July 17, 2013 By Michael Volpe
An information technology (IT) company in line to bid on billions in new contracts as a result of ObamaCare is the subject of a growing list of scandals and investigations in which its alleged that, among a number of abuses, the company has produced low ball bids in order to win Medicaid related contracts, only to create overages that balloon the expense of the project as it is implemented.
The name of the company is Client Network Services, Inc (CNSI) and it’s headquartered in Maryland. The company will be able to bid on billions in new ObamaCare-related IT contracts because, in order for states to receive new grants for expanded Medicaid rolls, ObamaCare requires states to have IT systems that are able to share data at so-called finger-tip access. Because most states have antiquated systems, such overhauls will often require the assistance of companies like CNSI.
In March, Louisiana Governor Bobby Jindal canceled one such contract between CNSI and his state after it came to light that a federal grand jury was investigating the relationship between one of his top aides and CNSI.
Aswell said he first became aware something was amiss in June 2011, when Bruce Greenstein went before the Louisiana Senate Governmental Affairs Committee to be confirmed as the secretary of Louisiana’s Department of Health and Hospitals (DHH), the equivalent of the US Health and Human Services (HHS) secretary.
During the proceedings, things became contentious and confusing when Greenstein refused to divulge the recipient of a contract to upgrade the State of Louisiana’s antiquated computer system, which electronically processed Medicaid health care claims.
Greenstein went back and forth with lawmakers for quite a while before he finally admitted it was CNSI, his own former employer. He assured the state legislators at that hearing that he created a firewall between himself and his former employer during the contractual process.
That turned out not to be true, and, instead, in March 2013, news was leaked that a federal grand jury was investigating the potentially illegal relationship between Greenstein and CNSI during the process in which this contract was awarded.
Once that came to light, not only did Jindal cancel the contract, but Greenstein resigned shortly after. Aswell said that all sorts of issues were raised with CNSI’s bid ($194 million), and a number of people in the media raised concerns that CNSI would not be able to achieve the contract for the pre-arranged price.
In 2012, Southeast Michigan Healthcare Information Exchange (SEMHIE), a multi-stakeholder initiative trying to integrate a health information exchange throughout southeast Michigan, sued CNSI for breach of contract after CNSI allegedly failed to provide SEMHIE with prior agreed upon software. An email was left unreturned by SEMHIE for this story. Jennifer Bahrami, press secretary for CNSI, also didn’t respond to an email for comment for this story.
In 2011, CNSI was accused of lowballing a contract in South Dakota, only to have expenses increase exponentially as the project wore on. A local story on the affair explained:
The South Dakota Department of Social Services has paid $49.7 million so far for a new Medicaid processing system that at this point remains inoperable.
The original contract was for $62.7 million, but the new system is now expected to cost far in excess of $80 million to complete and will take two to three more years to get running, according to court documents filed as part of a lawsuit between the contractor and the department.
The most in-depth investigation of CNSI occurred in Maine in 2006, and it was conducted by the magazine CIO, a journal for IT professionals. In that piece, CIO concluded that not only did CNSI’s system end up costing 20% more than the company’s originally bid, but its implementation was a logistical nightmare.
The department’s Bureau of Medical Services, which runs the Medicaid program, was being deluged with hundreds of calls from doctors, dentists, hospitals, health clinics and nursing homes, angry because their claims were not being paid. The new system had placed most of the rejected claims in a ‘suspended’ file for forms that contained errors.
Tens of thousands of claims representing millions of dollars were being left in limbo.
About 15 IT staffers and about 4 dozen employees from CNSI, the contractor hired to develop the system—were working 12-hour days, writing software fixes and performing adjustments so fast that Hitchings knew that key project management guidelines were beginning to fall by the wayside. And nothing seemed to help.
Because CNSI is a private company, their financials aren’t published, and thus, the exact amount of business it does with our government isn’t known. Furthermore, because most IT-related Medicaid contracts are done on the state level, tracking the amount of IT business that ObamaCare will create is also very difficult to do. It is clear that one company that should be happy with the implementation of ObamaCare is CNSI because it is without a doubt a boon to a company like it. The company’s behavior before and during the implementation of ObamaCare should therefore be watched very carefully and Front Page Magazine intends to do so.
Gov. Bobby Jindal and Maurice Brand, Magnolia LNG Managing Director and Joint Chief Executive Director, announced the company’s plans to develop a $2.2 billion natural gas liquefaction production and export facility at The Port of Lake Charles.
The LNG project would create 45 new permanent jobs, with an average salary of $75,000 per year, plus benefits. LED also estimates the project would result in 175 new indirect jobs. In addition, the LNG project would require an estimated 1,000 construction jobs.
The company expects to make a final investment decision to move forward with the project in late 2014, after it secures permits and completes financing. The mid-scale LNG facility would be located on 90 acres at the port’s Industrial Canal, off the Calcasieu Ship Channel. Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year, and construction would begin in 2015 pending the company’s attainment of permits and final financing.
