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By MICHAEL R. BLOOD Associated Press
Oct. 12, 2014 – 07:35 a.m.

LOS ANGELES (AP) — California’s health insurance exchange has awarded $184 million in contracts without the competitive bidding and oversight that is standard practice across state government, including deals that sent millions of dollars to a firm whose employees have long-standing ties to the agency’s executive director.

Covered California’s no-bid contracts were for a variety of services, ranging from public relations to paying for ergonomic adjustments to work stations, according to an Associated Press review of contracting records obtained through the state Public Records Act.

Several of those contracts worth a total of $4.2 million went to a consulting firm, The Tori Group, whose founder has strong professional ties to agency Executive Director Peter Lee, while others were awarded to a subsidiary of a health care company he once headed.

Awarding no-bid contracts is unusual in state government, where rules promote “open and fair competition” to give taxpayers the best deal and avoid ethical conflicts. The practice is generally reserved for emergencies or when no known competition exists.

Covered California was created in 2010 and given broad authority to award no-bid contracts as a way to meet tight federal deadlines for getting the new health insurance marketplace operational by last year. The same law also exempted it from sections of the state’s public records law, a loophole lawmakers closed last year after it was disclosed by the AP.

The agency confirmed some no-bid contracts were awarded to people with previous professional ties to Lee, but emphasized Covered California was under pressure to move fast and needed specialized skills.

The fledgling exchange “needed experienced individuals who could go toe-to-toe with health plans and bring to our consumers the best possible insurance value. Contractors like The Tori Group possess unique and deep health care experience to help make that happen and get the job done on a tight deadline,” Lee said in a statement.

“As this organization matures,” he added, “we will rely less on private contractors.”

With so much taxpayer money in play, a government watchdog group said more oversight is essential.

Kathay Feng, executive director of California Common Cause, said she recognized the need to free Covered California from cumbersome contracting rules that could have hampered its ability to meet Affordable Care Act deadlines.

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