Report: ‘Bad’ communication breaks Utah’s no-bid COVID-19 contracts


SALT LAKE CITY – Poor dialogue between state departments and lack of cooperation with health officials resolved issues around a pair of controversial, multimillion-dollar coronovirus contracts with tech companies, according to a limited legislative review released Tuesday .

A review by legislator auditors found that more than $ 97.3 million in state agencies dropped emergency spending to respond to the COVID-19 epidemic from March to July, with many contracts executed without “significant concerns” . ” But the two contracts “would have benefited from better communication, cooperation, and direction if all relevant state entities were included in the decisions.”

Those contracts include a partnership of more than $ 4 million with Twenty Labs on the Healthy Together app, and a $ 9.6 million partnership with Nomi Utah on the Testuta initiative.

“What we found was that more cooperation was really needed,” MLA Auditor General Cade Minche told lawmakers on the MLA Audit Subcommittee. “We understand that a lot was going on during that time, but we still feel particularly for those contracts, if there were collaborations with entities in play, something to avoid some of the pitfalls There could have been opportunities. “

The contract to develop the Twenty Two Healthy Together app was intended to assist with COVID-19 contact tracing efforts, among other features, but has not been a successful tool for state health officials. The tracking feature that was initially pitched to aid contact tracing has been discontinued, which was attributed by state officials to privacy concerns that drove many iTunes away from the app. The app was recently modified to use Bluetooth.

While questions and concerns revolved around the app, another Utah businessman offered the same service for free.

To date, the state has paid more than $ 4 million for the Twenty app and continues to pay the ongoing $ 300,000 monthly maintenance fee.

According to the review, the Utah Department of Health officials was not involved in contract negotiations with Nomi Utah and the Testuta initiative for the first month of the $ 2 million, five Drive-Then test locations for the construction of Test Drive.com $ 3 million was involved and laboratory services, and an additional $ 600,000 per month for each active testing location, even though the effort was initially offered as one that would be congested.

Questions and concerns are also swirling about Testuta’s COVID-19 test accuracy, although lab officials preserve the integrity of their tests.

While legislative auditors wrote in their report that “a full audit of all contracts would require identifying deep-rooted questions,” Utah State Auditor John Dugall has been auditing COVID-19 emergency expenses for several months. . His office has not provided a timeline as to when the audit will be completed.

However, in its limited review, MLA auditors found the contract with Twenty and Nomi – and more than $ 64 million in emergency purchases for personal protective equipment – did not violate state emergency procurement methods.

“However, while the state did take advantage of the flexible component (of the emergency procurement code) with the Twenty contract, based on the interviews we conducted and the documentation we reviewed we believed there could be more room for competition,” he said. The auditors wrote.

Auditors indicated that their limited review found that the Department of Health did not fully implement the Utah Department’s contracts, and that “greater co-operation” and the division of procurement “between the management office and the budget” at the initial stage Should have been. The ubiquitous epidemic. “

“For example, the Healthy Together app negotiations for contact tracing did not involve purchase or DOH until the final formation of twenty contracts,” the auditors wrote. “Although Utah Code found emergency procurement requirements Specific entities are not required to be included in the contract, we believe this would have helped secure a better contract and a better state actors in general terms. ”

Auditors also wrote that the Department of Health had “not fully engaged in preliminary negotiations for the original Nomi contract when they could provide subject matter expertise on test setups and protocols” and with the state’s Technology Services Department Nomi Were not included in the initial contract.

“Another area of ​​poor cooperation that we found is with the use and monitoring of these contracts,” the auditors wrote. “We were told that a state entity continued to work with a vendor, reconciling additional work and reevaluating some of the original terms of the agreement without the knowledge of other state agencies.”

While one state agency inspects the contract for the app, the other agency manages the payment.

“This contributes to confusion and decentralizes the efficacy of monitoring a contract for compliance,” the auditors wrote. “Agencies should communicate on contract amendments and provide a unit to oversee and monitor the contract.”

The Government Office of Management and Budget initiated preliminary contract negotiations for both Twenty and Nomi before the Utah Department of Health began handling the contracts.

Rep. Susan Harrison, D-Draper, and Rep. Andrew Stoddard, D-Sandy – both vocal critics of both the Twenty and Nomi contracts – again voiced their concerns during a briefing of no-bid contracts awarded to government operations interim did. Committee on tuesday

Stoddard said the state now paid $ 4 million on Twenty’s “app that doesn’t do what it should have done”, and told Phil Dean, if the interim executive director of the Government of Management and Budget, if There “has been considered.” To break those contracts or to reorganize them? “

Dean, who took over the role of Kristen Cox, executive director of the Office of Management and Budget, when she left last month, said, “The simple answer is yes. There has been talk of ensuring the apps their purpose. It is also fair to say that discussions are going on. ”

When asked specifically about free offers from another business to develop a contact tracing app, Dean said that “there have been many conversations about other opportunities,” but said the state now works under emergency procurement procedures Is not doing, and therefore it must pass a competitive bidding process.

Harrison voiced concern that “these companies had absolutely no background in health care, yet they were awarded multi-million dollar contracts for many other services.”

“Can you comment on what kind of consultations the health experts had to argue that they were intelligent contracts to enter the bidding process?” Harrison asked Dean.

Dean said that he was “not personally involved in those aspects, so I can’t answer that question directly.”

“I think it would have been prudent to use taxpayer dollars to invest in existing public health infrastructure and, at bare minimum, consult health department experts before entering into any bid contracts with those companies , Areas in which there is no expertise, “Harrison said.

In their report the legislative auditors offered several “lessons learned” – expressed with the title, “better communication and collaboration and a coherent theme”. He recommended the Legislature “learn these lessons to determine if more guidance is needed to determine how the executive branch uses emergency procurement in the future.”

In a written response to the legislative review, the Division of Purchasing Officers stated that the agency is committed to “making the Utah Procurement Code efficient and effective for all procurement, emergency and unprofessionalism.”

In a separate audit subcommittee meeting on Tuesday, House Speaker Brad Wilson, R-Cassville, reported that the legislative review showed “no misappropriation of funds, no violation of state purchase code or state law, but here Even under the umbrella of a state emergency, not all purchasing decisions are made equal. “

Wilson said some purchase decisions, like personal protective equipment, were timely and necessary, with others “maybe a little slowed down and a little more cooperation.”

“I think there were a lot of decisions that needed to be made quickly, and I think more big decisions were made well,” Dawson said. “I think it is incumbent upon us as a legislative branch to take lessons that we can learn and make sure that we keep those in mind for future times in this way Heaven is forbidden. ”

C-Minority Leader Karen Mayne, D-West Valley City, said additional watchdogs could be enacted in state law to avoid future problems. In his assessment, the problems came from turf fighting and personality issues.

“If it’s not a virus, it’s going to be something, and we need to keep things,” she said, “the echo of recommendation to keep a structure” so they can work together and with each other. Do not step on toes and go into personalities and grounds and all of them. ”

She called it a “wake-up call” to get state agencies to work better together.

“It was terrible, but I think our processes are going to be better for it,” she said.