Court Opinion

ID: 4106008
Source: CourtListenerOpinion
Date Created: 2016-12-09 16:08:40.380299+00
Date Added: 2024-06-11T07:46:01.204250
License: Public Domain

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SJC-12126

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 509, & others1     vs.
             AUDITOR OF THE COMMONWEALTH & others.2

         Suffolk.    September 6, 2016. - December 9, 2016.

 Present:    Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, &
                              Budd, JJ.

Privatization Act. Auditor. Commissioner of Mental Health.
     Public Welfare, Department of Health and Human Services.
     Mental Health. Practice, Civil, Action in nature of
     certiorari.

     Civil action commenced in the Supreme Judicial Court for
the county of Suffolk on April 8, 2016.

     The case was reported by Spina, J.

     Ian O. Russell (Katherine D. Shea & James F. Lemond with
him) for the plaintiffs.
     Bryan F. Bertram, Assistant Attorney General (Daniel J.
Hammond, Assistant Attorney General, with him) for the
defendants.

     1
       Massachusetts Nurses Association, and American Federation
of State, County and Municipal Employees Council 93.
     2
       Department of Mental Health, and Executive Office of
Health and Human Services (EOHHS).
                                                                     2

    LENK, J.   The plaintiffs, Service Employees International

Union, Local 509 (SEIU), the Massachusetts Nurses Association,

and the American Federation of State, County and Municipal

Employees, Council 93, challenge a decision by the Auditor of

the Commonwealth approving a proposed privatization contract

pursuant to G. L. c. 7, §§ 52-55 (Pacheco Law).    The Pacheco Law

establishes "[p]rocedures that agencies must follow when

beginning the bidding process for and entering into a

privatization contract."   Massachusetts Bay Transp. Auth. v.

Auditor of the Commonwealth, 430 Mass. 783, 786 (2000) (MBTA).

The Auditor of the Commonwealth must review all privatization

proposals to determine if they comply with the Pacheco Law.     Id.

    In January, 2016, the Department of Mental Health (DMH)

submitted a proposal to the Auditor that would privatize certain

of its State-run mental health services.    Under the terms of the

proposal, the Massachusetts Behavioral Health Partnership

(MBHP), a privately owned State-wide mental health provider,

would take over from DMH the provision of mental health services

in the Southeast region of Massachusetts.    In March, 2016, the

Auditor issued a written decision concluding that DMH's

privatization proposal met the requirements of the Pacheco Law,

specifically, that the privatization was procured properly, that

it would not result in a net cost to the Commonwealth, and that

it would not cause a decline in the quality of mental health
                                                                     3

services provided in the Southeast region.     The plaintiffs then

filed a petition in the nature of certiorari in the county

court, seeking review of the Auditor's decision.     A single

justice reserved and reported the matter to the full court.

     We conclude that the Auditor did not abuse her discretion

in determining that DMH's privatization proposal met the

requirements of the Pacheco Law.     Accordingly, we affirm the

Auditor's decision.

     1.   Background.   DMH administers mental health services to

low and moderate income residents of the Commonwealth through

the "MassHealth" program.3   The provision of these services is

divided into five geographic regions within the Commonwealth,

each containing several emergency service programs (ESPs):

Metro Boston, Western Massachusetts, Central Massachusetts,

Southeast and Northeast-Suburban.4    In each region, the ESPs

provide twenty-four hour emergency mental health services to

MassHealth members, uninsured individuals, and others requiring

mental health crisis intervention.     Prior to the effective date

of the Pacheco Law in 1993, DMH contracted with private

     3
       DMH is an agency within EOHHS. For clarity, we will refer
to DMH as the contracting party throughout the opinion, even
though EOHHS simultaneously played a role in the contracting
process.
     4
       The Southeast region encompasses Brockton, Cape Cod and
the Islands, Fall River, and Taunton/Attleboro.
                                                                     4

contractors to provide ESP services throughout Massachusetts,5

with the exception of the Southeast region.6

     DMH entered into the most recent contract concerning the

provision of ESP services on July 1, 2012.     After a competitive

procurement process, DMH awarded a five-year contract7 to MBHP

to manage all of the ESPs in the Commonwealth except those in

the Southeast region.8   It is undisputed that the 2012 contract

was not subject to the requirements of the Pacheco Law because

the services awarded to MBHP were already privately operated.

