A lawyer for Electronic Data Systems, the company that lost the state's biggest service contract, wrote Gov. Mike Easley last month asking him to stop its competitor's work on a new Medicaid computerized payment system.

Affiliated Computer Services won the $171 million, five-year contract last year, and EDS has been fighting back since then. EDS has a lawsuit pending against the state, saying it wrongfully awarded ACS the work.

In the letter, EDS attorney Mark Ash highlights ACS' delay in installing the system, which will increase project costs.

"We encourage you to require that work on this contract stop immediately," he wrote in the letter dated Nov. 14. "There is more than sufficient justification to cancel the contract and order a new procurement."

Renee Montgomery, an ACS attorney, wrote Easley a few days after Ash, laying blame for the delays with EDS and the "disruptions and diversions" stemming from its lawsuits.

Jill Lucas, an Easley spokeswoman, said the governor did not respond to the Ash letter and had no plans to do so.

Bill Ritz, an EDS spokesman, said Easley should know the Medicaid claims project is in trouble and will break its budget. ACS has said it cannot finish the work by July 1 and has proposed pushing the start date to April 1, 2007.

"The governor is ultimately responsible for the state Medicaid program," Ritz said.

If the project is nine months behind, total costs increase by about $40 million, according to a state analysis. But most of that, about $33.3 million, comes from the state having to pay to keep the old billing system running.

After winning the state job, ACS proposed modifying the work by having the system comply with proposed federal standards.

In his letter, Ash said the ACS offer supports a long-standing EDS claim -- that ACS' original proposal was not what the state asked for and should have been rejected.

Montgomery, in her letter, reminded Easley that an internal audit found that EDS overcharged the state millions of dollars. EDS provides substandard service to doctors, hospitals and pharmacies calling in with questions about claims, she wrote. About half of the callers to the service line hang up before they get their questions answered.

EDS disputed the audit findings, and Ritz called Montgomery's reference to the performance reports "a cheap shot" because the size of the telephone staff is set by contract.

They'll call you

Lottery officials have made it clear they don't have time to take phone calls about jobs.

With more than 200 jobs to be filled -- many between now and the lottery's April start date -- job seekers have been aggressively pursuing the work.

On its Web site, the lottery says: Don't call.

"Due to the high volume of requests, the Education Lottery will not be able to respond to employment inquiries sent by telephone or fax," the site says.

Job seekers are asked to mail a cover letter and resume to the North Carolina Education Lottery at this address:

Employment Opportunities

North Carolina Education Lottery

56886 Mail Service Center

Raleigh, NC 27699-6886

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