Gov. Deval Patrick's administration will invoke emergency rules — reserved for “an unforeseen crisis” — to sidestep the state’s procurement laws and award a lucrative, no-bid Obamacare contract to Minnesota-based Optum to salvage the disastrous state exchange, the Herald has learned.
Health Connector spokesman Jason Lefferts said the state is executing the unusual crisis clause “to avoid substantial harm to the functioning of government ... and since the health, welfare or safety of citizens of the Commonwealth is threatened without a functioning (state Obamacare exchange).”
But former state Inspector General Gregory Sullivan said the Patrick administration is abusing the emergency language.
“It wasn’t unforeseeable,” said Sullivan, now at the Pioneer Institute. “It was just denied by the administration for months. The administration was well aware of the fact that the Connector project was behind schedule, over-budget and dysfunctional ... I wouldn’t call this an emergency, and I think it should be competitively procured so everyone has a chance to bid.”
The state plans to sign the contract with Optum without a bid process or approval from the Health Connector board. Optum will subcontract with Virginia-based hCentive, which is developing “off-the-shelf” software for a new state site.
But in another twist, Optum revealed to the Herald it holds a 24 percent stake in hCentive, making the no-bid deal even sweeter. An Optum spokesman said it disclosed its hCentive stake to state officials.
A message to hCentive was not returned.
State officials will present the new $100 million “dual-track” plan during the Health Connector’s board meeting today.
But the Connector will get around obtaining a vote of approval from its board because the state’s Information Technology Division will technically be signing the contract.
At least one board member told the Herald the administration is cutting the board out of the process.
“We’re at the point now where some crucial decisions need to be made, and either the board has authority on this, or why do we have a board?” said board member Ian Duncan. “I’m very concerned about another proposal to spend $100 million of taxpayer money with no guarantee something will work.”
But board member Jonathan Gruber, who supports the plan, said the board has been kept informed and critics will have a chance to be heard.
“If someone at the board meeting really feels like this is a problem, then speaking their mind about it would be much more influential than a 9-1 vote,” he said.
GOP gubernatorial candidate Charlie Baker, the former CEO of Harvard-Pilgrim, told the Herald the time is past due for transparency at the Connector.
“It’s terribly disappointing to hear that the decision to spend tens of millions of dollars on an untested and unproven two-track system has been made behind closed doors and in haste by the same people who put us in this mess in the first place,” he said.
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