Assembly Convenes Oversight Hearing on State Emergency Contracts
On Monday, the Assembly Committee on Accountability and Administrative Review convened an oversight hearing on state contracting in an emergency, particularly amid the COVID-19 pandemic. The hearing, held in the Assembly Chambers to accommodate physical distancing, was opened by Accountability and Administrative Review Chair Cottie Petrie-Norris discussing the state’s rapid response to the pandemic, including procuring millions of items of personal protective equipment (PPE), and its process in entering into contracts and agreements for such items. Chair Petrie-Norris identified a series of priority areas for the hearing, namely lessons learned from the COVID-19 pandemic, vetting protocols and controls implemented based on lessons learned, remaining issues and gaps in state emergency contracting, and the state’s strategy in moving forward in procuring supplies during an emergency.
The hearing featured an overview from the Governor’s Office of Emergency Services (CalOES) Director Mark Ghilarducci and State Treasurer Fiona Ma of the Newsom Administration’s activities in responding to COVID-19, procuring PPE and other critical supplies, and ensuring proper use of taxpayer funds. The Newsom Administration entered into nearly 200 contracts and agreements for supplies and equipment to date to support the state’s response to the COVID-19 pandemic. Notably, in identifying that the state had to cancel or rescind only a handful of contracts due to potentially fraudulent activity, OES Director Ghilarducci indicated, “Not one dime – not one dime – of taxpayer dollars has been lost.” The Newsom Administration has reportedly launched investigations into several of the scrapped contracts and agreements.
A second panel featuring CalOES Director Ghilarducci examined California’s strategy for moving forward, particularly in areas of vetting protocols, supply chain operations, and price gouging and fraud prevention. The Legislative Analyst’s Office (LAO) further provided a presentation on purchasing supplies during an emergency, as well as oversight and transparency roles of the Legislature. The LAO noted that without basic information of the contracts into which the Newsom Administration is entering, the Legislature is limited in its ability to adequately perform its oversight function.
Questions from committee members predominately focused on the state’s vetting procedures, PPE sourcing, PPE distribution and prioritization statewide, publicizing contracts, and use of California manufacturers for future supply and equipment needs. Lawmakers generally commended the Administration for quickly procuring critical supplies and equipment to respond to COVID-19 and looked to the future to strengthen vetting and oversight processes.
The hearing agenda is available here and a background paper is available here. A video recording of the hearing is available here. A roundup of press articles on state contracting is available here. A warrant payment process chart is available here and a CalOES timeline handout is available here.