Special Review

Review of Procurement of Certain COVID Tests

March 2021

OFFICE OF LEGISLATIVE AUDITS

DEPARTMENT OF LEGISLATIVE SERVICES
MARYLAND GENERAL ASSEMBLY
 Joint Audit and Evaluation Committee
Senator Clarence K. Lam, M.D. (Senate Chair) Delegate Carol L. Krimm (House Chair)
Senator Malcolm L. Augustine Delegate Steven J. Arentz
Senator Adelaide C. Eckardt Delegate Mark S. Chang
Senator George C. Edwards Delegate Nicholas P. Charles II
Senator Katie Fry Hester Delegate Andrea Fletcher Harrison
Senator Cheryl C. Kagan Delegate Keith E. Haynes
Senator Benjamin F. Kramer Delegate David Moon
Senator Cory V. McCray Delegate April R Rose
Senator Justin D. Ready Delegate Geraldine Valentino-Smith
Senator Craig J. Zucker One Vacancy

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 March 31, 2021

Senator Clarence K. Lam, M.D., Senate Chair, Joint Audit and Evaluation Committee
Delegate Carol L. Krimm, House Chair, Joint Audit and Evaluation Committee
Members of Joint Audit and Evaluation Committee
Annapolis, Maryland

Ladies and Gentlemen:

We have conducted a special review of the procurement and related use of

COVID tests from LabGenomics, a foreign-based healthcare company. We also
reviewed the circumstances surrounding the termination of two State employees
after they had raised concerns related to the COVID tests. Our review was
initiated based on a joint request from the chairs of the Senate Education, Health,
and Environmental Affairs and the House Health and Government Operations
Committees for a review of two COVID-related emergency procurements. This
report is limited to the results of our review of one of those procurements and the
two State employee terminations.

We conducted our review during the period from September 11, 2020 through
January 29, 2021 and the results herein are based on information obtained during
this period. As will be expanded upon later, we were unable to obtain written
documentation on various aspects of the subject matter, but other information
relevant to our review may exist and could be provided to us in the future. Any
additional developments, which may come to our attention, will be addressed in a
subsequent report along with results of our review of other emergency
procurements made during the COVID pandemic state of emergency and the
related recommendations.

Our review disclosed a pervasive lack of written documentation to support the

key aspects of the procurement, use, and validity of the tests and the
aforementioned terminations. Consequently, the results of our review are
based primarily on interviews with current and former State employees and
other personnel including members of senior management at the Department
of General Services (DGS), Maryland Department of Health (MDH), the
Governor’s Office, and Towson University (TU). The procurement of the
tests occurred during the onset of the formal state of emergency declared by
the Governor. While there was an expressed urgency to procure the tests,
such conditions would not mitigate the need to properly document and comply
with State regulations specifically tailored to emergency procurements.

We concluded that the tests were not procured in accordance with State
procurement regulations. For example, the payments made for the COVID
tests were not supported by formal written contracts or agreements containing
any of the critical provisions required by State procurement regulations.
Instead, we were provided with a letter of intent for the initial purchase;
however, this document was not a contract as required by regulations. The
lack of a comprehensive written contract precluded effective monitoring. We
also were not provided with comprehensive written documentation of the
extent to which other vendors were considered, or of the specific parties
involved in the evaluation and selection of LabGenomics. Finally, there was
no support of the basis for the $11.5 million ultimately paid for the tests or the
decision to charter a flight for the shipment of the first tests at a cost of
$464,369 when the second tests were shipped for a cost of $14,265.

We also found that the first tests obtained from LabGenomics had not been
authorized by the Federal Food and Drug Administration and one study
conducted by a laboratory in Maryland concluded the tests were likely to have
an increased number of false-negatives and inconclusive results. In addition,
while concerns were raised with the reliability of test results reported by the
University of Maryland Pathology Associates (UMPA) laboratory using the
second tests obtained from LabGenomics, we were unable to obtain
documentation of test results from UMPA to corroborate the concerns with
the reliability of test results. As discussed below, our requests for these
records were initially denied. Subsequently, legal counsel to the Maryland
General Assembly confirmed that we were entitled to these records, but we
have not yet obtained and analyzed the records. We also determined that
MDH looked into concerns with the test results and noted deficiencies with
the lab procedures, but it did not determine if there were any issues with the
tests.

Finally, our review of the circumstances surrounding the termination of two

State employees after they had raised concerns related to the COVID tests,
found that the verbal representations made to us by the agencies’ management
as the basis for the terminations were not supported by available written

2
documentation. For example, one of these employees was terminated
approximately one month after questioning a large spike in positive COVID
cases, which we were advised were processed by UMPA, and among the tests
used by UMPA at the time were the second LabGenomics tests. In this
regard, supervisory officials advised us that the termination was due solely to
unrelated performance issues; however, this was not supported by written
documentation in the employee’s personnel file.

The responses to this review from the Governor’s Office, the Departments of
General Services and Health (combined), and Towson University are included in
Appendices B, C, and D, respectively. In accordance with State law, we have
reviewed the responses, and identified numerous statements that conflict or
disagree with statements and findings in our report. In each instance, we re-
examined and reassessed our documentation, and reaffirmed the validity of our
work and the related findings. In accordance with our policy, we have redacted
certain names and other information from the agencies’ responses.

Appendix A includes auditor’s comments, on what we deemed to be the

significant disagreements. Perhaps most troubling for OLA, is that we had
discussed each of these issues with senior management at the respective agencies.
As noted in the report, our conclusions reached were based on their answers to
specific questions, and our review of often limited documentation made available
by them or their staff to us. Nevertheless, we have concluded that these
responses, while generally disagreeing with our findings, have either confirmed
the correctness of our findings (such as the lack of a comprehensive contract) or
do not answer key questions posed by the review (such as the identity of the
individual who was ultimately responsible for making the decision to purchase the
test kits).

In addition to the aforementioned auditor’s comments included to address certain

disagreements in the agencies’ responses, we also want to address two general
statements included in the combined DGS and MDH response. The first is the
perception that this review “gives the appearance that OLA produced a rushed and
politically-driven report”, which is a characterization unsupported by the facts.
The field work underlying this report’s conclusions was conducted over a four-
and-half-month period, which is an unprecedented amount of time for such a
focused review, and demonstrates OLA’s level of care and detail taken to ensure
the comprehensiveness and correctness of our conclusions. In addition, as State
government agencies are well aware, OLA provides nonpartisan services to the
General Assembly, and prides itself on presenting objective results in an unbiased
manner. Second, we wish to acknowledge the “full and frank working
relationship” that OLA has with both departments. These longstanding

3
relationships are much valued by OLA and are based on mutual respect and trust,
and driven by a shared goal to establish proper accountability and good
governance. We believe that the conclusions in this report demonstrate OLA’s
commitment to that shared goal.

Respectfully submitted,

Gregory A. Hook, CPA

Legislative Auditor

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 Background Information

Legislative Request and Allegations

In June 2020, the chairs of the Senate Education, Health, and Environmental
Affairs and the House Health and Government Operations Committees requested
that the Office of Legislative Audits conduct a review of the emergency
procurements awarded to:

 LabGenomics for COVID tests used by laboratories to analyze samples

collected from patients at testing sites, and
 Blue Flame Medical for medical supplies

The legislators asked that the review include an evaluation of the procurement
process and accountability over the items purchased. We initially intended to
conduct the review in conjunction with our fiscal compliance audit of the
Department of General Services (DGS) – Office of the Secretary. However, our
preliminary inquiries disclosed that multiple State agencies were involved in the
procurement, accountability, and use of the items purchased from these vendors.
In addition, we identified numerous other material emergency procurements made
by the State associated with the ongoing COVID-19 pandemic. Consequently, we
decided to expand the scope of our review and we will issue a separate report on
emergency procurements made by the State during the COVID state of
emergency, rather than as a component of the DGS audit.

Our initial focus was on the LabGenomics tests due to the ongoing concerns with
the procurement and use of the related tests. In addition, our review included the
review of the termination of two employees associated with the LabGenomics
tests. Specifically, we received an allegation through our fraud, waste, and abuse
hotline regarding concerns raised with COVID test results by an employee at
Towson University (TU) who was subsequently terminated. In addition, during
the December 8, 2020 Joint Audit and Evaluation Committee hearing, we were
also asked to review the circumstances of the termination of the former Director
of Procurement at the Maryland Department of Health (MDH) who had raised
concerns with the process used to procure the COVID tests from LabGenomics.

In order to provide timely results on our efforts, this report includes the results of
our review of the procurement and accountability of the LabGenomics tests and
the aforementioned terminations based on information we obtained as of January
29, 2021. Our review of other emergency procurements, including the award to
Blue Flame Medical, will be included in a subsequent report.

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COVID-19 Pandemic
COVID-19 (Coronavirus disease 2019) is a disease that was first identified in
China in December 2019. It quickly spread worldwide and was characterized as a
pandemic on March 11, 2020 by the World Health Organization.

On March 5, 2020, the Governor of Maryland announced the State’s first positive
cases of COVID-19 and declared a state of emergency to mobilize all of the
State’s available resources. The COVID-19 pandemic created a worldwide
demand for COVID tests, and increased demand for personal protective
equipment (PPE) and other supplies. While the identification of these items was a
coordinated effort of multiple State agencies, DGS was primarily responsible for
conducting the related emergency procurements with technical assistance from
MDH.

Overview
DGS purchased the first 500,000 tests from LabGenomics in April 2020. We
were advised by MDH that all of these tests (except for the limited number used
by certain laboratories) were returned to LabGenomics on June 23, 2020. DGS
purchased the second 500,000 tests from LabGenomics in May 2020. The
combined costs of these purchases (including shipping charges) for the 500,000
tests ultimately received by the State totaled approximately $12 million.

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 Scope, Objectives, and Methodology

Scope
We conducted a review of the emergency procurements performed by the
Department of General Services (DGS) to purchase COVID tests from
LabGenomics. We also reviewed the circumstances surrounding the terminations
of the former Director of Student Health Services (SHS) at Towson University
(TU) and the former Director of Procurement at the Maryland Department of
Health (MDH).

This review was initiated based on requests from members of the Maryland
General Assembly; and after its commencement, we received an allegation of a
related matter through our fraud, waste, and abuse hotline. Our review was
conducted during the period from September 11, 2020 through January 29, 2021
and the results herein reflect information we were able to obtain during this
period. Other information relevant to our review may exist and could be provided
to us in the future. Any additional developments, which may come to our
attention, as well as the results of our review of other emergency procurements
and any related recommendations will be addressed in a subsequent report.

We conducted our review under the authority of State Government Article,

Section 2-1220 of the Annotated Code of Maryland. Our review did not
constitute an audit conducted in accordance with generally accepted government
auditing standards.

OLA Access to Information

During our review, we requested documentation of test results from the
laboratories that used the LabGenomics tests, specifically from the University of
Maryland, Baltimore’s Institute of Genome Sciences and University of Maryland
Pathology Associates, the MDH Maryland Public Health Laboratory, and CIAN
Diagnostics. The reason that we asked for this documentation was to verify
certain assertions made by the individuals that we interviewed. These assertions
included statements about the reliability or unreliability of the tests as well as
their disposition. The laboratories initially denied our request for these records.
Legal counsel to the Maryland General Assembly confirmed that we were entitled
to these records; however, we were unable to obtain and analyze the records prior
to issuing this report. Accordingly, the results of our review of those records will
be subject to inclusion in a subsequent report.

7
Objectives and Methodology
Our review included the following three objectives:

1. To evaluate the following areas related to the first 500,000 tests purchased
from LabGenomics.
 Procurement of Tests
 Receipt of Tests
 Disposition of Tests

2. To evaluate the following areas related to the second 500,000 tests

purchased from LabGenomics.
 Procurement of Tests
 Receipt of Tests
 Disposition of Tests
 Concerns with Test Results

3. To review the circumstances of the terminations of the former Director of

SHS at TU and the former Director of Procurement at MDH after they had
raised concerns related to the COVID tests.

Our review included tests, analyses, observations, and discussions with current
and former State personnel and others, as we deemed necessary to accomplish our
objectives. We reviewed numerous documents, including available procurement
records, invoices, laboratory studies and procedures, COVID test specifications,
and other related records. We interviewed 36 current and former State employees
and other personnel including members of senior management at DGS, MDH, the
Governor’s Office, TU, and the aforementioned laboratories (see Exhibit for a
listing). Finally, we conducted certain physical inspections of COVID tests
located at State and private facilities.

Due to a pervasive lack of written documentation to support the objectives in our

review, the majority of our results are based on verbal representations of the State
employees and other personnel we interviewed. To ensure that information
obtained by these interviews was properly recorded and was not subject to
misinterpretation, at least two OLA employees were present during substantially
all of the interviews and physical inspections we conducted.

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 OLA Observations

Objective 1

Initial Tests
Number Purchase Shipping
Vendors Total Cost
Purchased Price Cost
JKICT/LabGenomics
500,000 $9,000,000 $464,369 $9,464,369
Samsung SDS
Disposition of Tests
MDH advised us that almost all of the tests were returned unused on June 23, 2020.
OLA Conclusions as of January 29, 2021
 Tests were not procured in accordance with State procurement regulations,
including the lack of a written contract.1
 While there was certain documentation that other vendors were contacted, we
could not determine the extent to which they were actually considered to provide
the tests.1
 We found no records documenting the formal evaluation of the vendors, the basis
for the selection of LabGenomics, or whether LabGenomics was the best qualified
vendor.1
 We were unable to identify the specific parties ultimately responsible for the
evaluation and selection of LabGenomics.1
 A review of available records indicates the State did not ensure that the tests
received on April 18 and 22, 2020, were authorized by the Federal Food and Drug
Administration prior to them being shipped by LabGenomics.
 A study of the tests by one laboratory indicated the tests were likely to have an
increased number of false-negatives and inconclusive results, and increased test
processing times.
 We were advised by MDH that certain tests used by one laboratory were found to
produce inconclusive results.
 MDH did not acknowledge the aforementioned issues in its decision to return the
tests.

