Archive for January 4th, 2009

Political Subdivisions Sometimes (or all the time) Make Political Business Decisions

Sunday, January 4th, 2009

A large South Texas school district recently went out for Request for Proposals (RFP) seeking competitive stop-loss insurance for their self-funded employee health insurance program. Several proposals were received. A consultant was retained to review the offers but was not asked to make a recommendation. The recommendation was to be made internally to the Board of Trustees. The district’s CFO made it known that he recommended the apparent “low bidder.” However, the Board of Trustees voted to select the highest bid through a local insurance agent. Subsequently the CFO was removed from his position and given the job of “grants administrator.”

An Open Records Request was received by the district in November 2008 seeking documentation of the stop-loss insurance RFP. The requestor subsequently received an anonymous phone call stating that “I have seen your Open Records request, and I can tell you that you will not get everything you have asked for, and documents are being destroyed.”

If this scenario is true, it is a sad commentary on how some political subdivisions make business decisions at the expense of the taxpayers. Vendors become aware of those political subdivisions that consistantly make “political business decisions” and usually decline to offer competitive proposals/bids in future RFP’s. This has become such a prevalent issue that some carriers have “red-lined” South Texas and seek to derive business elsewhere.