State privatization effort questioned

By Tim Evans
tim.evans@indystar.com

A massive effort to privatize claims processing for a million needy Hoosiers is drawing fire from critics who say the process is moving too fast and the two contenders have spotty track records.
About the companies

Two consortiums are seeking the $1 billion contract to manage applications and eligibility review for state and federal assistance programs operated by the Indiana Family and Social Services Administration.

• Accenture LLP, a Chicago-based division of Accenture LTD, a Bermuda corporation, is heading one of the bidder groups. (Haven't we already heard of them?)

Accenture has 129,000 employees involved in management consulting, technology services and outsourcing worldwide, including about 100 in Indiana. (No, actually, they are based in Bermuda. Little to No taxes. Voila!)

• IBM and Affiliate Computer Services are heading the other bidder group. (I still wonder why IBM dropped the suit last time? Do you think there will be another?)

Information-technology company IBM has 341,750 employees worldwide and a services segment that offers business performance transformation services, business transformation outsourcing, engineering and technology services.

Dallas-based ACS is a provider of diversified business process outsourcing and information technology outsourcing solutions to commercial and government clients with 52,000 employees worldwide.

Source: finance.yahoo.com

Consortiums headed by IBM and Accenture are seeking the $1 billion contract that could become a contentious issue for the Daniels administration.

The Family and Social Services Administration is expected to announce a private partner within a month. Both contenders have run into problems with similar deals in other states:

Legislators in Texas last month threatened to fire Accenture or ban it from other state contracts following a barrage of complaints.

A partner in the IBM group, Affiliated Computer Services, lost part of a Georgia contract two years ago because of problems processing claims. Texas-based ACS also is the former employer of FSSA Secretary E. Mitchell Roob Jr.

While FSSA officials initially hoped to select a contractor by mid-May, spokesman Dennis Rosebrough said Tuesday that officials need more time.

"It's a big contract -- very complicated -- and we want to make sure we've got it right before we move forward," he said.

Rosebrough said Roob will not be involved in the selection process because of his former ties to ACS.

Privatizing the agency's applications and eligibility review process is intended to improve service to needy Hoosiers, while reducing errors and the expense to taxpayers. (Nope, sorry guys, but it won't....it'll actually cost you millions in Federal funds)

"No one can really argue with the stated reasons for these changes," said Lisa Travis, advocacy and education coordinator for the Indiana Institute for Working Families.

"But we are not aware of any other state doing so much, so fast, and there is no cost-benefits analysis that shows there will be a savings to taxpayers or improvements in services." (Yep. This was mentioned about TX too! And "we" didn't listen.....)

Travis and others contend the process to award the 10-year contract has limited legislative oversight and few opportunities for client, advocate or service provider input.

A similar effort to privatize welfare functions has run into problems in Texas.

State legislators upset about Accenture's handling of a pilot program to manage applications for food stamps, Medicaid and Temporary Aid to Needy Families in two counties have delayed taking the project statewide.

"Unfortunately, there was little testing of the new system before the rollout," State Rep. Dawnna Dukes said in an e-mail response to questions about Accenture's performance in Texas.

Dukes, a Democrat from Austin, said many of the responsibilities initially handed over to Accenture in January have been returned to state employees.

Staffing shortages and technical problems also have caused a backlog of thousands of applications, which delayed approval of benefits for some and improperly terminated benefits for others.

Jim McAvoy, spokesman for the Bermuda-based Accenture LTD, said pilot programs are designed to work out bugs in new systems and blamed some of the Texas problems on new eligibility rules instituted this year. (What are they going to do next year when the policies change again? My God! How stupid do they think we are!?! )

"You set up these systems. You test and you establish a basic benchmark," he explained. "You understand better and you re-engineer the system to meet demand and to solve issues."

An IBM spokesman said he could not comment on the proposal Tuesday.

Rosebrough said Roob and other state leaders knew there was a possibility Roob's former employer would be a bidder "because there are only a limited number of companies who provide these services."

Roob has delegated responsibility for the project to James Robertson IV, director of the agency's division of family resources, said Rosebrough.

Once a firm is selected to do the work in Indiana, Rosebrough said, state officials will negotiate final details of the contract, including the cost. The $1 billion estimate is based on the current cost of the work done by state employees.

None of the about 2,600 state employees involved in the work being privatized will lose their jobs, Rosebrough said, but some might be absorbed by the private contractor with pay and benefits at least equal to what they receive from the state.

Call Star reporter Tim Evans at (317) 444-6204.


Opinion: Privatization Glitches Draw Notice From Afar

Amy Smith
Austin Chronicle

6/1/2006

You know things aren't up to par on the privatization front when newspapers in distant states point to Texas as an example of what not to do, in recounting how a private contractor botched its job with the Texas Health and Human Services Commission.

The May 27 edition of the Fort Wayne, Ind., Journal Gazette pointed out that Texas lawmakers are putting the heat on the project's lead contractor, Bermuda-based Accenture, to clean up its $899 million act (although the newspaper didn't mention that Gov. Rick Perry insists that everything will work out fine in the end).

Indiana officials are considering awarding a similar contract to Accenture, but the Fort Wayne newspaper and other dailies are holding up Texas, as well as other states where Accenture has left its mark, as an example of how ambitious experiments like this one at HHSC can end up smelling like hydrogen sulfide gas.

Rotten eggs, in other words. "If Accenture's misadventure in Texas didn't give [Indiana] officials pause, it should have," the paper warned, adding, "Agency officials should try to find out what went wrong in Texas - and what if anything went right."


BLOGGER NOTES:

This was pulled right from HHSCs own Newslink.

It's kind of funny but I remember reading similar articles published in Mississippi saying the same things about Texas that people are now saying about Indiana!

What is it with this country that we continue to let our government rule without sense?