     5
       Mental Health Management of America, a private company,
apparently began to provide mental health services to mentally
ill patients covered by Medicaid in 1992. See Weld to Privatize
Acute Care for Uninsured Mentally Ill, Boston Globe, Jan. 25,
1995, at 1 ("Since 1992, Mental Health Management of America
. . . has been responsible for providing acute care to mentally
ill patients on Medicaid"); The Massachusetts Behavioral Health
Partnership (MBHP) took over the provision of such services from
Mental Health Management of America in 1996. See State Chooses
New Firm to Provide Managed Care For Mentally Ill, Boston
Herald, Jan. 20, 1996, at 6 ("[MBHP] will provide mental health
and substance abuse services to 400,000 Medicaid clients as well
as 30,000 residents who are covered directly by [DMH]").
     6
       During that period, DMH provided emergency service program
(ESP) services in the Southeast region directly through its own
employees.
     7
       The contract required MBHP to procure contracts with ESP
providers to deliver "direct care for behavioral-health crises
and emergency services to subscribers to ['MassHealth'],
subscribers to private health insurers, or the uninsured."
     8
       In procuring the 2012 contract, DMH issued a blanket
request for responses (RFR) seeking a vendor to provide various
medical services in accordance with the provisions of 801 Code
Mass. Regs. §§ 21.00 (2003) and 801 Code Mass. Regs. § 21.06
(1997), which mandate a competitive procurement process for
agency contracts.
                                                                   5

Under the terms of the contract, DMH reserved the right to amend

it "to implement new initiatives or to modify initiatives."

     In 2015, DMH amended its 2012 contract with MBHP in an

effort to privatize ESP services in the Southeast region.

Pursuant to the terms of the amended contract (2015 amendment),

MBHP would take over management of the remaining State-run ESP

services in that region.   Toward that end, MBHP was required to

"contract with one locally based provider to administer the ESP

for each catchment area,"9 issue a "request for responses (RFR)"

to procure ESP services for the Southeast region and "select

winning bidders" to provide services in accordance with a set of

guidelines established by DMH.   DMH created the criteria for

selection of the winning bids and retained final approval

authority over the selection of the winning bidders.   After

seeking interested bidders, MBHP ultimately recommended two

organizations to provide ESP services in the Southeast region.

     In accordance with its obligations under the Pacheco Law,

in January, 2016, DMH provided written notice and certification

to the Auditor of its privatization proposal and a comprehensive

analysis of how the proposal comported with the Pacheco Law.10

     9
       A "catchment area" is a geographical term used by DMH to
divide the Commonwealth into different divisions.
     10
       The Pacheco Law requires that any agency that wishes to
enter into a privatization contract must, "in consultation with
the executive office for administration and finance, first
                                                                   6

The submission included a detailed analysis of the financial

benefits of privatization,11 the structure of services that the

private ESP providers would deliver, and a model contract

between MBHP and each private ESP provider in the Southeast

region.12   Shortly thereafter, SEIU submitted a series of

objections to the Auditor, pursuant to provisions in the Pacheco

Law, challenging a number of aspects of the privatization

proposal.

