Rejected $10M DHHS Contract With Out-of-State Firm Returns to N.H. Executive Council, Drawing Fire

CONCORD — A $10 million no-bid consulting contract rejected twice by New Hampshire’s Governor & Executive Council is back on the agenda Wednesday, drawing sharp criticism from at least one councilor who says the Department of Health and Human Services is attempting an “end-run” around the council’s authority.

Councilor John Stephen said Tuesday the proposal would extend and expand the state’s agreement with Alvarez & Marsal Public Sector Services, a Washington, D.C.-based consulting firm, despite the council voting 3-2 on June 4 to reject it. The amendment would raise the contract’s total value to nearly $37.5 million and extend it through June 2027, according to DHHS documents.

The scope of work includes advising on Medicaid reforms, developmental disability system changes, and modernization of the state’s Medicaid Enterprise System. DHHS says the firm provides strategic expertise and continuity for multi-year initiatives, many of which rely heavily on federal funding. The contract is funded 74% by federal Medicaid dollars and 26% by state general funds.

Stephen argued it's especially egregious given the current proposal seeks retroactive approval to July 1.

“Bringing this contract back and asking for the Council to approve it retroactively is wholly unacceptable and is a complete end-run on the Executive Council process,” Stephen said in a statement. “I will not stand for it and I hope my colleagues join me tomorrow in declining this contract, again.”

DHHS previously defended the sole-source arrangement, saying Alvarez & Marsal is uniquely qualified because it has been embedded in the department’s strategic initiatives since 2020, including work on federally approved demonstration projects, waiver programs, and IT system overhauls. The department warns that without the amendment, progress on these projects could stall, risking compliance deadlines and federal funding.

If approved, the firm would be paid $410,325 per month for the next two years. The council is expected to take up the contract at its meeting Wednesday morning.