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Nazareth, Pa., United States

Tuesday, October 14, 2014

Brown's No-Bid Health Plan Consultant Deal Looks Illegal

Northampton County Controller Steve Barron is one of two elected officials who were banned from an Executive John Brown news conference last week. Like Council member Bob Werner, he said he was just there to listen. But he had some paperwork with him, and shared it with me after the news conference. It related to a Scranton-area based firm called the C3 Group, Cost Control Consultants. "We guarantee to boost your bottom line," boasts their webpage. This is the outfit that recommended that Brown reduce the health benefits being paid for County workers. Colin D. Healey, associated with that firm, is the helpful fellow who told employees, "Nobody subpoenaed you to work here." Barron is concerned that Brown has ignored the requirements of the Administrative Code in his selection of yet another sole source contract. I'm not suggesting another lawsuit because this horse has already left the barn, but Barron appears to be right.

Who the Hell is C3?

Their webpage boasts of "decades of combined experience in helping businesses improve profitability and control costs." That must be in dog years or maybe gerbil years. According to the state corporation bureau, its parent company has only existed for five years. Its three partners are Christopher Rothwell, Thomas Boles and Jeffrey Raider. It only has one other County Client, Lackawanna, where the Deputy HR Director was once a C3 employee.

Colin D Healey, the Employee Benefits Consultant who claims to have come up with the benefits reduction plan for Brown, appears to have nothing more than a bachelor's degree from the Indiana University of Pa. in '86. He's been with C3 since 2010, but claims to have 25 years of "management" experience. Prior to hooking up with C3, he bounced around for 12 years as an analyst with the Global Business Exchange, which provides corporate training.

He appears to have no real experience actually working in any of the companies where he has given advice or training on cost control.

Brown's Arrangement With C3.

When John Callahan ran for office, he said he would look to the people who work here to find ways to keep expenses down. But Callahan was defeated by John Brown, and his approach to cost containment has been government by consultant. He attempted unsuccessfully to bring in a business consultant for an exorbitant sum. He rammed a controversial PR consultant down the County's throats, though he had to do it twice to get it right. He's hired Donna Taggart, who seems to get consultant contracts everywhere. He's also hired Integrity Personnel. These all started out as no-bid contracts, meaning he never sought out proposals from anyone else. He did finally go through a Requests For Proposals on his second try for his PR consultant.

His specific arrangement with C3 appears to consist of three mini-contracts.

The first, dated 5/23/14, is a $24,000 consultant agreement for "cost containment measures for the County's group health plans". It's for three months beginning in June. C3 is to provide an "eligibility audit" and is to make recommendations concerning different benefit plans. Brown authorized payment on June 4.

The second, dated 7/24.14, is a $10,000 consultant agreement to control workers compensation claims costs.It's for three months, beginning August 1, and is for $65 per hour, not to exceed $10,000. It includes accident investigations. All claims are supposed to be investigated. Though the contract is a per hour contract starting August 1, Brown authorized payment of the full $10,000 on August 5.

The final mini-contract, dated 8/31/14, is basically a continuation of the first contract, related to the group health plans. Though no term is set forth in the agreement,a bill to Brown indicates it's for another three months, beginning in September, for another $24,000. Brown authorized payment of this bill on September 9.

That's three mini-contracts totaling $58,000. All but $10,000 relates to the health plans.

The Administrative Code

The purchase of services from outfits like C3 is governed under The Administrative Code. All services in excess of $25,000 require a written contract approved in advance by the Solicitor (Section 13.16a), as well as an Executive Order. The reason an Executive Order is required is because that serves to notify both Council and the Controller.

In this case, each of these mini-contracts is under $25,000. But this is "piece-mealing", defined in The Administrative Code as making a series of contracts for less than the actual purchase price, when there should have been one contract for one price. (Section 13.02(i). In this case, the benefits contracts totaling $48,000 were piece-mealed in violation of the Administrative Code

Brown's own invoices refers to C3's services as "professional services". Because they exceed $25,000 and they are "professional services", he was required to seek proposals from different vendors (Sec. 13.09(a)) unless he determined that it would be impractical and had permission from County Council to go ahead without seeking proposals. Sec. 13.07(b).

The Administrative Code also requires that the report or study made pursuant to a professional services contract must be supplied to Council. Sec. 13.16(f). Obviously, some kind of report had to be furnished to Brown before deciding on fairly drastic reductions in health benefits, but that has not been provided and Brown has claimed there is no written report.

Should Brown Be Sued?

I think it's pretty clear that Brown violated The Administrative Code. ... Again.  But is it knowing and intentional? "These contracts pieced together have the sole intention of avoiding disclosing the agreement with the consultant and keeping my office and council in the dark about the goings on in the county," Barron told The Express Times. Though I'm growing suspicious, I doubt Brown was playing games. I think the more likely explanation is that he has been in office less than a year and failed to consult with his Solicitor.