     On March 30, 2016, the Auditor issued her "Independent

State Auditor's Determination on the Department of Mental

Health's Proposal to Privatize Its Southeast Emergency Services

Program," approving the privatization proposal.   Shortly after

compl[y] with" several requirements. G. L. c. 7, § 54. The
agency head must certify in writing to the Auditor that the
agency solicited "competitive sealed bids for the privatization
contracts," G. L. c. 7, § 54 (1); that the privatization
contract provides a guaranteed minimum wage rate set out in the
statute and the same health insurance benefits for each
previously public position as was provided by the State, G. L.
c. 7, § 54 (2); that the privatization contract results in net
savings compared to "the costs of regular agency employees[]
providing the subject services in the most cost-efficient
manner," G. L. c. 7, § 54 (4); and that the "quality of services
to be provided" will "equal or exceed the quality of services
which could be provided by regular agency employees," G. L.
c. 7, § 54 (7) (ii).
     11
       DMH's submission noted that privatization would save the
Commonwealth $7,007,864 in its first year, and would provide
similar savings in subsequent years.
     12
       The sample contract between MBHP and each ESP provider
included a list of metrics by which MBHP would measure the
performance of each provider, and noted that the contract would
be in effect until June 30, 2017.
                                                                      7

the decision was issued, the plaintiffs filed a petition in the

nature of certiorari, G. L. c. 249, § 4, in the county court.

The parties then jointly asked the single justice to reserve and

report the case to the full court.    The single justice did so.13

    The plaintiffs maintain that the Auditor's decision was

arbitrary and capricious because DMH failed to seek competitive

bids before entering into the 2015 amendment with MBHP; DMH

improperly delegated the solicitation process of ESP providers

to MBHP; the privatization proposal fails to uphold the minimum

wage and benefits protections of the Pacheco Law; the Auditor

failed to take into account the costs of "bumping" and seniority

rights; and the quality of services provided by MBHP would be

lower than those currently provided by DMH.

    2.   Discussion.   a.   Standard of review.   In the absence of

a statutory right of appeal, the plaintiffs sought review of the

Auditor's decision by requesting relief in the nature of

certiorari, G. L. c. 249, § 4.   "The function of a civil action

in the nature of certiorari . . . is 'to relieve aggrieved

parties from the injustice arising from errors of law committed

in proceedings affecting their justiciable rights when no other

means of relief are open.'"   Figgs v. Boston Housing Auth., 469

    13
       The defendants' attorney represented during argument
before us that DMH has not proceeded with implementation of the
2015 amendment pending the outcome of this litigation.
                                                                     8

Mass. 354, 361 (2014), quoting Swan v. Justices of the Superior

Court, 222 Mass. 542, 544 (1916).

    An action in the nature of certiorari is an appropriate

means by which to challenge the Auditor's determination whether

a privatization contract complies with the Pacheco Law.     See

MBTA, 430 Mass. at 790-791.    "The legislative history of the

[Pacheco Law] and the law itself express the Legislature's

intent that the Auditor exercise discretion in reviewing the

contract."   Id. at 791.   In considering a discretionary decision

by an administrative agency, as here, "a reviewing court . . .

is limited to determining whether the decision is legally

erroneous or so devoid of factual support as to be arbitrary and

capricious."   MacLaurin v. Holyoke, 475 Mass. 231, 238 (2016).14

In conducting our review, we are mindful that "[a] decision

is . . . arbitrary and capricious [where] there is no ground

which 'reasonable [persons] might deem proper' to support it."

Garrity v. Conservation Comm'n of Hingham, 462 Mass. 779, 792

(2012), quoting T.D.J. Dev. Corp. v. Conservation Comm'n of N.

Andover, 36 Mass. App. Ct. 124, 128 (1994).

    b.   Procurement process.    We first address the plaintiffs'

argument that, in contravention of the Pacheco Law, DMH did not

    14
       The plaintiffs' counsel acknowledged at argument before
us that the arbitrary and capricious standard of review was
applicable.
                                                                   9

