Tennessee Department of Corrections Rebids $123 Million Health Care Contract After Corizon Accuses It and Centurion of Bid Rigging
by Matt Clarke
On May 10, 2021, the Tennessee Department of Corrections (DOC) announced that it would rebid the $123 million contract it had awarded to Centurion to provide behavioral health services—including psychiatric and addiction services—to prisoners in DOC prisons. The move came after Corizon accused the DOC and Missouri-based Centurion of bid rigging in a federal court filing.
In April 2021, Corizon filed an amended complaint in federal court alleging former DOC chief financial officer Wesley Landers sent internal DOC emails related to the contract to a home Gmail account, then forwarded them to Centurion Vice President Jeffery Wells. Landers used a program that automatically scrubbed the emails from his computer. Wells and Landers also allegedly communicated using the encrypted messaging service WhatsApp.
Some of the emails were recovered from Centurion. One was a draft of the request for proposals sent to Wells nearly two months before it was made public. The suit alleges Landers received a “cushy” job with a Centurion affiliate in Georgia in exchange for the information. The suit also alleges that the performance bond for the contract was changed from $1 million to $118 million, putting the contract out of reach for Corizon, which is smaller than Centurion. This allegedly happened just as Landers was being hired by Centurion. Corizon had won the two previous bids of the behavioral health services contract in 2012 and 2016.The lawsuit also alleges that the contract award was increased from $118 million to $123 million after it was awarded to Centurion to cover the increased costs of the larger performance bond and ensure Centurion’s profits.
Centurion fired Landers and Wells in February 2021. The DOC said it decided to reissue the contract after receiving information about bidding irregularities but Centurion would continue to provide behavioral health services to its prisoners until the matter was resolved. The DOC would not say whether Centurion would be allowed to bid on the new contract.
Corizon’s lawsuit demands compensation for lost profits and triple damages from Centurion and Landers. It also requests an injunction against several DOC and state procurement office officials to prevent violations of federal antitrust laws. See: Corizon, LLC v. Wainwright, USDC Middle Dist. Tenn., Case No. 3:20-cv-00892.
A September 22 report from the Tennessean newspaper stated that bidders “vying to provide behavioral health services to Tennessee’s inmates must obtain a $120.8 million performance bond to be considered for the contract, a price tag a competitor fears may steer the contract unfairly toward companies with sizable financial backing.” This requirement was detailed in a new request for bids by the DOC. In response, Corizon spokesperson Charles Siegel stated the bond could “discourage competitors from participating.”
Additional sources: apnews.com, tennessean.com