Health and Human Services Committee Chairman Merv Riepe announced to state senators last week that child welfare services in the Omaha and Sarpy County area could be in jeopardy.
The state withdrew its intention to award a five-year, $70 million-a-year contract to Nebraska Families Collaborative on Thursday and rejected all bids after an opposing bidder filed a challenge to the bid award.
The lack of a contract could lead to a gap in services for vulnerable children and families beginning in July, Riepe said. The department is attempting to negotiate a one-year emergency contract with Nebraska Families Collaborative, and then to restart the bidding process, he said.
HHS spokesman Russ Reno said Friday the department will seek an exception to competitive bidding to pursue a short-term emergency written agreement for the child welfare services in Douglas and Sarpy counties. There's not enough time to resolve the protest from Magellan Choices for Families and negotiate a new contract, Reno said.
In the challenge, Magellan protested that the state's calculation of the bids was incorrect, and didn't consider all the pricing information. And Magellan contended NFC did not meet bid requirements.
In the evaluation of NFC and Magellan, less than one point separated the two. And Magellan officials believe proper application of scoring criteria would result in it being the top bidder.
Children and Family Services Director Doug Weinberg told Riepe an emergency contract should be in place almost immediately.
But it appears it is not a done deal.
Dave Newell, president and CEO of Nebraska Families Collaborative said he was "extremely" disappointed with the state's decision to withdraw its intent to award the contract. Awarding the contract to NFC is in the best interest of children and families in the child welfare system in the eastern area, he said.
Further delay causes uncertainty and anxiety for those children and families, and for employees and service providers, Newell said.
One of those providers, Karen Authier, executive director at Nebraska Children's Home Society in Omaha, is concerned about the impact the decision will have.
The providers in the area that she had talked to were pleased when NFC was awarded the contract.
"There are some programs in place. We have working relationships with case workers, supervisors, everyone in that system," she said. "And to play market basket upset as of July 1 would throw the whole system into disarray."
Case management and payment processes would be disrupted, she said.
NFC is doing beneficial innovative projects with providers that are keeping kids out of the system or moving them to reunification or adoption, she said.
Reno said if the state is able to negotiate a short-term contract, it will then develop a new request for proposals, and evaluate the best way to move forward to provide services and ensure stability in the eastern service area.
The Omaha area is the last one to continue with a private lead contractor for child welfare. That concept failed in the rest of the state and HHS took over case management in all other areas.
A consultant that evaluated privatization in 2014 concluded the reform effort was not "experiencing any measurable benefits."
Hornby Zeller Associates' evaluation focused on Nebraska Families Collaborative.
Privatization started in earnest in 2009 with five lead contractors, and lasted only a couple of years in all but the Omaha area, where NFC continues to contract for child welfare services and case management.
The price of the NFC contract has gone up substantially in the past four years. The state paid the collaborative $53.8 million for the 2012-13 fiscal year.
The five-year contract with two, one-year renewal options, was to be a cost reimbursement-based agreement not exceeding $71.5 million a year.
NFC began providing services in 2009, when founding partners Boys Town, Child Saving Institute, OMNI Behavioral Health, Heartland Family Services and Nebraska Family Support Network formed Nebraska Families Collaborative.