publicly procure the services covered by the 2015 amendment.15

The 2015 amendment, inter alia, transferred managerial

responsibilities concerning the Southeast region ESPs from DMH

to MBHP and tasked MBHP with procuring private vendors to run

the ESPs.   The Auditor's analysis of the privatization

proposal's compliance with the procurement requirements of the

Pacheco Law began with the unremarkable determination that the

privatization contract at issue here constituted a "series or

combination of agreements."16   She then determined that "[i]n a

more complicated privatization proposal such as this, it is

essential that all the agreements are subject to a public

procurement process . . . ."    The Auditor went on to construe

the Pacheco Law as requiring that only "[t]he essential

contracts in a series of contracts" must be competitively

procured "at the time of the privatization."    "[E]ssential

contracts" are, in this regard, "the contracts that govern the

provision of public services formerly provided by [S]tate

     15
       Here, the plaintiffs object to the procurement process as
provided by the Pacheco Law, not as set forth in the regulations
established in 801 Code Mass. Regs. § 21:06. Although the
plaintiffs earlier made an objection to the Auditor that the
procurement process in this case did not comport with State
procurement regulations, before us the plaintiffs explicitly
disclaim that objection.
     16
       Insofar as the language of the statute defines a
"[p]rivatization contract" as "an agreement or combination or
series of agreements," G. L. c. 7, § 53, this determination is
patently reasonable. The plaintiffs do not contend otherwise.
                                                                 10

employees."   Additionally, the Auditor noted that the

2015 amendment was "part" of the 2012 contract, which had been

publicly procured by competitive bidding at its inception,17

because the additional obligations that the amendment placed

upon MBHP were explicitly contemplated in the language of that

contract.

     The Auditor then concluded that the agreements between MBHP

and the ESP providers were the only "essential contracts" in the

series or combination of agreements constituting the proposed

privatization contract.   Only those contracts had to be procured

under the Pacheco Law at the time of the privatization.     Because

MBHP had in fact solicited competitive bids for the ESP

contracts pursuant to its obligations under the 2012 contract as

amended in 2015, the Auditor concluded that the proposed

privatization contract had met the procurement requirements of

the Pacheco Law.

     The plaintiffs contend that the Auditor erred in several

respects.   They chiefly object to her determination that the

2015 amendment did not constitute an "essential agreement" in

the privatization contract, contending that it was the vehicle

that set in motion the proposed privatization.   Accordingly,

they argue that DMH was obligated to publicly procure the

     17
       The 2012 contract had been subject to a competitive
procurement process under State procurement regulations. See
801 Code Mass. Regs. § 21:06.
                                                                 11

services covered by the amendment.18   The plaintiffs do not

assert that either the 2012 contract or MBHP's contracts with

ESP providers failed to satisfy the public procurement

requirements of the Pacheco Law.   We address each of the

Auditor's conclusions in turn.

     The Auditor's determination that only the "essential"

agreements in a privatization contract, the agreements which

"govern the provision of public services formerly provided by

     18
       While both the Pacheco Law and state procurement
regulations set forth in 801 Code Mass. Regs. §§ 21:00 require
that public agencies solicit competitive bids with reference to
the procurement of services, the Pacheco Law places several
additional requirements on agencies asking to privatize
services. See 801 Code Mass. Regs. § 21:06 ("All acquisitions
of Commodities or Services, or both, must be competitively
procured unless the acquisition qualifies as an exception under
[801 Code Mass. Regs. § 21:05]"); G. L. c. 7, § 54 (1) ("The
[privatizing] agency shall solicit competitive sealed bids for
the privatization contracts based upon [a written statement of
the services to be privatized]"). For example, the Pacheco Law
provides that "[n]o amendment to a privatization contract shall
be valid if it has the purpose or effect of avoiding any
requirement of this section." Id.

     Additionally, the Pacheco Law does not contain the broad
list of exempt institutions that are in the procurement
regulations. See 801 Code Mass. Regs. § 21:01 (2) (2003)
(exempting institutions of higher learning, elected offices,
military division, and independent public authorities). The
differences between the State regulations and the procurement
requirements of the Pacheco Law are not without consequence.
For example, in 2015, the Auditor rejected a privatization
proposal from Roxbury Community College on the basis that
although it was exempt from State procurement regulations, it
was still bound by and had not complied with the procurement
requirements of the Pacheco Law. See Letter dated Nov. 17,
2015, at http://www.mass.gov/auditor/docs/privatization/11-17-
15-signed-objection-letter-for-roxbury-community-college.pdf
[https://perma.cc/NB9Q-T88A].
                                                                    12

[S]tate employees," must be procured publicly by competitive

bidding "at the time of the privatization" is itself reasonable.

