California said late Monday that Blue Shield had been chosen as the state’s third-party administrator for vaccine distribution. Gov. Gavin Newsom has been promising for weeks to release details of the contract, the details of which were made public yesterday, a holiday — the same day the no-bid contract went into effect.
Under the contract, an algorithm created by Blue Shield will sort out vaccine distribution across California. The Newsom administration will have final say on where vaccines are distributed and what the criteria determine how many vaccines go to each site. Blue Shield stands to earn up to $15 million, a sum that is capped in the contract.
The deal with Blue Shield and another with Kaiser were authorized by Newsom under an emergency provision that does not require legislative approval. The governor announced the deal late last month, but the contract was not signed until Friday. Terms of the contract run until December 31, 2021. Details of the deal with health giant Kaiser Permanente have not been released.
Blue Shield looms large in California political campaigns. It spent more than $1 million in support of Newsom’s 2018 campaign and more than $1 million lobbying state officials in the most recent legislative session. In January 2020, Blue Shield also donated $20 million to support Newsom’s high-profile campaign to combat homelessness.
In early February, Newsom maintained that linking Blue Shield’s support to the vaccination contract is “nonsense.”
“Everybody came together looking at what’s working, what’s not working, and we identified two partners in particular, two nonprofits, Kaiser and Blue Shield,” he said. “They have the kind of scale, they have the capacity…we were looking for.”
Blue Shield is tasked with creating a vaccine network that will be built in three geographical “waves.” The regions and deadlines for that plan are not included in the contract that was released. The Los Angeles Times reported a tentative timeline — which was confirmed to the paper by the California Department of Public Health — in which Central Valley counties such as Fresno, Kern, San Joaquin and Stanislaus are in the first wave that will begin February 21.
Some of the state’s biggest counties including Los Angeles, Orange, San Bernardino and San Diego are identified as second-wave regions. The target for rollout in Southern California is reportedly March 7. After that, San Francisco, Contra Costa and Alameda counties would be rolled into the network.
The state’s data operations throughout the pandemic have been plagued with glitches and revelations of system failure, including last August when it was discovered — by county health officials — that multiple errors on the state’s part had caused a backlog of 250,000-300,000 Covid-19 test records in its case data reporting system. California’s Director of Public Health resigned shortly thereafter.
Then there was the January 2021 loosening of restrictions, which was welcomed by Newsom critics but puzzling to anyone trying to follow the logic of the shutdowns, as most of the state’s self-identified Covid-19 data points were above where they were when the restrictions were implemented last fall.
And there is also the ongoing cascade of unemployment fraud revelations. As federal money flooded in to help Californians impacted by the pandemic last fall, the state sent about $1 billion to prisoners who fraudulently qualified for assistance. And it wasn’t just prisoners taking advantage of the chaos: A January 28 state audit estimated the amount of EDD (unemployment insurance) fraud committed in California between March and December 2020 might top $10.4 billion.
Capitol Public Radio found at least six companies that made political contributions to Newsom had received no-bid contracts from the state, influential appointments, or other opportunities related to the California’s pandemic response.
To its credit, the state has launched a website that lists Covid-related contracts worth a quarter-million dollars or more. There are over 100 contracts listed. Many of them are with companies that did not make major contributions to the governor.
One of the companies that did make contributions was UnitedHealth. Newsom tapped UnitedHealth to untangle California’s data challenges. The state has repeatedly fallen short on testing and data tracking, causing confusion for residents, cities and counties.
The state awarded a potential $177 million contract on no-bid basis to a UnitedHealth subsidiary to expand testing. The state also awarded another $315 million in contracts to other subsidiaries through an expedited bidding process.
According to Capitol Public Radio, UnitedHealth contributed $31,000 to Newsom’s reelection campaign in December and another $100,000 to his ballot measure committee.
There was also the ruckus over a $990 million no-bid contract for masks awarded to BYD. That company was supposed to quickly manufacture highly sought N95 masks at its factory in China but was forced to refund about $250 million for failing to meet a deadline. Newsom then agreed to an extension last summer worth hundred of millions of dollars more to the company. BYD’s president contributed about $40,000 to Newsom’s campaign in 2018 and 2019.
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