Prison Heath Privatization Faces More Legal Trouble
Florida’s long-running push to privatize prison health services could face another obstacle, as a likely contractor has taken a bidding dispute to a state appeals court.
Wexford Health Sources, which is slated to receive a contract to provide inmate health care in South Florida, filed a notice last week that it will appeal a Department of Corrections decision to dismiss a bid protest. Wexford filed the protest in July, after the department indicated it would contract with a competitor, Corizon, Inc., to serve prisons in other parts of the state.
The department also is expected to face a lawsuit that could be filed this week by the American Federation of State, County and Municipal Employees, a union that wants to block privatization. AFSCME said it would file the lawsuit after a legislative panel Wednesday made budget changes that would allow the department to move forward with contracting.
Corrections spokeswoman Ann Howard said Thursday the agency is continuing with the privatization effort, despite Wexford’s challenge in the 1st District Court of Appeal.
“At this point, we’re going to continue moving forward,” Howard said.
The Wexford appeal, however, creates uncertainty. If the company succeeds in the appeal, the bid protest would be revived and would go to an administrative law judge. That judge could call for changing the contract awards or even starting the procurement process again.
Wexford’s protest stems, at least in part, from the department’s decision to award contracts in different parts of the state. M. Christopher Bryant, an attorney for Wexford, said a major issue in the protest is that the department decided to award a combined contract for three regions to Corizon, while awarding only the South Florida region to Wexford.
In a protest document filed with the department in July, Wexford questioned whether the combined contract for Corizon was the “most cost-effective option for the department to provide health care services. Wexford contends that it is not, and is thus arbitrary and contrary to competition.”
The department’s dismissal of the protest, however, did not address such issues. Instead, it focused on a somewhat-esoteric legal issue about bonds that companies have to post when they challenge state bid awards.
Wexford provided a $100,000 check to serve as its bond, but the department said that amount was “deficient” and did not comply with state law. The bond requirement is aimed at making sure litigation costs get covered when the state wins bid-protest cases.
State law calls for bonds to total 1 percent of the overall contract amounts. Wexford contends that would have forced it to provide a $25 million bond, based on the department awarding five-year contracts and four different bid-award scenarios.
Wexford argues that such an amount is unconstitutional, with Bryant describing it as a “barrier” to legally contesting bids. But in its order last month dismissing the bid protest, the department took issue with the $25 million figure and Wexford’s arguments.
“Petitioner (Wexford) has not submitted a bond in the required statutory amount for any of the competitive solicitations, let alone all four,” the order said. “Further, the bond provided by petitioner was not based on the estimated contract amount for any of the competitive solicitations.”
The appeal, which likely will take months to resolve, is the latest twist in an ongoing controversy about the state contracting with companies to provide prison health services.
Lawmakers last year included fine print in the state budget that called for privatization. But AFSCME and the Florida Nurses Association filed a lawsuit challenging the constitutionality of using the budget fine print, known as proviso language, to make such a change.
Leon County Circuit Judge Kevin Carroll in July declined to rule on the constitutional question because the proviso language expired with the June 30 end of the state fiscal year. That led the department to announce it would go ahead with the privatization, based on other authority in state law.
The Legislative Budget Commission, a joint House and Senate panel, made budget changes Wednesday that were needed for the department to move forward. But AFSCME vowed to file another lawsuit to try to stop the privatization.
by Jim Saunders