Senate Republican Leader Scott Wilk introduced new legislation on Wednesday that aims to clamp down on gubernatorial discretion to ink multi-million no-bid contract deals without additional oversight.
Wilk said the legislation introduced Wednesday comes as a result of the state’s decision to grant and auto-renew a $1.7 billion no-bid contract with the Valencia Branch Laboratory, which whistleblowers told CBS 13 Sacramento was plagued with problems. A months-long investigation by state officials confirmed many deficiencies in the lab. However, the state still auto-renewed the contract in November, saying the lab had corrected many of its deficiencies and would not have any sanctions imposed about a week after the contract was renewed.
“During the past two years, we have seen the unaccountable and frankly out-of-control Newsom Administration paying out billions of dollars in secretive no-bid contracts under the guise of curbing the impact of an ongoing global pandemic,” Wilk said in a statement on Wednesday. “Sub-par contracting decisions in critical areas such as COVID-19 test processing has led to massive waste, left the state vulnerable to fraud, and worse, has hamstrung our ability to effectively slow the spread of COVID-19.”
One of Wilk’s bills would require no-bid contracts over $25 million to be subject to an oversight hearing of the Joint Legislative Budget Committee before contract renewal or extension. The bill would apply to no-bid contracts entered on or after Jan. 1, 2023, and would ensure no contracts are auto-renewed “without the opportunity for public input.”
According to Wilk’s office, the state entered into more than 8,000 no-bid contracts in 2020, of which, 80 totaled over $25 million.
Wilk’s other bill would grant whistleblower protections for employees of companies with no-bid contracts, aiming to empower employers to come forward with reports of “fraud, waste, abuse and improper activity” without the “fear of retaliation.” State employees are covered by whistleblower protections under existing law.
“Californians would not be aware of the Valencia Lab fiasco had brave whistleblowers not risked their livelihoods to expose the glaring deficiencies,” Wilk said in a statement. “They should be offered the same protections as other state workers who call attention to grievous problems at a state agency.”
In addition to concerns regarding existing agreements with the Valencia Branch Lab, Wilk pointed to a no-bid contract with Kaiser Permanente signed by Newsom’s administration earlier this month to expand Medi-Cal, skipping a formal bidding process required for other commercial insurers.
As first reported by Kaiser Health News last week, the contract – set to take effect in 2024 pending approval from the Legislature – would make Kaiser Permanente the only insurer with a statewide Medi-Cal contract and give the health care giant the ability to limit enrollment to those previously enrolled, except for foster kids who are eligible for Medicare and Medi-Cal.
State officials did not respond to request for comment regarding the contract with Kaiser Permanente within deadline.
