STATE CANCELS MEDICAID CONTRACT
  RALEIGH (AP) – The state has canceled one of its largest contracts – a five-year, $171 million deal to cre*ate a new Medicaid billing system – because it says the company it hired two years ago failed to meet its dead*l ines.
  Affiliated Computer Services of Dallas, Texas, was originally sup*posed to complete the work by this month, but the deadline was pushed back to August 2007. ACS and the state blame each other for the de*l ays.
  The company was considering le*gal options Monday, including suing the state for breach of contract, ACS spokeswoman Renee Montgomery said. ACS would prefer to complete the contract, she said.
  “You’re talking about bad faith ac*tions on behalf of the contract,” Mont*gomery said. “There’s substantial mon*ey owed by thedepartment to ACS.” The state has rejected requests from ACS for an estimated $42 mil*lion more to complete the work. ACS State Healthcare, the subsidiary per*forming the work, already is more than halfway through the project.
  Health and Human Services Sec*retary Carmen Hooker Odom wrote a letter Friday telling ACS it had missed a Thursday deadline to meet hiring demands and other condi*tions she laid out in a letter last month. She also instructed the com*pany to stop working on the project while it awaits directions from the state’s contract administrator.
  HHS spokesman Mark Van Sciver declined to comment on several ques*tions about the termination, citing the potential for future litigation.
http://www.hpe.com/