Republican candidate for New York State Comptroller Joseph Hernandez today called on Comptroller Tom DiNapoli to halt and investigate an $866 million amendment to a state Medicaid contract with Deloitte that pushed the total value of the deal to approximately $1.1 billion without a new competitive bidding process.
The Department of Health originally awarded Deloitte a $177 million contract in 2023 to develop a statewide Medicaid eligibility and enrollment system. Subsequent amendments increased the contract to approximately $317 million before Governor Kathy Hochul added another $866 million in August, bringing its total value to roughly $1.1 billion.
The expansion increases the state’s payments to Deloitte from approximately $9 million per month to roughly $25 million per month. Good-government experts have questioned whether an expansion of that magnitude should have been subjected to a new competitive procurement process.
“New Yorkers deserve an explanation for how Hochul turned a $177 million contract into a $1.1 billion deal without another company ever getting the chance to compete for the additional work,” Hernandez said. “First it went to $317 million. Then Hochul’s administration added another $866 million. At some point, this stops looking like an amendment and starts looking like an entirely new billion-dollar deal.”
State Finance Law §163 establishes New York’s competitive procurement requirements and provides for Comptroller review of covered procurements. State Finance Law §112 separately requires Comptroller approval before many state contracts above statutory thresholds can become effective.
“This is exactly the kind of spending New York’s Comptroller should be scrutinizing,” Hernandez said. “Kathy Hochul’s administration added $866 million to this contract without a new competitive bid. Tom DiNapoli should use every authority available to his office to scrutinize this amendment, determine how it was approved and demand answers from the Hochul administration about why an additional $866 million in work was not competitively bid.”
Deloitte previously worked on New York’s Excelsior Pass program, which ultimately cost taxpayers more than $60 million. Former State Budget Director Sandra Beattie also admitted this year to violating state ethics law in connection with interactions involving a Deloitte lobbyist while serving in state government.
“Kathy Hochul’s administration is handing Deloitte another $866 million without a new competitive bid,” Hernandez said. “Tom DiNapoli should freeze this amendment if his authority permits it, audit the procurement and put every document behind this deal in front of the public. New Yorkers deserve to know how Hochul’s administration allowed a $177 million contract to balloon into a $1.1 billion deal.”
“If Tom DiNapoli won’t aggressively scrutinize billion-dollar deals like this, I will when I take office on January 1, 2027.”
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