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HomeMy WebLinkAboutAgenda - 03-01-2005-5gORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 1, 2005 Action Agenda Item No. J SUBJECT: Cost Allocation Plan Contract DEPARTMENT: Finance ATTACHMENT(S): Contract Letters from MAXIMUS PUBLIC HEARING: (Y/N) No INFORMATION CONTACT: Ken Chavious, ext 2450 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider approving a contract with MAXIMUS, Inc. for the preparation of Orange County's Cost Allocation Plan. BACKGROUND: Office of Management and Budget Publication A-87 requires counties receiving federal funds to develop a Cost Allocation Plan annually. Preparation of this plan qualifies the County to receive reimbursement for local resources used to administer certain State and Federally funded programs. In addition, the Cost Allocation Plan is a tool used by staff in developing the full cost of providing certain services, MAXIMUS, formerly operating as David M, Griffith and Associates, has provided this service to the County for many years with minimal increases in cost, The work performed has generated significant revenue far the County, MAXIMUS is currently working on a project for the Town of Chapel Hill, During the Town's consideration of the firm, several issues surfaced regarding alleged improprieties involving MAXIMUS's performance under contracts far the State of Wisconsin's Department of Workforce Development in 2000 and New York City's Human Resources Administration in 2001. There were also articles in the local media regarding MAXIMUS and its proposal to perform services for the Town. After investigating the situation, the Town decided to continue tc contract with the firm, since the divisions of the company that were involved in the Wisconsin and New York situations were totally separate and apart from the divisions providing services to the Town. Attachments to this abstract include a letter written to Chapel Hill Town Manager Cal Horton, by Rachel Rowland, Regional Vice President for MAXIMUS. The letter addresses the incidents mentioned above. Similar to the Chapel Hill situation, the work that has been performed by MAXIMUS for the County is also performed by a different division than those mentioned above,. Another attachment to this abstract is a letter from Dianne Mazo, Senior Manager with MAXIMUS, who personally has prepared Orange County's Cost Allocation Plan for the past six years. As z outlined in the letter, MAXIMUS currently prepares these plans for over 100 units of government in the State of North Carolina. Orange County staff are not aware of any complaints lodged against this firm related to the preparation of cast allocation plans in the State of North Carolina and have been highly satisfied with work produced by MAXIMUS over the years. In light of general concerns about ensuring that the County does business only with vendors with demonstrated high ethical standards, staff will explore options to enhance the level of reference checking that is performed regarding recommended contractors, particularly for those with whom the County has had little or no previous dealings. FINANCIAL IMPACT: The cost of the contract for the 2004 Cost Allocation Plan is $9,200, the same as last year. Funds to pay for the current year contract are budgeted in the Central Services departmental appropriation. General fund revenues from the State and Federal governments and internal charge backs resulting from the Cost Allocation Plan have been in excess of $700,000 annually over the past several years. RECOMMENDATION(S): The Manager recommends that the Board approve the contract with MAXIMUS, subject to final review by staff and the Gounty Attorney, and authorize the Chair to sign it. 3 FY 04 Agreement to Provide Professional Accounting Services to Orange County, North Carolina THIS AGREEMENT, entered into this day of , 2005 and effective immediately by and between MAXIMiIS, Inc. (hereinafter called the "Consultant") and Orate County, State of North Carolina (hereinafter called the "County"), WITNESSETH THAT: WHEREAS, County has programs which it operates with Federal funding, and WHEREAS, County supports these programs with support services paid from County appropriated funds, and WHEREAS, the Federal government and the State will pay a fair share of these casts if supported by an approved cost allocation plan, and WHEREAS, the Consultant is staffed with personnel knowledgeable and experienced in the requirements of developing and negotiating such governmental cost allocation plans, and WHEREAS, County desires to engage the Consultant to assist in developing a plan which conforms to Federal requirements and will be approved by their representatives NOW THEREFORE, the parties hereto mutually agree as follows: 1. Engagement of Consultant. County agrees to engage Consultant and Consultant hereby agrees to perform the following services. 2. Scope of Services. Consultant shall do, perform and carry ottt in a good and professional manner the following services: a. Development of a central services cost allocation plan which identifies the various costs incurred by County to support and administer Federal programs. This plan will contain a determination of the allowable costs of providing each supporting service such as purchasing, legal counsel, disbursement processing, etc. b. .Prepare indirect cost proposals for federal grants as necessary, c. Negotiation of the completed cost allocation plan with the representatives of the State or Federal government, whichever is applicable. 