For about a year, I've been investigating and writing up the various illegal secret meetings held by Maryland's Health Benefit Exchange board -- that is, the state ACA organization.
A few months back, I diaried at length about the Maryland Health Exchange board of trustees and their routine and unrepentant violations of the state Open Meetings Act:
http://www.dailykos.com/...
Under Maryland law, each infraction is a separate violation, so when the MHBE "forgot" over the years to create required documents, or notify the public of planned meetings, it's not one ding. It's many. The record shows the MHBE has been sloppy and uninterested in the meeting transparency statute. Its score since 2011 is hard to count, but by now distinct violations total over 100, I'm pretty sure. Creating an exact list is an academic exercise anyway. The harm has been done and not fully rectified.
During 2014, more violations occurred, the State Open Meetings Compliance Board said in the third of a string of Open Meetings Act Opinions. Many of these concerned contract amendments or extensions for contracts that had been approved before 2014. In many cases, information on who and how much was skimpy to nonexistent.
The violations extend from January to the end of May, 2014. And there are certainly additional violations from June to the present. This is one wiggly, secretive bunch.
The violations of the "competitive procurement exception" or (a)14, as it's listed in the statute, are associated with a series of contracts worth more than $100 million as of June. Put another way, nearly every contract associated with creating a new Maryland health insurance website has been no-bid, sole source. At the same time, they were discussed and approved in secret under the claim that they were "competitive procurements."
The least problematic MHBE decision has been the no-bid award to Deloitte to rebuild the collapsed Maryland exchange website and database. At the April 1, 2014 meeting, there was a lengthy PowerPoint presentation about the "options" to fix the busted exchange. In the end, they decided to use Connecticut's software and hire Deloitte to modify it to suit Maryland.
This was not necessarily a bad decision. Reports so far are that the second version of the exchange will function. Of course, the reports are coming from the same organization that blew it last time. The MHBE is fortunate in many ways, and Deloitte can be viewed as the cavalry riding to the rescue.
And in every case, it could be that the contract decisions were the best possible. But the ends do not justify the means and 'git 'er done' doesn't excuse breaking the law and keeping the public and the media in the dark. The contractors don't bear the blame here. The MHBE board does, for apparent ignorance of their legal obligations to the public. Who got what contract when and for how much? The MHBE has handled things in a way that makes that a very, very difficult question to answer.
Before and after April 1, public business associated with the collapse and changeover was not handled properly by the nine MHBE trustees. State law dictates what they can do behind closed doors and how to do it; they've all been perfectly happy to act illegally, if their routine unanimous votes to hold secret sessions are the measure.
You have to wonder why.
Political Odor
It doesn't take a James Carville to figure out that Gov. Martin O'Malley sent his troops in to protect both his ambition to run for president, and Lt. Gov. Anthony Brown's chances to step into Maryland's big chair. News organizations have reported trouble getting documents through Maryland's FOIA process. The MHBE board likes deciding in secret. It's hard to say the operations pass the smell test.
Of course, the MHBE board already had a track record during 2011-2013 of anything from zero to minimal public information about its meetings, decisions and whether the original software project was on time and on budget. (Over that period, about $150 million went out the door. Maryland is suing to try and get some back). It's hard to understand why the board members would risk being entangled in a failed project enabled by their secretive actions; by keeping it all dark, the failures land in their laps.
But remarkably, the board members haven't been called on it. See "Political Odor," above.
News Media Attention Forces Better Behavior
Because of the media spotlight, there was more public information at the April 1 meeting than at any other. Nevertheless, the trustees "had" to go behind closed doors for unspecified "legal advice" before emerging to approve what was, after all, a foregone conclusion.
In response to an earlier Open Meetings Act complaint, the Compliance Board warned in May that courts have ruled against barring the public to get "legal advice" and then taking further action in secret.
The Maryland Department of Information Technology did the heavy lifting involved in getting new Exchange contractors, not the Exchange personnel. So weeks of work went on behind the scenes after a Feb. 23 secret vote to fire original contractor Noridian, and prior to the April 1 Deloitte contract award. There were MHBE meetings during this time, but at them the public heard very little about what was going on.
As a result the one decision involving Deloitte stands out. At the meeting where a decision was made, the public did get to hear about contents of the IT Department memo that earlier went out to board members.
But when the media wasn't looking? Many other contracts, including those to keep the original zombie website working until the new system is in place, have been approved or extended without competition and without presenting public information. And of course in the dark, often in teleconference meetings at odd times.
