Embattled Tech Firm Keeps State Contract

Source: Aman Batheja, Texas Tribune, January 22, 2015

While a mushrooming scandal complete with state and federal investigations prompted two Texas state agencies to cancel contracts with Austin technology outfit 21CT last month, the state of Texas has not completely cut ties with the company….The initial contract signed in August 2012 paid 21CT $167,000 for information technology security software and one year of maintenance and support, Pierce said. The agency has twice paid $30,600 for an additional year of maintenance and support, most recently in August, she said. …. The secretary of state selected 21CT from a pre-approved list of vendors maintained by the Department of Information Resources known as the Cooperative Contracts program, the same route used by the Health and Human Services Commission and Department of Family Services to award 21CT the now-canceled contracts….
Coleman asks 21CT to reveal its investors; firm says it has none
Source: Brian M. Rosenthal, Houston Chronicle, January 22, 2015

Hours after a Houston state lawmaker called on the company at the center of a no-bid contract scandal to disclose its investors, the CEO said in a blog post it firm has none. Seeking a subtle way to quell building speculation about whether the company has politically-connected investors, CEO Irene Williams said in a short post that she is proud to be one of only “a few women in Texas and the United States that is the CEO of a 100% self-funded successful technology company.” The Austin technology firm, which was founded in the 1990s, is under heavy scrutiny for its contract with the Texas Health and Human Services Commission for a Medicaid fraud detection system. The deal, originally signed in 2012 for $20 million and set to expand to $110 million, was canceled last month as part of a scandal that has so far led four high-ranking officials to resign and triggered a criminal investigation….

21CT chops workers in mass layoff after state contract cancelled
Source: Michael Theis, Austin Business Journal, December 29, 2014

21CT Inc. has given notice to the Texas Workforce Commission that it will cut 65 workers in a mass layoff in order to stay in business, in the wake of an investigation into how it came by lucrative state contracts. The company subsequently revised that number down, and now says that only 52 employees are affected by the job cuts. … Earlier this month, officials with Texas’ Health and Human Services Commission cancelled a $90 million contract extension with the company, which had been awarded no-bid contracts to look into Medicare and Medicaid fraud and abuse. The cancellation came after an investigation by the Austin American-Statesman into how the contracts were awarded. Subsequently, two top-level state health officials have resigned and Gov. Rick Perry has called for an investigation into the deal. ….

Health Chief Says He Was Misled on No-Bid Deal

Source: Morgan Smith and Terri Langford, Texas Tribune, December 23, 2014

Texas Health and Human Services Commission chief Kyle Janek said Tuesday he was misled in briefings on a no-bid, $110 million deal handed to an Austin company for unproven software to detect Medicaid fraud. Janek said the Office of Inspector General, the commission’s audit arm, should have alerted him that its contract with 21 Century Technologies Inc., also known as 21CT, “proceeded outside the normal channels” for approval….