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Lawmaker calls for comprehensive review of Tennessee's no-bid COVID-19 spending

Capitol View
Posted at 3:14 PM, Dec 16, 2020
and last updated 2021-01-23 11:54:24-05

NASHVILLE, Tenn. (WTVF) — Tennessee lawmakers should launch a comprehensive review of the Lee administration's no-bid spending in response to the COVID-19 pandemic, potentially even hiring an independent consultant to lead that effort, a Nashville state senator says.

That comes as the legislature's Fiscal Review Committee has summoned Tennessee Health Commissioner Lisa Piercey to testify Thursday regarding a $26.5 million, no-bid contract first exposed by NewsChannel 5 Investigates.

"While we all support the ability of the executive branch to rapidly enter into essential contracts during a genuine emergency and all acknowledge the need to ease some of the typical restrictions and safeguards, it is increasingly clear that there is a need for greater legislative oversight," Sen. Jeff Yarbro, D-Nashville, wrote in a letter to Lt. Gov. Randy McNally and copied to other legislative leaders.

Yarbro said that, while every state has struggled somewhat in responding to the COVID-19 crisis, "it should ... cause us great concern that we as legislators are learning about these problems from the news media rather than from the executive branch directly."

The Nashville Democrat's request follows a NewsChannel 5 investigation that revealed that Piercey, over the objections of career state employees, steered a $26.5 million contract for COVID-19 testing to a politically connected Utah company that had no experience in testing.

That deal with Nomi Health later collapsed when Tennessee Public Health Laboratory officials released a scientific analysis that showed the Nomi test was unreliable.

Still, Piercey approved a payment to Nomi of nearly $6 million to get out of the contract.

McNally spokesperson Adam Kleinheider said by email that “Lt. Governor McNally has received Senator Yarbro’s letter and shares some of his concerns."

Kleinheider said that McNally had spoken with state Sen. Todd Gardenhire, R-Chattanooga, earlier this week and that Gardenhire had requested that the administration appear before the Fiscal Review Committee.

The Fiscal Review Committee, which has no power to overturn state contracts awarded during a state of emergency, will have a chance to question Piercey and the state's chief procurement officer, Mike Perry.

Other questionable contracts include a $20 million deal with Hendersonville-based medical billing company Xtend Healthcare for contact tracing. No other company was invited to bid on the contract.

That contract was first reported by Nashville Public Radio.

NewsChannel 5 Investigates discovered that Xtend had worked with West Tennessee Healthcare system when Piercey was the executive vice president there.

Our NewsChannel 5 investigation had also revealed that the Lee administration had spent $80 million for personal protective equipment (PPE) and other COVID-19 supplies without competitive bidding.

Among those expenditures: more than $8 million on "sock masks" from the North Caroline-based Renfro Corp.

Yarbro, who had raised concerns about unaccountable state spending at the beginning of the pandemic, said that "given that there are many months of difficulty ahead, it is essential to improve our emergency contracting practices without delay."

"If the public is only finding out about a few troubled contracts amid a series of successful ones, that public misperception should be corrected," he wrote.

"If, however, the reported failures are more systemic or result from non-compliance with state law, the public deserves to know that we are working to solve these problems."

Gov. Lee told NewsChannel 5 Investigates back in the fall that he had no plans to return to normal competitive bidding processes as long as the pandemic continues.

Read Yarbro's letter below:

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