California’s Obamacare exchange awarded $184 million in no-bid contracts, some to companies with intricate connections to Obamacare officials, even though the state typically holds competitive bidding, The Associated Press reports.
The no-bid contracts account for almost $2 for every $10 the exchange, Covered California, awarded to private contractors since 2010, according to records reviewed by the AP. Several contracts, worth $4.2 million total, went to consulting firm The Tori Group, which had strong professional ties to state Obamacare exchange director Peter Lee. Other no-bid contracts were also given to the subsidiary of a health care firm Lee previously ran.
The Tori Group’s founder, Leesa Tori, worked under Lee at Pacific Health Advantage, a small business insurance exchange that went under in 2006. Tori was awarded no-bid consulting contracts as far back as 2011. In 2013, Tori’s firm was awarded an initial $150,000 contract by Lee himself, which was upped to $4.2 million later that year by the exchange board.
The AP found that at least five other Covered California contractors have ties to Lee and Tori at Pacific Health Advantage, including four who work at The Tori Group.
It’s typical for California state contracts to undergo competitive bidding and oversight, according to the AP. When state officials created Covered California in 2001, however, it was allowed to award no-bid contracts in order to meet federal deadlines for getting the exchange functioning in time (that same law actually exempted the Obamacare exchagne from public records requests, but that loophole was eliminated last year).
As Covered California first began to come together, the exchange “needed experienced individuals who could go toe-to-toe with health plans and bring to our consumers the best possible insurance value. Contractors like The Tori Group possess unique and deep health care experience to help make that happen and get the job done on a tight deadline,” Lee said in a statement to the AP.
“As this organization matures,” Lee said. “We will rely less on private contractors.”
The Obama administration also took heat for reviewing only one bid for its first HealthCare.gov contractor, CGI Federal. The administration blamed much of its Obamacare website problems on CGI, and replaced the company with a no-bid contract to consulting firm Accenture. The administration also excused the no-bid process because of the “urgency” needed to fix the site.