The Hudson County government lost an appeal on the New Jersey Office of the State Comptroller’s case that said they improperly awarded a $13.5 million contract for healthcare services at their correctional facility in Kearny.
By John Heinis/Hudson County View
The comptroller’s office filed a lawsuit against the county in August 2024 after warning them back in March of the same year that a fair, open bidding process had not been followed since only “several self-selected vendors” were asked to apply.
The county appealed, but Superior Court of New Jersey Appellate Judges Lisa Rose, Patrick DeAlmeida, and Ellen Torregrossa-O’Connor affirmed the findings of the comptroller.
“On December 12, 2023, the OSC issued an eleven-page written determination concluding the County had improperly relied on the professional services exception to the public bidding requirement and, therefore, failed to comply with the LPCL (Local Public Contract Law) with respect to issuance of the 2023 HCCC medical services contract,” they wrote in a 34-page decision on Monday.
“The OSC found the County again failed to comply with the notice provisions of N.J.S.A. 52:15C-10. It noted our observation relating to the 2018 contract that ‘[t]here is no doubt that the [C]ounty is now aware that it is required to provide the State Comptroller notice ‘at the earliest time practicable … of its intention to procure a new contract after expiration of the CCS agreement.'”
The comptroller also noted that the county notified them of the $13,488,000, one-year contract with Wellpath even later in the process in 2023 than they did in 2018.
According to the appellate division, the comptroller’s correspondence with the county in this matter was clear, as is the state legislation that gives them oversight over public awarded contracts by government entities.
“The OSC found, however, the County knew as of September 22, 2023, when it opened the proposals, the lowest proposal exceeded the $12.5 million notification threshold. The County waited until November 17, 2023 to provide notice to OSC it intended to award the contract to Wellpath in an amount almost $1 million greater than the notification threshold,” the decision says
“The OSC also rejected the County’s claim it did not promptly provide notification because County Counsel was optimistic he could negotiate a contract price below $12.5 million. With respect to the County’s claim the contract was exempt from public bidding or competitive contracting, the OSC reaffirmed the analysis and conclusion set forth in its December 12, 2023 letter.”
The court also points out that the county failed to submit the required contract compliance form or associated contract documents, including the contract itself, for more than 45 days and they denied the county’s motion to stay in December 2024.
“The County does not dispute the 2023 HCCC medical services contract procures patient care services at a county correctional facility. The County was, therefore, required by the LPCL to procure the contract either through public bidding under N.J.S.A. 40A:11-4(a), or competitive contracting under N.J.S.A. 40A:11-4.1(h),” the court further states.
“The County acknowledges it did not procure the contract under either of those statutory methods. We, therefore, affirm the State Comptroller’s determination the County failed to comply with the LPCL when it procured the 2023 HCCC medical services contract. We also affirm the State Comptroller’s directive the County comply with the LPCL when it procures contracts for patient care at the HCCC in the future.”
Acting State Comptroller Kevin Walsh, who is fighting a state bill that would strip his office of their investigatory powers, celebrated the legal victory in a statement.
“The Appellate Division’s decision affirms OSC’s authority to ensure major public contracts are handled fairly, openly, and in compliance with the law,” he said.
“These are fundamental protections for taxpayers and essential safeguards against favoritism, cronyism, and misuse of public funds.”
Hudson County spokesman Mark Cygan said they are taking a look at the court ruling and said the latest contract for the aforementioned services went through the full public bidding process.
“We are currently reviewing the Court’s decision. The contract in question was based on a process from the year 2023, determined by the prior administration. Under new legal counsel, in 2025 we awarded the medical services contract through the competitive bid process as required by the Comptroller.”