3. Time of Performance. The services to be perfozzned hereunder by Consultant shall be undertaken and completed in such sequence as to assure their expeditious campletion and best carry out the purposes of the agreement. The cost allocation plan, based upon the previous year's audited expenditures, will be available on oz befare June 30, 2005, based upon a mutually agreed project schedule, for your review and our negotiatian with Federal and State representatives.. 4. Contract Term and Com ensation. The term of this conuact shall be for a period of one year. County agrees to pay Consultant a sum no[ to exceed nine thousand two hundred dollars ($9,200), for all services required herein to complete the respective cost plan, which shall include reimbursement for expenses incurred, Consultant agrees to complete the project and all services provided herein, for said sum, The fee will remain the same, unless the scope of the project is amended in writing by Catmty. Any and all changes will be accomplished in accordance with Paragraph 6 of this conuact.. 5. Method of P_ ayment. Consttttant shall be entitled to payment in accordance with the provisions of this paragraph. Consultant will be entitled to a frxed amount as indicated above. Consultant's fees are due upon the rendering of a bill upon the completion of the cost plan for each year. 6. Chan es. County may, from time to time, require changes in the scape of the services of Consultant to be performed hereunder. Such changes, which are mutually agreed upon by and between County and Consultant, shall be incorporated in written amendment to this agreement. 7. Services and Materials to be Furnished b County. County shall locally furnish Consultant with all available necessary information, data, and material pertinen[ to the execution of [his agreement. County shall cooperate with Consultant in carrying out the work herein and shall provide adequate staff far liaison with Consultant and other agencies of County government. 8. Termination of Agreement for Cause. If, for cause, Consultant shall fail to fulfill in timely and proper mannez his obligations under this agreement, County shall thereupon have the right to terminate this agreement by giving written notice to Consultant of such termination and specifying the effective date thereof, at least five (5) days before the effective date of such termination. z 5" 9. Information and Reports. Consultant shall, at such time and in such form as County may zequire, furnish such periodic reports concerning the status of the project, such statements, certificates, approvals and copies of proposed and executed plans and claims and other information relative to the project as may be requested by County. 10. Copyright. County acknowledges that the report format to be provided by Consultant is copyrighted, Consultant shall ensure that all copies of its report bear the copyright legend. County agrees that all ownership tights and copyrights thereto lie with Consultant. County may use the report solely for and on behalf of County's operations, County agrees that it will take appropriate action by instruction, agreement or otherwise with its employees to satisfy its obligations with respect to use, copying, protection and security of the report fozrnat.. 11. Notices. Any notices, bills, invoices, or reports required by this agreement shall be sufficient if sent by the parties in the United States mail, postage paid, to the address noted below: Orange County MA}CIMl15, Inc, 208 S. Cameron Street 1100 Logger Court, Suite D-100 Hillsborough, NC 27278 Raleigh, NC 27609 12, Assignment. Consultant agrees not to assign, convey or transfer its interest in this Agreement to any other entity without the prior written consent of County, which consent shall not be unreasonably held, provided however, that Consultant may assign this Agreement to its parent corporation or to an affiliated company that succeeds to the business of Consultant contemplated herein. 13. Consultant Liability if Audited. Consultant will assume all fananciai and statistical information provided to Consultant by County employees or representatives is accurate and complete. Any subsequent disallowance of funds paid to County undez the claim for whatever reason is the sole responsibility of County. In no event shall either party, its directors, offacers, employees az agents be liable for any special, incidental, punitive, indirect, or consequential damages arising out of or in connection with the services provided or softwaze licensed undez this agreement, including but not limited to lost revenue; lost profits, replacement goods, loss of technology rights or services, loss of data, or interruption or loss of use of software or any portion thereof; even if advised of the possibility of such damages. This limitation shall apply to all claims whether under theory of contract, tort (including negligence), strict liability, or otherwise, 1v1AXIMUS liability (if any) to County or any third party is limited to the amount paid to MAXIMUS for softwaze license feesand/or the services.. 