Should these hastily developed and imprudent emergency measures secure the nine votes required for passage, they will upend the procurement process in the agency I direct, the Department of Health Care Finance, and perniciously impact the city’s Medicaid and Alliance programs — health-care programs that fund a full range of vital preventive, diagnostic and acute care services for 40 percent of D.C. residents, many of whom unfortunately struggle with chronic and life-threatening health conditions.
To understand how we have arrived at this moment, a brief history lesson is in order. Nearly 30 years ago, a District trial court ruled that a council-approved provision of the Procurement and Practices Act of 1985 amounted to legislative overreach and was thus legally untenable. The provision that drew judicial rebuke stated that “no contract for goods and services worth more than $1,000,000 million may be awarded until after the Council has approved the proposed contract.” When the council challenged this ruling, the Court of Appeals resoundingly confirmed the decision of the trial court, leaving the selection and approval of contracts entirely in the purview of then-Mayor Sharon Pratt Kelly (D) and the executive branch agencies under her auspices.
In the aftermath of this legislative victory, however, the problems that plagued D.C. government contracting practices for a decade continued virtually unabated, encouraging Kelly to embrace a power-sharing arrangement with the council covering contracts valued at more than $1 million. The clear purpose of the agreement was to establish the council as a legislative watchdog that would inspire executive agencies to eschew lax contracting practices that at times produced unjustifiable sole source awards to vendors, some of whom had questionable credentials.
In this role, the council was envisioned as a baseball umpire, if you will — the referee who called the balls and strikes in determining whether the executive branch appropriately followed the fundamental elements of procurement law in awarding high-dollar contracts. Though the council was imbued with the authority to disapprove contracts, the members had no authority to unilaterally select the winners from any procurement. That power was singularly reserved for the executive.
The curious emergency measures before the council today float without any legislative anchor to the foundational premise of Kelly’s agreement. More significantly, these proposals cut strongly against both the letter and spirit of the three-decades-old court ruling while raising troubling questions concerning the motives that spawned such irresponsible proposals.
Consider the following: Should the emergency measures secure approval, the competitive procurement process for $1.2 billion in contracts will be abruptly terminated, imposing $5.4 million in unbudgeted costs on the Department of Health Care Finance while surfacing skepticism among future companies about the integrity of the vendor-selection and contract process in D.C. Moreover, without any deep knowledge of D.C.'s health insurance market and the volatile dynamics associated with the Medicaid managed-care program, the bill’s sponsors aim to pick a winner by prematurely disqualifying one bidder, MedStar Family Practice, and then compelling the selection into the program of a replacement health plan, Amerigroup DC. This decision would require that we change the health plan assignments of more than 60,000 D.C. residents for the second time in less than 12 months — putting many of these members at risk of losing their chosen physicians during a pandemic.
Finally, and perhaps most puzzling, should the Department of Health Care Finance choose to exercise its federal and local authority to operate the Medicaid program with only two health plans rather than the three called for by the emergency bills, the proposal that was circulated for council review would both dictate and sharply limit the amount we could pay the remaining two managed-care organizations in the program for the next four years. Such an incredulous action would not only financially cripple these two health plans but could also threaten D.C. with a loss of more than $3 billion in federal funds over this four-year period.
In 1992, when addressing the issue of the council’s authority over D.C. government procurements, the court ruled, “In sum, we can find no basis to hold that the Council has been empowered by section 412 of the District Charter to erect its own mechanism of individualized contract review by use of its resolution authority.” The bewildering language of the proposed emergency measures is prima facie evidence that the time has come for the council to amend the Procurement Practices Act of 1985 by removing the language that triggers a legislative review and approval of contracts with a value of at least $1 million. This change would correctly return government procurement activities to the executive branch, end ethically dubious political gamesmanship from the contract review process and send a signal to future vendors that the award of contracts in D.C. will not be tainted by the sometimes brazen and graceless hand of politics. This would be positive reform, while having the added virtue of being the right thing to do.