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EMS collection contract put on hold as Spelman asks questions

Monday, October 19, 2009 by John Davidson

Representatives of MPB, an Austin-based debt collection agency, appeared before City Council on Thursday to object to the process the city used to hire a firm to collect outstanding accounts for the city’s Emergency Medical Services Department.


MPB, one of nine applicants for the contract, finished second to last in the “Demonstrated Experience” category of city’s evaluation matrix despite having held the city’s EMS collection contract from 1991 to 2001, and again from 2001 to 2004 jointly with another firm, CSI. Kernan Hornburg, manager of MPB’s client services division, presented council members with data showing that when MPB held the contract along with CSI, his firm doubled the results of CSI in terms of outstanding debt collected. “No previous vendor has surpassed our results,” he said, adding that by opting to hire the winning firm, Austin-based GILA Corp., the city would “lose millions.”


Council Member Bill Spelman asked the city’s purchasing officer, Byron Johnson, why MPB ended up with such a low ranking if they had performed so well in the past, to which Johnson replied that the contract from five years ago is not comparable to the current contract. Spelman, however, was not satisfied with this and persisted in questioning Johnson about the evaluation method used.


“It seems to me, as a general rule, we ought to be looking at past track records and taking those track records into account in making decisions going forward,” Spelman said. “This appears, on its face, to be a situation where that track record hasn’t been particularly persuasive.”


If the city changes the way it evaluates private firms applying for city contracts, it could potentially have a huge effect on hundreds of companies that do business—or seek to do business—with the city.


Spelman moved to postpone the awarding of the contract for one week, until Oct. 22, in order to discuss the issue in more detail with staff. When Council Member Laura Morrison asked Johnson if this delay would present any problems he said it would not, but then accused MPB of violating the city’s anti-lobbying provision and said the firm would not be considered for the contract if the contract were postponed.


Without elaborating, Johnson said MPB “did make illegal contacts according to the anti-lobbying ordinance,” and claimed to have “documented evidence,” which his office is planning to submit to the city’s law office for review, he said. Johnson was unavailable for further comment Thursday afternoon.


After the meeting, Spelman said, “As a general rule, the best way for us to be making a decision on a collection agency or any other thing on which there is a track record, is for us to take the track record seriously into account. And at least there was a prima facie case that one of the players had a significantly better track record in this field than some of the competitors. Why wasn’t that taken into account? Or maybe it was taken into account in exactly the right way but I didn’t have enough information or backup for me to know how it was taken into account or as a general rule how we are considering it when we are making decisions on contracts.”


Spelman said he intends to meet privately with Johnson this week to learn more about how the contract decisions were made.


Asked whether there’s a problem with EMS collections, Spelman said, “The highest collection rate we’ve gotten is about 15 percent ever. And now we’re talking about around an 8 percent collection rate, so it seems like it’s a very low number—so, the elephant in the living room is why is it only 8 percent and not 50 percent—and what can we do to get those rates up?”


Asked whether that reflected an overall collection rate or just those that were past due, Spelman said, “I think it’s just the ones we don’t collect right away, but again, I wasn’t getting enough information to know, and that’s one of the things I want to know about.”

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