Procurement of Tests:

The COVID tests were procured by the Department of General Services (DGS) as
an emergency procurement authorized in State procurement regulations. These
regulations include several requirements for emergency procurements including

1
Condition described is a violation or potential violation of requirements found in State
procurement regulations.

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(a) a formal written contract; (b) obtaining as much competition as practicable; (c)
submitting the procurement to the Board of Public Works; (d) publicizing the
award on eMaryland Marketplace (eMM)2; and (e) documenting the details of the
procurement, including justification for the use of the emergency procurement
and the basis for selecting the vendor. In regard to the written contract, the
regulations require the contract to include critical provisions such as conformance
of specifications, delivery and acceptance, dispute resolution, indemnification,
liquidated damages, compliance with laws, cost and price certifications, political
contribution disclosures, anti-bribery statements, and requirements for registration
of the business in the State.

a. Was the procurement in accordance with State procurement

regulations?
Our review disclosed that DGS did not have a formal written contract with
LabGenomics, a South Korean company, containing the critical provisions
required by State procurement regulations. Rather, DGS provided us with a
Letter of Intent (LOI) dated April 2, 2020 it issued to a Virginia firm
(JKICT) representing LabGenomics. The LOI included the following
information:

We are writing to provide a letter of intent from the Maryland

Department of General Services (DGS) with respect to a
transaction with your firm for Covid19 PCR Assay Kit (100T),
quantity 5,0003, responsive to your Proforma Invoice PIL20-
0402, dated April 2, 2020. The total cost of the transaction is
$9,000,000. The terms are 100% upon placement of order, via
wire transfer. This wire is scheduled for transmittal on April 3,
2020.

As such, the LOI did not contain any of the aforementioned critical
provisions required by State procurement regulations or any specifications or
requirements for the tests to ensure they would work as intended and
complied with Federal Food and Drug Administration (FDA) Emergency
Use Authorization (EUA)4. Furthermore, we determined that neither
LabGenomics nor JKICT were registered with the State Department of
Assessments and Taxation (SDAT), as required, to do business in the State

2
Although DGS replaced eMM with eMaryland Marketplace Advantage (eMMA) effective July
2019, the same publishing requirements exist.
3
5,000 refers to the number of test kits (1 test kit = 100 tests), which totals 500,000 tests.
4
EUAs are issued by the FDA to permit the emergency use of an unapproved medical product
during a period of a public health emergency.

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prior to the purchase. JKICT subsequently registered with the SDAT three
months after the purchase.

In relation to the selection of LabGenomics as the vendor to provide the

tests, as further described below, we found there was documentation that
other vendors were contacted regarding the procurement, but we could not
determine the extent to which they were actually considered to provide the
tests or whether the selected vendor was the best qualified. DGS did notify
the Board of Public Works (BPW) of the procurement and publish the award
in eMaryland Marketplace as required. However, BPW staff advised us that
due to the lack of the required written contract, the purchase may now need
to be submitted for ratification by BPW.

In addition, we found certain assertions made by State employees regarding

the selection of LabGenomics could not be supported. Specifically, DGS
prepared an undated procurement checklist, which included the following
statement:

On behalf of the Maryland Department of Health (MDH), DGS

Office of State Procurement (OSP) tendered payment to
JKICT/LabGenomics for 500,000 COVID-19 tests. Due to the
emerging details about the virus and testing, OSP has little to no
market research around this commodity. Accordingly, DGS
OSP relies upon the expert opinions of clinicians and others
within MDH who have made the determination that these tests
will meet the needs of the State and that costs are fair and
reasonable. DGS OSP is unable to find comparable products
within current contracts or its normal supply chain sources.

Regarding this statement, neither DGS nor MDH staff could provide us with
written documentation to support the evaluation of potential vendors as
further described below in Question c. “Why was LabGenomics selected?”

Finally, DGS chartered two special flights from South Korea to deliver the
tests for which it paid an additional $464,369 to another company (Samsung
SDS) without any written contract. DGS’s undated written justification for
the charter stated that

Samsung has provided a fair and reasonable cost for charters.

DGS OSP notes lack of availability of flights and, when
available, prices have been significantly higher than the cost
presented by this vendor. Due to the volatile environment of

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 overseas air freight, as well as the need for this transaction to
be finalized immediately, seeking competition was not practical.
Further, due to the need for upfront payment for the flights, a
direct voucher wire payment has been initiated.

DGS senior staff we interviewed could not provide us with any

documentation to support these assertions made in DGS’ written
justification. Moreover, as noted below, the shipping cost for the second
500,000 tests was $14,265. DGS did not document its rationale for
chartering the flights and incurring the additional cost for the first tests.

b. Were other vendors considered?

While there was certain documentation that other vendors were contacted,
we could not determine the extent to which they were actually considered to
provide the tests. Specifically, the Governor’s Office provided us with a
spreadsheet containing the names of 23 vendors that it claimed were
contacted prior to and after the tests from LabGenomics were purchased
including 8 from the United States, 13 from South Korea, and 2 from China.
We were advised that one employee from the Governor’s Office and one
employee from MDH were primarily responsible for contacting and
obtaining information from these companies related to their tests. The
results of these inquiries such as the status of the vendor’s application for
FDA EUA, types of equipment that may be used with the tests, technical
specifications for the tests, and number of tests available were included on
the spreadsheet for certain vendors.

However, the information for certain attributes was not completed for 20 of
the vendors on the spreadsheet (including for LabGenomics), and no
documentation was provided to support any of the information on the
spreadsheet for 12 vendors. For the remaining 11 vendors, we were
provided with certain written documentation such as performance data and
EUA acknowledgment letters for their respective tests, which appears to
substantiate that they had been in contact with the State.

c. Why was LabGenomics selected?

Neither DGS nor MDH could provide us written documentation to support
or otherwise justify the selection of LabGenomics as the vendor to provide
the tests. Rather, we were advised by the Secretary of DGS that MDH
selected LabGenomics because it had the ability to provide the desired
quantity of COVID tests within the State’s timeframe, which can be
characterized as “as soon as possible”. As noted above, we were advised by
Governor’s Office personnel that numerous vendors were contacted and the

12
selection was based on an evaluation of specifications (for example, the type
of equipment required to process the tests). Senior management officials at
DGS and the Governor’s Office advised us that pricing was considered, but
the State’s priority was to obtain a large volume of tests that met the State’s
requirements within a minimal amount of time.

We were advised that the State requested specifications on each vendor’s

tests, the status of their EUA application, estimated volumes of production,
and whether there were any issues with timely delivery. We were further
advised that the Maryland Public Health Laboratory (MPHL), which is a
unit within MDH – Laboratories Administration, was responsible for
reviewing the technical qualifications. While we sighted certain
correspondence related to the qualifications of the tests, there was no formal
document (such as selection committee evaluations and rankings)
summarizing the evaluation of the vendors for these key attributes with a
corresponding recommendation for which vendor was best suited to meet the
State’s needs.

In addition, the officials we interviewed could not identify the individual or

individuals ultimately responsible for deciding to procure the tests from
LabGenomics. The following is our understanding of the events
surrounding the procurement of the tests from LabGenomics based on our
review of existing documents and interviews of appropriate officials. The
former DGS Director of Procurement advised us that he prepared and signed
the LOI at the direction of the DGS Secretary. The Secretary of DGS said
we would have to speak with MDH for details regarding this decision and
could not identify the specific individual responsible for making the
decision. The former Secretary and current Acting Secretary of MDH both
advised us that they were not involved in the process and did not know who
decided to select LabGenomics. A senior MDH official said that the
Governor’s Office (including the First Lady’s staff), worked with DGS on
acquiring the initial tests. However, the Governor’s former chief of staff
acknowledged that he was involved in logistics, such as facilitating calls, but
did not know who made the decision to purchase the tests from
LabGenomics, and the First Lady’s current chief of staff advised us that she
was just involved as a translator.

As of January 29, 2021, we have been unable to locate any documentation or

reach a conclusion as to the identity of the party or parties who authorized
the purchase of the tests from LabGenomics. Ultimately, it is possible that a
paper trail identifying the employee responsible for approving the
LabGenomics purchase does not exist.

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Receipt of Tests

a. When and how many tests were received?

We received shipping records indicating the receipt of two shipments of
tests on April 18, 2020 and April 22, 2020 at the Baltimore/Washington
International Thurgood Marshall Airport containing 350,000 tests and
150,000 tests, respectively. MDH advised us in writing that the 350,000
tests were transported to MDH’s warehouse and the 150,000 tests were
transported to the Maryland Department of State Police’s Pikesville lab. We
were provided with a tracking sheet maintained by MDH documenting the
location and disposition of the tests. However, we have not been able to
trace the information from the tracking sheet to any supporting
documentation (receiving reports or independently maintained inventory
records identifying the specific number of tests received and transported to
other locations), and we were unable to sight any of these physical tests
because, as described below, the tests were returned prior to our review.

Based on the tracking sheet, it appears that MDH retained most of the tests
until they were returned (see below for discussion of the return process) and
the remainder of the tests were distributed as follows:

 Maryland Department of State Police received 150,000 tests.

 CIAN Diagnostics received 10,100 tests (7,200 were returned to MDH.
The 2,900 remaining tests were used for laboratory studies and patient
testing.)
 University of Maryland Medical System received 500 tests.
 Integrated Cellular & Molecular Diagnostics (ICMD) received 100
tests.

b. Did the State verify the tests worked as intended?

The CIAN Diagnostics and ICMD laboratories performed studies to verify
the efficacy of the tests by conducting analyses and comparing the results to
an FDA authorized test from another manufacturer. We obtained the results
of the studies, which disclosed that CIAN Diagnostics did not have any
concerns with the reliability and processing time of the tests. However,
ICMD’s study identified several concerns5 including:

 The LabGenomics’ test is less sensitive than the other manufacturer’s

test.

5
As of January 29, 2021, we are waiting on a response from the Maryland Public Health
Laboratory regarding the reasonableness of comparing the bridging studies between CIAN and
ICMD.

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 The LabGenomics’ test processing times (6-8 hours) was almost twice as
long as the other manufacturer’s test (3-4 hours) which limits the number
of samples that can be processed in a given day.
 The design of the LabGenomics’ test is likely to increase the number of
false-negative and inconclusive results.

Due to the concerns raised by ICMD, MDH requested that MPHL conduct
an independent study. MPHL noted that the tests did not contain the same
internal control reagent material and procedures that were referenced in the
FDA’s EUA granted to LabGenomics. Our review of available
documentation disclosed the following timeline and relevant facts related to
the EUA application submitted by LabGenomics and the shipment of the
tests to the State.

March 26, 2020 LabGenomics submitted the EUA application to the FDA.
March 30, 2020 The FDA requested that LabGenomics change the internal
control reagent material included in the test.
April 2, 2020 DGS issued the LOI to LabGenomics for the order of
500,000 tests.
April 3, 2020 LabGenomics revised its EUA application to reflect the new
internal control reagent material and resubmitted it to the
FDA.
April 18, 2020 350,000 tests were shipped from South Korea and delivered
to the State.
April 22, 2020 150,000 tests were shipped from South Korea and delivered
to the State.
April 29, 2020 The FDA issued the EUA to LabGenomics; however, the
500,000 tests previously shipped to the State did not contain
the new internal control reagent material and, therefore, did
not conform to the EUA ultimately issued by the FDA.

So, the tests received on April 18, 2020 and April 22, 2020 were not in
conformity with the EUA issued to LabGenomics. This means that although
MDH had verified that LabGenomics submitted its EUA application to the
FDA prior to purchasing the tests, there was no written requirement that
LabGenomics had to provide tests that conformed to the EUA.

In addition, we were advised by MDH management (including the prior

Deputy Secretary for Public Health) that “up to a couple thousand” tests
were used by CIAN Diagnostics for patient testing in early May 2020 and
that some of the specimens had to be retested using a different
manufacturer’s test because the LabGenomics’ test results were

15
 inconclusive. In this regard, CIAN Diagnostics management initially denied
using any of the tests but subsequently acknowledged using some of them
but denied having any concerns with the results. We were unable to validate
these assertions because documentation of these test results has not been
provided by CIAN Diagnostics as of January 29, 2021.

Disposition of Tests

a. Why were the tests returned?

MDH did not acknowledge the aforementioned problems (the ICMD
concerns and EUA issues) as the reason(s) for returning the tests when
responding to our inquiries in its written response dated November 16, 2020.
Rather, MDH stated that the reason the tests were returned (to obtain the
newer tests) was because, after delivery of the first tests, MDH learned that
LabGenomics had an upgraded test that had better controls for extraction of
the RNA process. MDH further asserted that it understood that the original
tests could still have been used with a custom lab process (as permitted by
the federal government) but this process would have taken longer than
purchasing the upgraded tests.

b. What happened to the unused tests?

We were advised by MDH that all of the original tests (except for the limited
number used by the laboratories) were returned to LabGenomics on June 23,
2020. Our review of shipping documents provided by MDH disclosed that
26 boxes of tests were picked up from the Maryland Department of State
Police on June 23, 2020, for shipment to an address in Ridgefield, New
Jersey. MDH did not provide us with the specific number of tests included
in the 26 boxes.

16
Objective 2

Second Tests
Number Purchase Shipping
Vendor Total Cost
Purchased Price Cost
$11,500,000
(original payment of $9 million
LabGenomics 500,000 $14,265 $11,514,265
for initial tests and an additional
payment of $2.5 million)
Disposition of Tests
The Governor announced that all of the tests were used as of December 15, 2020.
OLA Conclusions as of January 29, 2021
 Tests were not procured in accordance with State procurement regulations,
including the lack of a written contract.6
 We were provided no documentation of the extent to which other vendors were
considered.6
 We were provided no documentation to support the basis for the selection of
LabGenomics.6
 We were unable to identify the specific parties involved in the decision to purchase
the second tests from LabGenomics.6
 We were provided no documentation supporting negotiations for the additional $2.5
million paid for second tests that were received May 21, 2020 and June 17, 2020.
 We were unable to obtain documentation of test results from laboratories to
substantiate the disposition of the tests.
 Towson University and certain nursing homes raised concerns with the reliability of
test results reported by the University of Maryland Pathology Associates (UMPA)
laboratory; among the tests used by UMPA at the time were the second tests from
LabGenomics.
 MDH Maryland Public Health Laboratory (MPHL) and the MDH Office of Health
Care Quality (OHCQ) looked into concerns with the test results and noted
deficiencies with the UMPA procedures but did not determine if there were any
issues with the tests themselves.
 We were unable to obtain documentation of test results from laboratories to
corroborate the concerns with the reliability of test results.

