Proprietary information at center of Xerox and Molina dispute


As many New Jersey business owners know, bidding against other companies for contracts can be incredibly competitive. Companies seek to outbid each other and appear favorable in the eyes of their potential clients. Two companies are currently fighting over a government contract after one company accused the other of using proprietary information, in addition to other issues.

One state's Department of Health and Human Resources chose Molina Medicaid Solutions to fulfill a $248 million computer contract. Molina currently runs the state's Medicaid Management Information System, which processes claims for Medicaid recipients. The agency accepted bids to replace the old system with a newer model and chose Molina to continue with the contract.

Another company involved in the bidding process, Xerox, claims that Molina won the contract after the agency made errors in the bidding process. The first one occurred in 2011 when Molina cut a $10.5 million deal to allow the department to upgrade its computer systems, which apparently gave them unfair leverage in subsequent negotiations.

Another alleged error occurred that same year when the state agency gave Molina documents that contained Xerox's proprietary information. Molina claims that they noticed the error immediately but did not use the information, yet Xerox refutes that assertion.

Xerox also claims that Molina has access to the officials who were in charge of awarding the contract. Molina does not deny this, as they currently hold the contract and as a result, are in frequent contact with the parties in question.

Proprietary information leaks and other data breaches may be a common occurrence for New Jersey companies. Such breaches can cause companies to lose money because of lost contracts or even disgruntled customers. This is a security issue that should not be taken lightly. Even the threat of litigation over such matters can create significant headaches for business leaders. It is to the benefit of businesses to properly handle confidential information as it pertains to bidding for contracts. However, if a dispute does arise, it is possible to work toward a positive outcome.