Van-Go Transportation Inc. is suing Sampson County, maintaining that a faulty bidding process, conflicts of interest among county officials and “numerous improper and unlawful events” ripped a two-year, $2 million Medicaid transportation contract away from the company even though they rightfully — and legally — deserved it.
The lawsuit, in which Sampson County, the Sampson County Board of Commissioners and Enroute Transportation Services Inc. are listed as defendants, was filed at the end of June in Sampson Superior Court by R. Jonathan Charleston of The Charleston Group in Fayetteville, attorneys for Van-Go.
It alleges violations in the competitive bidding process and conflicts of interest involving the contract administrator, DSS director Sarah Bradshaw, and Board Chairman Billy Lockamy led to Enroute being awarded the service contract over Van-Go.
The contract, extending for the period of July 1, 2015 to June 30, 2017, has a value of approximately $2,088,000 over that term.
“This case involves numerous improper and unlawful events and occurrences surrounding the recent award,” the lawsuit alleges. “Sampson County and the Board acted erroneously, failed to use proper procedure, acted arbitrarily and capriciously and failed to act as required by law or rule when the board authorized the Sampson County to award the contract to Enroute.”
Shortly after three sealed bids — from Enroute, Van-Go and Joss Transportation Services — were opened in March, the suit maintains, the board and the county became aware of irregularities in the process, but “failed to discharge its duties” when it was made aware of those irregularities.
The board was not obligated to bid the service contract out, however because the county did so it had to adhere to requirements of state law. They did not, according to Van-Go’s attorneys.
“The RFP (Requests for Proposals) does not authorize a bid price that is conditional or contingent upon other factors. Any attempt to make the bid price conditional or contingent upon other factors would make the bid non-responsive unless contingent bids had been specifically authorized,” the company’s attorneys said.
Agencies must reject non-responsive bids. Van-Go said Enroute’s bid was just that.
Van-Go’s bid proposed a fixed cost per mile of service of $1.74, while Joss’ bid was $1.75. Enroute’s bid proposed a $1.54 rate, with an asterisk on the bid submission denoting a 1 cent fuel surcharge for each 5 cents per gallon over $3.95 per gallon, based on the average daily price at the Go-Gas station in Clinton.
“The contract application calls for a fixed or firm price — not an adjustable price,” the suit states. “Enroute’s bid price is non-responsive because contingent or conditional bids are not authorized in the RFP. Enroute’s bid is not a fixed price bid and contemplates cost increases to Sampson County based upon unstated variables. Consequently, there is no way to predict whether Enroute’s bid represents the lowest bid to Sampson County over the term of the contract as unpredictable geopolitical issues arise, as well as refinery outages and problems and weather impacts on fuel production.”
Enroute’s bid also did not identify a liability insurance carrier or coverage limits, stating coverage would be in place by July 1, the complaint reads.
“Therefore, Enroute’s bid is non-responsive,” the lawsuit states.
Joss also failed to provide the required liability insurance coverage in its bid submission, also making it non-responsive, according to the complaint.
“Plaintiff’s bid fully and completely conformed to the RFP, as is evident from its submission. Based on the bid price and required insurance coverage information, Plaintiff solely is entitled to be awarded the contract,” the lawsuit contends.
Prior to 2013, the Medicaid contract was held by Enroute, owned and operated by Ricky Moore. The battle between Enroute and Van-Go, as well as between commissioners, enveloped the county in the summer of 2013, with bids, re-bids, heated meetings, deadlocked votes and ultimately an upset bid that prompted local letters to the state asking for direction.
A primary contract for Van-Go and secondary contract for Enroute were ultimately inked in August 2013. Enroute bowed out halfway through its two-year contract in July 2014 when its upset bid of $1.54 and fuel charges submitted in September 2013 was never considered. The matter was referred to the Attorney General’s Office, which said the county had fulfilled its obligation and was not required to consider or accept an upset bid. County officials drafted a letter to federal officials asking for clarification. It never came.
