Texas GOP Lawmakers Challenge $295M Contact-Tracing Deal

AUSTIN, Texas (CN) — Five Republican Texas legislators sued Governor Greg Abbott on Monday, angry with a controversial $295 million Covid-19 contact tracing contract he awarded to a relatively small Dallas-area technology firm without approval from the Texas Legislature.

State Representatives Mike Lang, Kyle Biederman, William Zedler, Steve Toth and state Senator Bob Hall sued Abbott, a fellow Republican, as well as the Texas Department of State Health Services and Frisco-based MTX Group in Travis County District Court for violations of the Texas Constitution.

They claim Abbott “failed to follow competitive bidding rules” when he awarded the contract while the lawmaking body was out of session. They want the court to void the contract and halt payments from the state.

“The request for proposal for the contract was inadequate, the contract bid process was a sham, and the contract impermissibly exceeded two years,” the 25-page complaint states. “The second reason to invalidate the contract is that the Texas Constitution requires a separation of powers, and that separation leaves policy-making decisions with the Texas Legislature. These decisions are not changed by pandemics.”

The Texas Legislature is only in regular session for 140 days every odd-numbered year beginning in January. Abbott has so far resisted calls for a 30-day special session to address the pandemic, choosing instead to issue over 20 sweeping executive orders since March under the Texas Disaster Act of 1975. The law allows the governor to suspend laws if he or she concludes they “prevent, hinder or delay” needed action to cope with a disaster, as well as giving similar powers to mayors and county judges.

“The governor cannot establish new state policy, issue a $295 million contract to implement that policy, and ignore or suspend state statutes just by claiming ‘it’s a disaster,’” the complaint states. “The Disaster Act has rarely been employed, and thus its deficiencies have not been obvious until about March 2020, when the Covid-19 virus caused widespread alarm and executives all over Texas began issuing orders created by no legislative process.”

The lawmakers claim MTX and nine other companies applied for the state contract in May, which called for the training, deployment and management of thousands of contract tracers and the creation of a call center with 5,000 agents. Despite far larger companies including Accenture, AT&T and IBM applying, the contract was awarded to MTX.

The applicants were only given two days to submit their proposals and the state awarded the contract a mere eight days after it first asked for applications, the lawsuit claims. It also alleges the proposal request was not publicly posted as required by the state.

“The request for proposal was far less detailed than other specifications provided by other states during this time, with a very short span of time to respond,” the complaint states. “No substantive opportunity to ask questions or suggest alternatives that would have been vastly less expensive or more efficient was allowed.”

MTX’s bid was tied with Accenture’s as the state’s top scoring proposal but was $15 million cheaper, CBS-affiliate KTVT in Fort Worth reported last month. The 10 bids range from as low as $110 million to as high as $929 million.

Senator Hall, MTX and DSHS did not immediately respond to email messages requesting comment Monday evening. Hall has in the past questioned MTX’s lack of experience in handling such a large contract.

“I have seen companies try and bite off a project outside what they have experience to do,” he told KTVT last month. “You don’t go from a $1 to 2 million contract company to managing a $300 million contract just because you want to do that.”

The Houston Chronicle reported last month on allegations made by four former contact tracers who worked for MTX or one of its partners that describe “technical glitches, training flaws and problems with scripts used during phone calls” with those exposed to the virus.

Three of the employees who performed case investigations or contact tracing alleged “they did almost no work for weeks — just as the virus was taking off again in late May and early June.”

Follow @davejourno

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit