DHHS officials outline contract portfolio; committee presses for sole-source and savings details

The Department of Health and Human Services told members of the Finance - Division III committee on March 18 that it currently has 969 active agreements and had prepared a high-level briefing on the department’s largest general‑fund contracts.

Nathan White, chief financial officer for DHHS, said the department used the top general‑fund spend as a proxy to give the committee a manageable view of the portfolio. “Our providers and our contractors really play a critical role in accomplishing [the] health and human services mission,” White said, adding that some contracts provide direct services to New Hampshire residents while others support department operations such as billing and software.

The presentation separated contract types and accounting classes, White said, noting many contracts are budgeted across multiple class lines such as 102, 103 and 74. White told the committee the department sometimes “braids” federal and state funding in a single contract to avoid issuing multiple agreements for similar services.

Commissioner (Department of Health and Human Services) said the briefing focused on the highest general‑fund contracts, presented as 18 items rather than 20 because of space, and included grouped contracts where appropriate. “These contracts on this list serve, obviously a very significant function in the Department. They are contracts of how we provide services to our families, to our all of the folks in our state, our most vulnerable,” the commissioner said, emphasizing the mix of direct service and administrative contracts.

The committee’s questions centered on three recurring topics: whether contractual duties for area agencies could be reduced to save money; how the department treats sole‑source procurements; and whether there is evidence of waste in service plans for individuals with developmental disabilities.

Melissa Hardy, division director for Long Term Supports and Services, said area agency obligations are “pretty well spelled out” in contract language and statutory directives. Hardy and Chris Santonello, associate commissioner, told the committee that some duties and funding remain outside the contracts (for example, designated area agency rates) and that certain programs are statutorily required. Santonello referenced RSA 126‑G (family support councils) and RSA 171‑A (comprehensive community‑based service delivery) as statutory bases for funding embedded in those agreements.

On proposals that consultants recommended a two‑tier waiver for developmental disability services, Hardy said the department heard stakeholders and families object to that two‑tier approach and instead shifted work toward rate‑based changes and individualized assessments. “We’ve been moving to a rate structure,” she said, describing ongoing work on needs‑based SIS assessments to inform rates, and said the department does not expect contract savings from that work to materialize in the 2026–27 biennium.

Representative Priess asked whether the committee had any verified evidence of waste; legislators cited a whistleblower allegation that prompted questions about inconsistent individualized plans across area agencies. The commissioner said the allegation came from a single whistleblower and that the department had not provided evidence of systemic fraud, though acknowledged the potential for inefficient execution in complex government programs and said the agency was emphasizing fiscal stewardship.

On sole‑source contracting, Santonello and White explained New Hampshire procurement rules. White said the state’s administrative rules, referenced as MOP 150 or the DAS handbook, and contract procedures mean an initial sole‑source designation can persist through amendments or renewals, and that additions exceeding 10% of an original award may also convert an item to sole source. The commissioner said every sole‑source request in the department must be approved by department leadership and that staff are instructed to pursue competitive procurements where feasible.

White told the committee that some contracts are higher risk because of dollar value and thus receive more attention in monitoring; smaller contracts may not receive the same level of ongoing oversight. The commissioner and staff acknowledged monitoring capacity is constrained by available personnel and said higher‑dollar contracts receive closer scrutiny.

Members asked for follow‑up materials. Committee leadership directed DHHS to provide additional specifics including an approximate percentage of current agreements that are designated sole source, clarified draft language for any proposed DEI contract attestation referenced by legislators, and the change requests and other follow‑up items identified during the session. The committee recessed with the intention to reconvene Friday at 1 p.m. for any time‑sensitive follow‑ups.

The department cited other procurement controls in its standard terms and conditions, including a clause that contracts are subject to available appropriations and funding. White and Santonello advised the committee to read sole‑source justification letters included in G&C (Governor and Council) agendas to understand the rationale for any particular item.

No formal votes were taken on March 18. The meeting was primarily informational and focused on questions and directions for follow‑up rather than decisions about specific contracts.