Contract conflicts driving rift at DHHR

Recent developments in what can best be described as a soap opera situation have focused unnecessary media attention on a major agency in West Virginia state government. It centers on a dispute between top officials in the West Virginia Department of Health and Human Resources that has been fermenting for months. The most absurd aspect is that it has also produced a situation where three key employees have been put on paid leave since July.
This dispute between high-ranking officials in DHHR apparently can be traced back to last winter and to different views by these officials on which firm should be awarded a multimillion dollar contract. The rift then widened with the award of another seven-figure contract earlier this year.
Legislative Auditor Aaron Allred waded into the conflict back in February, asking DHHR Secretary Michael Lewis about the possibility that a pending seven-figure contract might involve a conflict of interest.
Allred was concerned that a private contractor who worked both for the state and the company and that had a financial stake in a pending 10-year, $200-million dollar contract might have used his influence to sway the decision toward that company.
Lewis then decided to rebid the contract with procedures in place to exclude that company from potentially benefiting from the contract.
He notified Allred in a letter dated March 22, 2012 that DHHR had “determined that the system in place. . .to alert us to potential conflicts of interest relating to procurements was inadequate.”
The Legislative Auditor’s office eventually recommended that the authority of DHHR’s purchasing office to award certain contracts without review by the state’s purchasing division be eliminated. But the people working in that DHHR office are still on the job.
The disagreement between employees involved in the dispute first received widespread attention when three senior officials on one side of this issue were placed on paid leave.
They are Susan Perry, deputy secretary for legal affairs; Jennifer Taylor, who serves as general counsel for DHHR; and Assistant Secretary John Law, who is in charge of public relations for the agency, have all been on paid leave since mid-July. Shortly after that move, the contract was awarded to Fahlgren.
The dispute accelerated when DHHR’s inspector general issued a search warrant alleging that Perry, Taylor and Law were trying to “favor” the Arnold Agency of Charleston, which submitted the lowest bid but lost this multimillion dollar contract to Ohio-based Fahlgren Mortine in mid-July. That warrant claimed that Brian Rosen, who heads up the purchasing division, and Taylor didn’t agree on this decision.
Rosen has Warren Keefer, a deputy secretary in DHHR, on his side in this dispute with Taylor and Perry, who now have indicated they plan to file a whistleblower action against DHHR. Pity new acting DHHR Secretary Rocco Fucillo who took over leadership of this key state agency after Lewis stepped down June 30 and has to referee this in-house dispute between some of his key staff members.
Meanwhile, according to the most recent estimates, West Virginia could more than triple its use of windmills to generate electricity that currently consists of five projects with a combined capacity of 582 megawatts. This modest beginning provides only 1.4 percent of this state’s electricity.
Some experts in the field believe West Virginia could more than three times that amount if it fully develops this source of power. But an important federal tax credit of about $1 billion a year — equal to about half of the wholesale cost of this electricity — is due to expire Dec. 31, 2012.
According to an official of the West Virginia Public Service Commission, there are no applications pending for new wind energy projects in West Virginia.
Jeff Herholdt, director of the state’s Division of Energy, said a continuation of the federal tax credit is essential to any further expansion of wind energy projects in this state.
This new form of producing electricity is also still controversial here. And the wind that is so necessary to the process is intermittent because it typically blows harder at night — which is after demand for energy peaks — so companies can charge higher rates. But the PSC has approved two new wind projects that are yet to be built.

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