Panel advises DHS to settle cost dispute

Software provider’s contract at issue

A legislative committee on Thursday recommended that the Department of Human Services attempt to settle a disagreement with a software company.

Florida-based CoCentrix is developing a tool that would move developmental disability assessments by the department to a computerized service administered by nurses and other professionals.

The project would determine how much care should cost for each person and track results. The department plans to use the software for roughly 12,000 Arkansans with developmental disabilities.

At dispute is whether the Human Services Department owes CoCentrix an additional $412,000 for software development. The department initially paid that amount to the company, but then recalled the bill. In total, the department has paid CoCentrix more than $9 million for software development, setup and training. CoCentrix has been paid according to the terms of a “time and materials” contract, which reimburses the company for the time it spends working on the project.

The Joint Performance Review panel began discussing the contract Wednesday afternoon. The committee chairman, Rep. Kim Hammer, R-Benton, called a timeout near 5 p.m. Hammer asked members to sleep on a proposal to recommend that the department “stop” the contract until phase 1 of the project is delivered, settle the disputed bill and propose a new contract for further project phases. Lawmakers are able to review further contracts under a constitutional amendment approved by voters in 2014.

On Thursday, Hammer also proposed that the committee request the Bureau of Legislative Research audit the contract and payments to CoCentrix. Members voted in favor of both proposals Thursday morning. Human Services Director John Selig said he would follow the committee’s recommendations.

During the meeting Wednesday, department officials said CoCentrix had been paid enough to complete the first phase of the project.

“As reported in the last [Joint Performance Review committee] meeting, we had placed the Universal Assessment Testing Project and our contract on hold to allow us to conduct a project audit,” said Craig Cloud, director of aging and health services for Human Services. “We feel certain that the payments made to date — which total $9.5 million over the course of the project — are sufficient to allow us to ensure delivery of phase 1.”

However, CoCentrix officials said the Human Services Department asked for and received numerous changes to the software.

“The deliverables were not well-defined,” said Gregg Barker, chief technology officer for CoCentrix. “As we delivered, the department asked us to make changes all along the way.”

For example, Barker said the state asked the company to change drop-down boxes to check-mark boxes in the software, which required modifying underlying code.

Jim Brader, director of the department’s Developmental Disabilities Services Division, said CoCentrix helped write the requirements in the contract and should be held accountable if they weren’t clear.

However, May Ahdab, CoCentrix’s chief executive, said the company did not sit down with the state and develop the requirements.

Rep. Dan Sullivan, R-Jonesboro, said that if the state did change plans, then it needed to pay the company accordingly.

“If I’m building a house and I have the plans that I’ve asked the architect to change … then I have to assume the cost,” he said.

From 2011 to 2014, the department also paid CH Mack, now known as AssureCare, $4.8 million to develop a similar tool. Officials say CH Mack was supposed to deliver the software by 2012 for $2.14 million.