Errors and omissions: Goof-up has Colorado crisis bidders seeing red – and green

It is unusual to speak with a public official who volunteers to explain how a series of costly errors happened on her watch. How errors, apparently made by inexperienced people, evaded internal controls and senior staff attention. How they ended up playing a significant role in the cancellation of $20 million in crisis services contracts less than two weeks after the winning bidders were announced.

Yet, with some courage, that is what Susan Beckman, chief of administrative services for the Colorado Department of Human Services did, only days after her department acknowledged its role in delaying the implementation of the state’s new crisis response network by months. The network itself was the brainchild of Gov. John Hickenlooper and state legislators, who supported a bill in early 2013 to fund a statewide crisis services hotline and a series of new walk-in crisis centers.

The governor’s original proposal underwent a significant evolution on the way to passage. In the face of an alternative plan advanced by the Colorado Behavioral Healthcare Council (CBHC) – a group representing the state’s 17 existing community behavioral health centers - the bill was substantially revamped and its proposed funding more than doubled to nearly $20 million. CBHC members argued that large urban areas would win placement of the five or six new walk-in centers promised in the governor’s plan, leaving rural areas without adequate help.

They argued that, instead of building new capacity, the state invest in existing treatment capabilities. They proposed a network of 13 short-term crisis stabilization units to be developed at a cost of $1.27 million. They also identified a significant gap in the governor’s plan and suggested an additional $9.5 million to fund four regional crisis-response and respite services teams. These teams would be capable of responding within an hour or two to urgent needs anywhere in the state, they maintained. The bill, inclusive of many of the providers’ suggestions, passed in May.

The bid specification that resulted walked something of a line, reflecting the interests of legislators and key stakeholders. While all involved wanted to build a crisis response system based on the best available thinking, there was also an expectation that crisis services funds would “build on existing foundations, with an eye toward innovation.” To many in the state, this meant that funds would flow to providers with established local relationships as a means of strengthening local mental health infrastructure. The RFP could legally have assured this by requiring that only in-state organizations with years of experience need apply. But officials didn’t do that. Instead, they developed a weighted scoring process.

On October 16, the winning bidders were announced. All four regional mobile crisis-services contracts – some $9.5 million of the additional crisis services funding contained in the plan advanced by CBHC – had been swept by Crisis Access of Colorado (Englewood, Colo.). Crisis Access is a group headed by CEO David Covington, former head of Adult Services for Magellan in Maricopa County, Ariz. It also includes Behavioral Health Link of Atlanta, the operator of Georgia’s suicide prevention hotline, and Recovery Innovations of Phoenix.

A flawed bid process

In an interview with Behavioral Healthcare, Beckman explained why the Department of Human Services subsequently decided to nullify the entire bidding process. She said that the problems with the bid process preceded the announcement of the winning bidders. In fact, they go back to the fact that the bid specification itself was flawed.

Beckman described the current situation as “horrible,” stating that the original bid specifications “not only did not meet the intent” of the legislature’s bill, “but also the requirements.” When, following the bid awards, complaints arose about the bid specifications and the awards, Beckman says that her department kicked the matter upstairs to Colorado’s Department of Public Administration (DPA) for an independent review. She points to the results: a one-page executive summary that notes “fundamental errors in the criteria” used to select the winning bidder, including “missing information and calculation errors.”

When asked whether the errors made a material difference in the detailed judges’ comments and scores awarded to each of the original bidders, Beckman replied, “The procurement work was sloppy,” and referenced the DPA’s assessment that it allowed for “variations in scoring that weren’t allowed, variations that affected the weighting of key criteria.”

But Beckman’s revelations were cold comfort to Crisis Access of Colorado, whose team celebrated the state’s notice of award on October 16, only to see them suspended on October 24 pending DPA review, and subsequently reversed on November 1. On that date, the state announced that its crisis services RFP – a key initiative of Governor Hickenlooper’s administration – was a “failed solicitation.”  

Legal challenge

Crisis Access CEO David Covington alleges that CBHC members illegally used political connections, rather than a state-mandated written protest process, to overturn the results of its winning bid. The group today filed a formal protest in District Court (Denver County, Colo.) noting its “unanimous” selection by the RFP bid evaluation committee and challenging the bid nullification as “arbitrary and capricious.”  In the filing, Crisis Access references a series of communications referencing the now-cancelled bid award, seeking to demonstrate that the evaluators clearly appreciated the guiding principles of the enabling statute.  

The filing challenges the state’s contention that the bid specification and process were flawed, instead asserting that the losing bidders resorted to “inappropriate ex parte communications” to “reverse the award without having to file a protest.” The filing requests a preliminary injunction to halt the award of new contracts until the matter is resolved.

Covington points to a November 4 e-mail from Harriett Hall, the CEO of Jefferson Center for Mental Health and the chairperson of CBHA, that hails the state’s “unprecedented” decision to “suspend the RFP.” Hall thanks fellow providers for the “concerns expressed to CDHS and the Governor’s office” and the “strong support” that “were vital to this solution.”

Apart from the filing, Covington’s allegations that ex parte communications affected the outcome drew denials not only from Beckman in her November 27 interview, but also from Clint Woodruff, director of the state’s Division of Financial Services, who had rejected Crisis Access’ detailed written protest of the award withdrawal in writing on November 21. Woodruff stated: “it appears . . . that some community groups or individuals were communicating with each other and taking credit for Department action” and that “obviously, the CBHC was disappointed in the initial recommendation of award to Crisis Access.” However, he maintained, “The Department cancelled the solicitation subsequent to review by the DPA. . . . . [It] followed the applicable procurement regulations and law.”

Only days later, on November 29, the Denver Post reported that after hearing complaints about the bid award from leaders of the mental health centers, State Sen. Irene Aguilar, a sponsor of the crisis services funding bill, said that “she reached out to Reggie Bicha, the director of the Colorado Department of Human Services” and that it was Bicha who “got the process stopped so that the grants weren’t inadvertently given incorrectly.” Incidentally, Senator Aguilar cancelled a scheduled Nov. 27 interview with Behavioral Healthcare and referred us to Beckman’s office instead.

Beckman’s team launched a new crisis services RFP on Nov. 22, a revised version that Beckman promises will be “perfect.” Despite its pending lawsuit and concerns that the details of its now-cancelled winning bid and evaluator’s comments about it were provided to competitors, Crisis Access is participating in the new process. Beckman said that the new bids, due in January, will be evaluated by a new selection committee, using a corrected scoring system.

Just whose claims, or bids, will prevail in the controversy over crisis services procurement in Colorado remains to be seen. The state will announce the winning bidders in February. Whether a judge will have anything else to say on the matter is a separate question.