Half a million Covid tests ‘not procured within state regulations’

7 April 2021

A review of the procurement of 500,000 Covid-19 tests by the state of Maryland, US, has found it was not carried out in accordance with regulations, including the “lack of a written contract”.

The review by the state’s Office of Legislative Audits (OLA) concluded that “payments made for the Covid tests were not supported by formal written contracts or agreements containing any of the critical provisions required by state procurement regulations”.

The audit revealed there was no basis supporting the payments to South Korean firm LabGenomics for the 500,000 tests. The first batch cost $9m but was returned when they proved faulty and had not received approval from the Federal Food and Drug Administration. The replacement batch cost an additional $2.5m.

There was also no documentation explaining the decision to charter a flight to transport the first tests at a cost of $464,369, when the replacement lot cost $14,265. 

It continued that although there was documentation to prove other vendors had been contacted, it was unable to determine the extent to which they were considered, or to identify the specific parties ultimately responsible for the evaluation and selection of LabGenomics.

According to the auditor, a lack of written documentation to support key aspects of the procurement meant its review was mainly based on interviews with current and former state employees and other personnel.

The acquisition of the Covid-19 tests was announced in April last year.

Legislative auditor Gregory Hook said: “While there was an expressed urgency to procure the tests, such conditions would not mitigate the need to properly document and comply with state regulations specifically tailored to emergency procurements.”

In response to the findings, the state’s department of health and department general services said compliance with audits and the underlying statutes and regulations was of the highest priority. 

“As a matter of professional pride, we have ensured that we typically have a full and frank working relationship with OLA. Unfortunately, the review and the manner in which it was conducted gives the appearance that OLA produced a rushed and politically-driven report implying dubious conclusions reached without regard to the actual circumstances surrounding the subjects of the review.”

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