6
Condition described is a violation or potential violation of requirements found in State
procurement regulations.

17
Procurement of Tests:

DGS purchased the second COVID tests directly from LabGenomics in May 2020
and returned the first tests as previously discussed. The purchase of the second
tests was also conducted as an emergency procurement authorized by State
procurement regulations and was subject to the same requirements we noted for
the initial tests. We were advised that the State returned the initial tests after the
two shipments of the second tests were received in May and June 2020.

a. Was the procurement consistent with State procurement regulations?

Although the purchases of the initial and second tests were separate
transactions, we could not determine if they were considered one combined
emergency procurement or two separate procurements. Specifically, while we
were advised by BPW staff that both purchases could be considered one large
emergency procurement, the first purchase agreement was with a Virginia-
based company (JKCIT) and the second purchase was made directly from
LabGenomics. In this regard, there was no written contract or LOI for the
second test purchase, and there was no amendment to the original LOI issued
for the initial test purchase to account for the second purchase. This lack of a
contract is significant given the issues previously noted with the initial tests.

DGS notified BPW of the second purchase and published the award on
eMaryland Marketplace as required. However, BPW staff advised us that due
to the lack of the required written contract, the purchase may need to be
submitted for ratification by BPW.

We found that documentation for the procurement of the second tests from
LabGenomics was lacking, such as, support for the basis of selecting the
particular vendor, and for certain assertions made regarding the negotiation,
competition, and pricing. Rather, DGS prepared an undated procurement
checklist, which included the following statement:

For greater reliability, productivity and efficiency in laboratory settings,

DGS received a request to purchase upgrades to previously acquired
COVID-19 test kits. These upgrades were negotiated directly with the
manufacturer, LabGenomics. Citing the compatibility needs, competition
would not be practicable. Pricing is fair and reasonable both by
comparing to the costs of the original tests, as well as examining the
extremely limited available data regarding the costs to acquire tests. The
air freight charge is far below market value and is also considered fair and
reasonable. Due to the payment being made via wire transfer, a BPO has

18
 been created for tracking purposes only. Payment to be made upon final
delivery of all 500,000 upgraded tests.

However, neither DGS nor MDH could provide us with documentation to

support the negotiation with LabGenomics and the determination that
competition was not practicable and pricing was fair and reasonable.7 In
regard to the shipping of the tests, the invoice from LabGenomics included a
shipping charge of $14,265.

b. Were other vendors considered?

We could not determine if any other vendors, in lieu of LabGenomics, were
considered at the time the second tests were acquired. The Secretary of DGS
did not know if other vendors were considered at the time of this purchase and
referred us to MDH. The former Deputy Secretary for Public Health advised
us that other vendors were consistently being pursued but could not provide us
with documentation to support this assertion. A former Chief of Staff to the
Governor advised us that he believed other vendors were considered because
he was personally engaged in conversations with at least three test suppliers.
However, he could not provide us with any documentation related to these
conversations. The current Deputy Legislative Officer at the Governor’s
Office, although not providing us with written information regarding the
consideration of vendors during the decision to procure the second tests, did
advise us that other vendors were considered at the end of summer 2020,
which was several months after the purchase of the second tests. Specifically,
the State was researching Multiplex tests (that is, tests that could detect both
flu and COVID), and he believed MPHL ultimately purchased COVID tests
from another vendor, in addition to those purchased from LabGenomics.

c. Why was LabGenomics selected?

Neither DGS, MDH, nor the Governor’s Office could provide us with
documentation to support the decision or the specific parties responsible for
the decision to procure the second tests from LabGenomics. The former
Director of Procurement at DGS who processed the transaction advised us that
the Secretary of DGS directed him to process the purchase of the new tests.
The Secretary of DGS directed us to MDH for the reason that the purchase
was made from LabGenomics, and the former Secretary of MDH advised us
that it was the Secretary of DGS or the Governor who made the decision. The
current Chief of Staff to the First Lady advised us that someone determined
LabGenomics was the only option available at the time of the second
purchase, but could not specify who made the determination. A former Chief

7
We were unable to obtain clarity if the second tests were deemed a new procurement or upgrades
to the original existing purchase.

19
 of Staff to the Governor advised us that the decision was made in consultation
with multiple agencies, but also could not specifically identify who ultimately
made the decision. The current Deputy Legislative Officer at the Governor’s
Office said the former Deputy Secretary of Public Health at MDH and a
former Chief of Staff at the Governor’s Office participated in the discussions
regarding the new tests; however, both of these individuals denied any direct
involvement in the decision.

As of January 29, 2021, we have been unable to locate any documentation as

to why LabGenomics was selected and the identity of the party or parties who
authorized the purchase of the second tests, and it is possible that a paper trail
does not exist.

d. How was the additional amount paid to LabGenomics determined?

We could not obtain any documentation to support how the price of the
second tests was determined. The current Chief of Staff to the First Lady
advised us that LabGenomics required the additional $2.5 million to offset the
costs of manufacturing and raw materials used to produce the tests. However,
there was no documentation to support this assertion. A former Chief of Staff
to the Governor advised us that the cost was always a concern; however, the
State was more focused on increasing testing capacity (that is, purchasing as
many tests as possible) in the interest of saving lives. In addition, the former
Chief of Staff stated that negotiations with LabGenomics occurred with a
combination of people from DGS and MDH but we spoke to the DGS
Secretary and the current Deputy Legislative Officer at the Governor’s Office
who was the former Deputy Director of Governmental Affairs at MDH, and
they could not provide us with the specific parties involved.  The current
Deputy Legislative Officer at the Governor’s Office also advised that he
participated in a few of the initial phone calls between the State and
LabGenomics, during which LabGenomics was notified that the State wanted
the new tests at no additional cost to the State. He could not explain or
document how the payment of the additional $2.5 million was ultimately
determined.

Receipt of Tests

a. When and how many tests were received?

We reviewed shipping records and other documentation indicating the receipt
of two shipments of the second tests on May 21, 2020 and June 17, 2020 at
the University of Maryland, Baltimore’s (UMB) Health and Science Facility
containing 100,000 tests and 400,000 tests, respectively. According to
available records, 344,800 of these tests were subsequently distributed to

20
 CIAN Diagnostics and 30,200 were distributed to MPHL. The remaining
125,000 were retained by the laboratories at the UMB’s Institute of Genome
Sciences (IGS) and UMPA.

b. Did the State verify the tests worked as intended?

We obtained documentation of studies performed on the second tests by
MPHL and CIAN Diagnostics. MPHL’s study concluded that the tests
demonstrated a slightly narrower range of detection compared to the federal
Centers for Disease Control and Prevention’s test, but concluded that the tests
did consistently detect the virus. CIAN Diagnostic’s study did not identify
any concerns with the tests.

Disposition of Tests

On December 15, 2020, the Governor announced that all of the tests from
LabGenomics had been used, but, as of January 29, 2021, we were unable to
obtain documentation supporting this assertion. No centralized records of tests
distributed and/or used was maintained by MDH, and we are unaware of the
existence of any such records. Consequently, we requested documentation of test
results from the laboratories that used the second tests (specifically from MPHL,
CIAN Diagnostics, and UMB for IGS and UMPA) in part to aid us in accounting
for the number of tests used. However, the laboratories initially denied our
request for these records. Legal counsel to the Maryland General Assembly
confirmed we were entitled to these records. However, we were unable to obtain
and analyze the records from the laboratories prior to issuing this report. The
results of our review of those records will be subject to inclusion in a subsequent
OLA report.

Concerns with Test Results

We received an allegation on our fraud, waste, and abuse hotline in September

2020 regarding concerns with the accuracy of test results received for samples
collected at Towson University (TU) and the response to these concerns by TU
administration. Subsequent to the receipt of this allegation, the local news
reported on similar concerns with the accuracy of test results identified by at least
one nursing home in the State. The samples collected at TU and the nursing home
during this period of time were sent to the laboratory at UMPA for processing and
analysis, and among the tests used by UMPA at the time were the second tests
from LabGenomics.

21
a. When were the concerns first identified?
The individual who submitted the allegation to our fraud, waste, and abuse
hotline advised us that 66 individuals whose test samples were collected by
TU in August 2020 and sent to UMPA for analysis were positive; however,
we were further advised that many of these individuals challenged the validity
of their test results for a variety of reasons (such as having no symptoms or
known exposures since an earlier test). As a result, the individual who
submitted the allegation stated that certain of these individuals immediately
retested at other laboratories and received negative test results.

In September 2020, OHCQ received a complaint from a nursing home

regarding staff members and residents whose test results came back positive
from UMPA. The Director of OHCQ provided us a redacted copy of the
nursing home complaint, which noted that nursing home staff members and
residents, who were asymptomatic, received positive test results. The nursing
home contacted MDH, which had MPHL retest staff members. Per the
complaint, all the retests for staff members were negative.

The Director of the MDH Laboratories Administration advised us that the

State Epidemiologist contacted him in September 2020 about concerns with
clusters of positive test results at several nursing homes that had their samples
tested by UMPA. Specifically, the Epidemiologist indicated that a large
number of asymptomatic staff members from a nursing home tested positive
and many of these individuals were subsequently retested by other
laboratories, including MPHL, and received negative test results. The
Epidemiologist was concerned that the results reported by UMPA using the
second LabGenomics tests could be falsely positive and requested a review of
the data by MPHL. The results of this review will be discussed in the section
below.

b. What actions were taken to address the concerns?

We were advised by the individual who submitted the allegation to our fraud,
waste, and abuse hotline that the former Director of Student Health Services at
TU who was responsible for obtaining and monitoring COVID test results on
campus raised concerns with the test results at TU. The individual who made
the allegation further advised us that these concerns were shared with TU’s
senior management, including the President of TU, the Baltimore County
Health Department, and the State Epidemiologist. However, the individual
who submitted the allegation did not believe that adequate action was taken by
TU, the Baltimore County Health Department, or the State Epidemiologist to
address the concerns with the accuracy of the test results.

22
We attempted to contact the President of TU to discuss these concerns and
were directed to the Vice President of Administration who was a member of
TU’s COVID response leadership team. The Vice President denied that there
were any concerns with the accuracy of the test results. This response was not
consistent with assertions made to us by the individual who submitted the
allegation and documentation we obtained, which indicated concerns with the
test results were communicated to TU’s senior management, the Baltimore
County Health Department, and MDH. In addition, this response was not
consistent with information we received from medical personnel at TU.

Specifically, TU’s Medical Staff Supervisor advised us that TU became aware

of similar concerns raised with positive test results from nursing homes that
used UMPA during this same period of time as TU and contacted UMPA to
determine if the samples from TU were processed using the second
LabGenomics tests and if the tests were repeated. The Supervisor advised us
that UMPA refused to provide any information. We were advised by the
individual who submitted the allegation that 44 of the 66 individuals who
tested positive were retested, but we were unable to obtain documentation of
the results as of January 29, 2021.

We also contacted the Supervisor of Disease Control at the Baltimore County

Health Department who acknowledged that concerns were raised about a large
number of positive test results at TU. He further advised that the Baltimore
County Health Department continued to monitor the test results at TU, but did
not take any actions to investigate the accuracy of the results.

In regard to the nursing home’s concerns, OHCQ initiated a review of the

UMPA laboratory after it received the September 2020 complaint to evaluate
UMPA’s compliance with federal and State regulations. The Director of
OHCQ advised us that the review did not include an evaluation of the
functionality or reliability of the specific LabGenomics tests used by UMPA
because it is beyond the scope of OHCQ’s authority. The Director advised us
that UMPA was found to be non-compliant with federal and State regulations,
for which OHCQ issued a statement of deficiencies on September 30, 2020.
For example, OHCQ reported that UMPA failed to establish and follow
written procedures to ensure patient samples were only tested within the
allowable timeframe after collection.

As noted above, the State Epidemiologist requested that MPHL conduct a

review of the nursing home tests that had questionable results. The Director
of the MDH Laboratories Administration advised us that the original samples
processed by UMPA were not available to perform retesting to determine

23
 whether the specific results were accurate. However, new samples were
collected several days later from 27 individuals who had tested positive. The
Director advised us that the new samples from all of these individuals, which
were processed by MPHL using the CDC’s test, had negative test results.
MPHL also conducted antibody testing on 58 individuals who had tested
positive from nursing homes and found that 51 individuals (88 percent) likely
had not been exposed to the virus.

Ultimately, we were advised by the Director that MPHL was unable to

determine if the questionable results were due to 1) inherent performance
issues with the LabGenomics tests, 2) modifications of the LabGenomics tests
made by UMPA, 3) cross contamination from specimen collection errors, or
4) breakdowns in testing practices or procedures at UMPA.

We were unable to obtain documentation of test results to corroborate these

concerns and the related statements. As noted above, the laboratories had initially
denied our request for these records. Legal counsel to the Maryland General
Assembly confirmed that we were entitled to these records. However, we were
unable to obtain and analyze the records from the laboratories prior to issuing this
report, and will include any findings in a subsequent OLA report.

24
Objective 3

Employee Terminations
OLA Conclusions as of January 29, 2021
Our review of the circumstances surrounding the termination of two State employees
after they had raised concerns related to the COVID tests found that the verbal
representations made to us by Towson University (TU) and the Maryland Department
of Health (MDH) as the basis for the terminations were not supported by available
written documentation.

Employee Terminations

We received an allegation on our fraud, waste, and abuse hotline in September

2020 regarding concerns raised with COVID test results by an employee at TU
who was subsequently terminated. Specifically, the former Director of Student
Health Services (SHS) at TU was terminated approximately one month after
pointing out potential inaccuracies with the LabGenomics test results. This
related to 66 samples collected from individuals at TU in August 2020 which
came back positive. During the December 8, 2020 Joint Audit and Evaluation
Committee meeting, we were asked to review the circumstances of the
termination of the former Director of Procurement at MDH who had raised
concerns with the process used to procure the LabGenomics tests.

a. What circumstances led to the termination of the Director of SHS at TU?

Allegation
We were advised during the follow up of our allegation that the former
Director of SHS was terminated on October 1, 2020, after a disagreement with
TU management regarding the cause of a spike in positive COVID test results
at TU in August 2020. Specifically, the former Director of SHS disagreed
with the view of the President of TU and leadership personnel from other
USM institutions who attributed the spike to the irresponsible behavior of the
individuals (primarily students), such as attending social events.