Even in the rare cases of an RFP (Request for Proposal) and, presumably, multiple bidders, the MHBE's meeting documents fail to inform the public who those bidders were and what their services would cost. In minutes there's just a vote to approve paying Company X to do something. Often, it's unclear to a layman what the something is.
The Dates, But First, A Failed Excuse
When a complaint is filed with the Compliance Board, the public body in question has to respond, justifying why it barred the public. Here the MHBE had to explain why confidential discussion of "competitive procurement" was not an illegal dodge when the MHBE board planned to approve sole-source, no-bid contracts.
In every case where the MHBE decided on the no-bid awards in secret -- most of time voting to approve in secret -- their defense was:
"it was necessary to preserve the Board' s ability to solicit proposals from other entities as one of its procurement options. Disclosing additional information might have revealed information that could have adversely impacted a future procurement for those resources." [from the MHBE attorney's July 25 response]
This is obviously nonsensical. What they just said: "We can discuss this contract in secret because we might ask for bids at some point in the future for the same or similar work." Their words are presented below. As you read -- or skim -- bear in mind that each time they claim they have a "future procurement" to protect, they're blowing smoke.
In reality the exception is meant to cover only a small part of the entire process of awarding, amending or terminating contracts, or to allow competing companies to protect certain proprietary information. In fact, barring the public is not requred.
The Open Meetings Compliance Board reminded the MHBE in a previous opinion:
"In closing, we note that unless another law requires a public body to discuss a particular topic behind doors, the decision to exclude the public is discretionary. We encourage the MHBE Board to consider, for future meetings, two questions: first, will each topic to be discussed in closed session fall within the scope of the exception claimed for it; and, second, even so, is there a need to exclude the public?" -- 9 OMCB 132
Well, guess what? The possibility of a future bidding situation isn't written into the law, yet here we have the MHBE board's compulsion to repeatedly bar the public from witnessing any discussion. Allowing the public to see a unanimous public vote after a secret discussion is very nearly as bad.
Gap Contract
The Compliance Board did say that sensitive information can be shielded in one case where competitive bids are expected but not yet in place: when there's an active RFP, but because of timing, the public body is agreeing to a "gap contract." That means they extend things for a little while with the current vendor after the contract ends, and until bids have been received and the new award made. One -- just one -- gap contract cropped up in 2014.
Meetings
The excerpts below are from the MHBE board's response, submitted July 25. Some of the meetings from January to June 1 involve multiple violations.
My commentary is in boldface. Bear in mind that approving, amending, terminating a contract or budget is to be done in front of the public - and not just the vote, but the discussion.
1. January 4: Contract Amendment Illegally Discussed in Secret
During the closed session, the Board voted to extend and expand the Maximus call center contract. The Board went into closed session … to discuss procurements related to call center staffing and resources.
While the Board ultimately decided to increase the existing contract with Maximus, it was necessary to preserve the Board' s ability to solicit proposals from other entities as one of its procurement options. Disclosing additional information might have revealed information that could have adversely impacted a future procurement for those resources.
Even though Maximus had previously obtained the call center contract, the Board was faced with an unexpectedly high call volume and had to decide how to respond. In making the decision to expand Maximus' contract, the Board discussed matters that would have adversely impacted the Board's participation in a subsequent competitive procurement process had that become necessary. Therefore, closing the meeting on the basis of SG § I 0-508(a)(14) was proper.
NOPE.
2. January 27: Same as Jan. 4.
The asserted violation is the Board's approval of an amended proposal for the Call Center expansion.
This topic is an extension of the issues discussed at the January 4 meeting, as the earlier increase to the Maximus contract did not fully resolve the Call Center crisis. The reasons for closing this session under (a)(14) are identical to those for closing the January 4 session and are incorporated herein by reference.
NOPE.
3. January 31: A Three-fer
Complainant identifies three topics ... the Optum/QSSI contract expansion, the Xerox sole source procurement, and budgetary increases related to those contracts, but does not identify a specific violation that is alleged to have occurred.
The MHBE's lawyer seems to think that a member of the public has to zero in on a specific violation; actually, that is not what the law requires. The law only requires a good-faith conviction by someone that the Open Meetings Act has been violated by a given public body. It is up to the public body to show, through adequate sealed minutes of its closed session and other mandatory documentation, that it was in fact staying within strictly construed exception(s).
In December, 2013, the Board had entered into a contract with Optum/QSSI to assist with remediating the website. As time went on, the website problems did not improve, and the Board found it necessary to expand Optum 's role in the repair effort.
The Dec. 2013 contract referred to here was, of course, discussed and approved in a secret meeting. Back on Dec. 15, the MHBE board broke the law by neglecting to prepare for public inspection the mandatory written closing statement.
