DHHS Tries To Defend Multi-Million Dollar No Bid Contract

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Aldona Wos and the Department of Health and Human Services is in the news again. This time they are under scrutiny for a $6.8 million no-bid contract that was awarded to Alvarez & Marsal. The News and Observer has the story,

In February, DHHS signed Alvarez & Marsal to a $3.2 million no-bid contract to reorganize the Medicaid office. Despite criticism about not putting the job up for competitive bidding, DHHS expanded the company’s duties and upped the maximum payment to $6.8 million a few months later.

The company is essentially running the Medicaid finance office, rewriting policies and procedures, writing reports, helping recruit new staff, and laying the foundation for what it says will be better forecasting of the Medicaid budget.

The company’s three principals are billing $473 an hour, five directors are billing $394 an hour, and nine analysts cost $242 an hour.

Rudy Dimmling of Alvarez & Marsal helped present the Medicaid budget to legislators at Tuesday’s oversight committee meeting on DHHS.

McKissick estimated Dimmling’s time on the job will cost the state $800,000 a year, much more than the state would pay an employee to be chief financial officer.

David Oglesby, senior adviser for contracts, grants and compliance at DHHS, said Alvarez & Marsal is a turnaround company with a practice focused on government that is “unique within the nation.” The Medicaid office had a pressing need to hire the firm, Oglesby said, and Alvarez & Marsal had worked under a consultant that’s done extensive work for the DHHS, giving it some experience in the state.

McKissick was not satisfied with the explanation. “They needed to evaluate other firms,” he said in an interview.


  1. Danny Hunt's avatar
    Danny Hunt
    | Permalink
    Really!!! $800, 000.00, $3. 2 million, $6.8 million, I haven't had a new set of textbooks or the equivalent e-text in six years. I wonder how many sets of textbooks and copies of e-text could have been purchased with those amounts of money? Was the Medicaid system suffering from that much chaos? Where's the oversight?
  2. Dr. Sheila Englebardt's avatar
    Dr. Sheila Englebardt
    | Permalink
    Totally unacceptable. Must have competitive bids and describe what Pele making outlandish hourly salaries will do to validate those salaries. What outcome products can we expect and when??
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