A few days ago the state threatened to fire the company – computer giant ACS – it gave the biggest state contract (installing a new Medicaid claims system) to a year ago. That‘s a $171 million contract and, right now, after working on it a year ACS is a year behind schedule. When the company asked the State to pay it an additional $40 million – over its original contract – the State threatened to fire ACS and cancel the whole deal.
But now, the State and ACS have agreed to ‘a cooling off’ period to let their dispute simmer a while.
This may turn out to be one of the biggest contract fiascos in state history.
A year ago, when the State awarded the contract to ACS – taking it from the previous claims processor, EDS – it boasted the new contract was going to save taxpayers millions. It was the greatest thing since sliced bread. Today, EDS is still processing the claims and, I guess, if the State cancels ACS contract the millions the State has paid them over the past year will have been wasted.
One footnote, the contract was awarded to ACS by the State Department of Health and Human Services while former legislator, Lanier Cansler, was Deputy Secretary of the Department. Today, Cansler is a consultant for ACS.
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