Gov. Jindal said, “Magnolia LNG’s decision to move forward in developing a new LNG facility is great news for our state. Magnolia is the latest company that is choosing to invest in Louisiana because we have one of the best business climates in the country and we are continuing to foster an environment where companies want to create jobs.
“We’ve fostered a strong business climate because we have overhauled our ethics laws, revamped workforce development programs, eliminated burdensome business taxes, instituted reforms to give every child an opportunity to get a great education, and now we are taking on tax reform in order to make Louisiana the best place in the world for businesses to invest and create jobs for our people. In addition to our strong business climate, Louisiana’s abundance of natural gas, pipelines and accessible waterways, as well as our outstanding workforce, were key factors in Magnolia’s decision to choose our state. Facilities like these will help create and sustain thousands of jobs in the energy industry across our state and will ensure quality jobs for Louisiana families for years to come.”
Magnolia’s project would be positioned for direct access to several existing gas pipelines. Using its patented Optimized Single Mixed Refrigerant process, or OSMR™, Magnolia LNG would produce liquefied natural gas more efficiently with fewer emissions than other LNG processes. OSMR adds conventional combined heat and power technology with industrial ammonia refrigeration to enhance the performance of the liquefaction process. Magnolia LNG would distribute to domestic markets as well as countries that have free trade agreements with the U.S. The company also will explore a potential expansion to 8 million metric tons per year in the future.
“Southwest Louisiana’s attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility,” Brand said. “We especially want to thank the Port of Lake Charles Commission for their partnership in identifying such an ideal location for this project. Whilst the company remains focused on securing the appropriate contracts, agreements and permits, we expect to commence construction of our first U.S. venture by 2015.”
Magnolia LNG will seek federal Department of Energy free trade agreement approval in 2013. The company will submit a pre-filing application to the Federal Energy Regulatory Commission in March, before it completes the selection of project partners by June 2013. The company plans to begin hiring in early 2015, with commercial operations to begin in 2018.
“The Port of Lake Charles has been able to provide a unique combination of location, infrastructure and transportation capabilities to help bring this project to the region,” said Port Executive Director Bill Rase. “Magnolia LNG will be a significant and welcome addition to Southwest Louisiana’s energy corridor. The Port’s staff and board of commissioners look forward to doing business with the company.”
LED began working with Magnolia LNG in late 2012. The company’s proposed 90-acre site would include a long-term lease with The Port of Lake Charles. When Magnolia decides to proceed with construction, the company is anticipated to make use of LED incentive programs, such as the Quality Jobs Program and Industrial Tax Exemption Program.
“This project is another demonstration of our capacity for strengthening Southwest Louisiana and the state to become a stronger energy producer,” said President and CEO George Swift of the Southwest Louisiana Economic Development Alliance. “We are appreciative of Magnolia LNG to make this investment in our region and for the Port of Lake Charles to once again to serve as the catalyst for this project. We look forward to their final investment decision next year.”
- $2.2 Billion LNG Liquefaction Facility Announced for Port of Lake Charles (gcaptain.com)
- Bechtel wins FEED contract for Mozambique’s first LNG project (transportationandstorage.energy-business-review.com)
- South Korea: STX Launches Ultramodern LNG Carrier VELIKIY NOVGOROD (worldmaritimenews.com)
- Critics of LNG Exports Undermining Domestic, Global Strategic Benefits (fuelfix.com)
- Demand for LNG to Outstrip Supply in 2013 (247wallst.com)
Posted on May 2, 2011 at 11:33 am by jenniferdlouhy
Governors from Alaska and states bordering the Gulf of Mexico are reaching out to their counterparts along the West and East Coast today in a bid to get them more involved in decisions about energy production offshore.
The push for a new Outer Continental Shelf Governors Coalition is led by four governors who know a little something about oil and gas production offshore: Rick Perry of Texas, Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Sean Parnell of Alaska.
In an invitation to other coastal state governors, the foursome said they hoped the coalition would “foster an appropriate dialogue between the coastal states and the administration” about offshore drilling. The group would give the governors a vehicle to lobby for expanded drilling offshore.
“All federal decisions regarding exploration and production must be made in consultation with affected states,” the four governors said. “In recent months, however, the federal government has taken sweeping actions regarding offshore oil and gas activities with little consultation with the states.”
And too often, they say, those decisions have conflicted with the states’ best interests.
For instance, Gulf Coast governors who signed the letter have protested the administration’s decision to halt deep-water drilling after last year’s oil spill and to postpone some sales of offshore drilling leases. And Virginia state leaders were upset by the Obama administration’s move to cancel a lease sale off their coastline.
Representatives from Louisiana, Texas and other states are set to announce the new group during a session this afternoon at the Offshore Technology Conference in Houston.
David Holt, president of the Consumer Energy Alliance and a FuelFix guest blogger, said the move would allow the governors to better communicate “the need to produce American energy offshore, not only for their individual states, but for the entire nation.”
Visit FuelFix this week for the latest news from OTC. You can also like our page on Facebook or follow @FuelFixBlog on Twitter. Look for updates from reporters @houstonfowler and @jendlouhyhc under the #OTCHouston hashtag.