Hutchinson reports on DHS contracting overhaul; moves Duncan Baird to DFA head up state budget | Arkansas Blog

Thursday, June 11, 2015

Hutchinson reports on DHS contracting overhaul; moves Duncan Baird to DFA head up state budget

Posted By on Thu, Jun 11, 2015 at 2:07 PM

click to enlarge Hutchinson talks about DHS contract problems, his upcoming trip to France and Germany, with press at the Governor's Mansion.
  • Hutchinson talks about DHS contract problems, his upcoming trip to France and Germany, with press at the Governor's Mansion.

Gov. Asa Hutchinson, at what he called a "pen and pad" meeting with the press at the Governor's Mansion, described what actions his office is taking to create "systemic changes" in the way the state Department of Human Services contracts with vendors, a problem that he said had been "festering." Specifically, he named contracts with C.H. Mack, CoCentrix, a vendor he declined to identify — it's IBM — and the vendor for the Enrollment and Eligibility Framework, which is used to determine eligibility for Medicaid, food stamp and other services. He released a  dated today on contract procurement oversight that he sent to the General Assembly.

C.H. Mack contracted with DHS to create a "universal assessment tool" to assess the needs of people served by the aging and adult, disability and behavioral health divisions of DHS. Mack failed to deliver and the state is seeking to recover $4.8 million, possibly through litigation. DHS contracted with CoCentrix after terminating Mack, DHS spokesman Amy Webb said.

Hutchinson said DHS, which has created an office of project management, is seeking to decrease CoCentrix's projected licensure costs "and improve performance of the product." I've asked Webb what the performance issues are.

In the letter to legislators, Hutchinson said an outside consultant, the Gartner Group, has been hired to "determine the technical feasibility of contract performance and to provide a second opinion on the future direction of the EEF review." The cost of the implementation of the system doubled to $200 million, DHS Director John Selig told the legislature's Task Force on Healthcare Reform a couple of weeks ago. Arkansas's share of that sum is about $25 million. Selig said the increase came from changes in specifications by the federal government.

DHS has also withheld $1.23 million in payments to IBM, which Webb said created the software used in the Enrollment and Eligibility Framework. Here's the announcement of that contract, entered into in 2013. She said she did not know the details on why the payments are being withheld. 

Hutchinson also announced that his budget director Duncan Baird will be the new budget director of the Department of Finance and Administration. He replaces Brandon Sharp, who was fired in May. Elizabeth Smith, Hutchinson's chief legal counsel, will become Medicaid inspector general.

Hutchinson leaves Saturday for Paris, France, and Dusseldorf, Germany, to "market" Arkansas's steel and "aerodefense' industries and agriculture. He'll attend the Air Show in Paris and a trade show in Germany, meeting with heads of companies that do business in Arkansas (12 French companies, 20 German) and also "senior leaders" of other industries. "It's a great opportunity to introduce myself as governor ... and expand our existing companies and trying to recruit and showcase Arkansas to other prospects," he said.

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