’s bill would cover most contracts with state agencies.

The bill, however, exempts contracts related to school districts, Medicaid and the Public Employees Benefits Program from her bill.

Smith said that the Medicaid and Public Employees Benefits Program contracts pass through other oversight that the Legislature need not take up.

“It will involve every contract that needs to be considered,” she said.

A Board of Examiners comprising some of the state’s constitutional officers vet those larger contracts.

Smith highlighted her bill at a press conference earlier this afternoon. She joined several other Democratic legislators who also paraded bills they are championing before members of the press this afternoon.

The bill has bipartisanship sponsorship.

Audio Clip

Assemblywoman Debbie Smith talking about how her bill increases accountability:

030811Smith:15 our state well

State Senate Majority Leader Questions High Cost Of New State Medicaid Contract

By Sean Whaley | 2:00 am January 27th, 2011

CARSON CITY – A lawmaker today questioned whether state officials did everything possible to negotiate the lowest cost for a recently approved $177 million Medicaid contract.

Sen. Steven Horsford, D-Las Vegas, asked Medicaid program Administrator Charles Duarte if the contract with HP Enterprise Services reflects a 10 percent reduction in the cost of state contracts sought by lawmakers to help address Nevada’s current fiscal crisis.

“There’s nothing we could do with this contract to reduce the amount that they are getting paid in order to use some of those proceeds to cover these . . . provider rates and services that are being impacted?” Horsford asked.

The state Medicaid budget proposes to continue or implement new reimbursement rate reductions to a variety of medical providers as part of Gov. Brian Sandoval’s plan to balance the state general fund budget. Those reductions would total nearly $60 million.

Horsford cited some of the wage rates for employees in the contract, such as $85 an hour for a business analyst, $105 an hour for a senior business analyst, a certified project manager for $135 an hour, clerical at $40 an hour and $160 an hour for a system administrator.

“To me those seem like excessive amounts for that contractor to be billing the state compared to, as you indicate, your own qualified staff who may be able to do some of this,” he said. “I know we need a contractor and I know there are a lot of benefits to having this contract in place.

“My concern is whether we have achieved every possible cost savings in issuing that contract and if that contractor is billing us reasonable amounts and that there is a checks and balance, an accountability, for what is being billed,” Horsford said.

Duarte said: “I don’t believe the rates are unreasonable and I don’t believe we have the capacity in the state nor in my agency to do the work that is being proposed here. This is highly technical work that is being done on very complex systems.”

Duarte said the agency would be happy to discuss the rates and other issues in more detail in future legislative budget subcommittee hearings.

He did say the contract came in as a budget neutral project.

That comment provoked a sharp response from Horsford, however, who said the intent was to reduce contract costs.

“That is not it, Mr. Duarte,” he said. “That is not the intent.”

“I understand,” Duarte replied.

Charles Perry, president of the Nevada Health Care Association, told the legislative budget panel that the skilled nursing homes he represents are one segment of the health care provider profession that will be seriously affected by the rate decreases recommended in Sandoval’s budget.

He testified that the industry would have extreme difficulty in providing care with the proposed reduction of $20 a patient day for Medicaid recipients.

“We’ve learned how to deal with less for an awful long time,” Perry said. “I’m not sure we can continue to do it.”

Four firms bid on the Medicaid contract. HP’s base bid was about $140 million, while the second lowest bidder came in at $179 million. The contract negotiation process with HP resulted in the final $177 million contact, which covers a five-year period.

Duarte said the contract for the company to manage the state’s Medicaid information system, including the processing of payments to medical providers, provides the amount the state can pay to the firm, not the amount that must be paid.

Audio clips:

Sen. Steven Horsford questions whether every effort has been made to reduce the contract costs:

012611Horsford1 :15 is being billed.”

Horsford says the contract costs seem excessive:

012611Horsford2 :12 some of this.”

Horsford challenges Medicaid administrator Charles Duarte:

012611Horsford3 :02 not the intent.”