The meeting notice contained no way for the public to dial in and listen to the open session.
It never put out legally sufficient minutes of the teleconference.
It never published the required public summaries of the discussions and actions in the Dec. 15 teleconference meeting.
Around April 1, 2014, they put out a chart containing supposed “summaries” of years of closed session actions they had never bothered to report.
For the Dec. 15 secret contract discussion, the summary says:
"12/15/2013 - The Board adjourned to closed session to discuss procurement related to a General Contractor for Maryland Health Connection. On an emergency basis, the Board approved contract with Optum/QSSI."
So this Jan. 15 action was a secret amendment to a secretly-approved contract.
By reading MHBE minutes, any citizen would have learned of the secret contract only in late January 2014, when later public meeting minutes were finally available. In the Dec. 17 minutes, the matter is disposed of by saying,
"Ms. Fitzgerald discussed how the MHBE has entered into a contract with Optum/QSSI, which will focus on enhancing the consumer experience by providing end-to-end project management and operational support, as well as technological assessments and recommendations. She noted that additional support will accelerate the pace of improvements. Optum/QSSI began their work with the MHBE on December 16."
Back to Jan. 31:
Similarly, at this point Xerox was brought in to provide support services for strategy, assessments, planning, and system and business process re-engineering related to the broken website.
… the Board also cited § 10- 508(a)(14) as a basis for closing the meeting, as the subjects in the Optum/QSSI expansion and Xerox contract had the potential to become the bases of future competitive procurements. These new contracts, and the necessary budget changes to fund them, were properly discussed in closed session.
NOPE.
Unfortunately for the good folks at the MHBE, approving and amending budgets is classified as a "quasi-legislative act," which must be proposed, discussed and approved (or not) in a public venue.
4. February 14: Canned Justification Fails
The Board cited SG I 0-508(a)(14) because of the potential need for future procurements to replace the services that Noridian had been providing.
5. February 18
The discussions regarding the Optum proposal were properly held in a closed session under SG§10-508(a)(8), due to the continued issues regarding Optum's increased responsibilities in light of Noridian's performance issues.
With regard to the Navigator Management Partners (NavMP) contract, this is another contract that may have been put out for competitive bidding if the NavMP contract was not approved by the Board. … 508(a)(14) can apply even when a sole source contract is involved. Therefore, that section was a proper basis for closing the meeting.
6. February 23 and March 7
Both meetings were the subject of Open Meetings Act complaints earlier in 2014, and, for example, the Compliance Board found a Feb. 23 teleconference in violation because there wasn't sufficient public notice. (Stick notice on website late on a Saturday for a Sunday night teleconference meeting = FAIL).
At this particular secret session, they voted to fire Noridian, that is, to terminate a contract ... something that is quasi-legislative and is appropriate only for open session. They were told that action taken during a closed meeting claiming "legal advice" has been frowned upon by the Maryland courts. Closing for "legal advice" means soliciting legal advice from an attorney and avoiding discussion of any other matter.
When they penned their excuses on July 25, the MHBE's attorney simply didn't explain why they decided “procurement” was a legal exception for what was discussed at the meetings, and in fact, it wasn't.
The subjects of the February 23, 2014 closed session were considered by the OMCB in its May 19, 2014 opinion. … The OMCB considered the March 7 closed session in its May 19, 2014 opinion.
But in that opinion, 9 OMCB 110, the Compliance Board did not address the question of whether (a)14 was appropriate.
In 9 OMCB 110 (May 19), the Compliance Board said two things:
The “litigation” exception (a)7 is
“Applicable to Discussions with Counsel About Potential Litigation Arising From Contract Changes” but not to discussions and approval of the changes themselves;
and “procurement” (a)(14) is
“Applicable to Non-Competitive Contract Discussions Only When Disclosure Would Adversely Affect a Specific, Related Competitive Procurement,” that is, a so-called “gap contract.”
7. March 18: Three More Amendments, Contracts
... The Board went into closed session pursuant to SG § 10-508(a)(7), (a)(8), and (a)(14). As explained above, entering into contracts or contract amendments with vendors Knot Technologies, Optum/QSSI, and Connecture to take over functions previously performed by Noridian necessarily implicated the Board's claims against Noridian and the potential litigation that could result and were therefore properly discussed in closed session with counsel pursuant to (a)(7) and (a)(8).
The discussions relating to the Weber Shandwick contract modification occurred in closed session pursuant to both (a)(7), as the Board was obtaining legal advice relating to its grant funding for the contract, and (a)(14), as the contract modification involved a temporary continuation of services that could become the subject of a competitive procurement ...
