Concerns raised over EMSA board's vote to disqualify bidder on ambulance contract

By Ziva Branstetter, Tulsa World, Okla.

March 28--STROUD -- EMSA board members voted Wednesday to disqualify one of three companies vying for the agency's lucrative ambulance contract, with several board members voting against the move out of concerns about the fairness of the process.

The board voted 6-3 to disqualify Rural/Metro Corporation -- a publicly held company that is reportedly the nation's second-largest ambulance provider -- from seeking EMSA's five-year ambulance contract. The action leaves AMR and Paramedics Plus the remaining contenders.

Rushed Ed Shadid: He said a vote to disqualify a company bidding on EMSA's ambulance contract was done too hastily. "I will echo some concerns that I am asked to digest all of this in an hour and make a binding, final vote," said Dr. Ed Shadid, a board member of EMSA and an Oklahoma City Council member.

The company said in a statement that it is "evaluating all of our options for moving forward."

"Rural/Metro is a respected national leader in private ambulance and fire protection services in 21 states and nearly 700 communities from coast to coast. We are shocked by the outcome and disregard of process in today's EMSA meeting,"

The vote came after board members discussed financial details of the three companies in an executive session. One board member said he was concerned should the meeting later be found illegal.

"I do not want to find ourselves in the position where we could be violating the Open Meeting Act," said trustee Phil Lakin, also a Tulsa city councilor.

The Emergency Medical Services Authority is a government agency that supervises a contractor providing ambulance service to more than 1 million people in Tulsa, Oklahoma City and surrounding suburbs.

Paramedics Plus, based in Texas, has contracted with EMSA since 1998 to provide paramedics. It has a five-year contract, approved by the board in 2008 and signed by EMSA CEO Steve Williamson, valued at more than $150 million.

A state audit, prompted by a Tulsa World investigation, raised concerns about possible conflicts of interest between EMSA and Paramedics Plus. Both entities have denied conflicts of interest and the company says it has a compliance audit done every year.

The state investigative audit found the company paid for $25,000 of Williamson's travel costs and that Williamson indicated on expense forms the company should be billed for two $400 spa visits. EMSA also allowed the company to avoid paying taxes on $7 million in purchases, including a gambling-themed party, by using its tax-exempt status, the audit found.

Williamson told the board that the three companies are "the top three that do this type of work."

AMR is a subsidiary of Emergency Medical Services Corp., a publicly held company, and is based in Greenwood Village, Colo. Its website claims it operates in 40 states and 2,100 communities.

Rural/Metro, also a publicly held company, has operations in 21 states and 700 communities, according to its website. It is based in Scottsdale, Ariz.

Paramedics Plus is a private company created in 1998 as an expansion of the East Texas Medical Center EMS service and EMSA, its website states. It has operations in five communities, including Tulsa and Oklahoma City. On its proposal seeking qualification, the company lists EMSA as its "high performance system" and Williamson as the contact.

Williamson told the board it is important to qualify bidders in advance because "this is a practice of medicine." Cities including Tulsa use a similar process for bidding on large projects.

"You want to be sure that these proposed bidders don't come in with a cavalier bid and low ball it and it's the patients we serve who suffer," Williamson said.

He said he had concerns about Rural/Metro's ability to handle the contract. Officials in Clark County, Ind., placed the company on 60-day notice recently that it was in breach of its contract due to lack of medical supplies, slow response times and other issues, Williamson said.

At Williamson's urging, the board viewed an eight-minute video of a meeting showing officials in Indiana discussing their concerns about the company.

Board member Clay Bird asked whether it was fair to disqualify Rural/Metro, with hundreds of locations and contracts, based on one contract dispute.

"If that is the only contract they've lost over the last five years, that's a pretty good percentage it would seem to me," said Bird, also the chief economic development director for the city of Tulsa.

Said Williamson: "To lose one in the middle of a contract is very, very rare."

"And we have to make this decision today?" Shadid asked.

"Yes," Williamson replied.

The companies must submit proposals to EMSA by May 17, he said. A nine-member selection committee will have until July 17 to review the information and select which company it will recommend to the full board, Williamson said.

