Powerful firm won county contract without the lowest bid

By Joe Schoenmann

Sunday, Feb. 26, 2012 | 2 a.m.

Seven law firms were interested in landing a lucrative contract with University Medical Center. After reviewing bids from the firms, the Sun found that the winning bidder, the powerful firm Lionel Sawyer & Collins, did not have the lowest bid.

(Teaser alert: You might be surprised how this episode ends.)

Then why were they selected? Aren’t public entities required to award contracts to the lowest bidder?

Winning bids are not always those that cost the least. Experience and ability to do the job — in this case shepherd UMC’s transition to a new form of governance — play a big part.

So the other firms didn’t have as much experience in public hospital governance? In this case it’s intended to save money, which UMC desperately needs.

We didn’t say that. In fact, some of the other firms had much more experience than Lionel Sawyer & Collins.

But first, a synopsis of Lionel Sawyer & Collins’ contract: It will be paid $15,000 a month for six months; after the county will pay the usual hourly rates, which range for senior partners from $500 to $650 an hour. Commissioners put a $100,000 cap on the contract, then eliminated a provision that would automatically hire the firm to lobby for UMC during 2013.

How did the other firms stack up?

One local firm, Jones Vargas, has far lower rates. Their partners would have charged $275 an hour. But instead of the hourly rate, the firm offered $5,000 a month for the first six months, one third of Lionel Sawyer & Collins’ asking price.

Another local firm, Greenberg Traurig, offered hourly rates for partners of between $373 and $517.

A Washington, D.C., firm, Patton Boggs, offered this: $630/hour for senior partners ($330 to $440 for associates), or a fixed fee of $125,000 for the first of three phases. Costs for the other two phases would be determined later.

Another firm with extensive experience in what UMC wants to do is Hogan Lovells, also based in D.C.

Why do you say they have extensive experience?

Clark County officials have talked about how Hennepin County (Minnesota) Medical Center’s transition to a not-for-profit public benefit corporation is a model they would like to examine for UMC. Hogan Lovells is the firm that helped with that change.

What is their asking price?

For three phases of work, they bid $450,000. If another phase were needed, the firm said it could run between $100,000 and $400,000.

And Lionel Sawyer & Collins' experience?

They are plugged into just about every high-powered entity in Nevada. One of its lawyers, Rory Reid, is the former chairman of the County Commission.

According to the firm’s bid, it doesn’t appear it has the hospital-transitioning experience of a Hogan Lovells but has done some health care work, including representing Catholic Healthcare West in a merger with Saint Mary’s Regional Medical Center in Reno.

The million-dollar question: Did the County Commission make the right choice?

Little in politics is black and white. However, right before the vote a few weeks ago, Commissioner Lawrence Weekly expressed unease with the recommendation by county counsel Mary Anne Miller to go with Lionel Sawyer & Collins. Weekly was miffed that he was not consulted, especially since he chairs UMC’s board of trustees.

Commissioners may never have even talked about the contract if Commissioner Steve Sisolak hadn’t moved it from the consent agenda. The consent agenda is typically reserved for routine matters that county staff believe can be approved without testimony or debate.

So that’s that?

No. The surprise is that Lionel Sawyer & Collins has decided to turn down the contract because of questions from Weekly and other commissioners.

Sisolak said he believes the matter will be reconsidered by the board at a future meeting.