There's no point in suing. The horse has already left the barn. C3 has been paid.

But I would demand that the Executive provide all written communications between himself and C3. I'd ask for the "eligibility audit" supposedly performed by C3 as well as any documentation reflecting its review of different plans.

56 comments:

Yes, it's all about what I think... said...

Someone should look into the past work that C3 has done for the County, specifically filing the necessary documents for the self-funded workers compensation plan a few years back.

Harp used them for the required safety document filing with the Commonwealth as well.

This isn't their first turn at the feeding trough that appears to have become a hallmark of the Brown administration. I sure hope I'm wrong.

I have no problem hiring experts, or even consultants, as I once was one, BUT why not hire them according to the Code and Charter - as employees under the current job descriptions already in place?

Hiring incompetent managers is no excuse to go consultant shopping when you need professional advice.

I seem to recall that there exists a volunteer board of HR professionals already empowered to give advice to Council and the Executive, made up of five actual HR professionals, with decades of experience among them (and all certified I might add).

What a colossal waste of both time and money.

If you are going to surround yourself with consultants, they should be the best, most experienced, and unbiased professionals that you can find.

Judge for yourself.

Bernie O'Hare said...

Rothwell also has an investigative services firm. My guess is he does a lot of worker comp work. But I see no evidence that this outfit makes campaign contributions, at least on the state level.

Yes, it's all about what I think... said...

I wasn't addressing campaign contributions in my comments.

I haven't explored that path as I'm sick of politics and politicians, therefore I wouldn't know, one way or the other.

Bernie O'Hare said...

No sickness allowed here.

Yes, it's all about what I think... said...

I do believe, however, that the administration circumvented the code by employing their services piecemeal though, if not breaking the letter of the law (code), certainly the spirit of the law (code).

Whatever happened to ethics?

Compliance?

Did the Purchasing Department bring this up or are they keeping their heads down to avoid the politics?

Inquiring minds would love to know.

Bernie O'Hare said...

Oh I think the letter and spirit of the law was violated. It just strikes me as too late. As for purchasing, this would not have gone through them, as I understand.

Yes, it's all about what I think... said...

So let me get this straight...the limit without intervention/contract/proposal review by anyone is $25,000 ...

...AND...

...mysteriously two of the three contracts come in at $24,000!

What a coincidence.

Yes, it's all about what I think... said...

Boles appears to be a member of the Society for Human Resource Management, but their directory indicates no current certification like PHR, SPHR, etc.

Should be familiar with their Code of Ethics though, as a member.

Yes, it's all about what I think... said...

But, for that matter, so was Siemiontkowski, a member.

Anonymous said...

"...mysteriously two of the three contracts come in at $24,000!"

This is really reaching to try and attack John Brown's administration. It will be a long four years if this is all you got and you use it over and over again.


Where were you when John Stoffa gave numerous just sub $25,000 contracts to his Lehigh County pall and consultant Ken Mohr? He not only gave him numerous sub $25K contracts but charged them back to various departments to hide them better.

But I guess that was then and this is now, right!

Bernie O'Hare said...

If there was evidence that John Stoffa issued multiple sub $25k contracts in one year to one vendor, I'd call him on it. But just as you don't have a name, you don't have evidence.

This is piece-mealing, is barred under the Admin Code, and your defense of this illegality is pure partisan politics.

If a previous executive broke the law, that's no justification for the current Executive. Come up with another argument.

Anonymous said...

Christopher Rothwell had been hired previously by the Stoffa administration to conduct consulting work for workers compensation claim for years. He has demonstrated, at least at the Gracedale complex, cost control measures in workers compensation and saved the County a lot of money. The County Administration (Cathy Allen) named Christopher Rothwell to head the County Safety Committee. From this platform, those cost control measurers instituted at the Gracedale Complex would be instituted County-wide.

Anonymous said...

"He's hired Donna Taggart"


for what?????

Anonymous said...

"But I would demand that the Executive..."

I would continue to ignore you, as he has from the beginning. Your blog was an in kind campaign donation to the ethically disgusting Callahan. Brown's ignoring you has been a very wise choice. Your advice sucks.

Anonymous said...

So we (the county) paid them $48,000 to tell us that the bottom of the barrel healthcare plan with the maximum out of pocket allowed by the new law will save the county money? Money well spent.

Anonymous said...

isn't it curious that john brown doesn't have any problem spending taxpayer money on whatever ...but can't find any for raises ? as far as i'm concerned he's crooked if council approves a budget with a 20 million dollar line of credit there crazy!

Anonymous said...

