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Maryland has spent millions on emergency contracts to improve COVID vaccine rollout, but few details made public

Maryland health officials have signed at least two emergency contracts to improve the state’s rollout of COVID-19 vaccine, committing taxpayers to spending tens of millions of dollars while providing few public details of how the money would be spent.

The contracts, obtained by The Baltimore Sun through a public records request, show acting state Health Secretary Dennis R. Schrader signed the contracts earlier this year for consulting services from Ernst & Young and call center services from Digital Mobile Innovations.

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Charles Gischlar, a Maryland Department of Health spokesman, said Ernst & Young is providing “forensic accounting support to cross-check our official data and inventory tracking,” while the DMI contract is “for the 855-MDGOVax call center.”

Taxpayer groups and lawmakers often criticize the use of such emergency contracts, which do not go through the normal process of soliciting and analyzing bids from multiple vendors, out of concern they can lead to higher costs and lower value. These new state contracts already are drawing questions.

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“I’m not convinced as to the value of these very large contracts,” said state Sen. Clarence Lam, a Democrat who sits on the state legislature’s Vaccine Oversight Workgroup. “It’s not clear what the state has entered into these contracts to do.”

The call center contract with Digital, or DMI, was for about $25 million and includes a renewal option worth about $9.6 million. It was signed Feb. 10 by Schrader, though services began Feb. 1, and pays the firm about $1.16 for each “engagement credit,” which includes live and automated responses to calls, texts or other contacts.

It came amid criticism of the state’s vaccine rollout as slow and inequitable, as well as inaccessible to those who are less tech-savvy, are homebound or do not have a computer. The new call line allows people to book appointments at the state’s mass vaccination centers, but not other facilities such as those operated by pharmacies, health departments or hospitals.

Lam questioned the need for an emergency contract for work the state should have known would be needed months ago. He also raised specific questions about why Ernst & Young was needed given that the state had added Dr. Robert Redfield, former director of the U.S. Centers for Disease Control and Prevention, as an unpaid consultant.

“I don’t see every other state entering into contracts to work with the federal government,” Lam said. “It really begs the question: Why aren’t they better prepared at what should be their job?”

The contract information provided to The Sun by the state did not include information about the full scope of services to be provided by Ernst & Young or the fee. It was signed Jan. 29 by Schrader.

Lam said he requested further information from the state, which he said he’s not received. He brought up the contract during recent vaccine oversight workgroup meetings with Schrader.

Schrader told the lawmakers that the firm was handling “a number of things” for the state, offering a national perspective on the supply chain and “helping us unravel some of the mysteries of the federal allocation and accounting system.”

At a recent Annapolis news conference, Gov. Larry Hogan, a Republican, said Ernst & Young “is earning their keep,” and had identified “a couple hundred thousand doses” that the state had received from the federal government but not yet used.

Documents obtained by The Sun separately from the public records request show the cost would be $3.79 million for the 90-day contract with Ernst & Young, with two 90-day renewal options.

Altogether, the cost of the two contracts could reach about $46 million.

It’s not clear how many emergency contracts the Hogan administration has signed that relate to the vaccine rollout, which has lagged behind that of other states, according to information collected by the U.S. Centers for Disease Control and Prevention and others.

Asked about its contract with the state, Ernst & Young referred questions to Michael Ricci, a spokesman for Hogan.

DMI officials said in a statement emailed to The Sun that the company was “highly focused on delivery high quality, innovative and cost-effective services” to Maryland where it is headquartered and long provided services. Officials also said the company was acting in “the very best interest” of Marylanders without access to technology.

“When the State asked for DMI to propose an emergency COVID-19 Hotline, we rapidly pulled together a next-gen solution that would easily handle more than [75,000] calls a day. Part of our solution was to provide outbound calling so we could directly reach under-vaccinated communities in the state and we created a digital channel (text messaging & web messaging) so that digitally savvy Marylanders would use those channels instead of the call center and free up the call center to those who were most comfortable on the phone, e.g. seniors. "

Ricci deferred further questions about the contracts to the health department for comment.

Gischlar said contract information had been submitted to the state Board of Public Works, which approves such state spending.

John T. Gontrum, a spokesman for the board, said the Ernst & Young contract was not received in time to be placed on the agenda for the March 10 meeting but should be on the agenda for the March 24 meeting. He also said there likely would be at least one other emergency contract considered.

Lawmakers said emergency contracts are not necessarily a problem, provided they offer value to the state.

“It is an emergency, so we wouldn’t want to get weighted down,” said state Sen. James C. Rosapepe, a Democrat who also sits on the vaccine oversight committee. “If it helped us understand the federal rules, that would actually made sense to me.

“The big picture is they desperately need expert help. Whether they are getting it or not is the question.”

Hogan has been a critic of emergency contracts in the past, specifically during the response to the 2014 rollout of the online exchange created under the Affordable Care Act.

Maryland’s exchange crashed on its first day and residents could not sign up for health insurance. The system was scrapped eventually for new technology. A Sun analysis of public records found the administration of former Gov. Martin O’Malley, a Democrat, awarded $84 million in contracts without competition, about a third of the money spent on the troubled website.

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After Hogan became governor, his office issued a statement that expressed his opposition to noncompetitive contract awards on the exchange and beyond.

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“Since taking office, Gov. Hogan has directed agency chiefs to correct issues related to single- and no-bid contracts,” the statement said. “Without a thorough and competitive bidding process, taxpayers are unable to trust that their money is being spent as efficiently as possible.”

The bidding process used by governments serves multiple purposes, including transparency with taxpayer dollars and assurance the money is well spent, said Charles Tiefer, a University of Baltimore law professor who follows contracting issues.

He said without competitive bidding through normal channels, it’s easier to misspend. A recent example came from former Republican President Donald Trump’s administration, which Tiefer said vastly overpaid for personal protective equipment.

Tiefer couldn’t comment specifically on emergency contracting during the pandemic in Maryland since the extent of the contracting was unknown. But he said the Hogan administration had ample time to set up for vaccine rollout and shouldn’t have needed to work outside normal channels.

State officials are permitted to use emergency contracting, he said. But there is a provision that makes clear “Maryland administration law doesn’t want officials to use emergency procurement as a way of avoiding competition,” he said.

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