Controversial Utah No-Bid Government Contracts Scrutinized

News

SALT LAKE CITY (ABC4 Utah) – On the heels of Tuesday’s announcement that state officials have released an audit on how two no-bid contracts were distributed to companies in the fight against COVID-19, ABC4 News is examining the state’s contract with NOMI Health, a local company at the center of the audit. 

On March 23rd, CEO Mark Newman of Nomi Health declared to the tech world how Test Utah would be rolled out and the manner in which they would accomplish such a monumental task.

“We are breaking down every barrier we experience and Kris Cox and Spencer Cox in the governor’s office have been incredible at moving barriers as we try to figure this out,” he said in a Silicon Slopes townhall.

At the time ABC4 News asked Lt. Gov. Spencer Cox to comment on what Newman was talking about.

The head of the states Coronavirus Task Force Lt. Cox replied, “I am not sure what Mark Newman was referring to with this comment, other than perhaps our state efforts to procure PPE and testing materials through our Unified Incident Command, which has been quite a feat.”

ABC4 News uncovered an email dated March 27 from the Lieutenant Governor to health officials, which indicates Mr. Cox was well aware of what the CEO of NOMI Health was referring to at that tech townhall.  

“I understand that UDOH shutdown the efforts of Timp Hospital to test because of the concern over the FDA’s approval of Co-Diagnostics test I reached out to Senator Romney’s team and they went straight to the FDA and were told that the preliminary approval is sufficient and couldn’t understand why we shut them down. See the email below,” said the Lt. Governor. “Please give this information to whoever needs it at Health and let’s get them to green light to continue today. Please tell your teams that we need to move heaven and earth to get more testing.”

Senator Romney’s team confirmed the email and told us because of Lt. Governor’s Cox’s request they advised the legal teams at both Nomi Health and Co-Diagnostics to review the FDA’s Emergency Use Authorization, and that Co-Diagnostics tests were cleared for use on March 19th, 2020. 

About a month later on April 24th, Benjamin Hart with the Governor’s Office of Economic Development stated he was receiving political pressure from the Utah Senate President Stewart Adams. 

“So this one came in through the senate president. I am getting a little political pressure just to see if we want to pursue.”

The email was addressed to former State Lab Director Robyn Atkinson-Dunn, and state officials Nathen Checketts and Christopher Hughes. 

The test was never purchased by the state or used as far as we can tell. 

The original NOMI Health contract came under audit by the Legislative Auditor General. The findings were released Tuesday where we found out the contract did not need to be rushed. 

“In some of these they could have benefited from slowing down a little bit, but they did go through quickly, but that’s in accordance with the law,” said Deputy Auditor-General Brian Dean. 

The Deputy Auditor-General says the limited investigation they conducted shows no laws were violated, but more communication at the beginning of the pandemic from the Utah Department of Health, and The Utah Division of Purchasing and General Services with the Governor’s Office of Management and Budget. GOMB is an office led by the recently retired Kris Cox.

The audit found Nomi Health came through with what the company promised. 

ABC4 News reached out to Nomi Health to see if the audit was a fair assessment. We also wanted to know how Nomi Health receive the Test Utah Contract, and who approached Nomi Health?

In a statement CEO Mark Newman told us: 

Our understanding of the initial report from the Legislative Audit is that it focuses primarily on the process of the Executive Branch during an emergency. After having its contract extended multiple times, Nomi Health is currently operating under an agreement that was executed after going through an extremely competitive, robust, and transparent procurement process.

We continue to be proud of the work we did with the State and TestUtah to bring free community testing to more than 75,000 Utahns during an unprecedented crisis.

TestUtah has delivered successfully and continues to deliver, on every aspect of its contract. Thanks to TestUtah, the State led the nation on free and accessible COVID-19 testing that requires no doctor’s order and no insurance.

In the first six months alone, TestUtah stood up more than 12 testing sites, multiple mobile response teams, numerous hot spot testing events (including engagements in rural and underserved communities in Utah), conducted nearly 250,000 online assessments, and performed more than 75,000 tests — all at no cost to any Utahn. We look forward to continuing to work with the State every day to help conquer COVID-19 in all of our communities.

ABC4 News Investigator Jason Nguyen asked Deputy Auditor-General Dean who initiated the contracts? 

“Those contracts were initiated with GOMB,” he said. 

Recently, the state carried out a competitive bidding process and signed a new round of Test Utah contracts.

“We selected a hand full of vendors from those two arenas and have made the decision that we will move forward with Nomi Health to operate the sample collection side of things and they will be partnered with a lab called Fulgent Therapeutics out of Los Angeles for their sample processing,” said Tom Hudachko with the Utah Department of Health at the time. 

No longer working with Test Utah was Timpanogos Regional Hospital and Co-Diagnostics. 

Timpanogos Regional Hospital is under a CLIA Audit and searching for a new Lab Director in its lab.

The latter company is at the center of a federal class-action lawsuit filed by Gelt Trading Inc. 

The suit accuses Co-Diagnostics of making false claims about their COVID-19 Test being 100 percent accurate. 

That test was validated recently by Dr. Megan Lockard through a company called TNG Dx. The validation study confirming that the CO-Diagnostics COVID-19 test performed as indicated. 

ABC4 News learned in an ironic twist that although the state decided to no longer work with Co-Diagnostics, they contracted with a company that distributes the Co-Diagnostics COVID-19 test.

Co-Diagnostics officials tell us in a statement Wednesday: 

In the early days and weeks of the pandemic, Co-Diagnostics commented publicly about the company providing tests in many parts of the world and the rule changes announced by the FDA that enabled Co-Diagnostics to provide tests to CLIA labs in the US. 

At roughly the same time, local officials were publicly expressing comments about shortages in tests and testing supplies.

TestUtah provided one of the first opportunities for Co-Diagnostics to contribute to the fight against COVID-19 in our own communities. Since that time, Co-Diagnostics has participated in deployments in several states in addition to Utah and serves multiple laboratories around the country. At least one of the labs, Premier Medical Laboratories, also provides services to the State of Utah.

Co-Diagnostics follows FDA guidelines for test validation and distribution of our Logix Smart COVID-19 test according to the highest industry standards. We stand behind the quality of our tests and are proud to be able to contribute to local, state, and global efforts to stop the spread of this deadly disease.

Just before the ABC4 News at 10 pm, Lt. Governor Spencer Cox issued the following statement: 

Getting tests running on March 27th was crucial because Utah didn’t have the robust COVID-19 testing network that it has today. In fact, that system took months of concerted effort to build. 

In March, our testing capacity was extremely limited, and we needed it all. The Utah Department of Health had temporarily ceased testing at the Mount Timpanogos site while waiting for final FDA approval of co-diagnostic testing. We learned, however, that these tests had received provisional approval. Testing entities all over the country greenlighted tests on those grounds, with the understanding that the FDA was working as quickly as they possibly could to vet numerous COVID-19 test processes. 

Without a doubt, NOMI Health has been a big part of getting Utah’s test capacity to where it is today, and awarding that contract under emergency rules was crucial to standing up testing quickly. As a side note, the State has recently renewed their contract following a public and competitive bid process. This speaks to their ability to deliver solid results.  

The report asserts that the State could have benefitted from better communication between agencies, and we completely agree. That is a large part of why we activated the Unified Command, a complex structure supporting Utah’s COVID-19 response, which has met daily since its creation in late March. We stand behind the decisions we made in March, but we also recognize that the last six months of work have brought us into much closer collaboration, and that collaboration has real benefits to Utahns, and to the fight against COVID-19.

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