Several government agencies faced scrutiny from senators Wednesday as they defended themselves over no-bid contract proposals and other non-competitive processes used during a state of emergency.
Concerns over government contracts have piled up over the course of numerous Senate hearings. Sen. Kenneth Gittens said Wednesday the actions of some agencies should be more closely examined. He warned those entities that if their decisions “won’t read good tomorrow, don’t do them today.”
The list of invited testifiers Wednesday was vast and included individuals involved in the most recent contract discussions that stirred political controversy: Department of Health Commissioner Justa Encarnacion and Avera Tech co-founder Michael Pemberton. Pemberton did not show up for the hearing.
“As it relates to Avera, I understand the community’s concerns on the appearance of a conflict of interest,” Encarnacion said. “On July 23, the Department of Health notified Avera that we disqualified the proposal sent by them due to their failure to submit the corporate documents on time, and we are pursuing other options for electronic contact tracing.”
The Health Department has resubmitted a request for bid proposals for contact tracing services, Encarnacion said, and six businesses have responded. The department is also utilizing the Centers for Disease Control and Prevention. It was not disclosed at the hearing whether the University of the Virgin Islands was contacted for a proposal as recommended by Lt. Gov. Tregenza Roach.
Though contact tracing negotiations with Avera have ceased, Sen. Athneil Thomas said the entire situation did not “have a good look.” He questioned the Health commissioner over whether the department would have gone through with the contract if there hadn’t been public outcry.
When pressed for details about the alleged correspondence between the Health Department and two other businesses originally contacted for bid – AMC Health and Aytu BioScience – Health officials said they could not yet provide them. The Source previously reported that Aytu BioScience CEO Josh Disbrow said the company was never contacted by Health to procure contact tracing services.
Encarnacion said the department was contacted by Aytu BioScience recently and was told the email requesting a proposal had gone to the company’s spam folder.
“There is no good answer to what transpired,” said Sen. Donna Frett-Gregory. Other senators criticized the department for how it handled the situation and what they called a lack of transparency.
“We don’t get a sense that you are sorry,” Sen. Janelle Sarauw said. “You are sorry you got caught. Had this body not intercepted [it], that contract would have gone through.” She added she found it suspicious when the department refused to answer questions and would not provide email correspondence regarding the businesses the department said it reached out to.
The Health Department’s proposed contract with Avera was not the only one under scrutiny Wednesday. Senators also requested clarity from the Department of Planning and Natural Resources and the Housing Finance Authority on work being performed by The Strategy Group VI, a company headed by Gov. Albert Bryan Jr.’s 2018 campaign manager.
VIHFA Proposal: The Second Contract Subject to Inquiry
In contrast to officials from the Health Department, Housing Finance Authority Executive Director Daryl Griffith came to Wednesday’s hearing with specific dates, times and details about how a $2.1 million contract between the Authority and The Strategy Group was awarded.
Griffith said that after the Authority heard back from four companies, from which it had solicited bids for public relations and marketing services, a committee evaluated each proposal using a set of technical criteria.
“The maximum obtainable points for each bidder was 70 points for the technical criteria and 20 points for the cost submitted by the top bidders. A third criteria with a value of 10 maximum points were added, to include an interview, presentation and a question and answer session by the four respondents,” Griffith said.
On July 16, the evaluation committee presented a summary of its findings and selected The Strategy Group over competitors Posey Marketing & Associates, Emergent Methods and NT Media Productions.
This summary, Griffith said, was reviewed by himself, followed by the procurement team, that prepared a request for board approval, and legal counsel, who drafted the contract.
“On July 21, 2020, at 1:29 p.m., VIHFA’s board of directors meeting was called to order and the Chief Disaster Recovery Office presented a request for the Virgin Islands Housing Finance Authority to enter into negotiations and execute a contract with The Strategy Group VI,” Griffith said. He said the board of directors deliberated and unanimously voted to approve the request.
Strategy Group CEO John Engerman clarified, saying there is no signed contract yet, but the company was told on Aug. 3 it was selected and is awaiting further instructions.
DPNR Task Order: The Third “Contract” Subject to Inquiry
The same company, Strategy Group VI, was also used by the Department of Planning and Natural Resources for support in issuing checks to fishermen who applied for the Fisheries Disaster Assistance Program after DPNR reached out to the Housing Authority.
Engerman said there is no contract between his company and DPNR, and that “program requirements were specific and set by the National Oceanic and Atmospheric Administration and DPNR for 18 months prior to our involvement.”
DPNR Commissioner Jean-Pierre Oriol was also able to supply dates and a chronology for how the arrangement occurred. He said that while no contract exists between DPNR and the Strategy Group VI, there is a $271,000 task order.
“The program was never intended to be run in-house. The goal was always to secure a contractor to provide case management services in reviewing applications and ensuring compliance with award and program guidelines,” Oriol said.
The contractor is responsible for “assisting fishers with the application process, reviewing applications and supporting documentation for eligibility criteria, and providing a recommendation to DPNR for liquidation,” Oriol said.
Oriol said that process started in January 2020, when five requests for proposals were sent to management firms and a recent DPNR retiree. The department received two written responses, and a “bid review team determined that the proposals were nonconforming and asked the respondents to revise their proposals.”
After doing so, only one proposal came back for consideration by the department.
Given the nonconforming bids, Oriol said the department was faced with two choices: either put out a public bid again that would last for 30 days or revise the budget plan and execute the program.
“Given the level of public outcry, including pleas from this body, to get the funds out to the fishers, we did not want to take either of these measures as it would mean additional delays in executing the program,” Oriol said.
Instead, the department spoke with the Housing Authority. It was determined that the existing contract the Authority had for assisting with disaster recovery-related services, could include the services “under the scope of work.”
It was after this discussion that a meeting was held with The Strategy Group, an already approved subcontractor with the Housing Authority, to go over the services DPNR was seeking.
Oriol said because it was “determined that these services were in line with the scope of the existing contract,” the department entered into an agreement with the Housing Authority.