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The Board of Public Works voted unanimously Wednesday to extend a contract that ensures electronic benefits services 鈥� including Supplemental Nutrition Assistance Program payments 鈥� will continue even as a contract approved this summer is the subject of a courtroom battle.
Department of Human Services officials said the extension is needed while a ruling voiding a new contract is appealed. Even so, Comptroller Brooke Lierman (D) expressed concerns over delays in securing a long-term deal and limiting the state鈥檚 exposure to tens of millions of dollars in fraud.
鈥淚 think a bad scenario is all of us being here again six months from now, and having to approve another extension, and the general fund dollars having to keep going to this 鈥� very scarce general fund dollars,鈥� Lierman said.
Maryland ranked second in the number of claims of stolen food assistance benefits over the past two years, according to the U.S. Department of Agriculture. From the second quarter of 2023 to the third quarter of 2024, according to USDA, there were 48,732 stolen benefits claims made in Maryland, second only to New York鈥檚 90,677 claims.
Maryland Department of Human Services Secretary Rafael J. Lopez told Lierman and the board that his agency has asked for $30 million in the coming budget. The money would be earmarked for reimbursing EBT cardholders who are the victims of fraud and benefits theft.
The new contract was supposed to include new benefits cards with a security chip feature.
The board鈥檚 approval of a six-month extension of the current contract with Conduent State and Local Solutions ensures there will be no interruption in distribution of cash and SNAP Benefits for more than 930,000 people through the Department of Human Services.
鈥淭hey are a lifeline to food and to help people make ends meet,鈥� Lopez said. 鈥淚n Maryland, these benefits are administered by a contracted vendor who produces and mails out the payment card, loads benefits on the cards and helps us make sure that we distribute these benefits in accordance with federal law and regulations.鈥�
The board in July unanimously approved a new contract with Conduent, for a five-year deal with two optional one-year extensions. That approval came as the losing bidder 鈥� Wisconsin-based Fidelity Information Systems 鈥� was challenging the award before the Maryland State Board of Contract Appeals.
The appeals board determined in August that the newly approved deal with Conduent was illegal and voided it. The department appealed that decision in Baltimore City Circuit Court .
鈥淲e will work with either of you,鈥� Lopez said, speaking to representatives of the competing bidders, who attended Wednesday鈥檚 board meeting. 鈥淎nd integrity for us means that if we made a mistake, and the circuit court says we did, we pick ourselves up and we will move on for Marylanders.鈥�
State officials said the $3.8 million extension on Wednesday鈥檚 agenda was needed because 鈥淐onduent has ceased engaging in any work under the new contract鈥� while the legal wrangling continues.
鈥淲ithout this option, we will not be able to run an EBT system in Maryland, and that is simply unacceptable,鈥� Lopez said. 鈥淲e鈥檒l not be able to issue payment cards or loan benefits.鈥�
Mike Miller, an attorney for Fidelity, said his client did not oppose the extension but said the state has another option: Award the contract to Fidelity. Miller told the board he was concerned the agency would come back asking either for another extension of the current contract or ask the panel to ratify the deal struck down by the contract appeals board.
鈥淚 don鈥檛 think you should allow them to railroad this process anymore,鈥� Miller told the board. 鈥淵ou should instruct them to take the lawful, cost-effective option that will get rid of these fraud issues.鈥�
