Bid Rejection Perils Funding for County Home Care Program

Chastised by Assemblyman Steve Peace (D-San Diego) to “not act . . . like a wimp,” the San Diego County Board of Supervisors, ignoring threats of a potential multimillion-dollar cutoff in state funding, on Tuesday rejected a Chicago company’s bid to provide homemaker services for the elderly and disabled.

The supervisors’ unanimous action, which reaffirmed an action taken by the board in October, appears to place the county on a collision course with the state over operation of the county’s In-Home Supportive Services (IHSS) program.

The board’s vote also infuriated an executive of the Chicago firm--which bid $1.1 million lower than a local company that now has the $5.3-million-a-year contract--who charged that the supervisors had “caved in” to pressure from a local labor union and to “bias toward . . . the hometown boys.”

“When I came here, they told me San Diego wasn’t like Chicago,” said Mark Heaney, executive director of National Homecare Systems. “But this is worse than anything in Chicago. This whole process was a joke.”

Reconsideration Due

Although the supervisors are scheduled to reconsider the matter today, county officials expressed concern that Tuesday’s action--which was contrary to the wishes of state Department of Social Services officials, as well as against the advice of county staff--could endanger millions of dollars in state funding for the program.

“I suspect that this thing could eventually end up in court,” Don Dudley, assistant director of the county’s Social Services Department, said after Tuesday’s meeting.

The IHSS program has been a subject of controversy since the summer, and Tuesday’s action, though inconclusive, did little other than exacerbate the disagreement and delay its ultimate resolution.

Under the program, about 2,200 poor elderly and disabled persons throughout the county receive assistance with shopping, cooking, cleaning and other chores from about 600 employees of Remedy Temporary Services, the local company that currently supervises the in-home program. The purpose of the program is to reduce public costs by enabling people who cannot care for themselves to remain in their own homes rather than be placed in nursing homes or other public facilities.

Made Lower Bid

Last summer, when the board solicited bids for the program, Chicago-based Wright Marketing Inc. (doing business under the name National Homecare Systems) bid more than $1 million less than Remedy.

Several supervisors, however, expressed concern about National’s qualifications to perform the service and also expressed doubts about the bidding process that led to the company’s low bid.

Specifically, some supervisors argued that because Remedy’s salary structure was known, National was able to undercut Remedy’s bid simply by basing the projected cost on lower salaries. Based on figures provided by the United Domestic Workers of America, the union that represents the home workers, National’s entry level starting salary would have been $3.75 an hour, compared to Remedy’s existing $3.94 figure which, if Remedy retains the contract, is scheduled to increase to $4.25. Union officials also complained that it would take workers longer to achieve raises under National’s pay plan than under Remedy.

“Anytime one bidder knows the other’s salary structure, it isn’t a fair bid process,” Supervisor John MacDonald said. Other supervisors warned that the lower salaries also could have produced less-qualified workers.

Union Faulted County

Union officials faulted the county for not specifying a minimum hourly wage or a requirement that existing workers be retained within the bid proposal.

“Something definitely fell between the cracks,” said Fahari Jeffers, the union’s executive vice president. “By not establishing a minimum, the county made it possible for salaries to go down. No one probably thought that anyone would bid lower than the wage being paid now. But that’s exactly what happened.”

Amid the simmering dispute, the supervisors voted 3-2 in October, with Brian Bilbray and George Bailey dissenting, not to award the contract to National. In so doing, the board ignored the recommendation of its own county staff, which recommended that National receive the contract and described the Chicago firm as having “a solid reputation for professionalism and integrity.”

Instead, the board’s majority proposed that the bids of both Remedy and National--the only two companies that bid on the project--be rejected and that the bid process be repeated.

Requested Extension

However, because the existing contract was scheduled to expire at the end of November, the county requested a three-month extension from the state so that a second round of bids could be solicited.

The state Department of Social Services agreed to a 30-day extension to the end of this year, but, after reviewing the county’s actions, rejected the county’s request.

“The basis for your request for an extension is that the bid process was fatally flawed due to ambiguity of the bid specifications and that the wage specifications would not ensure an orderly transition and long-term stability of the program,” state Social Service Director Linda McMahon wrote to the county on Dec. 7. “After reviewing all of the public record, it is clear that the bid was not ambiguous.”

The impending deadline lent a sense of urgency to Tuesday’s meeting, at which county administrators reiterated their earlier recommendation that National be awarded the contract.

Rejected Advice Again

For the second time, however, the board rejected that advice and indicated its intention to seek new bids--this time, after some caustic words from Peace.

“You’ve said the state told you this or that, but it’s just one petty little two-bit bureaucrat who told you,” Peace told the supervisors. “The bureaucracy in Sacramento . . . doesn’t have the authority to force you on this.

“Something stinks in this deal. If you people are going to roll over because of one individual in one department . . . don’t ever come back and complain to me about this Legislature or this state . . . forcing you to do anything. If you’re going to be a wimp on this one, don’t expect me to fight for you the next time there’s a battle. Don’t leave me blowing in the wind . . . when one little department wants to flex muscles it doesn’t have.”

County Social Services official Dudley, however, said later that county administrators have “found nothing to suggest that the state doesn’t have the authority” to possibly cut off funds for the $423,000-a-month program if it disagrees with the county’s handling of it.

McMahon’s Dec. 7 letter noted that, from the state’s perspective, the county had two options: awarding the contract to National or converting the IHSS program to a so-called “individual provider” system under which homecare workers would be hired by the county on a one-by-one basis, rather than under a contract supervised by a private company.

Critics of the independent provider method, however, charge that it leads to ineffective service because of the lack of central supervision. Homeworkers, meanwhile, dislike that system because they would be paid about 20 cents per hour less than they now make, according to union officials.

With Tuesday’s action all but assuring that a new contract will not be in place by the end of this month, county officials have begun scrambling to ensure that there will be no gap in coverage over the next several months. At Tuesday’s meeting, Lucille Moore, a spokeswoman for Remedy, made this pledge: “Everything Remedy can do to make sure every client is covered, we will do.”

Similarly, United Domestic Workers union President Ken Seaton-Msemaji promised the supervisors that his union’s workers “will not leave any client hurting.”

Temporary Pay Cut

Until a new bid is awarded, county officials have suggested that existing Remedy employees be retained as “independent providers.” Although that means a temporary pay cut, union official Jeffers said that workers are willing to accept the wage reduction, “because two or three months of a pay cut is better than three years of (National).”

However, because of the state’s opposition to any rebid process, county administrators fear that the state may cut off funds for the program, forcing the county, which now pays only a small portion of the cost, to absorb the entire bill.

“To pay the whole thing would be virtually impossible for the county,” Dudley admitted.

If county officials were concerned about the potential impact of Tuesday’s action, however, National executive Heaney was fuming after the meeting.

Audibly cursing as he paced the hallway outside the board’s meeting room, Heaney charged that the supervisors were swayed by “hometown preferences” and by fears that the program could be disrupted because of the union’s threats that its members would not work for National.

“We’re an out-of-towner, we don’t represent registered voters . . . who can march in and make threats,” said Heaney, who unsuccessfully sought to persuade the supervisors that his company would have no trouble finding qualified workers for the program. “They’re predisposed to vote for the hometown boy.”