See Dowling v. Registrar of Motor Vehicles, 425 Mass. 523, 525

(1997), quoting Massachusetts Med. Soc'y v. Commissioner of

Ins., 402 Mass. 44, 62 (1988) ("Where the [agency's] statutory

interpretation is reasonable . . . the court should not supplant

[its] judgment").   The statutory language does not speak

directly to whether all or only some parts of a privatization

contract consisting of a series or combination of agreements

must be competitively procured.      The Pacheco Law defines a

privatization contract, however, as a contract by which a

private entity "agrees with an agency to provide services . . .

which are substantially similar to and in lieu of, services

theretofore provided, in whole or in part, by regular employees

of an agency."   G. L. c. 7, § 53.    The Auditor's judgment that

the "essential contracts" are those which actually include the

private providers taking over public services directly aligns

with this definition.

    The Auditor's challenged determination that the

2015 amendment does not constitute an "essential agreement" in

the privatization contract that must be publicly procured at the

time of the privatization presents a somewhat closer question.

Her conclusion rests on two grounds.      First, she determined that

the 2015 amendment was part of the 2012 contract, which already
                                                                   13

had been publicly procured.   Second, she found that the only

contracts that actually "govern the provision of public services

formerly provided by [S]tate employees" are the contracts

between MBHP and the ESP providers.   Hence, in her view, the

2015 amendment did not constitute an "essential" agreement

because it was part of the 2012 contract and did not actually

effectuate the privatization.

    The disagreement between the plaintiffs and the Auditor

boils down to whether the 2015 amendment "govern[s] the

provision of public services formerly provided by [S]tate

employees."   The Auditor's determination that the

2015 amendment, which provided for the expansion of MBHP's

oversight and solicitation obligations, did not govern the

provision of public services formerly provided by State workers

is not an unreasonable resolution of that question.    The

2015 amendment merely extends MBHP's oversight of State ESP

services under the 2012 contract and directs it to solicit the

private providers that will take over the State positions.

Given that the Auditor advances a reasonable interpretation and

application of the procurement requirements of the Pacheco Law,

we cannot conclude that her interpretation, in these

circumstances, was arbitrary and capricious.   See Massachusetts

Med. Soc'y v. Commissioner of Ins., 402 Mass. at 62 ("Where [an
                                                                     14

agency's] statutory interpretation is reasonable . . . the court

should not supplant [its] judgment").19

       c.   Delegation by DMH.   We next address the plaintiffs'

argument that DMH improperly delegated to MBHP the procurement

process for the privatization contract, in violation of the

Pacheco Law.    The 2015 amendment charged MBHP with issuing a

"request for responses (RFR)" to procure ESP services for the

Southeast region and "select[ing] winning bidders" to provide

services in accordance with a set of guidelines established by

DMH.    The plaintiffs contend that DMH's assignment of these

tasks to MBHP contravened the requirements of the Pacheco Law.

The Pacheco Law provides, in relevant part, that an "agency"

intending to enter into a privatization contract "shall solicit

competitive sealed bids for the . . . contracts," and then

"publicly designate the bidder to which it proposes to award the

contract."     G. L. c. 7, § 54 (1), (6).   An "agency" is defined

as "an executive office, department, division, board,

commission, or other office or officer in the executive branch

of the government of the [C]ommonwealth."      G. L. c. 7, § 53.

The plaintiffs contend that the definition of "agency" in the

       19
       The plaintiffs also argue that the amendment was invalid
in any case because it "had the purpose or effect of avoiding"
the procurement requirements of the Pacheco Law. See G. L.
c. 7, § 54 (1). This argument is unavailing because, as the
Auditor notes and the plaintiffs repeatedly state in their
argument, the 2012 contract was not a privatization contract.
                                                                     15

Pacheco Law unambiguously required that DMH itself solicit the

bids and publicly designate the winning proposals in its

privatization.   By contrast, the Auditor, in approving DMH's

delegation of certain solicitation-related tasks to MBHP,

determined that it was "unreasonable to assume that the

Legislature would only permit an agency to undertake [the tasks

associated with the solicitation process] directly, even when

indirectly undertaking those tasks" would best serve the

purposes of the law as expressed in its preamble.

