Senators criticized the Department of Health Tuesday for what they described as circumventing the procurement process and awarding a $1 million contract for COVID-19-related contact tracing to tech startup Avera, which according to its webpage was co-founded by Aliyah Bryan, the daughter of Gov. Albert Bryan Jr.
Finance Committee members expressed shock when Health Commissioner Justa Encarnacion said the department offered the contract without requesting bids through Property and Procurement – an action that senators say could have serious repercussions.
Sen. Kurt Vialet said he would not name the founders of the business at the hearing, “but it will come out as to who are the principals. And when you find out who the principals are, who got a million-dollar contract within 72 hours without going through the requisite procedure, and other entities are not given the opportunity when we are doing a solicitation … you are setting yourself up for a bad situation.”
Health officials said they were under the impression Gov. Bryan had suspended the requirement for a request for the proposal because of COVID-19, which could be considered an emergency.
After putting out a bid request to three companies and not hearing back within 72 hours, Encarnacion said the department pursued a contract with Avera. She said Avera is “actually a very new company, so they do not have prior experience. So, we are actually providing the use of the V.I. as an opportunity so they will be able to get some experience.”
Sen. Vialet said he was furious and that there are procurement laws in the Virgin Islands that need to be adhered to. “If you are going to request that contact tracing is done, you go through the procurement process. This is the second contract that I have heard about in the last week that has not gone through that process and has been awarded to a specific group. And it always happens that these groups just happen to be there standing waiting to get a contract.”
Because the funding for these services is provided through the federal CARES Act and the department is not an autonomous or semi-autonomous entity, contracts are supposed to follow a process that ensures anyone can make a bid.
Sen. Donna Frett-Gregory said it is because entities like the Health Department enter contracts tied to federal funding that aren’t procured through the proper process that the territory continues to be a high-risk grantee. “If that process occurred the way you guys just described it, it is a problem,” she said.
“I can’t just walk up and get a contract,” Frett-Gregory later added.
Though the department did not publicize a request for proposal through Property and Procurement, Encarnacion said, “From my knowledge, we heard what the commissioner of Property and Procurement said, and this actually happens when we have a hurricane emergency also. So, you put in your request for bids and the individuals either respond or don’t respond. And if they don’t all respond within a period of time, then you can choose the one that has responded. That is the process that we took. From my knowledge, we did not go outside of the law.”
But Vialet maintained the department had been reckless, and the contract is “just a blatant abuse of one million dollars.”
Whenever the government spends funds inappropriately, Vialet said, it is made to pay them back later. “And this particular contract is bothersome, commissioner,” he added. He questioned what exactly the company was contracted to do.
“The type of contact tracing that this company is going to provide to us allows for tracing of individuals once they leave, for example, the airport. We would know exactly where they are going throughout the territory,” Encarnacion said.
She added that the department will be working with the Department of Tourism. “Tourism is building a website, and the data they are going to be collecting from that website from travelers will then be pulled into Avera, and that is going to include the status of those patients and where they are located in the territory. We will also be able to track them and trace them while they move around the territory.”
Sen. Janelle Sarauw said, “We have a legal issue on our hands because we don’t know what part of the statute was suspended, and we don’t know in detail what [qualifies] this contract to have been executed in 72 hours as exigent. What makes it exigent?”
Encarnacion also provided budget testimony for the Health Department on Tuesday. The department’s proposed FY 2021 budget is $52.5 million, of which $28.5 million will come from the General Fund, more than $19 million from federal funds, $3 million from the Health Revolving Fund and more than $1.5 million from non-appropriated funds.
Sens. Frett-Gregory, Vialet, Sarauw, Marvin Blyden, Oakland Benta, Allison DeGazon and Dwayne DeGraff were present for the hearing.