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Council delays $1.96 million benefits-administration contract, asks staff to return with one‑year option
Summary
The Detroit City Council Committee of the Whole asked Human Resources Director Denise Starr to return next week with options for a one‑year contract for benefits administration with WEX Health Inc., and to provide comparative procurement information and cost details for moving the service in‑house.
The Detroit City Council Committee of the Whole delayed action Thursday on a proposed three‑year, $1,958,400 contract with WEX Health Inc. to administer employee benefits, asking Human Resources to return in one week with information on a possible one‑year extension and competitive comparisons.
Human Resources Director Denise Starr told the committee the contractor handles online open enrollment for about 10,215 city employees and their families, COBRA processing and thousands of benefit inquiries. "Without this contract, we would have to go back to paper processing," Starr said, adding that open‑enrollment call volume can reach roughly 20,000 contacts and the city’s benefits team includes about eight staffers.
Councilmember Angela Whitfield Callaway moved to bring the item back in one week so the department can provide additional procurement and pricing details. "I'd like for us to maybe ask Ms. Starr to make this a one‑year contract, or at least look into it and bring that information back to us," Callaway said. The committee approved the motion without objection.
Starr said the city previously put the work out to bid and that no Michigan‑based vendors submitted bids at the price point offered. She estimated that building an in‑house system would take multiple years and significant investment to meet union, IRS and COBRA requirements. "These systems are very intricate," Starr said.
Members pressed on timing: multiple speakers noted the current contract runs through June 30 and the committee has limited days before expiration. One councilmember said the administration has repeatedly requested last‑minute extensions on major contracts and urged earlier procurement planning.
The committee did not vote on the three‑year contract; instead it directed the Human Resources director to return in one week with: a one‑year pricing option or rationale if unavailable; a list of other municipalities that use WEX; details on competing bidders and bid pricing; and an estimate for time and cost to implement an in‑house system if the city chose to pursue that route.
The item will return to committee for formal consideration after the staff report is provided.
