Colorado state senator asks for audit of state health department contracts

A Republican state senator is calling for the General Assembly's audit panel to put the state's handling of a pair of COVID-19 testing programs under the microscope, saying “tragic and alarming facts” have come to light about “the state’s mismanagement of Colorado COVID testing.”

The request, submitted to the Legislative Audit Committee by Sen. Rob Woodward, R-Loveland, highlights a pair of controversies reported on by The Gazette in May.

The first centers on San Dimas, Calif.-based Curative Labs, which snagged a $90 million, no-bid contract with the Colorado Department of Public Health and Environment (CDPHE) to provide surveillance testing in Colorado nursing homes.

According to The Gazette’s reporting, records show that Gary Lauder, a financial donor for Democrats and an influential backer and investor in Curative Labs, introduced the company’s CEO and Kacey Wulff, Gov. Jared Polis' pandemic adviser at the time, at a weekend getaway Lauder took with Wulff and her husband.

In emails, Wulff forwarded promotional material from Curative Labs to CDPHE officials in charge of picking firms to provide coronavirus testing. Curative Labs obtained a state contract worth nearly $90 million for coronavirus surveillance testing in Colorado nursing homes and other other hot spots, generating consternation from nursing home administrators. Wulff, after Curative Labs started providing tests in the state's nursing homes and other hot spots, thanked Lauder for flagging Curative Labs for state officials, emails show.

A Polis spokeswoman told The Gazette that Lauder didn't influence Polis' testing strategy, stressing that the governor deferred to officials with the CDPHE for vetting testing proposals from private providers.

The state’s relationship with Curative Labs later soured. Colorado severed ties with Curative Labs on Jan. 26, after federal regulators warned state officials they allowed the company’s tests beyond regulatory limits, potentially putting vulnerable nursing home residents in harm’s way. Colorado officials stopped the use of Curative Labs' tests in nursing homes in January.

Woodward’s audit request notes that Curative Labs “appears to have retained the full $89.2 million from the state of Colorado.”

Woodward told the committee Monday that significant deaths — more than 1,100 — took place in nursing homes around Colorado, despite not allowing visitors into nursing homes and requiring staff to use personal protective equipment. Woodward said that as the fall progressed, tests showed false negatives and false positives, resulting in some people being placed in COVID wards when they didn't have it, while false negatives led to COVID being spread among staff and other residents.

"One of the things this brought to light is that CDPHE made a very rash decision to grant a contract to Curative Labs," which didn't even have a test authorized by the Food and Drug Administration, Woodward claimed. 

Woodward said he wanted to audit the entire testing program, including the contract, with an eye toward how to fix the process for the future. "We need to make sure they have a process by which they grant contracts to qualified companies, not to companies that aren't qualified," he said.

The Loveland Republican also highlighted a second controversy on testing, centering on a competitor to Curative Labs landing another big state contract for at-home, self-administered coronavirus tests in Colorado.

Miami-based eMed inked a deal worth up to $53 million on Jan. 6 to deliver as many as 2 million coronavirus at-home tests monthly for front-line workers, educators and school staff. But while Curative Labs tests got widespread use under the state’s protocols, eMed saw distribution of self-administered tests stall due to what company officials describe as a cumbersome and bureaucratic registration and survey system administered by the state’s health department.

Citing reporting from The Denver Post, Woodward’s request noted “CDPHE data shows that less than 13% of the 2 million tests were delivered for use.”

“Evidence demonstrates significant failures by CDPHE and the Office of the Governor related to these two COVID testing programs,” Woodward wrote in his request. “These failures have wasted millions of dollars in taxpayer dollars and, more critically, have endangered the health and safety of Colorado’s most vulnerable populations.

“Refusing to initiate a full audit of Colorado’s COVID testing programs would be turning a blind eye to clear evidence of contractual misconduct that could have compromised the health and safety of Colorado residents.”

Committee Democrats weren't supportive of Woodward's request. 

Chair Dafna Michaelson Jenet, D-Aurora, noted the legislature had passed a bill in 2021 requiring a report on disaster responses to be submitted to the executive committee every four months, which she said has happened. There's all kinds of information that can be accessed, she told Woodward.

"When we're at a more stable place we will seek an 'after action' or 'post mortem'" to look at what happened and to ensure the state is in the best place for a similar situation, she said. "The information is out there; we don't need an audit."

The audit would take an estimated 13 months, which Michaelson Jenet said was too long.

Waiting for that longer post mortem puts people at risk and leaves questions in people's minds, Woodward countered. People will want deep and exhaustive answers, and no one is better suited than the auditor, he told the committee. 

But based on a concern raised by Sen. Julie Gonzales, D-Denver, that the documentation submitted by Woodward had only been presented to the committee as the afternoon session begin, Woodward withdrew his request in hopes that the committee might approve it in its next meeting.

Through a spokesman, Gov. Jared Polis accused the GOP of "attempting to score cheap political points off" tragedy.

“The reality is that Colorado has lost far fewer people to COVID-19 than nearly any other state — Colorado is in the bottom 10 states [for] COVID death rate and currently has the sixth-lowest COVID rate in the country," he said.

"Every death due to COVID-19 is a tragedy and represents a mother, a father, a grandparent that’s not coming home. ... It’s unfortunate to see people trying to politicize the loss of loved ones and family members due to this deadly virus.

"Frontline health care workers are battered and bruised, and hospitals in Larimer County, which Sen. Woodward represents, are filled with unvaccinated patients, so we would encourage him to join us in urging Coloradans to get the safe and effective vaccine so we can end the pandemic and get back to the Colorado we love instead of meddling in political games that Coloradans despise.

“At the legislature’s request, three times a year, the administration submits hundreds of pages to the legislature detailing the funds that we have distributed on COVID and present on our overall response to the JBC (Joint Budget Committee) and executive committee. Neither the governor nor the governor’s office had any involvement in this procurement. Our talented civil servant doctors and scientists vetted and chose this vendor under challenging circumstances; these civil servants deserve gratitude for their service to our state, not baseless partisan attacks.”