Franchot, Kopp Hit Hogan Administration Over Emergency Contracts
The Board of Public Works delayed a Hogan administration request to approve three existing Health Department contracts on Wednesday, after two members of the panel said the agency failed to provide enough information about the procurements.
The contracts, totaling nearly $13 million, were among 12 emergency procurements for which the state was seeking retroactive approval.
The other nine were approved, including a $25 million deal with Digital Management, LLC to create a COVID-19 vaccination call center, and lab testing contracts with Mako Medical Laboratories and CIAN Diagnostics worth $41 million between them.
But the two Democrats on the panel — Comptroller Peter V.R. Franchot and Treasurer Nancy K. Kopp — postponed approval of three procurements during a meeting that grew tense at times.
The session was chaired by Lt. Gov. Boyd K. Rutherford (R), who ran the meeting on behalf of Gov. Lawrence J. Hogan Jr. (R), who headlined a series of events outside Annapolis.
The largest of the three items the board voted to defer action on was an $11.9 million contract with Ernst & Young to “assist in supporting, assessing, enhancing, and executing Maryland’s COVID-19 Vaccination Plan.”
Franchot said he waded through pages of “carefully-crafted consultant verbiage” to get a firmer sense of the company’s scope of work.
“What, exactly, are we paying Ernst & Young millions of dollars to do, that we couldn’t do with our own staff?” he asked Assistant Health Secretary Webster Ye.
Ye said the company has helped the department with supply chain management, the creation of online registration systems, upgrading the agency’s aging software system (PrepMod), with data reporting and more.
He said Ernst & Young has also assisted the state’s vaccine equity task force.
Franchot said he was “appalled” that nine of the 11 Health Department procurements on the board’s agenda were beyond the 45-day window for emergency procurement.
“I’m not talking about a couple of days late,” he said. “I’m talking about weeks and months late, some from August.”
He and Kopp also pressed the agency to release an Ernst & Young-produced report that was part of the contract, but Ye steadfastly refused to commit.
“We’ll take a look at it,” said Ye, who spoke on behalf of acting Health Secretary Dennis R. Schrader. “We didn’t ask for a report to stick on a bookshelf and have it look pretty, sir. It was an operational set of items.”
“That’s fine, just send us what you have. You don’t have to have it bound,” Franchot replied dryly.
Kopp said she has high regard for the firm and applauded the state’s decision to hire them.
But, she added, “I don’t think it’s a good idea to keep secret, however, what their report was. We paid for it. It would be an interesting document or set of documents — or whatever it is — to see.”
Members of the General Assembly have also expressed concern with the Health Department’s slow-motion disclosure of lucrative emergency contracts. A measure to required faster notification of emergency contracts, Senate Bill 780, was approved 47-0 last week.
Rutherford voted against deferring the three contracts.
In a lengthy “prebuttal” prior to the objections expressed by Franchot and Kopp, the lieutenant governor said it’s impractical to require agencies to notify the General Assembly or the Board of Public Works about new contracts in an emergency.
“It’s as if [General Dwight D.] Eisenhower was asked by Congress… during the D-Day invasion how did they procure the Higgins boats that took the troops to shore,” he said. “There’s a time and place for reviewing the process.”
The legislature’s representative on the Board of Public Works, Kopp said the current requirement, 45 days, is more than enough time for the administration to disclose big-ticket contracts, even in a pandemic.
“I don’t think lack of transparency ought to be blamed on underfunding or insufficient personnel,” she said. “It’s not an impressive response.”
Rutherford volunteered that the state reached out to four companies for help with its vaccine management operation, two of which submitted bids.
The lieutenant governor said much of the controversy surrounding the state’s emergency contracts can be traced back to “confusion” in the General Assembly and the media.
In reply to the request for the report, Rutherford expressed an openness to providing it, saying “we need to look into that.”
“They are providing value,” he said of Ernst & Young. “If they said that there was a report, we’ll get that report.”
The other items that the panel deferred action on was a $330,000 contract with Berkeley Research Group for a consultant to the COVID-19 Surge Planning Team and a $723,480 contract with KPMG for “resource planning, data analysis, consulting, and project management services with expanded tasks.”
Franchot: Where is Schrader?
Franchot also expressed irritation that Schrader did not appear at the board meeting to defend more than $100 million in emergency contracts, and he requested that the acting health chief attend the panel’s next session, when the deferred items — presumably — will be back on the agenda.
Ye said Schrader was “currently trying to get next week’s vaccine allocation prepared and out.”
“Really,” asked Franchot, more of a statement than a question. “That’s what you’re saying?”
As the meeting grew tense, a visibly irritated Rutherford stepped into the fray.
“C’mon, Mr. Comptroller,” he snapped. Crosstalk ensued.
In defending the administration’s handling of its pandemic response and vaccine rollout, Rutherford — an expert in government procurement — said it was only natural that the state would seek outside expertise and staffing, given the rigors of the health crisis.
“We don’t have the data people in the state [government] to be able to do this type of deployment,” he continued, cutting off Franchot’s attempts to resume speaking. “Nor should we have the staff for a once-in-a-100-year event.”
“If I could just finish the question…” Franchot replied, before being drowned out.
In an interview after the meeting, Franchot called the explanation of Schrader’s absence “the biggest bunch of gobbledygook I’ve ever heard.”
How many other contracts remain undisclosed?
Frustrated by the late arrival of a dozen emergency contracts, Franchot demanded to know how many other contracts are operational but not yet public.
Ye refused to say. “We’re working as quickly as we can,” he offered.
In the interview, Franchot said he and Kopp will eventually unearth the number of emergency contracts that have not been disclosed.
“We’re going to get the answer to that,” he said. “Obviously they know it, because they’ve already paid the money.”
“Unlike the legislature, they can’t say no to us.”
An announced candidate for governor in 2022, Franchot said the late-filing and lack of disclosure over contracts underscores his call for an “independent commission of fiscal experts” to track how federal COVID-19 funds are spent.
“Today’s board meeting was just a little peak inside” the estimated $45 billion to $50 billion in federal money that is “raining down” on Maryland, he said.
The commission he has proposed would make sure contracts are being competitively bid and that companies are not engaging in “pandemic profiteering.”
“The system needs an enormous amount of transparency and accountability,” he added.
Editor’s note: This story has been updated to more accurately describe the full value of the Ernst & Young contract, a $3.8 million “base,” covering 90 days, with two $4.1 million renewal options, each covering an additional 90 days.