    The Auditor's determination that, in these circumstances,

DMH's assignment of certain tasks to MBHP did not violate the

Pacheco Law is reasonable because DMH retained control over the

solicitation process.     Nothing in the statutory text of the

Pacheco Law proscribes an agency from implementing the

solicitation process through an intermediary acting under the

agency's direction.     Furthermore, doing so would not contravene

the purpose of the Pacheco Law where, as the Auditor noted in

her decision, the agency "indirectly undertaking those

tasks . . . ensures that the Commonwealth receives high-quality

public services at low cost with due regard for the taxpayers of

the Commonwealth and the needs of public and private workers."

See G. L. c. 7, § 52.

    Here, there was ample evidence before the Auditor that DMH

controlled the procedure, criteria, and outcome of the
                                                                    16

solicitation process.    The 2015 amendment provided DMH with

control over how MBHP conducted the solicitation process, the

performance standards that bidders responding to the RFR would

have to meet in order to qualify as an ESP provider, and final

approval rights over the selection of the winning bidders.

Accordingly, the Auditor's determination that DMH's delegation

of solicitation-related tasks to MBHP did not run afoul of the

Pacheco Law was not arbitrary and capricious.

      d.   Minimum wage and benefit provisions.   We next turn to

the plaintiffs' argument that the model contract between MBHP

and the ESP providers included in the privatization proposal

fails to require compliance with the minimum wage and benefit

protections of the Pacheco Law beyond June 30, 2017.    Under the

Pacheco Law, "[e]very bid for a privatization contract and every

privatization contract shall include provisions specifically

establishing the wage rate for each such position, which shall

not be less than" "the lesser of step one of the grade or

classification under which the comparable regular agency

employee is paid, or the average private sector wage rate for

said position."   G. L. c. 7, § 54 (2).   The statute also

mandates that successful bidders provide health insurance

benefits comparable to those previously provided by the

Commonwealth to State employees performing the same services.

Id.
                                                                    17

       The plaintiffs argue that the model contract improperly

terminates these protections at the end of the current contract

period, June 30, 2017.     First, they contend that these

protections cannot be terminated as long as the corresponding,

previously State-employed jobs still exist.     In the alternative,

the plaintiffs maintain that the guarantee of the wage and

health insurance protections for merely one year in the model

contract constitutes an impermissible end run around the Pacheco

Law.

       In considering this issue, the Auditor found that the

Pacheco Law "sets forth no minimum standard for the term of a

privatization contract."    She then determined that the test that

she would use in "assessing the legitimacy of the term of a

privatization contract is whether the contract's term has some

rational basis or is designed to avoid the requirements of the

[Pacheco Law]."    Applying this standard to DMH's privatization

proposal, she found that "the limited timeframe for the contract

[and therefore for the protections] results from [DMH's]

preference to provide all ESP services under one umbrella

contract with MBHP, or whoever the successful bidder is at the

expiration of the [2012 contract]."

       The Auditor concluded that this was a "rational basis" for

the short duration of the ESP contracts and the protections they

provided.    During the review period, DMH had written to the
                                                                   18

