Almost one year after Maryland Gov. Larry Hogan drew national acclaim for procuring 500,000 coronavirus tests from South Korea while other states struggled to acquire kits, a new audit shows the hastily assembled deal violated state procurement rules.
An audit by the Department of Legislative Services says the Hogan administration failed to document “key aspects of the procurement, use and validity of the tests,” which the state acquired for $9 million in April 2020 from the South Korea-based company LabGenomics. Weeks after the deal was announced, the tests were found to be faulty, and Maryland had to spend an additional $2.5 million to replace them.
The lack of a standard contract for the acquisition “precluded effective monitoring” by the state, according to the audit, which was carried out over more than four months. It’s also not clear whether the state considered buying kits from other companies before it agreed to purchase them from LabGenomics, the audit says.
https://twitter.com/GovLarryHogan/status/1252297144754716672
Democrats in the state’s General Assembly requested the review in June as part of a larger examination of emergency procurement during the health emergency.
“The lack of a written contract and supporting documentation points to exactly why all procurements must follow state law and regulatory requirements — even during an emergency,” said Sen. Clarence K. Lam (D-Howard) in a statement. “While the urgency to obtain tests were well-intentioned, the rushed and opaque process led to so many subsequent problems that the tests went unused for many months.”
The audit also looked into the firings of two state employees who raised questions about the tests. The former director of Student Health Services at Towson University was fired after reporting potential inaccuracies with the tests’ results. The former Director of Procurement at the Maryland Department of Health also lost his job after saying problems with results could be traced back to the University of Maryland lab that processed them.
Towson University and the Maryland Department of Health denied any political motivation behind the firings, but auditors said they found no clear justification for them in the employees’ personnel files.
The governor’s chief of staff, Amelia Chasse Alcivar, defended the administration in a letter to the auditor, saying that opportunity to acquire 500,000 coronavirus tests was “unimaginable in many states at the time,” and the decision to buy them reflected “the most creative thinking to solve a very real problem.”
Maryland’s Department of Health and Department of General Services said the audit contains “a number of factual and other inaccuracies” apparently “intended to portray MDH and its public health laboratory in a suspicious light.” The agencies said the audit appeared “rushed” and “politically driven.”
The Office of Legislative Audits pushed back on that characterization, calling it “unsupported by the facts.”
Legislation under consideration in Maryland’s General Assembly would require additional oversight of state procurements during an emergency. The bill passed the House of Delegates last month and is now up for debate in the Senate.
Ally Schweitzer