Because of the complexity of the enabling legislation (SB 266) and the multiple services it contemplated, the Department of Human Services contracted with the Western Interstate Council on Higher Education to assist with the drafting of the state’s Request for Proposals. If this sounds like an odd outfit to hire as a mental health services consultant, it is alleged that WICHE has behavioral health policy expertise, and a quasi-retired human services employee appears to have worked for both WICHE and DHS during the drafting of the legislation and the later development of the RFP. It was not deficiencies in the RFP, however, that led to the state’s current predicament. It was more the Byzantine mechanics of the state procurement process that either led to a failed procurement or opened the door to political manipulation of the recommendation once it was made — depending on your point of view.
While the RFP divided the state into four service delivery areas, which included the Denver metro area and three larger, more rural regions, there were just three qualified bidders to provide this work. The announced winner, Crisis Access, is a Phoenix-based specialty emergency mental health care provider with operations in half a dozen states. They entered into a partnership with selected local health care providers to form a Colorado-based network to bid on all four contracts. Another bidder was comprised of members of the Colorado Behavioral Healthcare Council, a network of 17 community Mental Health Centers across the state. While these centers provide behavioral health services to a largely Medicaid population, they possess no particular expertise in handling emergency interventions. What they do enjoy is significant political muscle exercised through their local governing boards, which routinely include elected officials, prominent business leaders and non-profit allies. The CBHC acts as a statewide lobbying arm for the Mental Health Centers, led by George DelGrosso, father of House Minority Leader Rep. Brian DelGrosso. The third respondent did not participate in the current legal struggle.
At stake is $19 million in annual services for five years. In mid-October DHS notified Crisis Access it had been selected unanimously by its procurement review committee as winner of all four emergency service grants and publicly announced its intention to award these contracts to the company. Within hours this train began to jump the tracks. Emails, the bane of the careless, were produced in court that indicate there were almost immediately questions about the award on the part of both DHS Executive Director Reggie Bicha and the Governor’s office. Other emails reference conversations with George DelGrosso. Within 24 hours the losing bidders were provided with copies of the Crisis Access application, which had been scored as vastly superior to those of its competitors; 48 hours later Bicha suspended the award and requested that the Department of Personnel and Administration investigate the panel’s recommendation in its role as state procurement manager. Within a week DPA determined the original procurement had been “flawed” and Bicha then canceled it, announcing his intention to re-bid the RFP.
Was there a wink-wink understanding between DHS and DPA to kill the Crisis Access awards? And, since the community Mental Health Centers could now re-write their responses to include the innovative approaches proposed by Crisis Access, did anyone think Crisis Access would once again outclass its competition in a subsequent evaluation? Enter the attorneys. Crisis Access lawyered up at Holland & Hart, petitioning the District Court to halt this second procurement (although Crisis Access resubmitted its proposals, just in case) and ordering DHS to proceed with its original selection. No injunction will resolve the matter. There will be further appeals and hearings on the merits as months pass by without expanded emergency mental health services.
The legal test Judge Stern must apply in contemplating an injunction is whether there is a “reasonable probability of prevailing” on the part of the plaintiff. The Attorney General, representing DHS in court, is arguing that the state reserves the right to cancel its procurements at any time. Or, as Stern waggishly summarized their position, “You’re saying this is all much ado about nothing, because I can’t do nothing!” That clearly isn’t his preference as he noted in closing remarks that he had concluded the DPA’s procurement review, which DHS relied on to justify its cancellation, was, “Indefensible from start to finish.” Stern plans to issue a ruling this week and it seems likely he will have pored through the statutes to structure a defensible and plausible legal argument for intervening. Neither DPA nor DHS has identified a specific and fatal failure, or even a material deficiency, in the initial procurement. Rather, they have relied on a totality of errors’ argument that claims many small irregularities add up to a failed procurement.
Testimony failed to support their theory. Yes, there were apparently several errors in transcribing individual scores awarded by evaluators to a master score sheet, but when these corrections were made they did not affect the outcome or recommendation. There even appears to be a missing master score sheet, where these corrections were entered but never forwarded to DPA. Chris Hapgood, the DHS employee who chaired the evaluation panel, evidently believes he conducted a thorough and fair appraisal. Yet state procurement practices require all final reports to be prepared by procurement personnel and not the subject matter experts who actually score the applications. DPA acknowledged it has never spoken with Hapgood or any of his evaluators. In order to determine whether the RFP reflected priorities set forth in the enabling legislation DPA investigators used a computer word search to locate identical phrases appearing in both documents. They also acknowledged no behavioral health expertise. Should we believe that while Hapgood’s committee was a month late in reaching its recommendation, requiring 90 days rather than 60, due to the reams of response documents evaluators were required to review, that DPA was able to fully examine these applications in just two days?
This is the kind of lawsuit the administration would rather not have rumbling through the courts during a re-election campaign. Why did the Governor’s office have questions about the procurement? What were those questions and who was asking them? Was this curiosity an appropriate exercise of administrative discretion, or does it smack of placing a finger on the scales? Why were so many people at DPA speaking with George DelGrosso? How many other damning emails remain to be placed in evidence and what do they say? Why were calls being placed to DHS from the House Majority (Speaker’s) office? And, what do the prospective intervenors wish to say about the procurement? Did the suspension and eventual cancellation of the initial procurement deny the losers an opportunity to appeal the award to Crisis Access if it is reinstated? Does the state’s suggestion that Crisis Access can request reimbursement of expenses for its response to the failed procurement constitute fair and adequate compensation?
Stern would not permit attorneys for the Mental Health Centers to be heard on the grounds they had no standing to speak to the merits of the injunction request. Obviously, they felt differently. Former Solicitor General Richard Westfall was there to represent the Metro Denver applicants, while Sherman & Howard was in attendance on behalf of the other three regional center applicant teams. At December’s scheduling hearing DHS informed Judge Stern it would soon be ready to announce an award resulting from its second procurement. Stern admonished the Department that the last thing anyone needed was a third party with a potential procurement grievance against the state. According to the state’s legal theory of the case, however, there is no reason why they couldn’t proceed to announce a selected vendor. Legal strife is certain to delay the provision of these much-needed emergency mental health services for another year or more. (Your trusted correspondent will advise you should anything promising transpire, but don’t hold your breath.)
Miller Hudson is a public policy consultant and columnist for The Colorado Statesman. He can be reached at email@example.com.