Orange County officials are pausing plans to approve millions of dollars no-bid contracts at the request of a supervisor who’s questioning why there was no competition for them.

The nearly $19 million in federal CDC-funded contracts were up for approval by county supervisors Tuesday, including one that drew conflict of interest questions about OC’s top health official, Dr. Clayton Chau.

Chau, the county health officer and director of the OC Health Care Agency, was recommending the county hire a vendor he advises on the side for over half a million dollars of work – all without competitive bidding, Voice of OC revealed early this week.

But the day before the meeting, Chau delayed the approvals for a week at the request of Supervisor Katrina Foley, who’s questioning why the contracts weren’t put out to bid.

“It was numerous sole-source contracts, and so I needed more time to get to understand what the justification was for that,” Foley told Voice of OC in an interview Tuesday, using the county’s term for contracts that were not put out for competitive bids.

“I really had a lot of questions about what the money is going to be used for, what are the expectations by which the vendors will be measured by – and I just really didn’t understand what it is,” she added.

OC Supervisor Katrina Foley at the supervisors’ meeting on Tuesday, Sept. 28, 2021. Credit: JULIE LEOPO, Voice of OC

Foley also said she hadn’t received “any justification” for why the contracts were not put out to bid.

Chau said he was told by county CEO Frank Kim’s office that the item needed to be postponed, prompted by a request from a supervisor.

Foley was the supervisor who postponed the item, Kim said in a text message to a Voice of OC reporter.

Chau didn’t disclose his advisory board position with contractor Advance OC in his recommendation that the county hire the vendor for $600,000 in no-bid work.

A government ethics expert told Voice of OC that Chau should, at minimum, be transparent about his relationship with the contractor, if not recuse himself entirely from recommending them for county work.

“I would certainly recuse myself. That’s a clear conflict of interest,” said Tracy Westen, a government ethics expert who formerly headed the Center for Governmental Studies.

“It’s certainly something that should be disclosed,” he added.

Chau declined to answer questions for Voice of OC’s article on the conflict concerns, telling a reporter last week that he was in a meeting and deferring comment to a Health Care Agency spokesperson.

A statement provided days later by the spokesperson said Chau and the other advisory board members don’t make decisions at Advance OC, but rather provide “technical assistance” to the vendor.

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Advance OC relies on Chau and its other advisory board members for expertise on new features for the contractor’s services, which focus on building online maps of health data that highlights which communities are being underserved.

“His particular role is to give us a sense, from a public health perspective, how different features would be interwoven into our platform,” said Katie Kalvoda, the founder and CEO of Advance OC, in an interview last week.

“We come to them when we have questions about different things, and we lean on them for their experience and expertise,” she said, adding that advisory board members don’t have any voting power in how Advance OC is run.

But Westen said Chau’s advisory position with the contractor should lead him to step away from any involvement in his contract recommendations as a county official. 

The lack of competitive bidding for the $600,000 contract, he added, “doesn’t make the case any better.”

“The public is entitled to know that their officials are making the best possible decisions, free of personal bias,” Westen said.

“They deserve to know they’re getting the best government possible,” he said.

It’s not the first time Chau has faced conflicts of interest concerns.

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He was fined by state authorities back in 2014 for failing to disclose lucrative drug company speaking fees when he worked as a top psychiatrist at the county Health Care Agency he now leads.

He received $84,250 in apparent violation of an agency policy against accepting such payments, according to a 2013 Voice of OC investigation that revealed the payments.

As for why there was no competitive bidding for Advance OC’s original contract last year and the upcoming proposed one, Chau’s office said the first contract came as they were “looking for rapid solutions to understanding community needs related to COVID testing and other related COVID responses.”

The new, $600,000 proposed contract – funded by a federal CDC grant – would build on that work, Chau’s office said, adding “there is insufficient time to work with a new vendor.”

The new conflict concerns come amid reports that supervisors’ Chairman Andrew Do is trying to move Chau over to CalOptima, the county’s multi-billion-dollar public health insurance for low-income, disabled and elderly residents.

Do and Chau haven’t returned messages asking if there’s any truth to those reports.

Advance OC was less than a year old when it got its first no-bid county contract in July 2020, to develop an online map showing health and quality of life disparities across Orange County.

The recommendation to hire Advance OC for that work was made not by the health agency, but by Do — who in turn publicly credited Chau for spearheading the effort and getting Do on board.

“I completely bought in. And so, I want to thank Dr. Chau for taking the lead on that,” Do said just before voting for Advance OC’s original $385,000 contract.

In his report justifying the first contract, Do said it would allow the county to map out social equity data – without noting the county already was paying for a separate social equity data initiative underway, known as Orange County’s Healthier Together.

Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.

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