We interviewed the former Director of SHS who stated that he shared his
opinion with TU administration officials and other USM officials that the
spike was attributable to problems with the UMPA laboratory that processed
the tests. In this regard, the former Director of SHS advised us that many of
the TU individuals who initially tested positive for COVID approached the
then Director, challenging the validity of their test results for a variety of
reasons, such as having no symptoms, and certain of them were immediately

25
retested at other laboratories and received negative test results. Specifically,
the former Director further advised us that TU collected new samples from 44
of the individuals two days after the initial results were received and sent them
to UMPA for retesting. The former Director of SHS further advised us that,
upon being retested, 20 of these samples were negative, 16 were positive, and
8 were lost. These results combined with reports of increased positivity rates
at nursing homes and other institutions resulted in the former Director of SHS’
conclusion that the initial results from UMPA were not accurate. As
previously noted, we were unable to obtain and analyze test results from
UMPA.

The former Director was terminated approximately one month after voicing
his concerns about the LabGenomics test results.

TU Administration’s Comments on the Substance of the Allegation

The Associate Vice President of Student Affairs (the former Director of
SHS’s direct supervisor), the Vice President of Student Affairs, the Associate
Vice President of Human Resources, and TU’s General Counsel all advised us
that the former Director of SHS was terminated because of performance issues
and not the disagreement regarding the increase in positive COVID cases.

The Associate Vice President of Student Affairs stated that the former
Director of SHS was good at working with students and had a “strong bedside
manner”, but had difficulty with administrative tasks, such as, creating
spreadsheets and reports and automating certain practices, which led to a lack
of trust in his abilities. In addition, TU’s General Counsel stated the former
Director of SHS expressed reluctance to embrace TU leadership’s directives,
such as establishing an external medical advisory committee, which was a
source of tension. The Vice President of Human Resources stated that the
termination was not the result of a singular event, but a pattern of behavior
that was being addressed from a performance perspective, which extended
prior to the COVID pandemic situation.

Personnel File
We reviewed the former Director’s four most recent performance evaluations
on file. While we were advised there is no requirement to document the
reason for termination, all of the evaluations indicated that the Director of
SHS met or exceeded expectations and had no areas of deficiencies. For
example, the performance evaluation prepared by the Associate Vice
President of Student Affairs and signed by the Director of SHS on July 1,
2020, included the following comments (former Director of SHS authorized
for disclosure):

26
 Administratively [the former Director] has met all deadlines, continued to
maintain an open line of communication, kept me appraised of new
developments, and brings potential solutions to problems and situations.

Based on my observations, I do not have any immediate areas of

professional improvement or areas that that I would define as deficient.

Ultimately, TU could not provide any further documentation related to the

former Director’s termination.

b. What circumstances led to the termination8 of the Director of

Procurement at MDH?

Allegation
We interviewed the former Director of Procurement at MDH who advised us
that he was terminated and his last day at work was November 23, 2020. We
were further advised that this termination may have been related to the former
Director’s planned attendance at an upcoming Board of Public Works’
meeting during which the COVID tests were to be a subject of discussion.

Specifically, the former Director of Procurement advised us that his

termination may have been because the Governor’s Office did not want him in
attendance at the BPW meeting to avoid the risk of the former Director
speaking in a direction that was not aligned with the public position of MDH
and the Governor’s Office. This BPW meeting occurred approximately one
week after the former Director’s termination, during which the Acting
Secretary of MDH stated that the original LabGenomics tests were “clunky.”
The former Director of Procurement advised us that due to the nature of his
position, he rarely missed BPW meetings and would have attended this
meeting if not for the termination.

The former Director of Procurement further advised us that he had expressed

concerns with the first tests from LabGenomics on two occasions.
Specifically, he was contacted, via conference call, one evening prior to the
purchase of the first tests by the current Deputy Secretary of Operations at
MDH and the current Deputy Legislative Officer at the Governor’s Office
(who was the former Deputy Director of MDH’s Office of Governmental

8
Although the former Director officially resigned from State service, he advised us that he would
characterize his separation from service as a termination, based on his discussions with MDH
officials. Consequentially, we used “termination” throughout this discussion to be consistent
with his interpretation of events and MDH’s stated position.

27
 Affairs) and was asked to wire millions of dollars to a South Korean COVID
test company. The former Director of Procurement refused to process the
payment and explained that the transaction had to follow the proper
procurement process (previous sections in this report describe the lack of
compliance with State procurement regulations in the test purchases).
Additionally, after the original tests were received, the former Director of
Procurement stated that he contacted his supervisor, the former Deputy
Secretary of Operations, and suggested that the tests’ be verified by MPHL for
reliability. According to the former Director of Procurement, he was told to
not ask questions of this nature.

MDH’s Position on the Allegation

The former Secretary advised us that the termination was unrelated to the
LabGenomics tests and the BPW meeting. Rather, the former Secretary and
current Chief of Staff asserted that the former Director of Procurement was
terminated because he was only working part-time and MDH needed a strong,
full-time leader for procurement.9 We were advised by the Director for the
Office of Human Resources that she did not recall other terminations for a
similar reason, but it was unusual for the director of a unit to only work part-
time.

In addition, the current Deputy Legislative Officer at the Governor’s Office

acknowledged that he participated in a call to the former Director of
Procurement prior to the purchase of the first tests, but denied that the former
Director of Procurement was asked to process a wire transfer to a South
Korean COVID test company. The current Deputy Legislative Officer
advised us that the call was to inquire about expediting the procurement
process if MDH could identify a COVID test company. The current Deputy
Legislative Officer could not remember if LabGenomics was discussed during
the call.

Personnel File
The concern with the former Director of Procurement only working part-time
was not reflected in his personnel file. While we were advised there is no
requirement to document the reason for termination, we found no mention of
this concern in the performance evaluations that the former Director of
Procurement received or on any other written document. In this regard, our
review of the eight performance evaluations issued to the former Director of
Procurement covering the period from January 2016 to June 2020, disclosed

9
Based on the understanding that MDH needed a strong full-time procurement leader, we reached
out to MDH to determine if a new full time Director of Procurement has been hired. As of
February 25, 2021, we were advised by MDH that the position had not been filled.

28
that his performance was evaluated as “outstanding” on five of the evaluations
including his most recent evaluation for the period ending June 2020 and
“satisfactory” on three of the evaluations. Although the majority of these
evaluations had no written comments on the performance of the former
Director of Procurement, we noted that the evaluation dated July 3, 2018
stated that he had “done an excellent job of preparing MDH for BPW
meetings.” The former Director of Procurement authorized disclosure of
information from the personnel file.

Finally, our review of payroll records for calendar years 2019 and 2020 did
substantiate MDH’s assertion that the former Director of Procurement only
worked part-time during periods of those years. For example, the Director
worked an average of 58 hours per pay period during the last 12 pay periods
of calendar year 2019.

Ultimately, MDH could not provide any further documentation related to the
former Director’s termination.

29
 Exhibit

Schedule of Individuals Interviewed

Maryland Department of Health (MDH)
Thomas C. Andrews Chief of Staff
Corey Carpenter Director of Policy, Office of Governmental Affairs
Acting Deputy Secretary of Public Health Services; prior
Dr. Jinlene Chan
Assistant Secretary and Chief Medical Officer
Deputy Secretary of Operations (replaced Gregg Todd); prior
Atif T. Chaudhry
Director of Facilities Management and Development
Dana L. Dembrow Former Director of Procurement (resigned November 2020)
Deputy Director of Administrative and Support Services,
Rodney E. Hargraves
Laboratories Administration
Jennifer E. McMahan Director of Office of Human Resources
Dr. Robert A. Myers Director of Laboratories Administration
Director of the Office of Health Care Quality, Public Health
Dr. Patricia T. Nay
Services
Robert R. Neall Former Secretary (retired November 2020)
Former Deputy Secretary of Public Health Services (retired
Frances B. Phillips, R.N.
August 2020)
Acting Secretary (since December 2020); prior Deputy
Dennis R. Schrader Secretary of Health Care Financing and Chief Operating
Officer
Gregg Todd  Former Deputy Secretary of Operations (resigned in July 2020)
Assistant Secretary of Health Policy, Office of Governmental
Webster Ye
Affairs
Department of General Services (DGS)
Ellington E. Churchill, Jr. Secretary
Michael F. Haifley Deputy Chief Procurement Officer
Former Director of Procurement Bureau, Office of State
Daniel J. Mays Procurement (resigned December 2020 to become Director of
Procurement at Judiciary)
Institute for Genome Sciences (IGS) at the University of Maryland School of Medicine
(UMB laboratory contracted by the State)
Mike Humphrys Director of Microbiome Service Laboratory at IGS
Dr. Jacques Ravel Associate Director for Genomics

30
 Towson University
Former Director of Student Health Services (terminated
Dr. Matthias Goldstein
October 2020)
Dr. Vernon J. Hurte Vice President of Student Affairs
Steve Jones Associate Vice President of Human Resources
Vice President of Administration and Finance and Chief Fiscal
Benjamin Lowenthal Officer; member of the University COVID Response
Leadership Team
Dr. Lisa Murray Medical Staff Supervisor
Associate Vice President of Student Affairs and Dean of
Anthony Skevakis
Students
Sara Slaff Vice President of Legal Affairs and General Counsel
Baltimore County Department of Health and Human Services
Sabrina Chase Assistant County Attorney, Baltimore County Office of Law
Public Health Investigator, Supervisor of Disease Control;
George Elder
COVID liaison for colleges
Governor’s Office
Former Chief of Staff to Governor Hogan (effective August
2017, resigned June 2020 to become Senior Vice President for
Matthew A. Clark
Marketing and Communications at the University of Maryland
Medical System)
Chief of Staff to the First Lady of Maryland; Prior
Soo Koo Communications Director of the Governor’s Office of
Community Initiatives
Former Chief of Staff to Governor Hogan (effective June 2020,
Roy C. McGrath
resigned August 2020)
Deputy Legislative Officer (effective December 2020); former
Jake A. Whitaker Deputy Director of Office of Governmental Affairs at MDH
(started December 2017, resigned December 2020)
Others Interviewed or that Contributed to Our Review
Director of Office of Preparedness and Response, Operations,
Sherry B. Adams
MDH
Dr. Manoj Adusumilli Medical Director, CIAN Diagnostics
Planning Unit Supervisor, Maryland Emergency Management
Harrison Brown
Agency (MEMA)
Diane M. Croghan Deputy Chief of Staff, Governor’s Office
Marcia S. Deppen Director of Consequence Management Directorate, MEMA
Charles A. Eby Deputy Executive Director, MEMA
Robert E. Gleason Chief Procurement Officer, DGS
Chief External Affairs Officer, University of Maryland Medical
Kristen Jones-Bryce
System

31
 Medical Director, Integrated Cellular and Molecular
Dr. Adnan Khan
Diagnostics, LLC
Kyle Koeppler Chief Executive Officer, CIAN Diagnostics
Deputy Chief of Staff and Director of Office of Homeland
Walter F. Landon
Security
Jennifer Leatherman General Counsel, CIAN Diagnostics
Dr. Sombabu Mallapudi Principal/owner, CIAN Diagnostics
Russell J. Strickland Director, MEMA
Jon Weinstein Director, COVID-19 Testing Task Force, MDH

32
 APPENDIX A

Auditor’s Comments on Agencies’ Responses

The agencies subject to this review disagreed with many of OLA’s statements and
conclusions in their written responses (see Appendices B – D). After reviewing
these responses, we re-examined our work and reaffirmed that our published
findings are appropriate, clearly presented, and properly supported by the results
of interviews and our examination of the limited documentation provided to us
both during the review and in the attached responses. Thus, we continue to
believe that OLA’s statements and conclusions in the report are valid and were
not disproved by any of the unsupported assertions included in the responses.
Although we reviewed each response in its entirety, we did not deem it necessary
to provide a point-by-point rebuttal, but rather provided the Auditor’s Comments
below to certain significant disagreements in each of the agencies’ responses.

Auditor’s Comments regarding the Governor’s Office response (Appendix B):

The Governor’s Office disagreed with the statements made in our report regarding
its failure to provide documentation. Specifically, the Governor’s Office stated in
its response that its Senior Deputy Legal Counsel had advised us that he was the
point of contact for document requests, but our requests were made solely to two
current Governor’s Office employees for documents from their former positions
with the State.

The Governor’s Office had sufficient opportunities to provide the documentation

we requested, and contrary to its response, OLA did request documentation from
the Senior Deputy Legal Counsel. For example, in emails to the Senior Deputy
Legal Counsel dated January 14, 2020, we requested “a list of manufacturers (and
related documentation, such as proposals from the companies) that were contacted
for COVID test kits and any other correspondence” and “Any documentation and
correspondence that would be helpful for us to understand the process of
acquiring the COVID test kits.” Such requests were intentionally broad in scope,
given a lack of specific information obtained from interviews on existing records,
and were intended to obtain any documentation potentially or remotely relevant to
the subject under investigation.

In addition, as is typical during our examinations, we requested documentation

from the employees who were directly involved in the matters under review, and
to support assertions made during the interviews. Consequently, during our

1
interviews, the aforementioned two employees agreed to look for and provide
relevant documentation, as requested. Although these individuals provided us
with some records, upon our examination the records were generally deemed to
be insufficient to address the questions we were attempting to answer. Finally,
although given two weeks to review our draft report and understand our concerns
and findings, the Governor’s Office’s response did not include any additional
documentation to address the questions, providing further evidence as to the
validity of the conclusions reached in our report.

Auditor’s Comments regarding the Department of General Services

(DGS)/Maryland Department of Health (MDH) combined response (Appendix C):

The combined response from DGS and MDH included certain disagreements with
the content of our report. After reviewing this response and our related work, we
believe the content and conclusions of our report are appropriate, clearly
presented, and properly supported. For example, we noted the following:

I. Lack of Written Contract – It is troubling to us that the response

considers the letter of intent (see Attachment 1 to Appendix A) sufficient
to document a $9 million procurement from a foreign vendor that had not
previously conducted business with the State. Our report acknowledged
that there was a letter of intent, but indicated that it did not include all of
the required contract provisions, including language to address the
following key elements intended to protect the State:
a. conformance of specifications,
b. indemnification,
c. cost and price certifications, and
d. requirements for registration of the business in the State.

The response stated that the letter of intent satisfied the requirement of a
legally valid contract. However, as noted above, it did not include all the
required elements and accordingly did not comply with State procurement
regulations. Furthermore, we were advised by Board of Public Works
staff that, while the letter of intent may be evidence of an agreement
between the vendor and the State, without further documentation
incorporating the State’s required contract provisions, including those
noted above, this agreement may be “void” under State law.