Rothwell and C3 were sub-contractors for PMA to provide their risk management services. So, that contract was with PMA, the county's Third Party Administrator for Workers' Compensation. They took advantage of that relationship to sell other services to the county outside of the PMA work. There is something fishy about this business maneuver. Wonder what favors will be returned as a result of this exclusive arrangement?

Anonymous said...

Brown likes to hire whom ever he likes and pays BIG BUCKS TO THEM ! Like his $80,000 right hand mouth piece because he can't speak for himself. Take $ out of your employee's pay do not give them ANY RAISES. Pay more outsides with $ which should go to your EMPLOYEES. Brown lied to everyone and should NOT BE IN OFFICE. He DOES NOT CARE ABOUT HIS EMPLOYEES AT ALL.

Stacy Soldo said...

As does yours anonymous

Anonymous said...

This contract was probably legal, but like the PR one it is a waste of money. The previous administration made a similar proposal last year, but in the face of similar opposition, Stoffa threw in the towel and balanced the budget using all the fund balance. That surplus is gone. Mr. Brown ran on a platform of not raising taxes and was elected to represent the taxpayers. Either spending needs to be reigned in or you need to find 6 votes on Council to raise taxes. That's unlikely.

Anonymous said...

Its sick out time

Anonymous said...

+1

Anonymous said...

Brown is sending the wrong message to employees. Buck up and feel the pain of my austerity budget while I continue to spend precious county resources on useless insider contracts. He is the Prince of Phonies.

Anonymous said...

john brown simply can't be trusted . he throws money at everything but the employees ,the taxpayers he claims to care so much about will be in for a big surprise soon enough!

Bernie O'Hare said...

"I would continue to ignore you, as he has from the beginning."

That's ok.

Anonymous said...

typical rat-bastard politics!

Anonymous said...

jb is A FORWARD THING MAN TRYING TO RIGHT THE WRONGS OF PAST ADMINISTRATIONS.

Bernie O'Hare said...

Your grade school called. Time to get back to class.

Anonymous said...

Government by consultant at its best. This should make the tea partiers head explode!

Anonymous said...

right he's proves to us everyday he's the sharpest tool in the shed.do give us a list of all the wrongs he's trying to right. the county managed just fine without him!

Anonymous said...

I thought each department was supposed to cut expenses 10%. Did this not apply to the EXECUTIVE OFFICE ?

Bernie O'Hare said...

"This contract was probably legal, "

The first contract for $24k was legal. The second for $10k, which relates to different services, is legal. The third contract for $24k, which relates to the first, is illegal.

Anonymous said...

Why can everyone else raise taxes , especially school districts, and the county not? Especially after 8 years of no increases? Does this mean employees should receive the same pay they received 8 years ago ?

Anonymous said...

Bernie- agreed. By adding on to the first contract for an additional $24K that exceeded the threshhold for contracts that require competitive bidding or RFP's. However, he likely used a sole source executive order for both with justification based on C3's familiarity with the county's operations, etc. Check that out. An incestuous relationship has been formed between the executive and C3 which is headquartered 70+ miles away and is not by any stretch of the imagination a local company. How much of the contract is paid for portal to portal charges?

Anonymous said...

Hopefully Barron and/or council will demand all correspondence.

I still think Brown should be sued. Add this to the already illegal things that he has done since January and one can see he is ring as a dictator doing what he wants, breaking laws, playing politics with workers and consumers with no elected official such as the DA making him accountable.

Anonymous said...

He should pay back the $500,000.00 that Bangor had to buyout the police chief who was Illegally Fired! He should fix the prison because he will be a resident some day.

Anonymous said...


"An incestuous relationship has been formed between the executive and C3"

Oh the Pathos!! Oh the Derma!! OH PLEASE!!

This is no different than Stoffa and his pal Ken Mohr. Mohr had many sub $25K contracts from numerous departments for eight years. He got them whether the Department heads wanted him or not.
Were was the outrage there? You people are nuts. John Brown is just following past practice you know the thing you union boys love to claim to get away with anything.

Anonymous said...

Derma?

Anonymous said...

Derma? Oh Drama. At least Stoffa did not try to say the workers are over paid or over insured. The County can't afford to pay these generious benifits. But I can pay off those who I bring in, pay someone to try to make me look good so when I leave I can get elected to some other office.

Anonymous said...

Are you talking about Brown? He will never run for another office.

Peter J.Cochran said...

Worker Compensation- may be a big unknown area for C3 to deal with. See, if they DON'T attend the Governors Safety Conference in Hershey, they probably can't get anything done in a short period of time with any alleged malingerers or dealing with 3rd party benefit properly.---- I just know somebody is going to call me out on this---but I'm ready.

Anonymous said...

I think everybody is getting sick over this issue. It might be time to start using your sick days.

Peter J.Cochran said...