Auditor that it intended to extend its then-current contract

with MBHP and would extend these protections under that

contract.    As noted in the decision, the Auditor's approval of

the privatization proposal was based in part on that

representation.20    We conclude that there was no abuse of

discretion in the Auditor's reliance on DMH's written

representation that it would comply with her interpretation of

the Pacheco Law as a factor in her decision to approve the

privatization proposal.21

     e.     Costs of "bumping" and seniority rights.   The

plaintiffs maintain that, while the Auditor discussed the

subject of transition costs resulting from the termination of

employees as a result of the proposed privatization, she failed

     20
       The Auditor stated in her decision that "if the
procurement of a successor agreement to the agreement between
[DMH] and MBHP is not completed by the end of June 2017 and
instead the present agreement is extended until a new contract
is negotiated, the wage and benefit requirements of the [Pacheco
Law] should continue to apply as well until that new contract is
finalized." Elaborating on her view, she added that "[a]ny
amendment at that time that would, in extending the length of
the contract, also affect the wage and benefit protections of
the [Pacheco Law] would be inconsistent with this view."
Finally, she noted that "[i]n a communication with this
office . . . DMH took the same position, and this office's
decision not to object to the privatization proposal is based,
in part, on this assurance."
     21
       The Auditor did not address the contention that the
protections provided by the Pacheco Law extend in perpetuity as
long as the State jobs they correspond to exist. We, like the
Auditor, do not reach the question of the length of time a
private provider must continue to meet the minimum wage and
benefits requirements of the Pacheco Law.
                                                                  19

to account for the costs22 stemming from "bumping" and seniority

rights in determining that the privatization would provide the

Commonwealth over-all cost savings.23

     DMH provided the Auditor with a calculation of the

potential transition costs incurred as a result of the

privatization, based on the assumption that every DMH employee

affected by the privatization accepted a layoff and received the

maximum unemployment benefits to which the employee was

entitled.   The cost of this worst-case scenario was estimated to

be approximately $2.2 million.   Taking those transition costs

into account, the Auditor determined that the reductions in cost

from the proposed privatization of the Southeast region would

result in savings of approximately $7 million over the first

year of privatization.

     The plaintiffs contend that, although the Auditor took

notice of these cost data, she erred by not taking into account

     22
       The Pacheco Law mandates that the cost of a privatization
contract must "be less than the estimated cost" of the "costs of
regular agency employees[] providing the subject services" "in
the most cost-efficient manner." See G. L. c. 7, § 54 (4), (7)
(iii).
     23
       "Bumping" is a process by which employees with greater
seniority whose jobs are being eliminated or who face being laid
off may displace less senior employees. See, e.g., Andrews v.
Civil Serv. Comm'n, 446 Mass. 611, 619 (2006); Boston v.
Salaried Employees of N. Am., Local 5198, 77 Mass. App. Ct. 785,
786 (2010); Herlihy v. Civil Serv. Comm'n, 44 Mass. App. Ct.
835, 835 (1998). For example, a senior DMH employee whose
position was terminated as part of the privatization could opt
to take the comparable job of a less senior employee.
                                                                    20

the specific costs of retraining transferred employees who moved

into different jobs as a result of "bumping."    The plaintiffs

have not, however, made a showing that those retraining costs

could equal or outweigh the $7 million in savings that the

Auditor found would stem from the privatization, nor do they

otherwise contest the Auditor's conclusion concerning the

reduction in costs the privatization would afford the

Commonwealth.   Hence, even if the plaintiffs' contention that

the Auditor did not take into account costs associated with

"bumping" and seniority rights is correct, her conclusion that

the privatization would provide savings to the Commonwealth in

accordance with the requirements of the Pacheco Law would still

be accurate.    We therefore discern no basis on which to conclude

that her judgment on this issue was arbitrary and capricious.

    f.   Quality of ESP services following privatization.     The

plaintiffs' final objection concerns the Auditor's determination

that there will be no reduction in the quality of services as a

result of the proposed privatization.    The Pacheco Law requires

an agency advancing a privatization proposal to demonstrate to

the Auditor that "the quality of the services to be provided by

the designated bidder is likely to . . . equal or exceed the

quality of services which could be provided by regular agency

employees," G. L. c. 7, § 54 (7) (ii), "providing the subject
                                                                  21

services in the most cost-efficient manner," G. L. c. 7,

§ 54 (4).

    We review the Auditor's conclusions as to the quality of

services under the privatization proposal to determine if they

rest on at least one "ground which reasonable [persons] might

deem proper to support it" (quotation and citation omitted).

