Electronic Data Services, the Texas-based computer services company that processes Medicaid claims, will not protest the state's decision to replace it with a Virginia competitor.

EDS representatives met with Dan Stewart, assistant secretary with the state Department of Health and Human Services on Feb. 12, to present its case for the state to negate a new, $265.2 million contract with Computer Sciences Corp. EDS asked the state to let it keep the work, or to rebid the job, Lynn Bonner reports.

Stewart countered all EDS' points. EDS, which has processed the state's Medicaid claims for 32 years, decided to bow out.

In a letter to Stewart dated Friday, an EDS vice president said the decision not to file a protest was "based in the best spirit of cooperation."

Electronic Data Systems, the jilted computer company that learned a few weeks ago that the state wants someone else to process its Medicaid claims, wants to talk it over.

Lanier Cansler, state Department of Health and Human Services secretary, doesn't want to hear anything about it, Lynn Bonner reports.

An EDS lawyer sent a letter last week asking Dempsey Benton for a meeting to talk about why the state chose Computer Sciences Corp. Benton was days away from leaving the DHHS secretary's job.

Cansler, who until last week was a registered lobbyist for CSC, sent a memo to a half-dozen administrators and the agency's lawyer Monday, telling them he would not participate in the decision whether or not to grant EDS a meeting, and asking them not to talk to him about it.

Cansler has promised to wall himself off from any potential EDS protest.

State rules allow an agency's executive officer to give the job of reviewing meeting requests to someone else. On Benton's last day as secretary, he assigned the job to deputy secretary Dan Stewart.

EDS has been doing the job for more than 30 years, but its bid was higher than CSC's $265.2 million bid.

Top administrators at the state Department of Health and Human Services said at a meeting today that laptops must be loaded with encryption software by Thursday.

"Nothing will leave the building until these computers are encrypted," said Tom Lawrence, DHHS spokesman.

DHHS Secretary Dempsey Benton and deputy Dan Stewart talked about the encryption requirement, Lawrence said. They will have a report Thursday on how many laptops meet the requirement, Lynn Bonner reports.

The focus on security comes because an agency laptop stolen in Atlanta last month, a machine that contained Social Security numbers for tens of thousands of Division of Aging and Adult Services clients, did not meet state security standards and left residents exposed to potential identity thieves. Encryption makes computer data unintelligible to unauthorized users.

The division has said that the stolen laptop was scheduled to have the encryption software installed at the same time the employee had it in Atlanta.