A scrum over millions of dollars a year in ambulance-service profits in San Diego has taken a hardball turn, as long-time provider American Medical Response retained a law firm to formally protest the city's decision to go with a rival company.
According to an eight-page letter from Los Angeles attorney Pamela Johnston, the emergency-services conglomerate selected by San Diego Fire-Rescue officials—Falck of Copenhagen, Denmark—has a spotty track record unsuitable for San Diego.
The law firm also asserts that San Diego's recent bidding process was defective and that Falck does not meet the city's minimum standards specified in its request for proposals.
Even worse, the lawyer for American Medical Response said, Falck "appears to have falsified a recent proposal to Alameda County" and "may have purloined the intellectual property" of a risk management company in Texas.
Johnston in the letter asks the city to vacate its selection of Falck and open negotiations with her client—or at least start the bidding process over.
"In order to meet the city's stringent requirements, it is essential that the contractor be a well-oiled and well-functioning, experienced (emergency medical services) provider—one that has previously performed under contracts of a similar magnitude," she wrote.
Aides to Mayor Kevin Faulconer had no comment on the allegations contained in the protest letter.
Deputy Chief Operating Officer Jeff Sturak issued a statement saying the city would work to quickly determine whether the protest has merit.
"In doing so, we work closely with the City Attorney's Office and our client department," he wrote. "Once a response is issued by the city resolving a dispute, the city is then able to complete contract negotiations."
Sturak provided no timeline for reviewing the protest. The existing contract expires June 30, 2020. Any new agreement will be sent to the City Council for approval.
San Diego city firefighter-paramedics regularly respond to medical calls, but patient transportation is provided privately. American Medical Response, or AMR, now pays the city $10.7 million a year for the right to operate the ambulance service and bill patients.
The company is privately held, so no information on revenue from patient billings is publicly available.
For its part, Falck said it welcomes the opportunity to take over the ambulance contract in San Diego and it defended the selection process as thorough and fair.
"Falck is excited to have been selected by the city of San Diego and the San Diego Fire-Rescue Department to be its exclusive provider of emergency ambulance services," Troy Hagen, the Falck California chief executive, said in an email. "The city conducted a fair and impartial RFP process that concluded that Falck was the most suited to provide these services."
Hagen said his company "disputes and denies the allegations" that it falsified a bid proposal in Alameda County or that it wrongly took credit for the intellectual property of one of its consultants.
"Falck was selected by the county of Alameda after finishing first in a fair and competitive process and we continue to work with them on a very collaborative and productive basis," he said by email. "We look forward to doing the same in the city of San Diego."
San Diego Fire-Rescue Chief Colin Stowell announced Dec. 2 that a selection committee had chosen Falck over American Medical Response, even though AMR has served San Diego for more than 20 years.
The decision to negotiate exclusively with Falck came after a spate of disputes in recent years over AMR staffing levels, response times and penalties assessed by the city over the company's failure to meet specific goals.
Stowell said Falck was a logical choice that should serve residents well.
"They're the biggest ambulance company in the world," the San Diego fire chief said. "They are just not well known here."
Falck also serves parts of Los Angeles and Orange Counties with its subsidiary Care Ambulance Services, and it has separate contracts in Oregon, Washington, Florida, Georgia, Alabama, Colorado, Maryland and Michigan.
In addition to criticizing the San Diego bidding process, the AMR protest accuses Falck executives of misleading Alameda County authorities when they were competing for the ambulance contract in that region.
One of 10 exhibits attached to the protest is a Sept. 10 letter to Falck from SG Collaborative Solutions, a risk management firm in Westlake, Texas.
The two-page document alleges that Falck passed off the firm's work as its own and wrongly referenced proprietary data in its solicitation.
SG Collaborative Solutions did not respond to an email seeking comment about the dispute. The two companies are litigating a federal lawsuit in Northern California.
Another concern raised in AMR's protest letter is Falck's experience providing Advanced Life Support services, or ALS, as opposed to Basic Life Support, or BLS.
ALS typically includes a paramedic among the emergency medical technicians on each ambulance, while BLS does not. Paramedics can give injections, administer medication and provide other basic treatments that medical technicians cannot.
"Falck has only operated a single 911 ALS system (Alameda County) similar to the city system for only five months," Johnston wrote. "In those five months in Alameda, Falck failed to meet response times in four of the five months and, as a result, Falck has racked up $617,500 in fines."
The Danish ambulance provider has experienced difficulties in other markets too.
According to press reports in its home country this year, Falck was found to have abused its position of market dominance by the Danish Competition and Consumer Authority.
Falck apparently spread negative and false stories about another ambulance firm—actions that helped push the smaller rival into bankruptcy, the Copenhagen Post reported. An executive from Falck later apologized and the company settled the complaint for $22 million.
San Diego's decision to pass over AMR comes two years after the company renegotiated its deal with the city.
Prior to the 2017 contract amendment, city and AMR officials were at odds over response times, staffing levels and fees San Diego charged AMR for its failure to meet specific terms of the agreement.
San Diego last awarded its ambulance contract in 1997 to Rural/ Metro, a company that AMR bought in 2015 after it, too, repeatedly failed to meet conditions in its agreement with the city.
Stowell said earlier this month that prior problems with AMR played no role in the city's decision to open negotiations with a new provider.
"The only reason this RFP went out is that this contract termed out," he said.
**Note: this version of the article includes a corrected headline that more accurately reflects the content.