14. Contingencies. County intends to make all payments required to be made under the Agreement for the term of the contract. However, in the event, through no action initiated by County, the County Board of Commissioners does not appropriate funds 3 for of this Agreement and it has not funds to continue this Agreement from other sources, this Agreement may be terminated, To effect the termination of this Agreement, County shall, thirty days prior to the beginning of the fiscal year for which the Board does not appropriate funds, send written notice to Consultant stating that its Board failed to appropriate funds, IN WITNESS WHEREOF, County and .the Consultant have executed this agreement as of the date first written above.. County of Orange By: (County Official) MAX ITS, Lnc. By: ~ z, Dianne L,. Mazo Senior Manager 4 HEL,PLNG GOVERNMENT SERVE ~ dE PEOPLE° January .31, 2005 Mr. Ken Chavious Orange County Finance Director 208 S. Cameron Street Hillsborough, North Carolina 27278 Dear I{en: Last Thursday, we talked about the News and Observer article that had several unfavorable things to say about MAXIMUS after we were awarded a contract to do an efficiency study for the Town of Chapel Hill. The following day, a more favorable article appeared in the Durham paper with comments from some very satisfied clients of MAXIMUS You indicated that your board members were holding off on approving the Cwo contracts that we have before them (for the FY 04 cost allocation plan and the FY 04 EMS Medicaid Cost Report) until more information was provided that addressed the issues in Che article. I am enclosing the letter' wtitCen by Rachael Rowland, our Vice President of Government and Public Relations, for the Town of Chapel Hill.. The letter offers quite a biC of insight and explanation into the allegations in the article. I would like to add that Orange County has been a valued client of ours in the North Carolina office for at least 20 of Che 26 years that we have been prepay°ing cost plans in the State. I have been preparing cost plans and related studies in NC for more than 23 years and have prepared the last six plans for the County personally- I also prepared a pro forma full cost plan to identify proposed overhead for the Landfill when the county took that over and have prepared the County's EMS Medicaid Cost Report for the four years that that project has been in existence. The last cost plan identified in excess of $1.6 million in indirect costs for Social Services and Child Support. The county realizes approximately 50% reimbursement for those costs. You also know that, as part of our fee, I am always available to answer questions and offer expertise or advice when issues arise during the year. Currently, we prepare cost plans for more than 100 counties, cities, and state agencies in North Carolina and EMS reports for 25 counties.. We also assist many of our clients with rate calculations for health grants and with calculating projected reimbursements for new social services buildings, We are totally dedicated to preparing quality work on a timely basis for our clients each year. I understand how what was published would cause you, your manager, and the board concern. I sincerely hope that this letter, Rachael's letter, and an internal review of t 100 LOCGL'Ii COllRI', SUI7 f D-100 ~ RAL PIGFI, NC 27609 ~ 919 876.8042 ~ 919 878.8592 PAX ~ W WW MAXIMUS COM all of the important work that we, as DMG and now MAXIMUS, have done for the County will diminish those concerns. I look forward to hearing from you soon. Please contact me if you have any questions or need additional information, Sdm~rely, /` Dianne L Mazo Senior Manager Enclosure ~~~~~~ J HELPING GOVERNMENT SL. VE THE PEOPLE° January 28, 2005 Mr. Cal Horton Town Manager Town of Chapel Hrll 306 North Columbia Street Chapel Hill, North Carolina 27516 Dear Mr. Horton: As the result of recent media attention and local reports regarding MAXIMUS, I am writing Co provide you additional information and insight regarding the issues raised,. You may know that MAXIMUS has a distinguished .30-year history of "Helping Government Serve the People." As a Company, we pride ourselves on our integrity and ethical standards and believe our success over these many years has been the direct result of the emphasis we place on quality and the special partnership we foster with each of our public sector clients. In any Company's life -and MAXIMUS is no exception -- there are some less than flattering and, in our opinion, less than complete media reports that become a matter of public record. These reports are readily accessible through the Internet, although the ultimate resolution or disposition of the issues is often lost in the mass of information, Recent media reports in Chapel Hill relate to some published reports from the 2000-2001 timefiame -some five years ago -associated with MAXIMUS welfare-to-work line of business in Wisconsin and New Yor]<. What follows is some additional background information that should provide more clarity around the published issues. Wisconsin In 2000, the Wisconsin Legislative Audit Bureau audited the MAXIMUS contract with the State's Department of Workforce Development (DWD) under which MAXIMUS provides job readiness and employment placement services to unemployed citizens in Wisconsin. At the time, MAXIMUS operated one regionrn the Milwaukee County area