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Nebraska has awarded $69 million in no-bid contracts to Utah company amid COVID

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Nebraska has awarded $69 million in no-bid contracts to Utah company amid COVID
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Nebraska state agencies have inked at least five no-bid contracts with Utah-based Nomi Health worth up to a total of more than $69 million since April 2020.

The most recent of those contracts — an agreement to have Nomi find open hospital beds — was signed a few months after the company made a $20,000 donation to the Nebraska Republican Party.

The donation did not influence the state’s work with Nomi, according to a spokesman for Gov. Pete Ricketts, the most influential Republican in Nebraska, who credits the company with providing critical services during an emergency.

And for its part, Nomi does not seek out no-bid contracts, its CEO said. Rather, the company serves as a last option for Nebraska and other states when they need help fast. The company’s donation to the Nebraska GOP reflected the fact that Nomi had more contact with Republicans, who hold all statewide offices, than Democrats — some of whom criticized the non-competitive nature of the first contract awarded to Nomi.

The first no-bid contract was for free COVID-19 testing across the state — an effort dubbed Test Nebraska.

Ricketts announced the launch of Test Nebraska in April 2020 on the same day Iowa launched its Test Iowa program. A consortium of companies, led by Nomi Health, had launched its original public-private testing program in Utah just a few weeks prior.

Nebraska’s initial contract with Nomi was worth about $27 million, but the most recent version of the Test Nebraska contract had grown to about $62 million. That contract ended July 31.

The state signed two more contracts with Nomi Health in April 2021.

For one, worth up to an estimated $1 million, Nomi committed to provide staff at the request of the Department of Health and Human Services for COVID-19 testing and vaccination sites.

That contract was exempt from competitive bidding requirements under state law because it was for direct health care service staffing, according to DHHS. It was originally for three months but was extended for a month for an additional $120,000.

Under the other contract signed that month, Nomi agreed to provide COVID-19 vaccine scheduling services. The state agreed to pay up to $3 million for the first 1.5 million scheduled shots, then $2 per scheduled shot after that. That contract is scheduled to end in April.

In its justification for waiving the competitive bidding process, DHHS wrote that the state was in crisis and needed an immediate solution for “private scheduling for targeted populations of the state” to register for shots.

A new system was needed in addition to the state’s Vaccine Registration and Administration System, it wrote, because that system didn’t have the ability to provide scheduling for populations such as people with disabilities who require accommodations.

Although Nomi prepared a platform, the state didn’t use it, according to Nomi CEO and founder Mark Newman. (A DHHS spokesperson did not respond to an email asking for confirmation and if the state still paid for the service.)

In May, the State Department of Veterans’ Affairs signed a contract with Nomi for nursing staff at the Central Nebraska Veterans’ Home. The agency agreed to pay the company up to $225,000 during a term that ends in May 2023.

“Our agency is utilizing a number of contracts with agencies for temporary staffing in our four facilities, including Nomi,” department spokesman Holden Armstrong wrote in an email.

That contract was also exempted from the bidding process because it’s for direct medical care.

In the latest contract, signed in September, the state again called upon Nomi Health in an emergency situation. This time, it was to run a call center staffed by registered nurses to help hospitals find beds for patients without taking providers away from the people they care for.

With COVID-19 surging, DHHS wrote, the department needed resources to “immediately assist” hospitals trying to find more beds for their patients. Without the contract, it wrote, providers have to take time away from patients to make calls, which could cause delays or even death.

The state initially reached out to CHI Health, which ran a more narrowly focused transfer center for the state earlier in the pandemic, but it could not take on the expanded scope.

The state committed to paying no more than $576,972 for three months, plus four automatic three-month renewals unless the state gives 30 days’ notice.

When Ricketts announced that the state was relaunching its transfer center Sept. 1, officials briefly mentioned Nomi’s role.

Newman said that Nomi doesn’t seek out no-bid deals but that it has been serving as a last stop for states that have looked elsewhere without finding solutions.

“What’s happening is we’re last call,” he said.

A few months before the transfer center contract was signed, state financial disclosure records show that Nomi Health donated $20,000 to the Nebraska GOP.

It’s not the only time the company has donated to a political cause after securing work with a state. Politico reported in August that Nomi donated $100,000 to Florida Gov. Ron DeSantis after his administration awarded the company $46 million in no-bid COVID-19 testing and vaccine work.

Nomi’s political contribution policy says that it distributes donations in a “bipartisan manner,” using two criteria: It supports elected officials where Nomi has “a strong presence,” and it supports candidates, elected officials and committees that “have demonstrated a commitment to innovation and transformation within health care.” The contributions, the policy states, all comply with campaign finance laws.

