A company that received a $657 million contract to distribute coronavirus test kits and was attacked for the role of its owners in Gov. Kathy Hochul’s (D-NY) campaign is suing her administration on the grounds that it broke the requirements for competitive bidding.
After the state Department of Health advertised for bids to purchase COVID-19 test kits and then invoked an executive order when Digital Gadgets objected to the rejection of its bid, the company filed a lawsuit in Albany County Supreme Court alleging violations of state law by the agency, according to The Washington Examiner.
“Digital Gadgets brought this lawsuit to ensure the state complies with the rules they established along with the bid process,” Digital Gadgets spokesman John Gallagher told NPR affiliate WSKG, which reported the complaint.
“The DOH is blocking Digital Gadgets’ ability to demonstrate that the winning bidders do not meet the specifications issued by the department.”
Between December 2021 and March 2022, the state hired Digital Gadgets to acquire approximately 52 million test kits as part of its efforts to stave off a resurgent wave of the virus.
The contracts, which cost the Empire State close to $637 million, were purchased by the New York Division of Homeland Security and Situation Services Commissioner Jackie Bray pursuant to an executive order that overrode standard procurement procedures owing to the emergency at hand.
The Albany Times Union reported in July that Hochul received $300,000 in election campaign contributions from the company’s owner, Charlie Tebele, and his family, around the time the state was negotiating those contracts.
Hochul has stated that she is unaware of any specific purchase order with Digital Gadgets and that she is unaware of the Tebele family.
According to the lawsuit, state representatives, including Bray, were allegedly negotiating another order with the company between the months of April and June. In the interim, Tebele and his spouse contributed an additional $40,000 to Hochul’s campaign.
However, the Department of Health published an invitation for bids (IFB) on July 12 that was “virtually identical” to the terms being discussed between Digital Gadgets and the state just one month earlier, according to the firm’s complaint.
“Indeed, the [IFB] specifications were virtually identical to the June Order: it sought a vendor who could supply a minimum of 2 million tests per month and precisely the same specifications as the proprietary Surge Program proposed by Digital,” Digital Gadgets’s counsel wrote.
The Department of Health’s invitation from July 12 “did not specify the more expensive, US-made AccessBio tests, thereby allowing bidders to propose supplying cheaper, lower quality tests made overseas, including tests made in China.” According to the attorneys. This is the “key distinction” from that invitation, they claim.
Ultimately, during the summer, Digital Gadgets and more than 100 other businesses submitted proposals, but news of the Tebele family’s contributions to Hochul persisted.
Digital Gadgets was informed in August that its bid had been rejected, and it then asked Department of Health representatives to provide a briefing on the reasons why. In court documents, a lawyer for the company included a letter in which a department official involved stated that any disagreements over the selection of the winning offer should be brought to the attention of the state comptroller.