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By Deena Winter | Nebraska Watchdog
On Monday, the state auditor released an audit of DAS that uncovered questionable bidding practices, inadequate recordkeeping and erroneous accounting.
LINCOLN — The chairman-elect of the Nebraska Democratic Party today called for a special legislative committee to investigate the state’s procurement practices.
Vince Powers said an investigation should be conducted after news this week of an audit that uncovered questionable bidding practices and questions swirling around the awarding of the state’s health insurance program to a new vendor by the state Department of Administrative Services.
The DAS – which manages the day-to-day business of state government operations and oversees purchasing — is run by Carlos Castillo, Gov. Dave Heineman’s former campaign manager. Powers said he doesn’t expect the governor or attorney general to investigate, so lawmakers should convene a committee to look into allegations surrounding the department.
He said lawmakers should look into the awarding of the state health insurance contract to UnitedHealthcare of Minneapolis rather than Blue Cross Blue Shield, an Omaha company that had the contract for 27 years. Blue Cross has said the switch will cost the state an extra $10 million per year, but Castillo said an independent firm said the move would save the state up to $10 million per year.
On Monday, the state auditor released a report of DAS that uncovered questionable bidding practices, inadequate recordkeeping and erroneous accounting.
Powers said the governor should join him in calling for an investigation “if he has nothing to hide” and accused Castillo of acting like the governor’s campaign manager. An investigation would determine if the awarding of the health insurance contract was legitimate or “one of the biggest scandals in state government,” Powers said.
But Castillo noted a judge ruled in the state’s favor in a lawsuit filed by Blue Cross over the bidding process – which was the same process that worked for Blue Cross until the company lost the bid.
“They just happened to lose,” Castillo said. “In my opinion this is all a diversion. They want to distract people from the fact that their prices are high. … They got beat fair and square and I know it’s tough for them to accept but that’s the way it is.”
Castillo said neither he nor the governor is involved in awarding contracts “for this very reason” – a team of evaluators scores the bids and awards the contract to the lowest, most responsible bidder. Castillo said he understands the $184 million contract was probably one of Blue Cross’s biggest, but it’s his job to save taxpayers money when they’re footing 79 percent of the bill. The state auditor has said Nebraska has one of the most expensive health insurance plans in the nation.
“This is really about a big company with a high-powered lobbyist — who happens to be the former speaker of the Legislature (Kermit Brashear) — who lost a large contract,” Castillo said. “Unfortunately, they’ve resorted to smearing people’s reputations. At the end of the day, they didn’t have the best prices.”
As for the audit, Castillo said his department takes them seriously and evaluates them, and while he disagrees with some things in the latest audit, “he pointed out some procedural things we need to do better.”
Reported by Deena Winter, deena@nebraskawatchdog.org
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