In addition, although the response stated that the procurement of the

second tests was completed with a purchase order, we noted that the
procurement checklist prepared by DGS for the second tests indicated that

2
 the purchase order was created for tracking purposes only. This was
confirmed during an interview with the former Director of Procurement at
DGS who stated that the purchase order was created to track the receipt of
the tests prior to payment of the invoices.

II. Board of Public Works (BPW) Notification – The response implies that
the contract was compliant since it was submitted to the BPW and no
concerns were raised with the form of the contract. However, in
accordance with BPW Advisory 2009-2, when reporting emergency
procurements to the BPW, agencies are required to only submit an Action
Agenda item and a copy of the Procurement Officer’s Determination of
the Emergency. We were advised by BPW staff that the Labgenomics
award was initially presented to the BPW on the June 3, 2020 Agenda in a
compilation report with numerous other DGS emergency commodity
awards. That report was remanded back to DGS so that actual
documented invoices could be provided to the BPW office for review and
verification. According to the BPW staff, DGS provided purchase orders
(which as noted above were only used for tracking purposes), invoices,
payment transmittal documents and verifications of payment
disbursements, but BPW staff did not believe the actual contract(s) were
provided. Consequently, the BPW would not have reviewed the actual
“contract” document submitted and therefore, would not be in a position
to, nor have been required to, comment on whether it was compliant with
State regulations.

III. Documentation of Test Results – MDH acknowledged in its response

that patient identifiers were redacted in the records initially provided to us
in response to our inquiries. However, these records were deemed by us
to be incomplete (which we previously conveyed to MDH) as the records
only included results from certain periods of time and not all of the results
produced using the LabGenomics tests. The missing/redacted information
was critical to our review for multiple reasons. For example, the redaction
and omission of certain patient information precluded us from conducting
planned analyses and from verifying the accuracy and completeness of the
records. While the legal concerns regarding this issue were ultimately
resolved, we were unable to obtain and review the unredacted versions of
the records prior to issuing this report (as prominently disclosed in our
report).

IV. Concerns with Selective Utilization of Statements – The response raises

concerns that we did not include all information obtained during
interviews, which negatively impacts the validity of our work and

3
 contributes an element of bias in our report. Frankly, this assertion
confounds us as both departments know from longstanding practice and
professional standards that OLA reports do not and are not intended to
include all information obtained from an examination or review, verbatim.
Rather, OLA condenses the results from numerous audit processes (for
example, interviews, tests, observations, etc.) into a readable report of
practical length.

We believe that we have included all information obtained relevant to the

questions we attempted to answer for each of our objectives; and that the
selection and presentation of that information was done consistent with
our past practices. Finally, much of the lengthy response from DGS/MDH
includes explanations and not answers to the questions we were tasked
with answering and accordingly we did not include the information in the
body of our report. However, consistent with OLA’s report policy, we
have included these explanatory agency comments, which were submitted
with the combined response, in their entirety as an appendix to our report.

Auditor’s Comments regarding Towson University’s (TU) response (Appendix D):

The response from TU included certain disagreements with the content of our
report. For example, TU disagreed with any implied or expressed assertion that it
took inadequate action after receiving a spike in positive COVID test results in
August 2020 and that the former Director of Student Health Services (SHS) was
terminated because he raised concerns regarding this spike in positive test results.

In response to these disagreements, we note the following:

I. We did not opine on the adequacy of action taken by TU in response to the
spike in positive tests or the reason for the termination of the former
Director of SHS; rather, our report reflects the information that was
communicated to us by the individuals involved in matters under review.

II. We acknowledged in our report that documentation was not required to

justify the termination. Our report simply disclosed that the assertions
made by TU regarding the reason for the termination were not supported
with documentation and was not consistent with employee performance
evaluations included in the former Director’s personnel file.

We agree with TU’s response that neither TU nor any of its employees had a role
related to the procurement and use of the COVID tests from LabGenomics, and
our report does not make such a statement. Rather, our reference to TU in this

4
report is limited to its role as a user of the LabGenomics tests and its termination
of an employee.

5
APPENDIX A - Attachment 1
APPENDIX B

See Appendix A for

Auditor's Comments
regarding response
 APPENDIX C

See Appendix A for

Auditor's Comments
regarding response

March 26, 2021

Gregory A. Hook, CPA

Legislative Auditor
Office of Legislative Audits
Department of Legislative Services
301 West Preston Street, Room 1202
Baltimore Maryland 21201
Submitted electronically to [email protected]

Dear Mr. Hook:

The Maryland Departments of General Services (DGS) and Health (MDH) appreciate
the opportunity to respond to the Office of Legislative Audits’ (OLA) Review of
Procurement of Certain COVID Tests (Review), received on March 12, 2021. We thank
the OLA auditors for our ongoing conversations regarding these matters. DGS and
MDH collaborated on this response.

We highlight the Review’s cautionary note: “[OLA’s] review did not constitute an audit
conducted in accordance with generally accepted government auditing standards”
(Review at page 9). Unfortunately, the Review has a number of factual and other
inaccuracies, which we respectfully raise below.

We have five principal areas of concerns about the Review and respectfully disagree
with:
1. OLA Review Objective 2: “We were unable to obtain documentation of test
results from laboratories to substantiate the disposition of the tests” and “We
were unable to obtain documentation of test results from laboratories to
corroborate the concerns with the reliability of the test results.” ;
2. OLA Review Objective 3: “Our review of the circumstances surrounding the
termination of two State employees after they had raised concerns related to the
COVID tests found that the verbal representations made to us by Towson
University (TU) and the Maryland Department of Health (MDH) as the basis for
the terminations were not supported by available written documentation.”

3. OLA Review Objective 1: “Tests were not procured in accordance with state
procurement regulations, including the lack of a written contract.”

4. OLA Review Objective 1: “A review of available records indicates the State did
not ensure that the tests received on April 18 and 22, 2020, were authorized by
 the Federal Food and Drug Administration prior to them being shipped by
LabGenomics.”

5. Additional Concerns and Conclusions

1. OLA Review Objective 2: “We were unable to obtain documentation of test

results from laboratories to substantiate the disposition of the tests” and “We
were unable to obtain documentation of test results from laboratories to
corroborate the concerns with the reliability of the test results.”

Both DGS and MDH have fully complied with all requests for documentation made by
OLA. The Review contains several inaccuracies and omissions related to document
requests and productions, all seemingly intended to portray MDH and its public health
laboratory in a suspicious light.

On page 17, the Review claims that it could not “obtain documentation of test results
from laboratories to substantiate the disposition of tests” and that it was “unable to
obtain documentation of test results from laboratories to corroborate the concerns with
the reliability of test results.” Those assertions ignore the documents that the MDH lab
provided on November 24, 2020 as attachments 4, 9, 12, 12, 16, 22, 23, 25, and 27 to
Dr. Myers’ response via the OLA portal; see Attachment A. These attachments
contain the results from tests run by the MDH lab as well as the results of the tests run
by UMPA that were questioned. Only patient identifiers were redacted.

On page 21, the Review asserts that "[n]o centralized records of tests distributed and/or
used was maintained by MDH, and we are unaware of the existence of any such
records." That assertion ignores the documentation provided as attachments 17-19 of
Dr. Myers’ response.

Also on page 21, the Review claims that the MDH lab denied OLA's requests for
documentation of test results. As the attachments listed above show, that assertion is
inaccurate. In response to the November request for documents, the MDH lab gave
OLA documents with patient identifiers redacted. In one case, in response to a request
for a report by source of test, patient names were not requested. See attachment 16 of
Dr. Myers’ response.

Regarding the so-called denial of record requests and the related question of whether
OLA was entitled to the unredacted versions of the attachments listed above, at some
point after MDH provided those attachments, MDH counsel learned that UMPA and
UMB were questioning whether OLA was entitled to unredacted records without at least
an explanation of the need for patient specific information like name, DOB, SSN, etc.
The assistance of the OAG's Opinions and Advice counsel was requested in resolving
this matter. Accordingly, the MDH lab did not provide unredacted documents showing
test results until that legal issue was resolved.
2. OLA Review Objective 3: “Our review of the circumstances surrounding the
termination of two State employees after they had raised concerns related to the
COVID tests found that the verbal representations made to us by Towson
University (TU) and the Maryland Department of Health (MDH) as the basis for the
terminations were not supported by available written documentation.”

Regarding the individual in question with the Towson University personnel action, no
one in the Administration, DGS, or MDH was aware of this employee, the complaint, or
the termination prior to reading the Review. As such, we reject any implication or
allegation that the Towson University personnel action had any nexus to the
procurement of COVID-19 tests as inaccurate and not based in fact.

MDH rejects the implication that the former employee mentioned in Review resigned for
any reason other than 1) MDH needed new leadership to manage a proposed
redesigned procurement and contract management office, and 2) that leadership could
not be provided by a part-time employee.
These circumstances were discussed with the former employee who acknowledged
during the course of the conversation that indeed, the part-time nature of his
employment was a limitation on the overall performance of the Office of Procurement
and Support Services. These were the only topics discussed during the meeting on
November 23, 2020. However, at the conclusion of the meeting, the former employee
referenced a letter he intended to respond to from DGS recommending that a major
MDH procurement unrelated to COVID be terminated due to questionable procedures.
The former employee was thanked for his good service during his tenure, which as
stated in the Review, is reflected in the former employee’s personnel file.
The former employee’s part-time status was due to the earning limitation placed on a
retired state employee who returns to work for a state agency; i.e., the returned
employee’s salary cannot exceed the difference between the employee’s salary prior to
retirement and the employee’s pension amount. The earnings limitation provision
resulted in the former employee having to work less than 40 hours per week, as the
Legislative Auditor acknowledged. This was explained to the Legislative Auditor as well
as to why other MDH employees in similar circumstances were not subject to the same
treatment as the former employee; that is, they were not the head of a major MDH
program averaging more than $600 million in procurements each year.
If the former employee had any concerns about the procurements addressed in the
Review for which he was not responsible, those concerns were not brought to the
attention of senior MDH leadership at any time before, during, or after the November 23,
2020 meeting when the former employee’s status with the department was discussed.
The Review asserts as does the former employee that he was terminated to keep him
from appearing at an upcoming Board of Public Works (BPW) meeting. The former
employee resigned on November 23, 2020. The next BPW meeting was held on
December 2, 2020. There were no test kit procurements on that agenda. Furthermore,
reports of the LabGenomics emergency procurements were accepted by the BPW at its
September 2, 2020 meeting, nearly three months prior to the former employee’s
resignation. These facts directly contradict the assertion in the Review that the
employee was terminated to prevent him from attending the upcoming BPW meeting
where the test kits would be discussed.
MDH respectfully suggests that the only pertinent documentation related to the former
employee’s “termination” is his letter of resignation.
The footnote on page 28 of the Review implies that the MDH was disingenuous in
asserting that a change in procurement leadership needed to occur because the
position had not been filled as of February 25, 2021. In order to demonstrate MDH’s
commitment to re-defining and revamping its procurement operations, the following
actions are currently underway to improve and redesign procurement and contract
management processes:
• MDH has been working with the DGS Office of State Procurement (OSP)
regarding the need to redesign the overall methodology for procurement and
contract management within MDH. MDH is coordinating extensively with DGS
OSP to perform an end-to-end review and analysis of the procurement policies
and procedures across MDH.
o The DGS Agency Procurement Review program (APR) team is currently
assessing MDH’s procurement processes and procedures to provide
recommendations for improvement.
The initial kick off meeting for this review occurred on January 4,
2021.
This involves evaluating all aspects of procurement operations,
including: Organizational standards; Compliance; Program
standards; Staffing standards; and Professional standards.
MDH is working closely with DGS APR throughout this review
process and is beginning to implement recommendations prior to
completion of the assessment and finalization of the report.
• MDH worked with DGS OSP to develop a proposed expanded organizational
structure for the MDH Office of Procurement and Support Services, which
includes:
o Adding additional permanent positions to more than double the number of
staff in this unit
o Restructuring the department with an additional layer of oversight by
procurement managers
Previously, all procurement managers reported directly to the
Deputy Director who oversaw all procurements directly
o Restructuring the workflows within the department by creating structured
service delivery lines that are segregated based on common procurement
disciplines
• MDH is also working with DGS OSP to expand the capacity of the MDH Office of
Procurement and Support Services to provide additional services that were not
previously provided by this office. These additional services include:
o Comprehensive end-to-end contract management for all agreements
o A consolidated agency-wide unit for Memoranda of Understanding and
Interagency Agreements
 o A consolidated agency-wide unit for grants management
• MDH is reviewing the existing Contract Tracking System and evaluating the need
for an advanced contract management system, in order to:
o Enhance visibility into the performance of the contracting process
o Better track contracts and agreements across all MDH departments

MDH and DGS OSP developed a job posting that will be utilized to fill both the MDH
and DGS vacant Procurement Director positions. A job posting was published on
January 4, 2021 and closed on January 25, 2021 to fill both of these
positions. Subsequent to the closing of the job posting, MDH coordinated with DGS
OSP to upgrade the job classifications for both the MDH and DGS Procurement Director
positions. This has delayed the hiring for these positions; however, MDH and DGS
began conducting joint interviews the week of March 22nd.
3. OLA Review Objective 1: “Tests were not procured in accordance with
state procurement regulations, including the lack of a written contract.”

The Review faults the lack of a “formal written contract” to evidence the transactions. In
the regulations referenced in the Review, a “contract” is defined as a written agreement
entered into by a procurement agency for the acquisition of supplies. Additionally, the
statutory definition of a procurement contract is an agreement in any form entered into
by the unit for a procurement. By either legal definition, the original letter of intent
between the State of Maryland and JKICT/LabGenomics (the “LOI”), provided upon
request to the OLA, was indeed a legally valid contract at the time that the State wired
payment.

Moreover, the procurement of the upgraded tests was completed with a purchase order,
a copy of which was provided to OLA. The regulations referenced by the Review
specifically state that, upon acceptance, a purchase order “becomes a contract.” The
accepted purchase order here was also a legally valid contract.

In its review of these emergency procurements, the BPW -- which can also waive any of
its regulations when appropriate -- did not express any concern that the form of the
contracts violated its regulations. As described in BPW Advisory 2009-2, the regulations
referenced by the Review provide that, after reviewing an emergency procurement, the
BPW “may require the agency to take preventive or corrective future action.” After
reviewing these contracts, however, BPW did not state that any corrective future action
was needed. The Review’s conclusions about the contractual requirements are legally
questionable and to date unsupported by the unit that promulgated them.

