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    Did California Get Its Money’s Worth From $1.7 Billion COVID Test Contract?

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    By Kristen Hwang and Ana B. Ibarra

    The Valencia lab, a public-private venture between the state and PerkinElmer, processed only 1 to 8% of all Californians’ COVID tests in the first 10 months of the contract. And the lab was riddled with dozens of problems, according to an inspection report.

    A patient sample that wasn’t processed for more than 30 days. A test used without proper validation of its accuracy. Patient results changed without notification. Safety and disinfection procedures called into question. 

    These are just a few of the myriad problems at the Valencia Branch Laboratory, a public-private COVID-19 testing lab operated by PerkinElmer that the California Department of Public Health hired in a no-bid, $1.7 billion annual contract.

    An inspection report released last month by the health department outlines major problems dating back further than a year ago, raising new questions about how the state is spending taxpayer dollars to combat the pandemic. The report shows the lab has routinely underperformed, failing to meet the contract’s goals for turnaround times and numbers of processed tests. But the state auto-renewed the year-long contract at the end of October.

    Gov. Gavin Newsom and state health officials say the laboratory has been crucial to expanding the state’s testing capacity for schools and underserved communities. 

    But California’s two largest school districts — Los Angeles Unified and San Diego Unified — aren’t relying on the lab because it was unavailable when they needed it. 

    A CalMatters analysis shows each test at the PerkinElmer Valencia lab costs the state more than three times the amount the Los Angeles Unified pays a Bay Area startup, SummerBio.

    Already, the state has paid more than twice as much to PerkinElmer for 5.5 million tests as LA Unified’s total projected $350 million cost for the entire school year. The school year is less than half complete, but LA Unified already has administered 7.4 million COVID tests while never using the state’s PerkinElmer lab.

    In the 10 months following its October 2020 opening, the lab processed between 1 and 8% of all COVID-19 tests administered in California each week, according to available data archived by CalMatters. During the first week of December, the lab processed roughly 8.5% of California’s tests, according to the most recently available data.

    PerkinElmer, a global testing diagnostic company, did not respond to a request for comment about the cost of the testing and the reported problems at the lab.

    State health department officials, in an unsigned statement in response to questions, said the PerkinElmer contract was renewed because of the potential for a winter surge and continued need for testing.

    But the health department’s report, which was released eight months after officials indicated it would be completed, revealed that inspectors from the state’s Laboratory Field Services threatened sanctions for major deficiencies just 10 days before the contract was renewed.

    The state public health department “probably should have canceled (the contract) because honestly, there’s other vendors out there. They’re doing it for a lot less money more efficiently,” Republican Senate minority leader Scott Wilk, who represents the area surrounding Valencia, told CalMatters. 

    Wilk has been the most outspoken critic of the contract, repeatedly calling on the Newsom administration and the health department to halt the auto-renewal. Wilk said his office is working on a proposal to reform the no-bid contracting powers that the Legislature granted Newsom at the beginning of the pandemic. 

    “I think there have been abuses there,” Wilk said. 

    Public health experts and advocates say despite the lab’s troubles, it provides critical testing for smaller school districts, rural counties and underserved communities. Roughly 62% of tests processed at the lab are from communities of color, with about a third from the state’s most disadvantaged neighborhoods, based on the California Healthy Place Index.

    In Madera County, for instance, the lab allowed the county and its partners to ramp up testing in a speedier time frame. 

    “Valencia has been a net positive for Madera County. Residents would have been at a significant disadvantage without the combination of the Valencia lab and state contracts like the one with OptumServe,” said Sara Bosse, Madera County’s public health director.

    Click here to read the full article at CalMatters


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