Losing Software Bidder Charges University of Illinois is About to Make a $100M Mistake

A Kansas City company which lost out on a major software contract with the University of Illinois Hospitals, says the winning company’s bid will end up costing taxpayers up to $100 million in excess costs.

Among the bidders, two of the nation’s biggest medical software providers, Cerner Corporation and Epic, slugged it out for the contract to provide medical record and billing systems for UI Health. Epic was the high bidder, but won the contract.

Now, Cerner is crying foul, contending the fix was in, and that the deal will cost taxpayers tens of millions of dollars they don’t need to spend.

“I smell a rat here,” says Mara Georges, the City of Chicago’s former Corporation Counsel who is serving as Cerner’s Chicago attorney. “The taxpayers of the State of Illinois are entitled to an explanation, and an explanation has not been forthcoming!”

At issue, is what was supposed to be an all-encompassing contract, says Georges. And she says Cerner provided just that, in their bid for $60.5 million.

“It said ‘all in’ price,” she says. “Capital A, capital L, capital L!”

Georges contends the Epic bid of approximately $62 million will require additional implementation by another vendor, which will run between $75 and $100 million. And she complained that while Epic was allowed to demonstrate their software, Cerner was not.

“It certainly seems there was an attempt, a successful attempt, to steer the contract towards Epic,” she says.

Frustrated in their attempts to appeal the contract award, Cerner took the matter to the Illinois Procurement Policy Board, where both the Chief Procurement Officer for Higher Education, and a representative of the University of Illinois declined to provide input despite the fact that both were present. But recorded minutes of that meeting indicate that board members were troubled by how the matter had unfolded.

“I guess U of I doesn’t really care if there is a $75 to $100 million additional cost to taxpayers,” one member exclaims. “I just find this appalling!”

Board member Bill Black expressed outrage that no one from the University would explain how the decision had been made.

“The University of Illinois is a world class public university, and I get damn tired of them operating like just the opposite---like they are Harvard,” he said. “Every time the University gets in trouble, it’s because they won’t say what they’re doing!”

Epic did not reply to a request for comment, and the University of Illinois likewise refused NBC 5’s request for an interview. But the Chief Procurement Officer, Ben Bagby, did provide a copy of the denial letter he sent to Cerner in January.

In that letter, Bagby noted that a 17 member evaluation committee scored Cerner so low that they failed to meet the threshold to demonstrate their product.

“Epic’s proposal exceeded the minimum… and was found the most advantageous to the state,” he wrote. “Cerner simply did not submit a proposal that showed its technical qualifications at the minimum level required.”

Bagby insisted any additional costs on the back end would be incurred, regardless of vendor, a contention Cerner disputes.

Georges maintained that Cerner needed to demonstrate their software, to satisfy the technical questions which would have led to a higher overall score.

“For whatever reason, there was an interest in making sure Epic was awarded this contract,” Georges said. “It appears there was favoritism toward Epic, and that procedures were not followed to give everyone involved in the process a fair shake.”

In a statement, a University spokesman refused to address Cerner’s specific charges, only saying that the process had unfolded according to all procurement processes mandated by state law.

The Illinois Procurement Policy Board was troubled enough that they scheduled a session for the parties to come in and explain themselves. That hearing will take place March 20th in Springfield.

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