Date Requested:January 12, 2011
Time Requested:04:46 PM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2011R1086 Introduced HB2137
CBD Subject: PEIA TO ADVERTISE CONTRACTS
FUND(S)
2180
Sources of Revenue
Special Fund
Legislation creates:
A New Program

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The purpose of this bill is to require the Public Employees Insurance Agency and its contractors, under certain circumstances, to advertise that they are seeking bids prior to accepting bids on contracts.
    
    The Public Employees Insurance Agency (PEIA) presently adheres to the requirements of this bill to identify qualified possible vendors to bid on solicitations in a competitive process. The PEIA also conducts pre-bid conferences with potential bidders in the solicitation to provide an opportunity to encourage vendor participation.
    
    It is currently the State of WV’s position that joint bidding is not permitted. If a vendor intends for any portion of a proposal or agreement to be subcontracted to another party, the vendor must fully disclose the subcontract and subcontractor at the time of the bid submission. All entities and personnel, including their roles, are to be named in the bid. The agreement and purchase order are awarded to one entity, the proposing vendor. The vendor is solely responsible for all work performed under the agreement and must assume prime contractor responsibility for all services offered and products to be delivered under the terms of the agreement, including, but not limited to, assignment of work and payment to subcontractors. The vendor must obtain prior written authorization from the Agency for all subcontracted portions of the agreement or any subsequent change or extension. The vendor to whom the agreement is awarded must be the sole point of contact with regard to all matters, including those involving subcontractors.
    
    However, passage of this bill would place an administration hardship on our Third Party Administrators by requiring advertising of every provider/pharmacy contract in their networks. Provider network contracts are, as an industry practice, negotiated not bid. This portion of the bill would create a substantial impediment to forming provider networks available to PEIA.
    
    The PEIA cannot precisely determine the fiscal impact or cost for this provision at this time. However, it is anticipated that the cost associated with this provision would be substantial and passed back to the Public Employees Insurance Agency in the form of higher administration expense fees and higher provider reimbursements.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    


Memorandum
Person submitting Fiscal Note:
Chip Myers
Email Address:
clifford.m.myers@wv.gov