A judge has ruled in favor of Sampson County, its Board of Commissioners and Enroute Transportation Services, denying Van-Go Transportation Inc.’s motion for a preliminary injunction and dissolving the company’s temporary restraining order in the matter of Medicaid transportation services.
Van-Go filed suit against the county at the end of June, maintaining that a faulty bidding process, conflicts of interest among county officials and “numerous improper and unlawful events” deprived them of securing a $2 million Medicaid transportation contract for the next two years. Van-Go has been the county’s service provider since 2013.
On June 29, Van-Go filed a verified complaint against the defendants seeking compensatory damages, injunctive relief staying the award of a transportation services contract by Sampson County, and a declaratory judgment. That day, Judge W. Allen Cobb Jr. issued a temporary restraining order for Van-Go, which was able to continue Medicaid transportation, and EnRoute was enjoined from performing any acts under the contract.
On July 13, the matter came back to Sampson County Superior Court for Superior Court Judge Charles H. Henry to hear motions from both sides, including a motion for a preliminary injunction by the plaintiff (Van-Go) and a motion from the defendants to dissolve the temporary restraining order.
“This case involves numerous improper and unlawful events and occurrences surrounding the recent award,” the lawsuit alleged. “Sampson County and the Board acted erroneously, failed to use proper procedure, acted arbitrarily and capriciously and failed to act as required by law or rule when the board authorized the Sampson County to award the contract to Enroute.”
The presiding judge, whose ruling was filed at the Clerk of Court on Monday, said both vendors were responsible bidders, and that the contentions of Van-Go lacked merit.
“The court concludes that Van-Go as well as Enroute are responsible bidders. Both have shown the skill, judgment and integrity necessary to the faithful performance of the contract, as well as sufficient financial resources and ability,” the ruling stated.
“The Plaintiff has failed to show that the rejection of the plaintiff’s bid was a result of any fraud, corruption, abuse of discretion or any other improper motive on behalf of the defendants. The court concludes that the plaintiff is not likely to prevail on the merits of that particular claim,” the ruling continued.
At the hearing, Van-Go was represented by R. Jonathan Charleston, Coy E. Brewer, Jr. and Dharmi B. Tailor; Sampson County and its commissioners were represented by Jonathan E. Hall; and Enroute was represented by Clay Collier and Norwood Blanchard. Also present at the hearing was Sampson County attorney W. Joel Starling.
The judge found that Enroute’s bid “substantially conformed” with state law and, further, that surcharge language did not give it an “unreasonable advantage” in the bidding process.
Shortly after three sealed bids — from Enroute, Van-Go and Joss Transportation Services — were opened in March, Van-Go maintained in its previous complaint, the board and the county became aware of irregularities in the process, but “failed to discharge its duties” when it was made aware of those irregularities.
“The RFP (Requests for Proposals) does not authorize a bid price that is conditional or contingent upon other factors. Any attempt to make the bid price conditional or contingent upon other factors would make the bid non-responsive unless contingent bids had been specifically authorized,” Van-Go’s attorneys said. “The contract application calls for a fixed or firm price — not an adjustable price. Enroute’s bid price is non-responsive because contingent or conditional bids are not authorized in the RFP.”
Van-Go’s bid proposed a fixed cost per mile of service of $1.74, while Joss’ bid was $1.75. Enroute’s bid proposed a $1.54 rate, with an asterisk on the bid submission denoting a 1 cent fuel surcharge for each 5 cents per gallon over $3.95 per gallon, based on the average daily price at the Go-Gas station in Clinton.
Van-Go further argued that Enroute’s bid did not identify a liability insurance carrier or coverage limits, stating coverage would be in place by July 1, while Joss also failed to provide the required liability insurance coverage in its bid submission, also making it non-responsive.
“Plaintiff’s bid fully and completely conformed to the RFP, as is evident from its submission,” Van-Go attorneys maintained. “Based on the bid price and required insurance coverage information, plaintiff solely is entitled to be awarded the contract.”
Department of Social Services (DSS) officials concurred with a staff recommendation that Enroute’s bid was the “lowest responsible” in April after a comprehensive evaluation of the three bids was formulated by a team within DSS. They cited Enroute’s years of experience to Sampson and said the potential fuel surcharge added to the rate was also anticipated to remain lower than expenses related to the next lowest bid.
The memo concluded that “based upon Enroute Transportation Services, Inc.’s fuel surcharge, as specified in their proposal, gas prices would have to reach $4.95 per gallon effective July 1, 2015 and remain at that rate for the full 24 month period of the new contract in order for their bid not to be considered as lowest received. We do not anticipate this happening.”
County attorney Joel Starling echoed that statement in his own memo to commissioners.
“Responsive” bids, the court stated, must substantially meet the requirements of the specifications and laws applicable to the contract. Enroute’s did that.
“The bid of Enroute substantially conformed to the specifications of the Request for Proposal and the laws applicable to the contract with regards to rate of reimbursement,” the court ruled. “The surcharge language of Enroute’s bid did not give it an unreasonable advantage over the plaintiff or Joss.”
The failure of Enroute to meet the requirement in the RFP to have insurance coverage on their vehicles in the amount of $1.5 million at the time of the submission of the bid “is not material,” the judge said in his July 13 ruling.
“It is unreasonable to require a bidder to expend money to acquire additional insurance to meet this requirement three months prior to time the bidder has to perform under the terms of the contract,” the ruling read. “Acknowledging that liability coverage requirement and stating that coverage in that amount would be in place by July 1, 2015 fulfills substantially the contract proposal provisions. The court concludes that the plaintiff is not likely to prevail on the merits of that particular claim.”
Van-Go said staff and board conflicts conspired against it, noting that Board of Commissioners Chairman Billy Lockamy and DSS director Sarah Bradshaw each had conflicts of interest that should have disqualified them from participation in the consideration of the bids for the contract. The court was not convinced.
“The plaintiff’s contention that Sarah Bradshaw … and Billy C. Lockamy had a conflict of interest … is unpersuasive and not supported by the affidavits submitted by the parties. The court concludes that the plaintiff is not likely to prevail on the merits of that particular claim,” the ruling stated.
“Based upon the foregoing, the court denies the plaintiff’s motion for a preliminary injunction and allows the defendants’ motion to dissolve the temporary restraining order,” Henry’s ruling concluded. “The temporary restraining order entered on June 29, 2015 is dissolved.”
County officials, who have a policy of declining comment on ongoing litigation, again were mum when reached Monday and asked what the next step would be for the county, what the ruling would meant for Medicaid transportation and a possible transition back to Enroute.
Reach staff writer Chris Berendt at 910-249-4616. Follow the paper on twitter @SampsonInd and like us on Facebook.