Bradshaw and Hurmean Beach, contract manager for DSS, said they considered all information from the agency’s Medicaid and Program Evaluation staff, which reviewed the three bids received. They concurred with the recommendation to award Enroute’s as the “lowest responsible” bid in April.
DSS cited Enroute’s years of experience to Sampson and said the potential fuel surcharge added to the rate was also anticipated to remain lower than expenses related to the next lowest bid.
“Staff have reviewed the issue of the fuel surcharge and have concluded that gas prices would have to reach $4.95 per gallon effective July 1, 2015 and remain at that price for the entire two-year term of the Medicaid transportation contract in order for Enroute’s bid not to be deemed the lowest bid received,” county attorney Joel Starling stated in a memo to commissioners.
While commissioners split on the issue, a 3-2 majority of the board stood by staff’s recommendation.
Van-Go said staff and board conflicts conspired against it.
Bradshaw’s involvement “tainted” the bidding process and she “should have recused herself from the evaluation and recommendation to Sampson County and the Board” as Moore is her former brother-in-law, said Van-Go attorneys, who allege that the board took insufficient action to mitigate Bradshaw’s actual or perceived conflict of interest with Enroute.
“Although Bradshaw was not the final selecting official, she was intimately involved in the process, discussed the matter with evaluation team members, and was in a position to influence the evaluation team and the board,” the complaint reads.
It also describes Lockamy as having a similar conflict.
“Lockamy, directly or through his company Lockamy/Tek Insurance Agency Inc., sold or arranged liability insurance coverage for Enroute in connection with the company’s prior performance of transportation services to Sampson County and is expected to do the same in connection with the transportation services which are the subject matter of this lawsuit.”
The lawsuit states that, in addition to all other factors, Enroute’s vehicles are of inferior quality and condition in comparison to Van-Go, which said it has established itself in a short time operating in Sampson.
“Despite these circumstances, transactions and occurrences, Sampson County and the Board awarded the contract to Enroute. Defendants failed and refused to abide by the guidances, law and regulations, and failed to conduct a fundamentally fair, consistent and rational bidding process. Plaintiff was the lowest responsible and responsive bidder for the contract. Moreover, Plaintiff’s bid, unlike Joss and Enroute’s bids, conformed with the bid specifications,” the suit concludes.
Van-Go has a central location in Clinton, where there are 24 employees working out of its offices. The company has a new office in Henderson, which accommodates its clientele in Warren and Vance counties. Additionally, Van-Go conducts services in Harnett County.
It is seeking in excess of $100,000 in damages from Sampson County claiming the contract award to Enroute “has caused and will continue to cause plaintiff to suffer immediate and irreparable harm to its business.”
Van-Go is still providing Medicaid transportation services, having filed an injunction to continue such service until the case is resolved, company officials said this week.
“Plaintiff is entitled to a temporary restraining order and preliminary and permanent relief to enjoin defendants from performing on the award of the contract … and to allow plaintiff to continue to provide transportation services to Medicaid clients for DSS pending the outcome of this case,” the lawsuit states.
Van-Go said it made a request that its objection to the contract award be placed on the board’s June 25 agenda, however the request was declined. Reached for comment on the lawsuit, Sampson County officials said it is policy not to comment on pending litigation.
In April, commissioners alluded to a lawsuit that might be coming with the decision in favor of Enroute.
“When one person bids fixed, then everybody needs to bid fixed,” Commissioner Albert Kirby said at that time. “Legally it’s unfair and legally you are going to run into some problems if you have to face Van-Go suing you in this situation. More importantly, it’s going to make us look bad as a county. This case has a history. You’re going to hear all that in a lawsuit if it comes up.”
“I want this county to run their business like a business,” Commissioner Clark Wooten replied then. “Now the legal part of it … we can get 12 jurors if there’s a lawsuit and you can argue and it can cost the county tons of money. But in my opinion, we are not doing our duty if we don’t seek the lowest bid for the taxpayers.”
Reach staff writer Chris Berendt at 910-249-4616. Follow the paper on twitter @SampsonInd and like us on Facebook.