In any case, the contracts did embody several of the regulatory clauses, such as those
accounting for the parties, scope, price, terms, and payment method. In the end, valid
contracts occurred with goods delivered at the prices stipulated and in the provided
delivery timeframes.

The OLA’s Review also finds fault with what it claims is a lack of evidence documenting
the extent to which research was conducted into other sources of tests, and the
subsequent evaluation process. The regulations require that for an emergency
procurement, the agency’s procurement officer obtain such competition as is possible
and practicable to acquire the needed items or services in time to meet the emergency.

In the instant case, alternative vendors were sought and considered. A chart naming the
companies and noting important aspects for consideration when selecting a vendor was
created as part of this due diligence. The OLA received a copy of this chart. There is no
legal requirement for emergency procurements that there be records documenting a
“formal evaluation” of vendors, or a determination by the procurement officer that the
vendor selected is the “best qualified,” as would occur in a procurement conducted
under normal circumstances.

The regulations referenced by OLA state that an emergency procurement occurs when
there is a “sudden or unexpected occurrence or condition which agency management
could not foresee” and items must be “procured in time to meet the emergency.” These
are not the circumstances, as suggested by the Review, when a “selection committee”
should be organized to deliberate and compile rankings.

It is important to remember the context during which this procurement occurred. During
the early stages of the pandemic, there was unprecedented global competition for
scarce resources to mitigate the threats posed by the pandemic and allow the State to
care for the health and safety of the citizens of Maryland. After a needed resource was
identified as being available, and an offer was made to the State with acceptable terms
given the circumstances, if the State were to hesitate for too long to undertake standard
due diligence, more often than not, the offer was no longer available. The need for
caution and due diligence had to be viewed in light of the unprecedented crisis the
State, the nation and the world were facing at the time, and the risk inherent in any
transaction had to be balanced with the risk to the lives of Marylanders.

During the early stages of the pandemic, the sources for most of the high-demand items
(masks, ventilators, test kits, etc.) were almost non-existent domestically. South Korea
was well-positioned to offer these desperately needed supplies.

Subsequent to the procurement, DGS reported the emergency procurements to the

BPW. DGS worked with BPW staff to determine how best to report these items, after
which BPW provided DGS with emergency procurement forms and agreed to accept a
chart with the required information. (Copies of the chart and completed reporting forms
were provided to the OLA upon request.) Members of the BPW submitted numerous
follow-up questions about the procurement.
4. OLA Review Objective 1: “A review of available records indicates the State
did not ensure that the tests received on April 18 and 22, 2020, were authorized
by the Federal Food and Drug Administration prior to them being shipped by
LabGenomics.”

OLA further faults the State for procuring test kits that had not yet received an EUA. At
the time the LabGenomics’ COVID-19 test kits were purchased, the EUA was pending
with the FDA. The Review also fails to explain that the FDA allowed manufacturers to
sell a COVID test as soon as they had validated the test and with the understanding that
an EUA application would be submitted within 15 days. See Policy for Coronavirus
Disease-2019 Tests During the Public Health Emergency (Revised) - Immediately in
Effect Guidance for Clinical Laboratories, Commercial Manufacturers, and Food and
Drug Administration Staff (fda.gov) (Mar. 25, 2020).

The unprecedented nature of the emergency required adapting existing practices to

assure that Maryland was able to meet the needs of this emergency and was not
restrained by practices that had never been tested in such an extraordinary way. The
simple truth is that the demand was so high in America and around the globe for test
kits, that practically instant decisions had to be made with the best information available
in an effort to ensure the State could properly respond to the ongoing threats to the
health and safety of Maryland’s citizens.

Given the existence of a catastrophic health emergency and a worldwide pandemic, and
given the scarcity of tests for COVID in April 2020, it was a reasonable decision to
purchase the tests before LabGenomics’ receipt of the EUA.

Lastly, the Review suggests impropriety in, as part of the initial procurement of COVID-
19 tests, incurring costs for charter freight instead of commercial shipping. These
payments to Samsung SDS were accepted by BPW on September 2, 2020. See line 51,
page 63, BPW Agenda: https://bpw.maryland.gov/MeetingDocs/2020-Sept-02-
Agenda.pdf.

Commercial passenger air transport is a critical component of the freight supply chain.
Under normal times it is more economical to place freight in the cargo area of a
passenger plane. Worldwide passenger flights experienced an unprecedented decline
in 2020. Per the International Civil Aviation Organization (ICAO) international and
domestic air passengers experienced an overall reduction of 60% in 2020 compared to
2019. In April 2020, international commercial air traffic had essentially ceased, and for
the flights that were still in operation, it was sporadic at best. There was an enormous
amount of competition for the limited cargo transport space available.

Additionally, at the time of the charter, numerous health care officials and state leaders
had reported instances in which federal authorities had intervened and, in some cases
diverted the delivery of medical supplies related to the COVID pandemic regardless of
contracts between State and local governments and vendors. In several cases, state
officials reported that the Federal Emergency Management Agency confiscated supplies
with no explanation, while others reported that the agency had outbid them for the
equipment. A sampling of news reports in March and April 2020 is included as
Attachment B.

In order to ensure the timely and safe delivery of the test kits, and to avoid having the
cargo confiscated or diverted by the federal government upon arrival, chartering a flight
directly into Maryland's State- owned airport was deemed essential. Baltimore/
Washington International Thurgood Marshall Airport provided the safest, most reliable
and expedient transport option to allow the State of Maryland greater control of the
cargo. DGS consulted its logistics specialist to consider alternate direct charter
pricing. Initial estimates far exceeded the transport cost offered through Korean Air.

5. Additional Concerns and Conclusions

MDH and DGS strenuously object to the Review’s practice throughout of selectively
utilizing statements and reflections gleaned from the interviews conducted by the
auditors without mentioning certain information and explanations that were also
provided during the interviews. For example, it was explicitly stated during one of the
MDH interviews that the former employee who was allegedly terminated for disagreeing
with the test kit procurements had absolutely nothing to do with those procurements.
That information is absent from the Review. For the Review to fail to present all of the
information given to OLA, both through in-person interviews and the voluminous
amounts of documentation provided, casts serious doubt as to whether the Review
completely and accurately presents a factual set of findings and any subsequent
inferences were properly drawn.

In conclusion, for both DGS and MDH, compliance with audits and the underlying
statutes and regulations is of the highest priority. As a matter of professional pride, we
have ensured that we typically have a full and frank working relationship with OLA.
Unfortunately, the Review and the manner in which it was conducted, gives the
appearance that OLA produced a rushed and politically-driven report implying dubious
conclusions reached without regard to the actual circumstances surrounding the
subjects of the Review.

Please do not hesitate to let us know if you have any questions in this regard.

Sincerely,

Eric T. Lomboy Thomas C. Andrews

Chief of Staff, DGS Chief of Staff, MDH
ATTACHMENT A
 ATTACHMENT B

• Warren to feds: Why did you take Massachusetts’ medical supplies?

o The Boston Globe, Matt Stout Globe Staff,Updated March 31, 2020
• Hospitals say feds are seizing masks and other coronavirus supplies
without a word
o Los Angeles Times, APRIL 7, 2020 2:07 PM PT

• “Either be in or out”: Feds swooped in on Colorado’s ventilator order, Polis

says.
o The Denver Post, By SAM TABACHNIK, PUBLISHED: April 4, 2020 at
12:12 p.m
• A 'War' For Medical Supplies: States Say FEMA Wins By Poaching Orders

o NPR, April 15, 20204:18 PM ET, Heard on All Things Considered

• Officials in at least 6 states are accusing the federal government of quietly
diverting their orders for coronavirus medical equipment
o Business Insider, Mia Jankowicz Apr 8, 2020, 7:58 AM
 APPENDIX D

See Appendix A for

March 26, 2021  Auditor's Comments
regarding response
Mr. Gregory A. Hook, CPA 
Legislative Auditor 
Department of Legislative Services 
Office of Legislative Audits 
Office of the  
301 West Preston Street, Room 1202 
General Counsel  Baltimore, MD 21201 
8000 York Road Via: email at [email protected] 
Towson, MD 21252

Re: Response to Special Review of Procurement of Certain of COVID Tests  
Dear Mr. Hook: 
On behalf of Towson University, I would like to thank you for this opportunity to 
review and comment on the March 2021 draft Report of the Office of Legislative 
Audits (“OLA”), Department of Legislative Services (“DLS”) entitled “Review of 
Procurement of Certain COVID Tests.”   
For purposes of clarity and context, the University respectfully requests that it 
be noted in the final Report that neither Towson University nor any of its 
employees had any role related to the procurement and use of any COVID‐19 
(“COVID”) tests from LabGenomics, or any other COVID test manufacturer.  As 
part of its COVID testing program for students, faculty, and staff, the University, 
like many other Universities within the University System of Maryland (“USM”), 
contracted with University of Maryland Pathology Associates (“UMPA”),1 a not‐
for‐profit entity, to provide COVID testing services.   
The University’s Agreement with UMPA, which is attached hereto, sets forth the 
specific duties performed by UMPA as well as the scope of the contractual 
relationship.  This Agreement was not requested from the University by DLS 
during its investigation.  As set forth in the Agreement, the University’s role 
regarding COVID testing is generally limited to specimen collection on swabs 
(collection kits) received from UMPA, and receipt of final testing results from 
UMPA after UMPA had analyzed the collected specimens.  (See Attachment A to 
the contract for the list of services provided by UMPA.)  Any questions regarding 
the procurement or use of the specific test kits used should have been directed 
to UMPA, not the University. 
With respect to references in the draft Report surrounding concerns raised with 
COVID testing results by the former Director of the University Health Center 
(UHC), the University strongly disagrees with any implied or express assertion in 

1
UMPA is clinical practice group that is not a part of USM, or the University, but is a 
separate legal entity. 

OI  410.704.4003 F  410.704.3205

[email protected]
www.towson.edu/counsel/
the draft Report that it took inadequate action after receiving a spike in positive 
COVID test results in August 2020.  When the batch of positive test results were 
received in August 2020 from UMPA, the University did not discourage the 
former Director from expressing his concerns, but instead encouraged 
communication and discourse both internally and externally.   
As acknowledged in the draft Report, the former Director raised his concerns 
with not only the University and USM, but also with the Baltimore County 
Health Department and the State Epidemiologist.  Such collaboration with 
University and USM leadership and with outside state and local health agencies 
was (and still is) encouraged by the University as proper analysis of testing 
results is critical in assessing the safety of returning students, faculty and staff to 
campus, and determining the safest and most scientifically sound next steps.2  
The former Director engaged in such discourse.  Moreover, as noted in the draft 
Report, the University’s Medical Staff Supervisor reported that UHC contacted 
UMPA to determine if the samples from the University during this time period 
were processed by UMPA using the LabGenomics’ tests and was unable to 
obtain such information from UMPA.  There was no indication from UMPA that 
the batch of positive test results were, in fact, false positives.  In light of the 
testing results received and in consultation with scientific experts, the University 
made the difficult, but safest decision to move in‐person student instruction for 
the Fall of 2020 to remote learning.  
The University also disagrees with the implied or express assertion in the draft 
Report that the former Director was terminated because he raised concerns 
regarding the cause of a spike in positive COVID test results at the University in 
August 2020.  As reflected in the draft Report, the Associate Vice President of 
Human Resources/Chief HR Officer stated that the termination was not the 
result of a singular event, but a pattern of behavior that was addressed from a 
performance perspective.  Additionally, the former Director’s direct supervisor 
(the Associate Vice President for Student Affairs/Dean of Students) and the Vice 
President for Student Affairs (who made the ultimate termination decision) 
reported that the former Director was terminated on October 1, 2020 due to 
significant performance issues related to a pattern of behaviors that had a direct 
impact on his overall management of the COVID testing program during the 

2
 The University disagrees with the characterization in the draft Report that the Vice 
President for Administration and Finance (A&F) denied that there were any concerns 
with the accuracy of the test results.  In his interview with DLS staff, he indicated that he 
was not aware of such complaints and had no reason to believe the tests were 
inaccurate.  The University also disagrees with the characterization that President 
Schatzel refused to meet with DLS.  DLS sent an inquiry for information concerning 
procurement of certain COVID Tests. The President referred the investigator to our Vice 
President for A&F and CFO who oversees procurements.  The University has made every 
effort to respond to all DLS requests for documents and interviews. 

2 
July‐September 2020 timeframe, and not any alleged disagreement regarding 
the reasons behind the positive COVID cases the University received in August 
2020.  
The former Director was responsible for overseeing the collection of specimens, 
aggregation of the collected material, and reporting the test results received 
from UMPA.  As stated above, neither he nor the University had any role in 
procurement of the type of test used, analyzing the actual specimens utilizing 
the COVID test kits in question, or making the actual determination of the 
accuracy of the test results. Thus, the former Director’s termination could not 
have been, and was not, associated with the procurement and use of the COVID 
tests that are the focus of the DLS investigation. 
For additional clarity and context, it is important to note that the draft Report 
does not fully explain or discuss the employment status of this “at‐will” position, 
the policies covering the position, or the process for notice termination.  As a 
Regular Exempt Employee, the former Director was subject to both University 
Policy 07‐01.22, and USM Policy VII‐1.22.  Pursuant to these policies, the 
University may terminate the employment relationship at any time in 
accordance with the provisions of the policies.  (A copy of both of these policies 
is attached.)  
The performance issues that ultimately led the Vice President of Student Affairs 
to terminate the former Director took place in July‐September of 2020, which 
occurred after his last written performance evaluation.  These performance 
issues were shared by University leadership in interviews with DLS during its 
investigation, and provide appropriate justification for the notice termination 
decision.  Pursuant to University policy, the documentation required for a notice 
termination is a separation form accompanied by a letter of termination, both 
of which were present in the former Director’s personnel file and provided to 
DLS.  While the University can include written performance plans or other 
documentation in a personnel file should such documentation exist, notice 
termination requires no such documentation.  It is also noteworthy that USM 
policy does not require written documentation providing the reason for 
termination of an “at will” employee who was terminated by a period of notice.   
The University maintains that it fully complied with both University and USM 
policy regarding (a) the decision to notice terminate the former Director, and (b) 
the maintenance of the required documentation of that decision. The University 
respectfully requests that the final Report reflect that appropriate 
documentation as required by policy was in the former Director’s personnel file 
and was provided to DLS.   
Thank you again for the opportunity to respond to the draft Report.  Please feel 
free to contact me if you have any questions. 
 