Ricketts knows about the donation, spokesman Justin Pinkerman wrote in an email. But Pinkerman rejected the idea that it could have influenced the state’s decision to keep working with Nomi.

“That is a ridiculous insinuation,” he wrote. “Nomi Health has helped save thousands of lives in Nebraska and should be thanked for the role they have played in our COVID response.”

It’s common for political action committees and organizations, whether for-profit or nonprofit, to donate to candidates for office, according to Randall Adkins, a political science professor at the University of Nebraska at Omaha.

Such donations do not indicate a quid pro quo, he said.

“That company has decided that the Republican Party’s policies are in alignment with their interests in the state of Nebraska,” Adkins said.

In Nebraska, Republicans control every statewide elected office and hold a majority of seats in the officially nonpartisan Legislature. Meanwhile, the four state legislators who called on Ricketts to terminate the Test Nebraska contract last year were Democrats.

“To be candid, we had a lot more contact from the various Republican leaders on a state and local level than we ever did from the Democratic Party,” Newman said in explaining the donation.

While the Test Nebraska contract drew criticism from some state leaders, the other contracts haven’t attracted similar attention.

A May 2020 World-Herald analysis of emails, documents and text messages released by the Governor’s Office showed a rush to sign up for the Test Nebraska program. According to Matt Miltenberger, the governor’s chief of staff, Ricketts and his team discussed the work underway by Nomi Health and other companies involved with the offices of both Utah Gov. Gary Herbert and Iowa Gov. Kim Reynolds.

Ricketts is among state officials who have lauded the testing program, which, according to his office, delivered more than 785,000 test results and helped the state double its testing early on in the pandemic.

State Sen. Robert Hilkemann of Omaha also praised it in an October 2020 op-ed.

“Many states are still struggling with the delivery of widespread free public testing while Test Nebraska has been a success story,” he wrote.

But the practice of no-bid contracts involving Nomi has drawn criticism.

In Tennessee, the state paid Nomi Health almost $6 million to get out of its no-bid contract for a testing program, according to WTVF-TV in Nashville. That contract was signed by officials who disregarded career state employees’ concerns.

Last month, the Salt Lake Tribune’s editorial board criticized Utah’s no-bid contract with Nomi to set up a clinic for monoclonal antibody treatment. The editorial cites emails showing that the State Senate president was troubled that the contract was issued without taking bids or informing public officials.

The no-bid contract for Test Nebraska received criticism from four legislators who urged Ricketts to redirect the money to Nebraska’s public health and health care system. The state’s typical procurement processes exist to foster competition and reduce costs while improving the quality of services and ensuring fair treatment.

State Sen. Megan Hunt of Omaha was among the senators who pushed back against the contract. Among her critiques, she called it “opportunism at its worst” and requested a financial audit of the testing program.

The State Auditor’s Office sent Hunt answers to her questions. It also looked into financial aspects of the initial Test Nebraska contract. Deputy Auditor Craig Kubicek said there’s not much to look at when it comes to emergency contracts because they don’t require the same level of review.

Hunt’s feelings about the Test Nebraska contracts haven’t changed.

“Anytime the state is entering a contract, especially if it’s a no-bid contract, we need to have more accountability for that money,” she said.

Sen. Machaela Cavanaugh of Omaha was among the three other Democratic senators who called for the state to cancel the contract. She still believes that it was “handled extremely inappropriately from the beginning and never really addressed or fixed.”

People are willing to accept urgency as a rationale, Hunt said, because it’s true that the state didn’t have a lot of time. But she and Cavanaugh contend that Nebraska has world-renowned health care experts that officials could’ve consulted and didn’t.

More broadly, Cavanaugh said she doesn’t think that it’s good governance to do no-bid contracts under most circumstances.

Newman said he understands why people would question the company’s role here.

“I understand when people are like, ‘Wait, we’ve been used to health care working this way for 50 years,’ especially in Nebraska,” where there are entities like UNMC, he said.

But he believes that the pandemic exposed that the traditional process wasn’t going to work.

The Governor’s Office said that in many cases, including with testing, there weren’t always in-state options.

“Testing equipment wasn’t even available for purchase for the Nebraska Public Health Lab,” Pinkerman wrote.

The Governor’s Office has been happy with Nomi Health’s work, calling the company a “tremendous partner.”

And Newman is proud of his company’s work in the state. Nomi has tested over 1 million people in Nebraska, he said, and he called Test Nebraska “one of the most open-access and inclusive testing programs in the entire nation.” He hopes that Nomi will continue its work in the state.

“We went through so much together — the state and Nomi, together, through this — why wouldn’t we be a Nebraska company for the next decade?” he said.

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This article originally ran on omaha.com.

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