House members demand open, competitive process to determine the future of API

5 committee chairs urge procurement officer to halt $225 million sole source contract

JUNEAU – The Department of Health and Social Services recently entered into a contract with Wellpath, an out-of-state company that has a troubling track record of health and safety issues, to take over operation and management of the Alaska Psychiatric Institute.
The State made the unusual decision of awarding Wellpath a sizable contract without following the standard competitive bidding process to determine who is most capable of meeting the department’s needs. Phase One of the contract is already under way and costs the state $1 million per month, and Phase Two, poised to begin in September, would cost the state $225 million over a five-year period.

On Friday, the co-chairs of the House Health and Social Services, Judiciary, and State Affairs committees signed a joint letter urging the Chief Procurement Officer Jason Soza to stop Phase Two and immediately begin a competitive bidding process.

A joint hearing of the Health and Social Services and State Affairs committees held April 2 motivated the letter. During the hearing, a DHSS official and the chief procurement officer revealed three key facts: (1) the department did not disclose Wellpath’s extensive record of patient deaths, negligence, and lawsuits to the chief procurement officer before he approved the Wellpath contract, (2) DHSS failed to reveal that the non-profit Providence Health and Services had offered to take over or assist with API management, and (3) Health Commissioner-designee Adam Crum invoked statutory authority to make the contract possible, but hedeclined to participate in numerous legislative hearings on the issue.

“API is a critical institution that serves some of the most vulnerable Alaskans: people who need help dealing with a mental health crisis and who cannot advocate for themselves. It’s essential that they are provided the best possible care.” said Rep. Ivy Spohnholz, co-chair of the Health and Social Services Committee.

Rep. Zack Fields, State Affairs Committee co-chair, added, “It is disturbing that DHSS withheld information about Wellpath’s track record of legal and health and safety issues, and that the chief procurement officer was not made aware of Providence’s ability to assist with API management when he approved a sole source contract worth nearly quarter of a billion dollars.”

“In light of these revelations, we need a fair, open, competitive bid process to determine whether to contract for services at API and who is best qualified to perform those services,” said Rep. Matt Claman, chair of the Judiciary Committee. “The department should change its plan and begin the standard RFP process immediately.”

The House Majority is a 25-member coalition of Democratic, Republican, and Independent representatives from large and small communities across our state. The House Majority is committed to serving all Alaskans with integrity and transparency, and to practicing informed leadership so that every citizen’s quality of life will improve for generations to come.

Letter from the co-chairs to Chief Procurement Officer Jason Soza

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