N.J. Comptroller’s Office tells Hudson County to halt $13.5M contract for services at jail


The New Jersey Comptroller’s Office is telling Hudson County to halt a $13.5 million contract awarded for healthcare services at their correctional facility in Kearny, asserting that a fair, open bidding process was not procured.

New Jersey Acting Comptroller Kevin Walsh. Screenshot via Zoom.

By John Heinis/Hudson County View

“As part of OSC’s statutorily established oversight, OSC has repeatedly advised the County how to properly procure the services, but the County has failed to comply and has refused to follow OSC’s directive that the county report how it will comply with New Jersey’s procurement laws,” the comptroller’s office said in a statement.

In a letter from Acting New Jersey Comptroller Kevin Walsh to County Counsel Donato Battista today, said that the county circumvented transparency and public bidding requirements when it didn’t advertise the opportunity to bid, invited a few hand-picked firms to apply, and improperly entered into private negotiations with the preferred vendor – which is Wellpath even though he didn’t mention them by name.

Since December 2023, Hudson County has repeatedly disregarded OSC’s directive to submit a corrective action plan to procure the services using a competitive, publicly advertised process, as the law requires, Walsh asserted.

OSC’s letter directed the county to submit this plan within five days.

Additionally, their review also found that Hudson County had used an improper procurement process in 2018 when it procured services from the prison healthcare management company named Wellpath.

The county renewed Wellpath’s contract year after year, without advertising, resulting in an expenditure of over $39.5 million over five years.

Walsh also sent a separate letter to the state’s top leaders: Gov. Phil Murphy, Senate President Nick Scutari (D-22), and Assembly Speaker Craig Coughlin (D-19) notifying them of the situation.

“The [Local Public Contracts Law] LPCL was enacted to benefit New Jersey taxpayers and instill trust that public officials are making well-reasoned and unbiased decisions that serve the public good,” Walsh wrote.

“Disregarding important public bidding requirements, as the County has done here, threatens to erode public confidence in the public bidding laws and their use by local officials.”

Mark Cygan, a spokesman for Hudson County Executive’s Craig Guy’s office, said that they have always been cooperative and transparent with the comptroller’s office and they have declined to seek a joint ruling from the appellate court.

“Hudson County has always been fully cooperative and transparent in its interactions with the Comptroller’s Office. The County has provided hundreds of pages of documents and gave timely responses to requests for additional information. From 2019-2023, pursuant to law the County awarded a series of one-year professional services contracts to Wellpath, each time notifying the Comptroller’s Office,” he said in a statement.

“And each time, the County received no objection or even any response at all from the Comptroller’s Office. We realize that there is a good faith difference of opinion regarding the proposed contract and have consistently offered to jointly seek a ruling from the Appellate Division, an offer which the Comptroller’s Office rejected since 2018. The Comptroller’s inaction and continued non-responsiveness threatens the health and well-being of Hudson County inmates and the County’s ability to provide constitutionally mandated services. If there is a lack of transparency here, it’s coming from the Comptroller’s Office.”

In Walsh’s letter to Battista, he shed some light on what has been happening in the courts in relation to this matter.

“In January 2019, the County filed a complaint against OSC in the Chancery Division, Hudson County, seeking a declaratory judgment whether its 2018 Procurement complied with the LPCL,” he wrote.

“The case was later transferred to the Appellate Division, which dismissed it because the Court found the County failed to assert a concrete claim against OSC.”

Furthermore, the OSC contends that Hudson County disregarded OSC’s statutorily established oversight and submitted the procurement in November 2023, two months after proposals had already come in, and the lowest bid exceeded $12.5 million.

By law, if a contract is valued at $12.5 million or more, the local government is required to submit it to OSC for review and approval at least 30 days before beginning the procurement process.

This is the fourth Hudson County investigation revealed by the comptroller in the past year.

In March 2023, they asserted that Bayonne ignored a public records request and subpoena related to the sale of Marist High School, claiming in May that NJCU “likely violated federal law” by improperly allocating $14 million in COVID-19 funds, and, in October, stating that West New York’s union contracts don’t comply with sick leave rules.

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