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Firm behind Florida unemployment mess will get $135 million state contract after all

The firms that had challenged the contract awarded to Deloitte Consulting removed their complaints last month. It’s unclear why.

TALLAHASSEE — Deloitte Consulting, the company behind Florida’s disastrously faulty unemployment system, is getting another huge state contract after all.

Despite months of negative publicity, including criticism from Gov. Ron DeSantis, the Agency for Health Care Administration is moving forward with Deloitte on a potential $135 million contract to overhaul the state’s Medicaid data system.

In August, the agency announced its plan to award Deloitte the contract. But the new project got delayed when two of Deloitte’s competitors, Accenture and IBM, filed bid protests claiming, in part, that Deloitte lied on its bid and the state ignored its history with the unemployment system.

Last month, however, both companies suddenly dropped their bid protests — without explanation —clearing the way for Deloitte to win the award.

“All protests to the Procurement Award have been removed,” read a slide from an official meeting last week on the state’s Medicaid operations.

Officials with IBM and Agency for Health Care Administration didn’t respond to requests for comment. A spokesman for Accenture declined to comment.

Now that the challenges to Deloitte’s contract have been dropped, DeSantis spokesman Fred Piccolo said in a statement that the governor is directing agency officials to make sure the project comes in on time and on budget.

Piccolo noted DeSantis has said the state bidding process should be “free from political interference.”

Sen. Janet Cruz, D-Tampa, blasted the governor for not doing more to stop what she called an “outrageous” contract.

“I believe it’s within the Governor’s right to halt all contracts, but he won’t,” Cruz said. “Instead we reward incompetent Deloitte more taxpayer dollars.”

Deloitte Services Director Jonathan Gandal defended the agency’s decision in a statement, saying that the company had “deep experience” helping states upgrade their Medicaid systems.

“Deloitte received the highest score in this open and competitive procurement after an independent committee evaluated all the proposals and determined that we offered the best value to Florida taxpayers from both a technical and financial perspective,” Gandal said. “We look forward to collaborating with (the Agency for Health Care Administration) on this important project.”

When the contract with Deloitte was announced in August, it immediately sparked controversy at the highest levels of state government. Deloitte was already under fire after the unemployment system it was paid millions continuously failed in the first days and weeks of the coronavirus pandemic. DeSantis had blasted the company in numerous news conferences and ordered an investigation into the state’s contract with the company.

“Obviously, I don’t want Deloitte getting contracts, personally, because we’re investigating what happened with the unemployment system,” DeSantis said days after the awarded contract was announced.

The governor noted then that Deloitte’s contract was being challenged by other bidders. In their now-dismissed complaints, Accenture and IBM spotlighted what they said were flaws in how state officials chose Deloitte to initially get the contract.

Accenture’s protest, for example, noted that Deloitte misrepresented its record to the state. Deloitte, when asked to note any past sanctions from governments for poor performance, did not disclose any fines within the past five years.

However, Deloitte’s work on Florida’s unemployment system — for which it was fined some $8 million for poor performance — ended in 2015. That was within the five-year window specified by the application. The Times/Herald reported on this discrepancy a month before Accenture filed its protest.

In its complaint, IBM claimed a state evaluator failed to consider entire portions of the company’s application, artificially deflating IBM’s eventual score.

The state does not appear to have addressed questions raised by the protesting firms. Instead, each agreed independently to drop the issue, records show.

Sen. Darryl Rouson, D-St. Petersburg, said in the wake of this most recent contract, he will be introducing legislation to remake the process the state uses to award these large contracts.

“As Floridians, we deserve more from our agencies—what we don’t need are more backroom, sweetheart deals with vendors that have questionable track records,” Rouson said.

Accenture will continue working with the state on a different facet of the Agency for Health Care Administration’s Medicaid modernization effort. In 2019, the firm was awarded a contract of about $40 million to do that work.

The Medicaid overhaul could have major consequences for millions of Floridians. According to the Kaiser Family Foundation, about one in five Floridians benefit from the federal program in some form or another.

The idea behind the modernization effort is to build a system that will allow for more efficient communication between the many government agencies that interact with the various state Medicaid programs.

Although few know what such a streamlined system would actually look like — it’s not easy to put payment, patient and medical history data from across Florida in one easily accessible place — there are big picture benefits to the state’s plan. Medicaid fraud could theoretically be more easily detected if state agencies are able to monitor data trends using the data warehouse. Patient outcomes could theoretically be improved if various government actors are able to properly access records from other departments.

That’s why the effort involves major investment from the federal government. The feds are covering as much as 90 percent of some of the major upgrades to the system, including the Florida data warehouse.

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