The committee will include members of EMSA's board, city councilors from Tulsa and Oklahoma City and an industry expert Williamson said he would recommend. It will not include EMSA staff, he said, though they may advise the committee, records show.

Board Chairwoman Lillian Perryman said she shared Williamson's concerns about Rural/Metro, "even if it's one town."

Lakin said it was difficult for him to determine whether the three companies were qualified given the information presented Wednesday.

"I've pulled up some articles on some of these companies while we've just been sitting here," he said. "I know you've done some research, but I'm conducting some research here, too."

Shadid said he had concerns about Paramedics Plus.

"I've expressed from our council serious concerns about our response times. ... What would be the response times for Paramedics Plus under our system if we weren't excluding as much as 25 to 30 percent sometimes?"

Williamson responded: "We are not putting Paramedics Plus on trial here."

"But we are putting Rural/Metro on trial," Shadid replied quickly.

Williamson said Shadid and other board members should review the information provided to board members Wednesday and decide how to vote.

EMSA has had the information for at least a month, while board members received it Wednesday, records show. The board typically meets only monthly.

The board eventually conducted a series of three votes, with some confusion over what members were voting on. Six board members voted to qualify AMR and Paramedics Plus and to disqualify Rural/Metro, while three voted against disqualifying the company.

Voting for the measure were Perryman, Mark Joslin, Larry Stevens, Gary Marrs, Joe Hodges and Charles Foulks. Voting against were Lakin, Bird and Shadid.

The company's emailed statement, from Phil Forgione, Rural/Metro Corporation, vice president of national marketing, states: "We do not understand the rush to judge without the Board having the benefit of full details, especially considering the response to the RFP is not due until mid-May, and the system start up is not until Nov. 1, 2013."

Open Meeting Act concerns: Before the executive session, EMSA attorney Jim Orbison assured board members they could review the information submitted by the three companies in executive session.

"This is sensitive information not allowed to be released to the public. It is both under state and federal law a trade secret," he said.

Orbison referred to criminal charges recently filed in Oklahoma County against members of the state Pardon and Parole Board alleging board members violated the act.

"I'm sure that's weighing on your mind," Orbison said. He said the law requires such violations to be willful and board members would be protected if they are following the advice of their attorney.

The agenda cites a general exemption in the Open Meeting Act that requires another state or federal law to authorize a closed hearing. Orbison said the Open Records Act allowed company financial information to be withheld from the public.

In other business, board members viewed a chart provided by EMSA that states the agency has addressed nine out of 19 audit recommendations. EMSA is in the process of making changes to address seven recommendations and has not addressed three recommendations, the chart shows.

Audit recommendations EMSA's board voted Wednesday to refer outstanding items from an investigative state audit to board committees. Here is the status of the audit's recommendations:

Completed:

--Disclose potential financial benefits or conflicts of interest. Board approved addition to code of conduct Feb. 27.

--Assess costs and benefits of organizational memberships. Management will provide costs and benefits of such memberships during the annual budget process.

--Address potential conflicts with related-party accounts. Policy approved by board Feb. 27 and signed by staff.

--Create more committees to address specific issues. Committee structure approved Feb. 27 and members appointed Wednesday.

--Enhance financial oversight by reviewing single-item purchases over a certain amount. All disbursements being sent to the board monthly.

--Formalize policy whereby the board approves purchases more than $25,000.

--Review all of the CEO's expenditures. All expenses are reviewed by the board chair or vice chair.

--Enhance expenditure transparency. All checks sent to the board; those more than $10,000 posted on the Web.

--Seek legal counsel regarding questionable expenditure practices. Completed and reported to the board.

In progress: Properly address potential sponsorships; consider bidding process for collection services; improve address data system; enhance patient outreach; enforce contractual requirements; automate discounts; change expenditure expectations.

Not started: Strengthen board attendance policy; adopt policy for formal evaluation of CEO; perform self-assessments.

Source: EMSA audit recommendations chart

Ziva Branstetter 918-581-8306 ziva.branstetter@tulsaworld.com

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