Medicaid Administrator Charles Duarte says contract costs are reasonable:

012611Duarte :14 very complex systems.”

$177 Million Medicaid Contract Approved By Gov. Sandoval, Board Of Examiners

By Sean Whaley | 4:08 pm January 11th, 2011

CARSON CITY – It didn’t take long for Gov. Brian Sandoval to encounter controversy in his new job.

At his first Board of Examiners meeting as governor today, Sandoval had to deal with a vendor dispute over a massive $177 million Medicaid contract.

The board, which also includes Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the contract with HP Enterprise Services after hearing that the second place bidder, ACS State Healthcare, failed to file a timely protest.

Gov. Brian Sandoval presides over his first Board of Examiners meeting as governor

The five-year contract is for the fiscal agent for the state’s Medicaid program run by the Department of Health and Human Services. The company will manage the state’s Medicaid information system including the processing of payments to medical providers.

“It’s the monster contract we have,” said Mike Willden, director of the Department of Health and Human Services.

Attorney Josh Hicks, who had previously served as general counsel to Gov. Jim Gibbons, represented ACS at the meeting. He said the size of the contract made posting the bond to file a formal challenge cost-prohibitive. It would have required $245,000 to post the bond, he told the board. The money would not be refundable to the company.

Willden said he believed the contract was properly awarded and that any lengthy delay in approving the agreement could cost the state several million dollars.

Sandoval raised numerous questions about the contract along with Miller, who initially asked for more details on the agreement. Sandoval has previously served on the board as attorney general.

Miller and others had received a four-page letter from ACS detailing the company’s concerns about the award of the contract. The concerns included a belief that there was a scope of work change in the negotiations with HP, and that the final cost was “materially different.”

In the ACS letter, Hicks said in part: “Even more shocking than the protracted negotiation was the revelation that during the negotiation period, approximately $30 million in cost was added to the contract. This was done confidentially, without participation from other vendors and therefore in a noncompetitive fashion, and without any re-scoring of the original proposal.”

Willden said he and other state staff, including representatives from the attorney general’s office, spent the past four days reviewing the award process and found no issues. There were negotiated changes to the contract after HP was selected, but Willden said there were no changes significant enough to warrant restarting the bidding process.

Four firms bid on the contract, he said. HP’s base bid was about $140 million, while ACS’s bid was $179 million. The contract negotiation process with HP resulted in the final $177 million contact.

“Yes there was an increase, in obviously the basic bid price by about $30 million,” Willden said. “I don’t think it is a significant, in my opinion, a change in the scope of work. These are types of things that when we pick a vendor, a contractor, there will be negotiated items.

“I believe due diligence is done and we have a lawfully bid contract,” Willden said.

After the vote, Miller said: “The contractor appears to be bringing much needed value to the state in an essential area of state service. Although some concerns were raised prior to the contract being approved, Director Willden testified today that he is confident that he fully vetted those issues with the Department of Administration and the Attorney General’s office prior to recommending that the contract be approved.”

Nevada’s current contractor, Magellan First Health, is providing Medicaid services in only two states, while HP is working in 22 states, he said.

“So we’re now in the majority club rather than a very minority state,” Willden said.

The conversion to HP is expected to occur by mid-summer, he said.

“This is a very more well planned, thoughtful process, and we hope don’t have the hiccups we had when First Health came on board,” Willden said.

Audio clips:

HHS Director Mike Willden says he believes the contract with HP is proper:

011111Willden3 :17 be negotiated items.”

Willden says HP runs similar systems in 22 states:

011111Willden1 :10 very minority state.”

Willden says this transition should be smoother than the last:

011111Willden2 :09 Health came onboard.”

Nevada Legislature Strikes Deal With Firm To Complete Portion Of Study

By Nevada News Bureau Staff | 6:54 pm July 29th, 2010

CARSON CITY – The Nevada Legislature has reached agreement with a firm hired to help analyze the state’s revenue structure to complete a portion of the project.

