Being mayor of Richmond, Tex., for 33 years and board chairman of the state's massive social services agency has given Hilman G. Moore a certain perspective on the finer points solved in the letting of large public contracts.
Moore was speaking of the Texas Medicaid insurance contract the other day when he said: "If you throw $2 billion up there for grabs, there damn sure are some dogs that will bite for it."
Not only did some dogs bite, the tussle over who will operate the nation's only privately run medical insurance plan for Medicaid recipients has turned into a ferocious, muzzle-in-the-dirt dogfight between Electronic Data Systems (EDS) of Dallas and its scrappy chairman, H. Ross Perot, and Bradford National Corp., a New York financial and computer services company.
Moore and the two other members of the board of the Texas Department of Human Resources voted in July to drop Perot's National Heritage Insurance Co. subsidiary, which had held the contract since 1977, and turn the business over to Bradford.
The agency's staff had judged Bradford's overall bid to be lowest, even though National Heritage was well under Bradford's first-year premium costs. t
Perot scuttled his vacation and came back to Texas, bristling at the thought not only of losing a lucrative contract in his own back yard, but losing it to what he called a "third-rate company." Bradford National was also an old adversary, having won a contract three years ago to be the fiscal agent for New York City's mountainus Medicaid claims business. Electronic Data was eliminated from the competition.
Perot sailed directly into the fight. First he sought advice from state Attorney General Mark White and former attorney general John Hill, whose law firm represents Perot. Then he called his close friend, Gov. Bill, before launching his own "investigation" of Bradford's track record, which he claims was overlooked in the bidding for the Texas contract.
Clements maintains that he simply told Perot to ask the board to have consultants take another look at the bids.
But instead, Perot and EDS President Mort Meyerson launched an intense lobbying campaign to overturn the board's decision, beginning with personal visits to each commissioner.
When Moore was quoted as saying that, after talking to Perot and Meyerson, he thought the board had made a mistake, Bradford National responded with a newspaper advertising campaign lambasting Perot's lobbying tactics, and the insurance contrct war was on.
Within weeks, Perot's representatives had appeared at meetings of state agencies to air their charges about Bradford's past performance. And Perot and his flying squad of public relations aides and corporate assistants had blitzed the state's media to push his message that by, EDS estimates, Texas would spend about $100 million more than it needs to in the next four years by switching to Bradford.
Bradford's spokesmen responded mainly by pointing to the fact that the board had voted them the contract. An opinion from Attorney General White's office favored Bradford. A few days later, Hill filed suit seeking to have the Bradford contract thrown out.
Perot and his representatives suggest there may have been an anti-private enterprise "mole" in the state welfare agency's staff eager to have Bradford get the contract and fail to meet it, which would drop the Medicaid insurance program into the state's lap.
"There's nothing more determined or harder to dislodge in this world," says Perot, "than a government bureaucrat with his toes dug in . . . , unless it's a mother protecting her child."
But state welfare staff people maintain that the complex bidding for the contract, in which future Medicaid claims and investment activity must be forecase several years in the future to arrive at a total cost to the state, was carried out fairly.
The litigation over the contract, which would take effect next fall, has been temporarily shelved by the court while an outside accounting firm hired by the welfare board studies both bids once more as well as the way they were analyzed.
Bradford's latest word on the dispute is that, if the board decides to pull back its contract, the company "would expect to be compensated."
Besides criticizing the staff's arithmetic on the bids, Perot has charged that Bradford inflated its net worth in its presentation to the board and that his independent "investigation" turned up a "smoking gun" that will show Bradford to be a poor business risk for the state.
"I don't want to come out with anything that won't stick to the wall," he said recently. But an EDS vice president charged that a New York state social services official, Charles Christopher, was a "double agent," employed simultaneously by the state and Bradford. Christopher has denied the charge. s
Peter Del Col, chairman of the board of Bradford, called Perot's charges "wild allegations . . . sick stuff," and said Perot is desperately using personal and political influence in his home state to subvert the legitimate contract award.
Del Col says Bradford has the financial capability to handle the Texas contract, but he concedes that his company has had its troubles in the past, including having to terminate computer service contracts with the National Flood Insurers Association, the National Securities Clearing Corp. and the Pacific Stock Exchange ahead of schedule.
And, after an article about the investigation appeared in a New York newspaper recently, Del Col acknowledged that Bradford for the past few years has been under grand jury investigation involving work under a U.S. Navy contract. But the Bradford chairman insists that the investigation will turn up no wrongdoing.
Perot, who in recent years has stepped back from the day-to-day operation of his multimillion-dollar computer services company to engage in other concerns, says his lively return to the business of contract negotiations and bureaucratic arm-twisting is not based merely on the profit motive.
"It wasn't the numbers that triggered me," he said. After all, the Texas Medicaid contract, while it costs $2 billion in state and federal funds to carry out, brings in only about $3.8 million annually, after taxes, for the National Heritage insurance subsidiary. "I just want to win it," Perot said.
No less than any other self-made multimillionaire, Perot hates to lose, whether he has to take on a business competitor or a foreign country.
He is perhaps best remembered now for being the first prominent American to have some employes taken hostage by the Iranians and, so far, the only one to get his back.
The daring rescue raid his corporate guerrillas launched in February 1979, taking advantage of the chaos in the waning days of the shah's regime and sprang two EDS computer technicians from prison was, he says, "just lucky."
He still flies 52 American flags -- one for each hostage -- in front of his company's headquarters in north Dallas.
But the cause on which Perot has spent most of his time and energy in recent months has been a self-proclaimed war on narcotics traffic into Texas.
Last December, after Clements appointed him to a special governor's task force on narcotics, Perot revealed that he had provided a "safe house" near Dallas for two undercover narcotics agents so they could hide from an underworld executioner.
Perot said he met the two agents by chance, after one of them had already been wounded by the hit man. "They badly needed protection," he said. "It was not available. I gave it to them." So deep was Perot's involvement in the fight against drug traffic that last March he asked the Dallas Planning Commission for permission to construct a heliport at his north Dallas estate so he could fly back and forth to his office and avoid drug traffic assassins he feared would ambush him if he traveled by car.
The planning commission turned down his request after hearing from some of Perot's neighbors, including J. Fred Bucy, head of Texas Instruments, who pointed out that a determined gunman could bring down a helicopter in flight.
Perot has also been busy this year, again with John Hill's expert legal help, trying to recoup his company's financial losses in Iran, where EDS set up an operated a nationwide computerized social welfare program. After the shah went into exile, Perot sued in federal court, and last spring won a $19 million judgment for the loss of equipment and anticipated revenue. A company spokesman said EDS is not counting on getting the money from Iran's current government leaders anytime soon.
The Texas Medicaid contract, which covers about 700,000 eligible recipients, occupies his attention, and Perot said he will stay with it until the last appeal is exhausted.
"I'm totally confident" of overturning the board's decision, Perot said, but if he is unsuccessful, "at least I'm going to get it tattooed across the forehead of every Texan" that the state has made a costly mistake.