With regard to the Berry Dunn contract for independent verification and validation (IV&V) services, the two-month extension was discussed in a closed session … as the Board was in the process of preparing an RFP for a competitive procurement for an IV&V vendor to begin work on July 1, 2014.
There you go, a "gap contract."
8. April 1
More procedural blunders: exception a(14) appears in minutes but NOT on closing statement; no summary of actions taken appears in the minutes. Under the law the MHBE can't decide, after filling out their closing statement/agenda, that they'll add a few more topics and a few more exceptions.
From the April 1 Minutes:
Chairman Sharfstein discussed that the purpose of the closed session was to obtain legal advice on the terms of a potential contract with Deloitte Consulting. Professor Apfel motioned to move into closed session, which was seconded by Mr. Saquella. All members present voted unanimously to move into closed session. For topics discussed and actions taken, please see Statement for Closing a Meeting, dated April 1, 2014.
Voting Session
Chairman Sharfstein noted that there is a minor procurement procedure that relates to contracts that is going to be waived in the coming motion. Chairman Sharfstein read the emergency justification that will authorize the Chairman to finalize the contract with Deloitte Consulting to leverage Connecticut’s IT system to update the MHBE IT platform.
The Board then adopted a resolution reflecting the Board’s decision to adopt the Deloitte eligibility and enrollment system and authorizing the Chairman of the Board to finalize the contract with Deloitte Consulting, LLC.
Interesting that there is no mention of the cost of this contract, even a ballpark cost. They knew; the contract was signed the very next day.
To be fair, there was huge media attention on this meeting and so they handed out the memo recommending Deloitte, and there was a long PowerPoint presentation on the memo in front of the public.
But they still had to go into the Secret Underground Bunker simply to get some unspecified "legal advice" on an action that was already a foregone conclusion.
9. April 15
Complainant alleges that a closed session for the "discussion of possible emergency procurement for SHOP consultant" was not properly within SG § 10-508(a)(14). As explained in the closing statement, the Board discussed the potential procurement in a closed session for two reasons: first, "to protect (the) integrity of future procurement if competitive procurement method is selected,"
and secondly, to obtain legal advice regarding the possible emergency procurement. Had the outcome of that legal advice necessitated a competitive procurement for the SHOP consultant, public discussions about it could have adversely impacted the competitive bidding or proposal process. Of note, the actual selection of the SHOP consultant was voted on in open session.
Here is how it's explained in the minutes; plausible, but not legal. Minutes:
Closed Session
Chairman Sharfstein announced that the Board would be moving into a closed session. He explained that the purpose of the closed session is to address personnel matters, obtain legal advice, and discuss procurement strategies. Specifically, the Board would be discussing personnel related to the closed session minutes and obtaining legal advice for consultant services to assist in structuring a competitive procurement related to the SHOP.
Voting Session
Chairman Sharfstein noted that the action for the Board to consider is to approve justification for an emergency contract not to exceed $150,000 with Audacious Inquiry, a Maryland-based Minority Business Enterprise (MBE). If approved, Audacious Inquiry would provide support in developing a SHOP strategy.
Chairman Sharfstein explained that the justification for the contract included the following factors: (1) the urgent need to have a SHOP strategy, (2) the drastic increase in workload for the MHBE in evaluating the technical capacity to do the SHOP implementation already underway, (3) Audacious Inquiry’s understanding of the issue, and (4) to allow for a competitive approach to SHOP moving forward. Chairman Sharfstein explained that Audacious Inquiry will assist in developing and implementing the SHOP strategy.
10. May 20
Once again, the board
need[ed] to maintain confidentiality of discussions of possible sole source procurement, given potential for competitive RFP if sole source is not pursued.
Of note, the Board approved the KPMG contract and authorized the lease in open session (thus carrying out “mere ceremonial ratification” without substantive discussion in front of members of the press and public).
11. May 30
The hosting and software licenses considered during the May 30 meeting were new issues resulting from Deloitte's appointment as prime contractor on the MHBE website the month before. This hosting contract needed to be discussed in closed session under SG § I 0-508(a)(14) because of the possibility that another competitive procurement would be necessary for website hosting if the award to Xerox was not approved.
With regard to the software licenses, the Board considered the option of procuring through Deloitte in closed session because, if the option were to be rejected, the Board would have needed to develop a competitive procurement.
For both the hosting and software licenses, the Board voted for approval in open session.
In a subsequent diary we will look at the contracts approved and amounts involved over this 5-month period.