ROGERS - Serco Inc., a British company recently awarded the federal contract to administer the rollout of President Barack Obama’s health-care law, is set to open an information hub in Rogers, adding 800 to 1,000 jobs by October, sources confirmed Tuesday.
Serco’s domestic operations, headquartered in Reston, Va., have leased roughly 150,000 square feet of space in the 217,000-square-foot building that once housed Emerson Electric Co. at 1315 N. 13th St., said David Estes, the CEO of First State Bank in Lonoke, which owns the building. Serco is a leading provider of professional, technology and management services focused on the federal government. The deal includes an option for Serco to lease the rest of the building, which sits on 26 acres.
“It’s effectively a done deal. They’re leasing the facility from us,” Estes said Tuesday. “We’re pretty pumped up about 800 new jobs.” Other sources said the number of jobs may reach 1,000.
Emerson pulled out of the plant in early 2001, and the then-36-year-old building was bought by a group of investors. Estes said the bank ended up having to foreclose on the building. “We just got it back last summer,” he said.
Serco Inc. employs some 9,000 people. It has an annual revenue of $1.5 billion and is part of a $6.6 billion global business, Serco Group, according to its website. A synopsis of the government’s agreement with Serco said the company will provide services for the Center for Medicare and Medicaid Services, an agency within the U.S. Department of Health and Human Services that manages parts of the Affordable Care Act.
The center’s description says the contract calls for Serco to handle all incoming mail related to the health-care exchanges and to create a single address where potential exchange users can direct correspondence.
Rogers will be that address. Or at least one of them.
“It’s pretty interesting how this thing is going to work and how quick it’s going to get up and going,” said Estes.
“This facility will be the intake facility for all the mail for all the health exchanges across the country. They are expecting 1 million … pieces of mail in the first couple of weeks to hit the Rogers post office.”
Employment opportunities for the Serco jobs began showing up on websites Monday. Positions included an on-site recruiter “preferably with previous experience recruiting for a high volume, call center environment.” One candidate will be selected for each of three geographic locations: Rogers; Corbin, Ky.; and Anniston, Ala. Other jobs advertised included computer-systems analysts, data-entry operators, foreign-language translators, program managers, clerks, quality-control inspectors, and technical instructors.
The company, according to the contract solicitation, will not have any say in making health-care eligibility determinations. Its main function will be to conduct “mail triage” - routing mail to its proper destination, such as a federal employee or another contractor that will process appeals, and creating and archiving image copies of written or typed documents. Serco employees will occupy the building at least 12 hours a day Monday-Friday.
Ordinarily, when a company establishes a plant in Arkansas, congressmen and senators rush out a congratulatory news release. None of the members of Arkansas’ congressional delegation announced the Serco decision.
The federal government has not cleared Serco to discuss the contract and the location of the mail center, said Alan Hill, a company spokesman. Sen. Mark Pryor, D-Ark., did not return calls seeking comment. Sen. John Boozman, R-Ark., had not heard about the contract, said his spokesman, Patrick Creamer.
When reached for comment, Rep. Steve Womack, R-Ark., former mayor of Rogers, said: “Americans deserve real health-care reforms that lower costs, increase access to coverage, and improve the quality of care. The Affordable Care Act did not do this. Instead, the ACA hurts both our health-care system and our economy.
“Nonetheless, it remains the law of the land. If we are going to be forced to live with this law, I am glad Serco recognized the value of doing business in Arkansas and is helping offset the ACA’s impact in the Third District by bringing their new service center … to Rogers, and I welcome them to Arkansas.”
Serco’s initial 12-month contract could be worth as much as $1.2 billion if extended over five years, according to an article published in last week’s The New York Times. The company has extensive government-contractor experience with the Defense Department and intelligence agencies. It also manages air traffic control towers in 11 states and reviews visa applications for the State Department. But it has little experience with the Department of Health and Human Services or the insurance marketplaces, known as exchanges, where individuals and small businesses are supposed to be able to shop for insurance, the article said.
Serco is expected to assist the Obama administration and the individual states in determining who is eligible for insurance subsidies, in the form of tax credits, and who might qualify for Medicaid.
“This is a huge undertaking,” Hill, the Serco spokesman, told the Times. The mail exchanges are supposed to be in operation in every state by Oct. 1. “We have some tight deadlines to meet.”
Serco and its subcontractors are expected to immediately begin hiring 1,500 people. Contract documents say that Serco must be ready for an increase in the volume of work because some states that are planning to run their own exchanges may need additional help from the federal government, the Times article said.
Emerson Electric’s closing in Rogers in 2001 eliminating about 260 jobs. The St. Louis-based Emerson Electric made softball-sized commercial refrigeration units at the plant.
Information for this article was contributed by Alex Daniel and Steve Painter of the Arkansas Democrat-Gazette.
Front Section, Pages 1 on 07/10/2013