Bernie, I have posted about this event with a PA.State Trooper's death. I have stated on this blog that a big picture is- what if; some subversive group wants a bite of our asses here when we fail to grab one man with bolt rifle? ----Well the alarm has now come. This knucklehead character is not where they think he is,and has not been- and here we are . This was an Infantry issue and we don't have the right people to solve it. I have chastised as an old man, the liking's of a football coach 40 years ago, well football rules have not changed much in 40 years to say the least -I consider myself a patriot of this country and say we as a nation are in jeopardy.Wait.- the bigger issues are about to occur and we will not fight this crap out at city and county level after that.

Peter J.Cochran said...

Oh Ya?I know what your thinking. Equate this to ; Where is this administrations SURGEON GENERAL in this Ebola contamination and the strategy required to ....This is a litmus test of this administration in Washington, D.C. The ISIS will grow here too.

Anonymous said...

I believe that Stoffa used Ken Mohr for three large building projects in his two terms of office. Wayne Grube Park, the historic courthouse renovations and human services building. Ken has outstanding credentials in project management, and was a former county administrator. Each contract was very specific and hours reported to the T. Those capital projects would not have been completed on time and on or under budget without his assistance. He was well worth the money. No one can question his credentials. However, these jokers from C3 are another matter. It is preposterous to compare their qualifications and contracts with the ones awarded Mohr.

Anonymous said...

Agree 753

Anonymous said...

You dismiss the other possibility that Brown did consult with the Solicitor and got yet another piece of bad advice. Can't wait to see if he got to the part of the HRC that prohibits lines of credit for general operating expenses.

Anonymous said...

Someone needs to shine a spot light on Taggers long history of no bid contracts throughout the Valley.

Anonymous said...

I heard Mr. Healey tell a Gracedale employee yesterday to put her kids on CHIP! And he had no answers about the value of the new plan as it relates to Cadillac status. In other words, they are not doing research, they just slashed to the highest out of pocket max allowed by law. I don't think employees have a problem with the coinsurance as much as the high out of pocket max, which is completely unaffordable.

Anonymous said...

4:24 you know very well that Ken Mohr had nothing to do with the lease negotiations for the HS building. That was between Jim Gentile, the administration and county council. In 5 years the county can buy out the lease and the final costs will be around $20 million. The county could NEVER have built a facility of that size, quality, and excellent location in a year for that money. Mohr's involvement was to coordinate the sale of the Wolf and Bechtel buildings, which was very successful. He also kept track of the budget and finances, enabling the project to finish on time and at or under budget. His management of other county projects, including the Wayne Grube park and historic courthouse renovations were nothing short of amazing. To attack Ken Mohr and John Stoffa for hiring him reveals your ignorance.

Bernie O'Hare said...

The outright lies at 4:24 have been deleted, as will her future OT rants.

Bernie O'Hare said...

"I heard Mr. Healey tell a Gracedale employee yesterday to put her kids on CHIP! "

There is no shame in that, and it's pretty good.

Was Healey more polite?

Anonymous said...

Yes lets transfer those cost. Now all PA taxpayers can eat them.

Yes, it's all about what I think... said...

Wal-Mart used to be famous for hiring part time employees, and at their orientation they were given all the federal and state programs that they could apply for as "poverty" eligible.

Why shouldn't we transfer all the costs to the taxpayer anyway (sarcasm), rather than let the individual companies foot their own bill?

The County seems to be doing the same. Does anyone know what kind of business Brown was in before he became a politician?

Did anyone ask HR how much was saved by excluding, at least for primary coverage, spouse of employees who work elsewhere and are eligible for insurance with their employer?

Did anyone ask HR how many of our claims are "in-network," thereby providing additional savings to the health plan?

Is the real goal to shift costs and coverage to "other" plans? If so, why don't we just excluded family coverage completely and just cover employees? (Yes, more sarcasm, but it could be done legally).

Anonymous said...

I just saw someone ask what the Brown Clown did in his prior life and I cant wait to see the answer. Oh wait....thats right, Johnny boy wont answer that one. But in his campaigning, he has told people that he was in the public relations sector. Huumm... if thats the case, why hire a PR firm. Ok lets let that one go. He also told people he was an efficiency expert. Well??? then why hire C3? In truth, Browns real compensated job was a mystery before politics.
I read in the comments that He will never run for another office. I wish that were true but in this guys head, he is walking around like he is making a positive difference. Mores the Pity.
The delusions he has would make half the drug users in the county jealous.
All the sarcasm aside, whats really depressing is how the employees of the county are being treated. Being told to go on programs like CHiP is a slap in the face to anyone who works hard. As an employer, the county should be protecting its staff, not selling them out to some slash and burn outfit. Whatever happened to "For the people". Guess that was just a misprint.

Anonymous said...

Loved your comment. It felt good to laugh! thank you