See Garrity v. Conservation Comm'n of Hingham, 462 Mass. at 792.

The plaintiffs argue that the Auditor erred in four respects in

determining that the quality of services would not decline due

to the proposed privatization.   They contend that the proposed

privatization will fail to provide services to patients with

commercial health insurance; result in fewer licensed clinicians

serving patients; lead to a harmful reduction in staffing in the

Southeast region; and reduce the hours of staff availability at

community centers in the ESPs.   We address each of these

contentions in turn.

    The plaintiffs first maintain that, contrary to the

Auditor's findings, the model contract contained in DMH's

submission to the Auditor does not mandate that ESP providers

deliver services to commercially insured individuals.    The

Auditor noted in her decision that the model contract explicitly

requires that ESPs must provide services "to individuals . . .

experiencing a behavioral health crisis," and that DMH

represented to her that ESPs would be required to provide
                                                                  22

service to all individuals, regardless of any insurance

coverage.   The Auditor's reliance on the model contract, as

augmented by DMH's representation, was not unreasonable.

     The plaintiffs also object that the Auditor's decision does

not adequately address SEIU's arguments that the private ESP

providers will employ more unlicensed clinicians than does DMH,24

and that the proposed privatization will result in a significant

reduction in staffing in the Southeast region.   The plaintiffs

contend that both of these occurrences will result in a decline

in the quality of services in the Southeast region as a result

of the privatization.   The Auditor's determination addressed

both of these contentions by stating that the model contract

requires ESP providers to meet the same standards of care

currently provided by DMH's State employees.25   Given that the

Auditor relied on the contractual obligations of the ESP

     24
       According to the Service Employees International Union,
Local 509 (SEIU), and undisputed by DMH, eighty-seven per cent
of DMH clinicians providing ESP services have a professional
license, while only sixty-eight per cent of ESP clinicians
Statewide are licensed.
     25
       In this regard, the Auditor had data before her that,
although disputed by SEIU, she apparently credited. The data,
submitted to the Auditor by DMH, based on studies by MBHP,
purports to show that private ESP providers across the
Commonwealth have provided equal or better care than the ESPs
operated directly by DMH. The private ESPs which purportedly
performed as well or better than their State counterparts were
subject to similar licensing requirements as the private ESP
providers in the Southeast region would be under the model
contract.
                                                                  23

providers in addressing plaintiffs' contentions, her judgment in

this instance was reasonable.

     Finally, the plaintiffs object to the proposal's reduction

in walk-in services at community centers in the ESPs from the

current twenty-four hour per day staffing levels.26   The Auditor

noted in her decision that the proposed ESP contract guarantees

services to those in psychiatric distress twenty-four hours each

day, seven days per week, regardless of the hours when the

community-based location is staffed,27 and that only 0.63 per

cent of patient encounters in the Southeast region over the

prior year took place at the community centers during a time

when staff would not be present under the terms of the model

contract.   She determined that any impact on service would be

"de minimis."   This was not unreasonable.

     We accordingly conclude that the Auditor's judgment that

the quality of services would not decline as a result of the

proposed privatization was reasonable.    See Forsyth Sch. For

Dental Hygienists v. Board of Registration in Dentistry, 404

Mass. 211, 218 (1989) ("[An agency's decision] can be disturbed

     26
       Under   the model contract, community-based locations in
Brockton and   Taunton would be open for walk-in services between
8 A.M. and 8   P.M., Monday through Friday, while the locations in
Cape Cod and   Fall River would be open between 7 A.M. and 11 P.M.
     27
       DMH represented to the Auditor during the review process
that ESPs would use mobile service centers to respond to
patients in distress.
                                                                   24

only if it is based on a legally untenable ground . . . or is

unreasonable . . ." [quotations and citation omitted]).

       3.   Conclusion.   The matter is remanded to the county court

for entry of an order affirming the Auditor's determination that

DMH's 2016 proposal to privatize its southeastern emergency

service programs comports with the requirements of the Pacheco

Law.

                                       So ordered.