3 
 
Sincerely,  
 
ftÜt fÄtyy
 
Sara Slaff 
Vice President of Legal Affairs and General Counsel, Towson University 
 
 
 
Enclosures  

4 
 UNIVERSITY OF MARYLAND PATHOLOGY ASSOCIATES, P.A.
LABORATORY SERVICES AGREEMENT
FOR COVID-19 TESTING SERVICES

THIS LABORATORY SERVICES AGREEMENT (“Agreement”) made as of the date of the last
signature set forth on the signature page below (the “Effective Date”), between the University of Maryland
Pathology Associates, P.A. (“UMPA”) and Towson University (“Referring Entity” or “TU”) (referred to as each a
“Party” and collectively the “Parties”).
BACKGROUND
WHEREAS, UMPA is the not-for-profit corporation that operates as a clinical practice group for
the Department of Pathology at the University of Maryland School of Medicine and provides, among other
services, diagnostic laboratory services. UMPA is a separate legal entity from the University of Maryland
School of Medicine.

WHEREAS, Referring Entity is a public agency and instrumentality of the State of Maryland
requiring certain COVID-19 related diagnostic laboratory services for its students, faculty, staff and TU
affiliates.

WHEREAS, UMPA is qualified and willing to provide such services, as further defined herein, to
Referring Entity on the terms and conditions of this Agreement.

WHEREAS, UMPA is a covered entity as defined by the Health Insurance Portability and
Accountability Act (“HIPAA”) and its implementing regulations.

WHEREAS, Referring Entity is a HIPAA hybrid entity under which Referring Entity partners
with the TU Institute for Well-Being (IWB), a HIPAA covered entity when providing services to non-
students and operates pursuant to the Family Educational Rights and Privacy Act (“FERPA”) when
providing services to students, and where all other units and divisions of the Referring Entity are not
HIPAA covered entities.

In consideration of the foregoing premises and mutual promises contained herein, and intending to
be bound legally hereby, Referring Entity and UMPA agree as follows:

1. SERVICES.
a. UMPA shall provide laboratory services as described in Attachment A (the “Services”).
b. Referring Entity shall perform those duties described in Attachment B which are necessary for
the provision of Services.
2. TERM AND TERMINATION. This Agreement shall commence on the Effective Date and shall
continue for a period of one (1) year unless terminated earlier as set forth in this Agreement (the “Initial
Term”). This Agreement shall be renewed automatically for additional, successive one-year terms (each a
“Renewal Term”), upon the expiration of the Initial Term, subject to the termination provisions herein.
The Parties may voluntarily terminate this Agreement at any time by mutual written agreement. Either
Party may voluntarily terminate this Agreement by providing written notice of termination to the other
Page 1 of 8
 Party at least sixty (60) days prior notice to the effective date of termination. In the event that either Party
breaches a material term of this Agreement or a material representation or warranty, the non-breaching
Party will issue a notice of breach; if the breaching Party does not cure its breach within thirty (30) days,
the non-breaching Party may terminate the Agreement.
The Parties shall continue to fulfill their obligations under this Agreement relating to the Services requested
and/or performed prior to the effective date of termination, including, without limitation, Referring
Entity’s payment for Services provided up and until the date of termination. Notwithstanding anything to
the contrary, upon expiration or termination of this Agreement, neither Party shall have any further rights
or obligations hereunder except for rights and obligations accruing prior to the date of expiration or
termination or arising as a result of any breach or expiration or termination of this Agreement.
3. PAYMENT. In consideration for the Services, Referring Entity agrees to pay UMPA the fees specified
on Attachment A. UMPA will generate an invoice for services rendered the previous month at
rates indicated in Attachment A. The invoice summary will include a summary of tests and associated
volume, charges per test and total charges. Upon request, a list of patient’s tests performed by patient,
charges per test and total charges will be available. The invoice shall be paid by the Referring Entity within
30 days of receipt of proper invoice. UMPA and Referring Entity will review the scope of laboratory
operations at least quarterly to determine the level of service and financial funding for the agreed upon
services.

For the avoidance of any doubt, the Parties acknowledge and agree that UMPA will not bill patients or
patient’s insurance for Services performed hereunder.
4. CONFIDENTIALITY. Unless inconsistent with the Maryland Public Information Act, Maryland Code
Annotated, State Government, Title 10, Subtitle 6, as amended from time to time, each Party agrees to treat
confidentially all of the information marked or designated as confidential at the time of disclosure and
provided to such Party by the other Party in connection with this Agreement and to return such information
to the providing Party upon termination of this Agreement.

5. MEDICAL RECORDS. To any extent applicable, the Parties will comply with the privacy, security and
confidentiality requirements of the Health Insurance Portability and Accountability Act, as amended,
("HIPAA") and Maryland law governing the confidentiality of patient information and medical records.
Without limiting the generality of the foregoing, each Party will only disclose laboratory test results or other
information generated in connection with providing the Services as required by these or other applicable
laws. Both Parties agree to comply, and cause each of their respective employees and contractors to comply,
with applicable provisions of HIPAA, as amended, any regulations promulgated thereunder, and any
applicable state laws protecting the privacy of patient information.

6. INSURANCE.

a. UMPA agrees to procure and maintain in effect during the Term adequate professional liability
insurance in the amounts of at least One Million ($1,000,000) Dollars per occurrence and Three
Million ($3,000,000) Dollars in the aggregate for all negligent acts or omissions of its employees
and agents providing services pursuant to this Agreement. In furtherance of the foregoing, the
Parties agree to procure and maintain during the Term professional liability insurance covering
their employees in the performance of professional services while acting within the scope of this
Agreement. These insurance requirements may be satisfied with a policy of commercial insurance
from an insurance carrier registered to write insurance policies in Maryland, or a self-insurance
trust fund or captive insurance company which is consistent with Medicare self-insurance
Page 2 of 8
 requirements. This insurance shall apply to claims asserted for contribution and indemnification,
contractual, statutory or under common law, as well as claims by or on behalf of patients. In the
event any insurance described in this Section is purchased on a claims-made basis, tail coverage
for prior acts shall be obtained so as to continue coverage for a minimum of three (3) years
following expiration or termination of this Agreement under any circumstance.

b. Referring Entity is self-insured pursuant to the State of Maryland self-insurance plan.

c. Each Party shall provide the other with at least thirty (30) days’ advance written notice of any
adverse change in its total program of liability insurance coverage. The Parties agree to provide
prompt notice to each other of any potential claim or suit relating to the provision of services
under this Agreement as soon as possible and to cooperate with each other in the investigation
and settlement of such claims or suits. Each Party further agrees to provide prompt notice of any
such claim or suit to its carrier and to provide evidence of such notice to the other Party upon
request.

d. Each Party is responsible for covering its own employees.

e. Each Party shall furnish the other, upon request, a current and valid Certificate of Insurance or
verification of the existence and relevant terms of its program for self-insurance satisfying the
requirements set forth in this Article.

7. HEALTH CARE REGULATORY COMPLIANCE. To any extent applicable, each Party hereby
represents to the other that, to the best of its actual knowledge, neither it nor any employee, contractor, or
agent now or hereafter engaged by such Party to provide services under this Agreement (collectively, a
“Representative”) is, or at any time has been, excluded from participation in any federally funded health
care program, including the Medicare and Medicaid programs. Each Party hereby agrees to promptly notify
the other of any threatened, proposed, or actual exclusion of such Party or any of its Representatives from
any federally funded health care program, including the Medicare and Medicaid programs. In the event that
a Party or any of its Representatives is excluded from participation in any federally funded health care
program during the term of this Agreement, or if at any time after the Effective Date it is determined that
a Party or any of its Representatives is in breach of this Section, this Agreement shall automatically
terminate as of the date of such exclusion or breach unless the breaching Party cures its breach by removing
any Representative who is so excluded or has otherwise breached the provisions of this Section from the
performance of services under this Agreement.
8. COMPLIANCE WITH APPLICABLE LICENSING, CERTIFICATION STANDARDS AND
LAW. UMPA and its personnel shall perform the Services in accordance with all applicable regulatory,
licensure, and accreditation requirements including those of The Joint Commission, the Maryland
Department of Health, the Federal Drug Administration, College of American Pathologists, CLIA, and the
AABB. Further, UMPA shall maintain all applicable licenses, certifications and accreditations in good
standing.
To any extent applicable, both Parties acknowledge and agree at all times during the term of this Agreement
to comply with all applicable federal, state, and local laws in performing its obligations hereunder, including
but not limited to Family Educational Rights and Privacy Act (“FERPA”), the Deficit Reduction Act of
2005, the Federal False Claims Act and other federal and state laws addressing anti-kickback, self-referral,
fraud, abuse and waste, as well as whistleblower protections for those reporting violations of such laws.
9. OTHER PRIVILEGES AND REFERRALS NOT AFFECTED. Nothing in this Agreement affects or

Page 3 of 8
 precludes either Party’s ability to engage in a similar service arrangement and/or make referrals to any other
laboratory in any manner, whether located within or outside the Referring Entity’s service area.
10. MAINTENANCE OF BOOKS, DOCUMENTS AND RECORDS. If and to the extent that this
Agreement is subject to Medicare statutes and regulations governing access to books and records of
contractors and subcontractors, Referring Entity shall, for a period of four (4) years following the
furnishing of Services, maintain and make available, upon written request, to the Secretary of the United
States Department of Health and Human Services or the Comptroller General of the United States, or to
any of their duly authorized representatives, this Agreement and any of the Referring Entity books,
documents and records which are necessary to verify the nature and extent of the cost of the Services
provided hereunder. Furthermore, if the Referring Entity carries out any of the Services through any
subcontract with a value or cost of Ten Thousand Dollars ($10,000) or more over a twelve (12) month
period with related organizations (as that term is defined under federal law), the Referring Entity agrees
that each such subcontract shall provide for such access to the subcontract, books, documents and records
of the subcontractor. If UMPA is requested to disclose books, documents or records pursuant to this
Agreement for purposes of an audit, it shall notify Referring Entity of the nature and scope of such request.
These requirements are effective as of the date of execution of this Agreement and pertain to all records,
which have or should have been maintained on or after that date. This Agreement pertains solely to the
maintenance and disclosure of specified records and shall have no effect on the rights of the Parties to this
Agreement to make assignment or delegations.
11. NOTICES. All notices or other communications under this Agreement shall be in writing and shall be
deemed duly given if delivered in person or upon the earlier of receipt if mailed by certified or registered
mail, or three days after certified or registered mailing, return receipt requested, postage prepaid, addressed
and sent to:
If UMPA:
University of Maryland Pathology Associates, P.A.
419 W. Redwood Street, Suite 200
Baltimore, Maryland 21201
If REFERRING ENTITY:
Towson University
8000 York Rd, Towson, MD 21252
Attention: Office of General
Counsel

12. MISCELLANEOUS.

a. RESPONSIBILITY FOR ACTIONS. Each Party shall be responsible for its own acts and
omissions and the acts and omissions of its employees, officers, directors, and affiliates. A Party shall
not be liable for any claims, demands, actions, costs, expenses, and liabilities, including reasonable
attorneys’ fees, which may arise in connection with the failure of the other party or its employees,
officers, directors, or agents to perform any of their obligations under this Agreement.

b. NON-DISCRIMINATION. Both Parties warrants that they do not and will not discriminate against
any person because of race, creed, color, national origin, gender, veteran status, or handicap, or as
otherwise may be prohibited by law. Both Parties warrant that they are in full initial and ongoing
compliance with all current applicable federal, state, and local laws, regulations, and ordinances,
Page 4 of 8
 included but not limited to:
1. Civil Rights Act of 1964;
2. The Rehabilitation Act of 1973;
3. The Fair Labor Standards Act;
4. Equal Opportunity Clause (41 CFR 60.250.5(a); 41 CFR 60-300.5(a); and
41-CFR 60.741.5(a)
5. Affirmative Action Programs (41 CFR 60-1.40(a)(2)
6. Other laws that may apply from time to time as amended.

c. INTEGRATION. This Agreement and all attachments hereto constitute the entire agreement
between the Parties with regard to the subject matter hereof and thereof, and all
attachments/documents referenced in the Agreement are incorporated by reference. This Agreement
supersedes any and all previous agreements between or among the Parties relating to the subject matter
hereof. There are no agreements, representations, or warranties between or among the Parties
concerning the subject matter hereof other than those set forth in this Agreement.

d. ASSIGNMENT. This Agreement may not be assigned by either Party without the other Party’s
written consent. Subject to the preceding sentence, all rights, privileges, duties and obligations under
this Agreement shall inure to the benefit of, and be binding upon, the Parties’ successors and permitted
assigns.

e. FORCE MAJEURE. Neither party will be liable for failure or delay in performing any of its
obligations under this Agreement to the extent the failure or delay is required in order to comply with
any governmental regulation, request or order, or necessitated by other circumstances beyond the
reasonable control of the party so failing or delaying, including but not limited to Acts of God, war
(declared or undeclared), insurrection, fire, flood, accident, labor strikes, work stoppage or slowdown
(whether or not that labor event is within the reasonable control of the parties), or inability to obtain
raw materials, supplies, power or equipment necessary to enable a party to perform its obligations. The
party experiencing the event of force majeure shall: (i) promptly notify the other party in writing of an
event of force majeure, and describe the event, the expected duration of the event, and its anticipated
effect on the ability of the party to perform its obligations; and (ii) make reasonable efforts to mitigate
(and to the extent possible, remedy) the event of force majeure.

f. GOVERNING LAW. This Agreement shall be governed by, construed and interpreted in accordance
with the laws of the State of Maryland without reference to its conflicts of laws principles.

g. INDEPENDENT CONTRACTOR RELATIONSHIP. In the performance of all obligations and

duties hereunder, UMPA and its employees, agents and subcontractors shall be deemed to be
independent contractors with respect to Referring Entity, and the Parties shall not be considered joint
ventures or partners.

h. WAIVER. All waivers of rights, powers, and remedies by a Party to this Agreement must be in writing.
No delay, omission, or failure by a Party to exercise any right, power, or remedy to which a Party may
be entitled shall impair any such right, power, or remedy, nor shall such be construed as a release by a
Party of such right, power, or remedy or as a waiver of or acquiescence in any such action, unless such
action shall have been cured in accordance with the terms of this Agreement. A waiver by a Party of
any right, power, or remedy in any one instance shall not constitute a waiver of the same or any other
right, power, or remedy in any other instance.

i. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which
Page 5 of 8
 shall be deemed an original but all of which shall constitute one and the same instrument.

j. AMENDMENTS. This Agreement may be amended at any time by mutual agreement of the Parties
without additional consideration, provided that before any amendment shall become effective, it shall
be received in writing and signed by each of the Parties.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the Effective
Date.

