AMR Threatens $20 Million Lawsuit After Surprise Contract Reversal

Jan. 28--American Medical Response claims Clackamas County county officials rejected the company's ambulance contract proposal for unfounded and capricious reasons and warns that the company may seek up to $20 million in damages.

In May, a month after AMR submitted a bid to offer service, officials notified AMR that the county intended to award the company an exclusive franchise. But last week the county commissioners reversed course, voting 3-2 to reject the contract.

A tort claim filed Monday demands that county officials either approve the proposed contract or extend AMR's existing contract for four years.

In a meeting Tuesday, a deeply-divided board opted instead to attempt to negotiate a one-year contract extension.

The dispute began Jan. 21, when Commissioners John Ludlow, Tootie Smith and Jim Bernard voted against against approving the contract. Commissioners Martha Schrader and Paul Savas put up a passionate fight to move it forward, for fear of litigation and because only four months are left on the county's current contract with AMR.

The reversal caught Clackamas County fire districts and emergency service agencies by surprise. In December, the county's Emergency Medical Services Council, which represents all fire departments in the county, unanimously advised the commissioners to sign the contract.

American Medical Response, the county's current ambulance provider, submitted the lone bid for the multi-million dollar contract, one of the county's largest. Metro West, a competitor, submitted a bid after the deadline, and it was not accepted.

After bidding closed and the county signaled its intention to approve the contract, AMR General Manager Randy Lauer agreed to permit the county to publish his company's proposal on the county website.

Now that the commissioners have rejected the contract, company officials contend that publishing AMR's proposal puts them at a disadvantage if the commissioners issue a new request for proposals. Furthermore, the tort claim contends that revealing AMR's proposal prior to contract award violates Oregon's Uniform Trade Secrets Act and entitles the company to triple damages and recovery of attorneys fees.

Timeline

2012

Jan. 24 -- Board directs staff to negotiate one-year extension with AMR and develop an RFP.

Feb. 29 -- Board approved AMR extension until May 1, 2014.

Sept. 11 -- Stakeholders meetings begin to craft RFP.

Nov. 1 to 21 -- Draft RFP available for public comment.

2013

Feb. 6 -- Board issues RFP.

April 24 -- American Medical Response proposal received on time; Metro West proposal received late and not accepted.

May 22 -- Evaluation Committee scores proposal; makes recommendation to board.

May 30 -- Board approves notice of intent to award contract to American Medical Response; authorizes staff to start negotiating contract.

Oct. 3 -- County make RFP, AMR proposal, current AMR contract and the proposed contract available for public review.

Dec. 18 -- Board deadlocks on moving the contract to a business meeting for a public hearing.

Dec. 19 -- County's Emergency Medical Services Council writes letter urging board to approve the contract.

2014

Jan. 16 -- Board deadlocks again on moving the contract to a business meeting for a public hearing.

Jan. 21 -- A 3-2 vote by commissioners rejects the proposed contract.

Jan. 27 -- American Medical Response files a tort claim against the county.

"By publishing its bid, cancelling the RFP and re-soliciting, Clackamas County failed to act impartially and has undermined open competition, thereby violating the Oregon's express public policy," wrote attorney John DiLorenzo in the tort claim. He wrote that "AMR is entitled to recover punitive damages and attorney's fees because the county's actions were malicious or willful."

Lauer previously estimated that his company spent $500,000 on the rejected proposal. He said he was unsure whether AMR would submit a new bid if the process starts all over again because other bidders would have the advantage of knowing details of his company's bid and because he thinks some commissioners are biased against AMR.

The tort claim singles out Commissioner Jim Bernard, saying that he tried to persuade a key American Medical Response employee to work for Metro West. Bernard said commenting would be inappropriate because he is named in the claim.

Lauer told The Oregonian and the board that AMR would extend the current contract -- which is already on a one-year extension -- rather than leave county residents without ambulance services in May.

However, the board's vote stipulates that the new one-year extension must be completed by March 1. The commissioners again split 3-2 on the decision, with Schrader and Savas preferring a two- to four-year extension because county staff estimate a new request for proposals will take at least two years to prepare.

"I still believe that AMR has won the contract fair and square, and I think it's a shame we're at this juncture," Commissioner Schrader said.

If AMR refuses to negotiate a one-year extension, the board will consider a longer extension or other interim solution. Smith maintained that the one-year extension would benefit the board, because it would invite new ideas and innovations.

"I think the board has a real opportunity to go not with the status quo as it has been for several decades," Smith said. She didn't explain specific details of what she wanted to see, other than relying on fire departments more for ambulance services.

The board room was packed Tuesday with AMR employees, so that many stood against the walls of the hearing room, and out the door. Many came to the meeting directly from a protest rally that morning on Interstate 205 and Sunnyside Road. Some commissioners acknowledged the backlash from the employees, who have been criticizing the commissioners in public meetings as well.

"There's really no reason for AMR to negotiate with us," Bernard said. "They feel as we have slapped them in the face. And that's probably justified."

-- Molly Harbarger

Copyright 2014 - The Oregonian, Portland, Ore.