BPW Approves Another Increase to Emergency Health Department Contract that has Ballooned to $87 Million

Comptroller Peter V.R. Franchot (D) expressed concern again Wednesday as the Board of Public Works retroactively approved an emergency contract for a Health Department consultant that has increased during the pandemic from less than $4 million to more than $87 million.

The contract with New York-based consulting company Ernst & Young has been debated by the state’s fiscal watchdogs at several meetings since last spring.

Maryland Department of Health Secretary Dennis R. Schrader said the $40 million contract increase for Ernst & Young is meant to anticipate the needs of the state over the course of this year.

“This is a substantial investment of taxpayer dollars and, to be honest, a year later, it’s still not very clear what the state is getting from these particular consultants,” Franchot said.

Wednesday’s emergency procurement includes a $25 million contract increase to aid in the Department of Health’s response to the pandemic and an additional $15 million to assist in restoring its cyber capabilities following the Dec. 4 ransomware attack.

Schrader told the board that the agency’s network is “about 75% operational now.”

“​​The next stage is to reconnect and start to recover the systems and we’ll need a lot of help working … to bring our functional areas back online,” he continued.

The Department of Health increased the contract with Ernst & Young by $40 million on Dec. 18, 2021. Agencies bring emergency procurements before the Board of Public Works for retroactive approval.

Wednesday’s contract expansion was ultimately unanimously approved by the spending panel. It was the third time that the Department of Health has appeared before the board to increase the funding for the contract with Ernst & Young.

The agency first entered into a $3,794,600 emergency contract with the company in January 2021 to aid the state with its vaccine rollout.

In April 2021, Franchot and Gov. Lawrence J. Hogan Jr. (R) debated a proposed $21,251,451 contract increase.

Franchot insisted that this was an example of state agencies abusing emergency procurement regulations, but had little choice but to approve the contract revision. At that time, funding for services provided by Ernst & Young cost the state approximately $25 million.

An additional $22 million was approved by the Board of Public Works last September to extend the contract through the end of June 2022.

More than two-thirds of the funding for the $87 million contract comes from the federal government. The remainder is pulled from the state’s general fund.

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