BOARD MEETING DATE: April 6, 2007
AGENDA NO. 5

PROPOSAL:

Execute Contract for Workers’ Compensation Claims Third-Party Administration

SYNOPSIS:

The current contract for workers’ compensation claims administration services expires April 30, 2007.  On December 5, 2006, the Board approved release of an RFP to solicit proposals from firms interested in providing these services.  This action is to execute a three-year and two- month contract (to move to a fiscal year-based contract) with ACME Administrators, Inc., through June 30, 2010, for a total amount not to exceed $180,145.  Funding for this contract has been included in the Fiscal Year 2006-07 Budget and will be requested in successive fiscal years.

COMMITTEE:

Administrative, March 9, 2007, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a three-year and two-month contract (to move this contract to a fiscal year basis) for the period May 1, 2007, through June 30, 2010, with ACME Administrators Inc., to perform workers’ compensation claims third-party administration in an amount not to exceed $8,250 for the remainder of FY 2006-07, $49,913 for FY 2007-08, $52,408 for FY 2008-09, and $54,574 for FY 2009-10, and including a one-time data conversion cost of up to $15,000 in FY 2006-07.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD currently contracts with Colen and Lee 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, 2007.  On December 5, 2006, the Board approved release of RFP #P2007-17 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 Procurement Policy and Procedure, a public notice advertising the RFP and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP has been mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/ where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html).  Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

A total of 98 copies of the RFP were mailed to workers’ compensation claims administrators.  Eleven proposals, six of which were responsive to the RFP, were received by the deadline for submittal at 5:00 p.m. January 4, 2007.  The panel scored the six responsive proposals based on criteria set forth in the RFP, namely, demonstration of an understanding of the scope of work, demonstrated technical expertise in claims administration, and relevant public-sector claims administration experience.  Costs were scored based on three-year costs as reported in proposals.

The panel evaluating the proposals included a risk manager for the County of Riverside, a risk manager for the City of Ventura, a workers’ compensation defense attorney, and three AQMD employees, including a Risk Manager, a Controller, and a Senior Deputy District Counsel.  Of these, two are African-American, one is Asian-Pacific Islander, one is Caucasian, and two are Hispanic; two are female and four are male.

ACME Administrators, Inc. received the highest rating.  The firm demonstrated superior experience and expertise in workers’ compensation claims administration and a commitment to working towards an environmentally friendly “paperless” system.  Three of the firms submitting proposals self-certifying that they met MBE/WBE qualification requirements.

The attachment provides the panel’s ratings.

Proposal

This action is to authorize the Chairman to execute a contract with ACME Administrators, Inc., for the period May 1, 2007, through June 30, 2010, to provide workers’ compensation claims administration.  Under the contract, ACME Administrators, in compliance with the provisions of the California Labor Code, would utilize its resources to engage and retain the services of medical providers, managed care, 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 in an amount not to exceed $23,250 (which includes up to $15,000 for data conversion) is available for the remainder of FY 2006-07, and funding not to exceed $49,913 for FY 2007-08, not to exceed $52,408 for FY 2008-09, and not to exceed $54,574 for FY 2009-10 will be requested in subsequent budget years.

Attachment

Evaluation of Responsive Proposals to RFP #P2007-17

ATTACHMENT

EVALUATION OF RESPONSIVE PROPOSALS TO RFP #P2007-17

WORKERS’ COMPENSATION CLAIMS
THIRD-PARTY ADMINISTRATION