KY lawmakers mad about no-bid, $23 million vaccination contract

Kentucky lawmakers on Tuesday criticized a no-bid, $23.1 million contract the Kentucky Department of Public Health awarded to a year-old Lexington medical clinic to deliver 300,000 COVID-19 vaccine doses by June 30.

Wild Health Inc. started the work March 22 with a vaccination site at Kentucky Dam Village State Resort Park in Marshall County, with more sites expected to follow in rural areas and small cities around the state. It will be paid roughly $77 per shot.

Apart from COVID services, Wild Health’s website says it offers its patients “a comprehensive look at your genetic analysis, laboratory results, microbiome and lifestyle factors in order to craft a plan that fits your health, fitness, and longevity goals.” A related firm run by the same executives, Wild Health CBD, sells cannabidiol products.

The state had several months to prepare its mass vaccination effort, so it did not need to skip the competitive bidding process and hand such a lucrative deal to one lucky business, state Sen. Stephen Meredith, R-Leitchfield, said at a meeting of the legislature’s Government Contract Review Committee.

Many other health care providers that are vaccinating Kentuckians, such as hospitals, rely largely on volunteers and face the administrative burden of billing and collecting payment for their work, Meredith said. But the state has decided to make coronavirus vaccinations a profitable gig for one company, he said.

“This is just not right. This is a sweetheart deal,” Meredith said. “It’s the worst example I’ve seen in the time I’ve been here. We should be ashamed that we’re passing on this contract.”

Another lawmaker, state Sen. Adrienne Southworth, R-Lawrenceburg, asked why the Department of Public Health didn’t put local health departments in charge of administering the vaccines statewide since they already operate in every county, rather than pay a private contractor to travel around and set up vaccination sites.

Mark Carter, an executive policy adviser for the Kentucky Cabinet for Health and Family Services, defended the state’s decision to hire Wild Health.

Wild Health performed COVID testing services for the University of Kentucky last year, so it was a local firm with an established record, Carter said.

“They’ve already performed extremely well, so I feel like we did a reasonable process to try to assess whether their pricing was reasonable, and we did negotiate with them,” Carter said.

Responding to lawmakers’ questions, Carter acknowledged that the Department of Public Health did not seek competitive bids for the vaccination contract, as governments typically do for major purchases. Despite that, the state became aware of two other companies interested in the contract, he said, including a Florida firm that would have cost half as much as Wild Health but moved more slowly.

“We felt a need to move quickly to get shots in arms,” Carter said. “The big issue was speed. Wild Health could stand up almost right away, as soon as we got through the contracting process.”

But state officials have known since at least December that COVID vaccines were coming, so why were they not prepared in advance to request bids for vaccination services from a variety of companies, Meredith asked.

Carter said the Department of Public Health initially did not expect Kentucky to pivot from several mass vaccination sites to many smaller sites, requiring more administrative support, until May or June. However, vaccine supplies came faster than expected, and the doses have been steadily going into arms, he said.

“In some ways, we’ve been a victim of our own success,” Carter said. “We’re over 1.5 million, probably approaching 1.6 million as we speak, and the need to shift and pivot happened sooner than we anticipated.”

That didn’t soothe critics on the legislative committee, who said that, even by state government standards, $23.1 million is a lot of money to hand someone without following the usual procedure.

State Rep. Mark Hart, R-Falmouth, said when he was mayor of a small town, ethics rules required that any purchase greater than $20,000 be competitively bid. This not only guaranteed that taxpayers got the best available deal for their money, Hart said, it provided transparency, because local officials could not simply steer a deal to someone.

“I’ve got a big concern with the fact that this wasn’t bid out,” Hart said.

Officials at Wild Health did not immediately return a call seeking comment on Tuesday.

According to the Secretary of State’s website, Wild Health organized in Delaware on Dec. 2, 2019, and it received its certificate of authority — permission to do business in Kentucky — last May 27. Its chief executive officer, Matt Dawson, is a doctor and podcaster who is also one of the investors who purchased the landmark Kentucky Castle on U.S. 60 near Versailles for $8.7 million in 2017.

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John Cheves is a government accountability reporter at the Lexington Herald-Leader. He joined the newspaper in 1997 and previously worked in its Washington and Frankfort bureaus and covered the courthouse beat.
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