BOISE -- Following a closed session review of a controversial, and now voided, contract involving the state's health insurance exchange, the former contract holder spoke to KTVB and the chairman explained how a no-bid contract is legal for the board.
Former contract holder responds
A few weeks ago, former Idaho Health Insurance Exchange Board member Frank Chan's company was awarded a contract worth as much as $375,000 to help develop a state platform for the insurance exchange website. He quit the board that same day.
The contract almost immediately brought criticism, and Chan walked away from the contract within days. He says since then, he has not tried for any bids, but is concerned about the future of his business. He says it was never his intent to cause controversy.
"I believe the intent for me to be able to help out Your Health Idaho was that I do have the experience and my company has the experience to really provide the help that they need right now. It's unfortunate that given what actually happened and transpired, it went sideways," Chan said.
How can high dollar contract go with no bidding process?
After the criticism, the board hired an attorney to review the contract and procedure involved. On Tuesday morning, the board met with the attorney in a three-hour closed session. Very few details were given, but the determination was nothing illegal happened.
Usually, most state contracts over $25,000 have a strict bidding process outlined in state law. Contracts over $50,000 have an even more rigorous procedure.
After hours of calling around to various agencies and the attorney who did the review, the board's chairman clarified the laws that govern the exchange board are different.
The legislation that set up the board and its duties allowed Your Health Idaho Executive Director Amy Dowd to award a high-dollar, no-bid contract. That's because the legislature gave the board the ability to set its own contracting process.
"[The legislature] exempted the exchange from the state procurement rules and authorized the exchange to create it's own procurement policy. I'm assuming that was done because of the tight time frame and the expedited need to act," said Stephen Weeg, Idaho Health Insurance Exchange Board Chairman.
Insurance Exchange Board has changed contracting policy
Now after the review, the board has changed that procurement policy: If the executive director has a contract for consideration that's over $15,000, the board weighs in. Also, there's now a cooling off period where board members would have to wait a year before taking any work from the exchange.
The board says the review meeting and the review itself are not and will not be public because of discussion of personnel matters and attorney-client privilege. No action was taken against Dowd, but a personnel committee has been formed to review the executive director position.
Clarification on former contract holder's previous clients
KTVB previously looked into clients listed on a news release biography for Chan and his company listed when the contract was announced. Two of the companies listed as clients could not readily be found with current web presence or registered with the Secretary of State.
Chan and the public relations firm working with Your Health Idaho explained that one of the companies, Boise Salt Water Aquarium, is no longer in business. They further clarified the other company listed, Perpetual Solutions, was a typo and should have read Simple Solutions, for which Chan's company created a product called Perpetual Presentations.