as part of then-Governor Tommy Thompson's model Wisconsin Works (W-2) welfare reform effort. The legislative audit identified questioned and potentially unallowable costs charged to Che project. Many of these costs were the direct result of poor management decisions and insufficient accounting practices that were (fortunately for MAXIMUS) confined to that single project site. After- working closely with ow° stale partner, DWD, MAXIMiJS resolved the audit issues by refunding the questioned amount of $485,000 to the State. Other audits during that same period of time revealed that MAXIMUS had also failed to bill an additional $1.5 million in costs that were fully allowable and documented. Our concern was not to collect these funds, but to resolve the issues in Wisconsin and regain the trust and confidence of our client. MAXIMUS 1100 LOGGER COUIir,SUITE D-100 ~ RALEIGIi, NC ?7609 ~ 91987GBOA2 ~ 91987H 8592 PAX ~ WWW.MAXIbNS.COM 10 moved aggressively, replacing all of the senior project management, and instituting more rigorous accounting and human resom'ces policies, procedures, and practices. Nevertheless, we recognized that our accounting and management failures had generated substantial negative publicity in the state and reflected poorly on the successes of the landmark W-2 program. In a gesture of goodwill and our commitment to the Milwaukee community, MAXIMUS contributed an additional $SOQ000 to community-based organizations in Milwaukee that provide services to program participants. MAXIMUS is proud that in the years and audits occurring since the ?000-?001 timeframe, there has not been a single questioned or unallowable cost identified. MAXIMUS remains a strong partner with the State and,just Chis past Fall won the re-bid of the contract we have operated since 1998 in Milwaukee. As a further- demonstration of the confidence that our client has placed in us, MAXIMiJS was also awarded a contract to operate yeC another region in Milwaukee. It's a testament to our commitment to quality and our commitment to our clients that we were able to overcome our difficulties in Wisconsin, and today we are doing more work in the State than we were five years ago. New York During the same time period that MAXIMUS was the subject of press scrutiny in Wisconsin, the Company was awarded two contracts by the New York City Human Resources Administration to provide welfare-to-work contracts in New York City, iJnder State law, these contracts and those awarded to other vendors, had to be registered by the City's Comptroller, The City's Comptroller refused to register the MAXIMUS contracts, alleging improprieties in the procurement process and in the Company's conduct, The Comptroller- made several allegations including that MAXIMUS had inappropriately interfered with the procurement process and had inappropriate access to agency officials. These allegations also resulted in substantial negative press. Mayor Rudy Giuliani was supportive of the procurement and argued strongly that the MAXIMUS contracts be registered. The Mayor sued the Comptroller to force the registration of the contracts. After a protracted legal battle, the New York Supreme Court Appellate Division held that the Comptroller was required to register the contracts. Significantly, the court found Chat there was no evidence that MAXIMUS was afforded unfair access to Che agency and interfered with the procurement. The courC also indicated that Comptroller had overstepped his authority in refusing to register the contracts. This matter was also investigated by certain governmental agencies. The District Attorney's Office of New York County and the United States Attorney's Office for- the Southern District of New York, in response to requests made by the Comptroller, announced that they were investigating the facts underlying Yhis matter. MAXIMUS steadfastly maintained that its actions were lawful and appropriate and cooperated fully with the governmental reviews of the matter. I~f~F`~i~~P~J~~..~S In October' 2001 the U.S. Attorney's Office informed MAXIIVI(IS thatrt was closing its file on the matter without taking any action against the Company. In December 2001 the District Attorney's Office informed MAXIMUS that it was closing its file on the matter without taking any action against the Company. MAXIMUS felt vindicated by the court decision and the results of the various agencies reviewing the matter. As in Wisconsin, MAXIMtIS continues to provide services to the City and State of New Yorlc. The events I have outlined have certainly helped shape the Company that MAXIMUS is today,. We are a Company that governments at all levels can rely upon to deliver quality services and products. We are a Company that stands behind our work and does not shy away from tough issues. When and where problems arise, we work aggressively to correct these issues, not run away from them. This is a quality that our clients value, this is a commitment upon which they can depend. Please let me Irnow if therets any additional information I can provide you on these matters or any others that are raised. I can be reached at 703.251.8688 or on my mobile phone at 703.928.3977. Sincerely, ~~~' ~ ~.-a-,,.~1~~ ~;~-. Rachael A. Rowland Vice President of Government and Public Relations Cc: Kay .Iolmson, Finance Director', Town of Chapel Hill 1'~/~~,~;I1~/i~~