BOARD MEETING DATE: April 2, 2004
AGENDA NO. 9

Execute Contract for Workers’ Compensation Claims Third-Party Administration

SYNOPSIS:

The current contract for workers’ compensation claims administration services expires April 30, 2004. On November 7, 2003, the Board approved release of an RFP to solicit proposals from firms interested in providing these services for the next three-year period. This action is to execute a contract with Colen and Lee, through April 30, 2007, for an amount not to exceed $50,000 per year. Funding for this contract has been included in the FY 2003-04 Budget and will be requested in successive fiscal years.

COMMITTEE:

Administrative, March 12, 2004, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a three-year contract for the period May 1, 2004, through April 30, 2007, with Colen and Lee to perform workers’ compensation claims third-party administration in an amount not to exceed $50,000 for each of the three years.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD currently contracts with Tristar Risk Management to provide workers’ compensation claims third-party administration services. These services include the processing of workers’ compensation claims in accordance with applicable Labor Code regulations; engaging the services of medical providers, defense attorneys, and other firms or individuals to perform specialized work in connection with claims handling; conducting the necessary investigation of claims and assisting AQMD in identifying and aggressively defending against fraudulent claims; and making timely payments on behalf of AQMD to claimants and service providers in accordance with Labor Code regulations to minimize the risk of late-payment penalties.

The current contract expires April 30, 2004. On November 7, 2003, the Board approved release of RFP #P2004-10 to solicit proposals from workers’ compensation claims administrators interested in providing these services for the next three-year period.

Outreach

In accordance with AQMD's consulting and contracting policies, a public notice advertising the RFP and inviting proposals was published in the following publications:
 

1.	Antelope Valley Press	10.	Inland Valley Daily Bulletin	19.	Philippine News
2.	Black Voice News	11.	Korea Central Daily	20.	Precinct Reporter
3.	Chinese Daily News	12.	La Opinion	21.	Press Enterprise
4.	Desert Sun	13.	La Prensa Hispana	22.	Rafu Shimpo
5.	Eastern Group Publications	14.	La Voz Publications	23.	The Signal
6.	El Chicano	15.	Los Angeles Daily News	24.	State of California
7.	The Excelsior	16.	Los Angeles Sentinel		Contracts Register
8.	El Informador	17.	Los Angeles Times	25.	The Sun
9.	Inland Empire Hispanic	18.	Orange County Register	26.	Wave Community
	News				Newspapers

Additionally, potential bidders were identified using the Los Angeles County MTA Directory of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the National Directory of Minority-Owned Business Firms; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notices of the RFP were mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce, and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon]; and on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

A total of 108 RFPs were mailed to workers’ compensation claims administrators. Fourteen proposals were received by the deadline for submittal at 5:00 p.m. on January 9, 2004, 13 of which were responsive to RFP requirements. The panel rated the responsive proposals based on criteria set forth in the RFP, primarily, firms’ responsiveness to the RFP and their demonstrated technical expertise as claims administrators.

A panel of three AQMD employees, including the Risk Manager, Controller and a Senior Deputy District Counsel, along with the Risk Manager for the City of Pomona, reviewed the proposals. Of these, one is Asian-Pacific Islander, two are Caucasian, and one is Hispanic; two are female and two are male.

Colen and Lee received the highest rating. The firm demonstrated superior experience and expertise in workers’ compensation claims administration, particularly with other public entities in the local area, and has the resources and experience required to perform aggressive claim administration services.

The attachment provides the panel’s ratings.

Proposal

This action is to authorize the Chairman to execute a contract with Colen and Lee for the period May 1, 2004, through April 30, 2007, to provide workers’ compensation claims administration. Under the contract, Colen and Lee, in compliance with the provisions of the California Labor Code, would utilize its resources to engage and retain the services of medical providers, defense attorneys, and other firms or individuals to perform specialized work in connection with workers’ compensation claims administration. Funds for workers’ compensation claims administration are included in AQMD’s budget each fiscal year under the Administrative and Human Resources – Professional and Specialized Services account.

Resource Impacts

Sufficient funding is available for the remainder of FY 2003-04, and funding in an amount not to exceed $50,000 per year will be requested in successive budget years.

Attachment

Evaluation of Proposals for RFP #P2004-10
 

ATTACHMENT

EVALUATION OF PROPOSALS FOR RFP #P2004-10

WORKERS’ COMPENSATION CLAIMS
THIRD-PARTY ADMINISTRATION
 

Workers’ Compensation Claims Administrators	Final Rank	Technical Criteria	Cost	DVBE/Small Business Points	Total
Colen and Lee	1	65	24	10	99
ClaimQuest	2	57	26	10	93
JT2 Integrated Resources	3	58	23	10	91
Tristar Risk Management	4	62	22		84
Ward North America	5	58	22		80
Alternative Serv. Concepts	6	50	30		80
Buckeye Claims Admin.	7	54	12	10	76
Southland Claims Service	8	36	26	10	72
Intercare Insurance Services	9	48	17		65
Murphy and Beane	10	26	30		56
Frye Claims Consultation	11	45	11		56
Frank Gates Service Co.	12	46	-0-		46
Pegasus Risk Management	13	43	-0-		43

/ / /