UNIVERSITY OF MARYLAND PATHOLOGY ASSOCIATES, P.A.

Sanford A. Stass, M.D., President

Date: 08/10/2020

TOWSON UNIVERSTY

By:
Vernon J. Hurte, Ph.D., Vice President for Student Affairs
Title:

Date: August 28, 2020

Page 6 of 8
 ATTACHMENT A:
DESCRIPTION OF SERVICES AND FEES

UMPA will provide the following Services and, in exchange, Referring Entity shall pay the following Fees:
Services Fees

SARS-CoV-2 RNA Amplification (“Test”), which Thirty Five Dollars ($35) per Test performed.
shall include:  The Parties may change this per Test rate in
 Provide Referring Entity with collection accordance with Section 12(j) of the
kits and requisitions for the Test; Agreement; and.
 Provide Courier Services for transportation  UMPA may change this per Test rate upon
of Collection Kits to the testing site and sixty (60) days prior written notice to
back to UMPA; Referring Entity.
 Performance of the Test;
 Reporting of Test results as follows:
o EPIC My Portfolio (if applicable);
o Individual patient report to the
ordering provider;
o Provider access to EPIC
Portfolio MD
o Reporting of positive and negative Test
results to Maryland Department of
Health in accordance with the most
recent published guidance.
 The turn-around time (TAT) for test
results is based on receipt of the specimen
at UMPA until the test result is reported.
If electronic/on-line ordering of tests is
utilized, the TAT is 24-48 hours. If
electronic/on-line ordering is not used,
the TAT is < 72 hours.For the avoidance
of doubt, verbal notification of either
Detected or Not- Detected SARS-CoV-2
(COVID-19) RNA is not required.

For the avoidance of any doubt, Referring Entity acknowledges and agrees that:

 UMPA shall not perform, control, supervise, or oversee the collection of patient samples for the
Test. Referring Entity must separately arrange for the provision of sample collection services,
including appropriate training and supervision of any personnel collecting patient samples.
 UMPA shall not be responsible for the storage of the Test kits after delivery to the Referring Entity.
 UMPA shall not be responsible for the collected samples until retrieved by UMPA.
 UMPA will have sole discretion to determine the testing viability of Test samples it receives.
 UMPA shall not be responsible for obtaining patient consent for testing, or notifying families,
employers, or other persons of Test results except as may be described herein.

Page 7 of 8
 ATTACHMENT B:
DESCRIPTION OF REFERRING ENTITY DUTIES

Referring Entity will provide the following Duties related to the provision of Services:
1. Secure a physician order or other qualified provider order for performance of Services
(as may be necessary), containing accurate identifying codes and other diagnostic information as
may be necessary and appropriate.

2. Ensure that each patient’s essential data, as defined below, is provided to UMPA via a
secure file transfer prior to performance of the Test by Contractor. The essential data for each
patient is: first and last name, DOB, gender, SSN, race, gender and ethnicity, and insurance
information (as needed).
3. Perform specimen collections from patients.
4. Provide patient samples to UMPA that are accurately and correctly labeled, with sufficient
patient sample for testing.
5. Upon receipt of the positive or negative Test result from UMPA, the Referring Entity
and/or the ordering provider shall be responsible reporting said Test result to the patient as soon as
possible.
6. Cooperate with UMPA in establishing monitoring performance improvement programs
7. Maintain electronic distribution records of laboratory test results.
8. Communicate to UMPA requests for supplies, forms, etc., needed by Referring Entity in the
performance of said Duties.

Page 8 of 8
 07-01.22 – SEPARATION FOR REGULAR EXEMPT EMPLOYEES

I. Policy Statement:

Towson University (the “University”) has established implementing

procedures pursuant to the USM Policy VII-1.22, Policy on Separation of
Regular Exempt Staff Employees, regarding the separation of Regular
Exempt employees.

II. Responsible Executive and Office:

Responsible Executive: Associate Vice President of Human Resources

Responsible Office: Office of Human Resources (“OHR”)

III. Entities Affected by this Policy: All divisions, colleges, departments and
operating units.

IV. Procedures:

A. Applicability

This policy applies to all Regular Exempt Employees except those

positions excluded by USM Policy VII-1.22, (Policy on Separation for
Regular Exempt Staff Employees) Section I, B and any additional
positions excluded by the President of the University and approved by the
Chancellor. The Office of Human Resources shall notify, in writing, any
employee excluded from this policy.

B. General

1. Regular Exempt Employees at the University are employed on an

at-will basis. This means that, subject to applicable laws and
policies, either the employee or the University may terminate the
employment relationship at any time in accordance with the
provisions of this policy.

2. The Separation Policy for Exempt Employees does not apply when
an exempt employee is laid off. Layoffs will be in accordance
with USM Policy VII-1.32, Policy on Layoff and Recall of
Regular Exempt Staff Employees.

3. The provisions for probation and rejection on probation are

covered under USM Policy VII-1.21, Policy on Probation for

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 Regular Nonexempt and Exempt Staff Employees.

C. Process for Voluntary Separation

1. An exempt employee who wishes to end his or her employment

with the University should give at least thirty (30) calendar days
written notice. This written notice should be given to the
employee’s Supervisor.

2. The Supervisor completes the Personnel Separation Form and

attaches a copy of the letter of resignation or retirement from the
employee. The form and attached letter are sent to the Vice
President of the respective office or department and OHR. The
Separation Form and Separation Checklists can be found on the
OHR website.

D. Process for Involuntary Separation

1. Any Supervisor who is contemplating the involuntary separation of

a regular exempt employee shall contact the Vice President for the
respective office or department, and the Associate Vice President
for Human Resources or the Employee/Labor Relations Manager
prior to any action to terminate the employee.

2. The Supervisor completes the Personnel Separation Form and

attaches a copy of the termination letter from the University or the
resignation or retirement letter written by the employee in lieu of
termination. The form and the attached letter are sent to the Vice
President for the respective office or department, and the Associate
Vice President for Human Resources or the Employee/Labor
Relations Manager. The Separation Form and Separation
Checklists can be found on the OHR website.

3. Termination letters shall be signed by the Vice President for the

respective office or department (or their designee) with a copy to
the Associate Vice President of Human Resources in accordance
with either Sections IV.E or IV.F of this policy, as applicable.

E. Period of Notice for Involuntary Separation

1. An employee may be involuntarily separated and shall be provided

with a defined period of notice. Service for determining length of
notice is based on service at the University rather than University
System of Maryland (USM) service and shall include prior service
at the University provided there were no breaks in service longer
than three (3) years. An exempt employee at one USM institution
who is offered an exempt position at another USM institution may,
at the discretion of the offering institution, be credited with prior

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 USM service for purposes of calculating the required period of
notice upon separation. Any such decision to credit prior service at
another USM institution shall be noted in the employee’s
personnel file at the time of appointment and become effective
after satisfactory completion of the probation period. The period
of notice shall be as follows:

Years of Towson University Service Period of Notice

Less than one year One month

One year but less than four years Three months
Four years but less than seven years Six months
Seven years but less than ten years Nine months
Ten years or more Twelve months

2. At the option of the President or Vice President for the respective

area, an employee who has been notified of a separation, may be
placed in an administrative leave with pay status for any part or all
of the notification period. The employee shall not earn other paid
leave (annual, sick, holiday, personal) during the period of
administrative leave. The President or Vice President for the
respective area may assign alternate duties and responsibilities to
an employee who has been notified of separation for any part or all
of the period of notice.

3. Failure to provide notice as set forth in this (Period of Notice for

Involuntary Separation) section may be appealed in accordance
with TU Policy 07-08.05, Policy on Grievances and Special
Action Appeals for Regular Exempt Employees.

F. Termination for Cause

Section IV.E above does not apply if the employee is to be terminated for
any of the following reasons: moral turpitude, incompetency, willful
neglect of duty, illegal actions, gross misconduct, severe safety violations,
failure to accept reassignment, or medical condition causing inability to
perform essential job duties with or without reasonable accommodations
required by law. Termination for cause may be appealed in accordance
with TU Policy 07-08.05.

Related Policies:

USM Policy VII-1.21, Policy on Probation for Regular Nonexempt and Exempt Staff
Employees

USM Policy VII-1.22 – Policy on Separation for Regular Exempt Employees

07-01.22 - 3
USM Policy VII-1.32, Policy on Layoff and Recall of Regular Exempt Staff
Employees

TU Policy 07-08.05 – Policy on Grievances and Special Action Appeals for Regular
Exempt Employees

Effective Date: 06/07/2004

Amended Date: 04/01/2020

Approved by: President’s Council

Approved by: President Kim Schatzel

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 USM Bylaws, Policies and Procedures of the Board of Regents

VII-1.22 - POLICY ON SEPARATION FOR REGULAR EXEMPT STAFF

EMPLOYEES

Approved by the Board of Regents on December 3, 1999, EFFECTIVE January 2 and

January 12, 2000; Amended, June 27, 2014; Amended October 9, 2015; Amended
December 20, 2019)

I. PURPOSE AND APPLICABILITY

A. The purpose of this policy is to establish a separation process for regular

Exempt Staff employees in the University System of Maryland (USM).1

B. Regular USM employees in the following Exempt positions are excluded

specifically from sections III and IV of this policy:

1. Officers: Vice Chancellors, Vice Presidents, Provosts and Academic

Deans.

2. Associate and Assistant Vice Chancellors, Associate and Assistant Vice

Presidents, Associate and Assistant Provosts, Associate and Assistant
Academic Deans.

3. Subject to approval of the Chancellor, the President may designate other

key executive positions for this exemption. Appointees to such positions
shall be notified of such designation at the time of appointment. Current
appointees notified of such designation prior to April 1, 2000, were not
required to be notified at the time of appointment.

II. GENERAL

A. Employment for regular USM employees in Exempt positions is on an at-will

basis. This means that, subject to applicable laws and policies, the
employment relationship may be terminated at any time by either the
employee or the Institution, consistent with Section III of this policy.

B. All actions taken under this policy and institutional procedures shall be
reviewed by the institution’s Chief Human Resources Officer in advance of
the action being taken.

C. An employee who wishes to end their employment with the Institution should
give at least 14 calendar days written notice.

1
Sections II.A., II.D.2., II.E., and III of this policy do not apply to exempt employees who are represented
by an exclusive representative under the collective bargaining law, Title 3 of the State Personnel &
Pensions Article of the Maryland Code. Those employees may be terminated only for cause.

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 USM Bylaws, Policies and Procedures of the Board of Regents

D. Resignation in Lieu of Termination

1. The President or designee has the discretion to permit, but not require,
any employee to resign in lieu of involuntary separation. The
institution shall maintain records documenting that the resignation was
in lieu of involuntary separation, and the employee generally should be
required to execute an appropriate release of legal claims.
2. The President or designee may determine an appropriate period of
notice to be provided that serves the best interests of the institution.
The length of the period of notice provided is not required to conform
to the schedule contained in III.B. below.

E. Compensation in Lieu of Notice

In lieu of providing a full period of notice to an employee who is being

involuntarily separated, including those permitted to resign in lieu of
involuntary separation under section II.D. above, the President or designee
may determine that the employee should be separated prior to the end of the
notice period. In that case, the employee shall receive alternative
compensation to compensate for the loss of salary and benefits that the
employee otherwise would have received during the notice period. In
consultation with the Office of the Attorney General, the institution will
develop an appropriate compensation arrangement for such an employee that
complies with applicable laws.

III. TERMINATION BY PERIOD OF NOTICE

A. Determination of Period of Notice

An employee covered by this section III who is involuntarily separated shall

be provided with a defined period of notice.

1. Service for determining length of notice period is based on institutional

service rather than USM service and shall include prior institutional
service, provided there were no breaks in service longer than three years.

2. An Exempt employee at one USM institution who is offered an Exempt

position at another USM institution may, at the discretion of the offering
institution, be credited with prior USM service for purposes of calculating
the required period of notice upon separation. Any such decision to credit
prior service at another USM institution shall be noted in the employee’s
personnel file at the time of appointment and shall be effective after
satisfactory completion of the probation period.

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 USM Bylaws, Policies and Procedures of the Board of Regents

B. Length of Period of Notice. The period of notice shall be as follows:

Years of Institutional Service Period of Notice

Less than one year One month
One year but less than four years Three months
Four years but less than seven years Six months
Seven years but less than ten years Nine months
Ten years or more Twelve months

C. Employee Work Assignments During Period of Notice

During the period of notice, the President or designee may:

1. Continue the employee in his or her regular position; or

2. Assign the employee alternate duties and responsibilities at a level of

service of at least 25% of their existing average workload over the past
thirty-six months.

D. An employee covered by this section III may grieve the institution’s failure to
comply with section III, except in situations where the employee has resigned
in lieu of termination.

IV. TERMINATION FOR CAUSE

With the approval of the President or designee, the period of notice or alternative
compensation as set forth in section III above is not required if the employee is to
be terminated for cause, including without limitation any of the following reasons:

A. Moral Turpitude

B. Incompetency or Inefficiency in the Performance of the Employee’s Duties,

including Failure to Meet Performance Expectations as Documented in a
Performance Evaluation and/or Disciplinary Action

C. Willful Neglect of Duty or Abandonment of Job

D. Illegal Actions, including Violation of the State Ethics Law

E. Gross Misconduct or Wantonly Offensive Behavior Toward Fellow

Employees, Students, Patients, Clients, Users of University Facilities, or the
General Public

F. Insubordination or Serious Breach of Discipline

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 USM Bylaws, Policies and Procedures of the Board of Regents

G. Serious Breach of Professional Behavior that Reasonably may be Expected to

Result in Lower Morale in the Organization or Loss or Injury to the
University or Public

H. Professional or Scholarly Misconduct

I. Severe Safety Violations or Actions that Cause Significant Damage to Public

Property or Waste of Public Resources

J. Failure to Accept Reassignment

K. Medical Condition Causing Inability to Perform Essential Job Duties with

Reasonable Accommodations Required by Law

IMPLEMENTATION PROCEDURES:

Each President shall identify their designee(s) as appropriate for this policy, develop
procedures as necessary to implement this policy, communicate this policy and applicable
procedures to their institutional community, and post it on its institutional website.