The agreement reached with Moody’s Analytics requires the firm to finish the Nevada Vision Stakeholder Group portion of the contract by Sept. 15. It will require more work by the firm and two more meetings of the Vision Stakeholder Group, but the payment will remain at the initial bid of just under $100,000.

Lorne Malkiewich, director of the Legislative Counsel Bureau, said the other piece of the contract, a tax study, was cancelled.

“We cancelled the tax study portion, as it was too far behind schedule to allow completion in a timely manner,” he said. “We will pay nothing for any work they’ve already done on that portion.”

The company had been sent a notice of default for failing to complete the contracted work for a total cost of $253,000. A report was due July 1.

The firm produced a draft report that was rejected in May by the Vision Stakeholder Group, a panel of 19 Nevada residents appointed by the Legislature to assist in the overall revenue study. The group’s charge was to produce a document highlighting what the group wanted Nevada to look like over the next several years.

The draft report included a discussion on taxes but did not include any specific recommendations.

Lawmakers are facing a revenue shortfall in the next budget that could total as much as $3.5 billion. The shortfall could mean huge cuts to state programs and education without new revenue. A collection of temporary tax hikes approved by the Legislature in 2009 to balance the current budget are set to expire next June 30.

The study was sought by some lawmakers for guidance on how to deal with the state’s ongoing budget crisis.

Firm Hired To Produce Study of Nevada Revenue Structure Sent Notice Of Default

By Sean Whaley | 12:13 pm July 22nd, 2010

CARSON CITY – A firm hired by the Nevada Legislature to produce a report on the state’s revenue structure has been sent a notice of default for failing to turn in the document by a July 1 deadline.

Lorne Malkiewich, director of the Legislative Counsel Bureau, said the notice was sent Wednesday to Moody’s Analytics, the contractor hired to perform the study. The company has 10 days to respond by producing the final report or the contract will be terminated, he said.

Malkiewich said an effort was made to negotiate an extension with the West Chester, Penn., based firm without success.

The firm has not been paid the $253,000 for its work on the study, he said.

Mark McMullen with Moody’s, the author of the draft report, referred an inquiry to the firm’s legal department, which could not immediately be reached for comment.

Malkiewich said an arrangement may still be worked out with Moody’s.

Members of the Interim Finance Committee’s Subcommittee to Conduct a Review of Nevada’s Revenue Structure were advised Wednesday in a memo of the decision to issue the notice of default.

The firm produced a draft report that was rejected in May by the Vision Stakeholder Group, a panel of 19 Nevada residents appointed by the Legislature to assist in the revenue study. The group’s charge was to produce a document highlighting what the group wanted Nevada to look like over the next several years.

The draft report included a discussion on taxes but did not include any specific recommendations.

The draft report said Nevada should: “Stabilize government program fund­ing levels by diversifying the tax base, using alternatives to general funds to support public investments, expanding rainy-day funds and securitizing future revenue streams.”

After rejecting the draft at its May 14 meeting, Moody’s was expected to work on a new draft and bring it back to the group for review and approval. No new meeting of the Vision Stakeholder Group has ever been scheduled.

The revenue study has been controversial from the beginning, with critics, including Gov. Jim Gibbons, calling it a thinly disguised effort by some to push for new taxes in the 2011 legislative session. Gibbons rejected a measure passed by the 2009 Legislature to fund the study.

Lawmakers, lead by Senate Majority Leader Steven Horsford, D-Las Vegas, then decided to use legislative funds to pay for the review instead.

Supporters say there are no pre-ordained conclusions for a tax increase expected from the study.

Lawmakers are facing a revenue shortfall in the next budget that could total as much as $3.5 billion. The shortfall could mean huge cuts to state programs and education without new revenue. A collection of temporary tax hikes approved by the Legislature in 2009 to balance the current budget are set to expire next June 30.