Judge questions Hudson County's 'rush' to award prison contract

December 03, 2009  Jersey Journal

A superior court judge today questioned why the county rushed to award a prison medical services contract before getting the report of an expert it had hired.

“Why was there a rush to enter into the contract when they were spending money on an expert to see if the original contract was too much money,” Superior Court Assignment Judge Maurice Gallipoli asked attorney Edward J. Florio today.

The county Board of Freeholders hired Chicago doctor Ron Shansky in March to review its proposal for medical services at the county jail and juvenile correctional facility after bids came in high.

But before Shansky submitted his findings, the freeholders moved in April to hire Correctional Health Services of Verona to provide services for $29.7 million.

CHS outbid Evesham-based CFG Health Services, which submitted a $38.3 million proposal.

But in August, after Shansky submitted his report, the freeholders amended the contract with CHS, reducing staffing by 35 percent, bringing the new contract to $22 million.

Gallipoli said he wasn’t accusing the county of anything “nefarious” but that choosing to not seek new bids could be seen as questionable.

“A favored bidder could be told, ‘Bid low, get the contract, because we’re going to reduce the services,’” he said. “That’s what a suspicious person or public could conceivably think.”

Gallipoli heard arguments from lawyers representing CFG, CHS and the freeholders for about two hours in his courtroom on Newark Ave. in Jersey City.

CFG filed a suit last month accusing the county of circumventing the law when it awarded a contract for prison medical services to a former county employee who also contributed to a sitting freeholder’s campaign fund.

While CFG officials have said the suit is likely the first in the state to challenge a contract using the state’s pay-to-play law that issue didn’t come up in court today.

CFG contends in its brief that a $1,000 political donation made to Freeholder Anthony Romano should have disqualified the winning company from bidding.

Geoffrey Perselay, president of Correctional Health Services of Verona and a former county administrator who once served as acting jail warden, made the donation on May 30, 2008. His company was awarded the contract in April of this year.

The suit charges that the state’s pay-to-play law prohibits the county from awarding a contract above $17,500 to a business that had made a reportable contribution to an elected county official within the previous year.

Maeve Cannon, CHS’ attorney, argued that CFG should have been disqualified from the process for not submitting a complete bid. She also argued that the county has the right to amend a contract once it’s awarded.

But Richard Trenk, who represents CFG, contends that the county never had any intention of awarding the original contract and that new bids should have been sought based on Shansky’s recommendations.

Florio said the county was attempting to be transparent when it voted on the contract amendment.

If Gallipoli rejects the amendment, the freeholders would have to decide what to do about the original contract. Gallipoli said he did not feel he had jurisdiction to discard the original contract.

He gave the lawyers until Dec. 11 to submit written summaries and said he would then rule on the case.