Auditor questions no-bid contracts at Covered California

SACRAMENTO — California’s state auditor on Tuesday questioned the use of no-bid contracts at Covered California, which spent nearly $200 million without seeking competitive bids during a three-year period.

While the agency has significantly reduced its reliance on no-bid contracts, State Auditor Elaine Howle found Covered California waited until January to comply with a bill passed last summer requiring tighter contracting rules at the agency.

Howle’s office found California’s health insurance exchange issued 64 no-bid contracts worth nearly $200 million through June 30 — about a fifth of the nearly $1 billion in contracts issued during the three-year period.

Auditors reviewed 40 no-bid contracts and questioned the need for three, including one for advertising and another for a data analytics project manager. The auditors found nine other contracts for which Covered California did not supply sufficient justification for avoiding competitive bids.

Covered California says it needed no-bid contracts to rapidly prepare for enrollment under the federal health overhaul and is relying less on them now. Less than 10 percent of the 166 contracts in the last fiscal year were no-bid, worth $10 million. In the 2012-2013 fiscal year, nearly 20 percent of contracts — worth $150 million — were no-bid.

“As the organization matures, the competitive bidding process across the organization has increased significantly,” said Roy Kennedy, a spokesman for Covered California.

Covered California’s contracting practices have come under scrutiny before. The Associated Press reported in 2014 about Covered California’s heavy use of no-bid contracts, some of which went to people with previous professional ties to Covered California’s executive director.

Last year, the Legislature ordered the agency to adopt tighter procurement standards in line with the strict policies used by most of the rest of state government. State agencies are generally required to shop around for large purchases to avoid ethical conflicts and ensure taxpayers get a good deal.CaliforniaCalifornia state auditorCovered CaliforniaElaine Howle

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

A sign about proposed development of the bluff at Thornton State Beach in Daly City on Friday, Feb. 26, 2021. (Kevin N. Hume/S.F. Examiner)
Retreat center proposed at popular state beach

Daly City residents oppose construction on ocean bluffs

Rev. Roland Gordon shows “The Great Cloud of Witnesses” collage mural at the Ingleside Presbyterian Church, which he began building in 1980.<ins> (</ins>
Rev. Roland Gordon preaches love in action

Pastor promotes peace, hope through art and prayer

Basketball (Shutterstock)
SI alum Begovich gets his moment, but Stanford falls on Senior Day

MAPLES PAVILION — Generally speaking, Stanford’s home finale on Saturday afternoon, a… Continue reading

U.S. Attorney David Anderson announces federal firearms charges against two men for their roles in a March 2019 shooting outside the Fillmore Heritage Center in a news conference alongside SFPD staff at the Phillip Burton Federal Building on Thursday, Jan. 9, 2020. (Kevin N. Hume/S.F. Examiner)
Departing U.S. attorney predicts corruption probe will continue

David Anderson shook up City Hall as top federal prosecutor

Board of Supervisors President Shamann Walton, a former school board member, has been asked to help secure an agreement between the school district and teacher’s union. <ins>(Kevin N. Hume/S.F. Examiner)</ins>
 <ins></ins>
Supervisor Walton tapped to mediate teacher contract talks

District and union at odds over hours in-person students should be in the classroom

Most Read