March 18, 2022

County Paid $885,000 on the Vaccine Contract after Hidalgo Decided to Cancel It

County Paid $885,000 on the Vaccine Contract after Hidalgo Decided to Cancel It

The more we learn about Harris County’s vaccine outreach contract, the more it stinks.

County records show that shortly after County Judge Lina Hidalgo announced on September 8 that she intended to ask the Commissioners’ Court to cancel the controversial contract, the County rushed through a payment of $885,000 on September 16 covering all of the contractor’s outstanding invoices.  When the County made the payment, the invoices had only been pending for about two weeks. Few County vendors get paid that quickly.

That payment came on top of another $539,000 payment made the same day Hidalgo announced the cancellation. In total, the contractor was paid over $1.4 million in eight days. The County Attorney is now attempting to recover most of the money paid to the contractor.

Source: Harris County Auditor’s Office

The timeline of these payments raises more serious questions about the controversial vaccine outreach contract.

The selection of Elevate Strategies was approved by the Commissioners’ Court at its meeting on June 8 last year. However, at that time, a final contract was not ready.  The Court was asked to approve the award to Elevate Strategies but was assured that the contract would be brought back for final review after it was completed.  That never happened.  Instead, the final contract was signed by the County and Elevate Strategies on July 27 without further action by the Court.

The contract provides that the contractor may only invoice the County after “the Department’s acceptance of equipment, product or Services.” It also provides the Contractor’s invoice “will include a description of the Services performed . . .” (emphasis added).1  The contract identifies the “Department” as the Harris County Judge’s Office.

Five days after the contract was signed, Elevate Strategies submitted an invoice for $539,363.97, which was approved and paid on September 8, the same day Hidalgo announced she was going to cancel the contract.  For this invoice to be approved, Elevate Strategies should have performed $539,000 worth of services in the first five days on the project.  Given that those five days included a weekend, that would seem extraordinarily unlikely.

On August 28, Elevate Strategies submitted a second invoice for $590,193.94, which was quickly followed with a third invoice four days later on September 1 for an additional $295,680.06.  All totaled, Elevate Strategies billed the County $1,425,237.97 for about 35 days on the job.  That would mean that Elevate Strategies was performing about $41,000 of work for the County every day from July 27 to September 1, including weekends.  An attorney for Elevate Strategies stated at the September 14 commissioners’ meeting, that Elevate had hired 15 employees to work on the project. So, that would come to just under $100,000 per employee in just the first month.

But what makes this sequence of events even more problematic is an exchange that took place at the March 22 Commissioners’ Court meeting between Commissioner Cagle and First Assistant County Attorney, Jay Aiyer.  Cagle asked Aiyer how much Elevate Strategies had been paid and if any of the money had been recovered.  Aiyer told the Court that his office had recovered “a little over $200,000” and were expecting to get another $500,000 that Elevate had agreed to refund. (See Commissioner Court Video at 4:32:40.)

Of course, this begs the question of why the County would be due any refund if all the Services on the invoices had been performed, as required by the contract before any payment was approved.

And the contract does not provide for any advances. This was confirmed by the County’s Purchasing Agent, Dwight Dopslauf, during the Commissioners’ Court meeting on September 14. Commissioner Tom Ramsey was questioning Dopslauf as to why the financial information required in the RFP was waived for Elevate Strategies. Dopslauf said the financials were not necessary because “we made it clear we were not paying any dollars upfront.” (See Commissioners’ Court video at 7:06:00)

So, who approved the payment of these invoices before the services were performed and why? Notwithstanding that the contract identifies Hidalgo’s office as the “Department” responsible for approving invoices, David Barry, the County Administrator, told the Commissioners’ Court on August 24, that the contract would be “managed under public health which is under my responsibility.  By no means have we just paid them the lump sum of the contract.  We will be watching the data every month.”   (See Commissioners’ Court video at 6:05:40) Whether the approval came from Hidalgo’s office or from Barry’s office, someone has some explaining to do.

Submitting a fraudulent invoice or knowingly approving the payment of a fraudulent invoice would be a far more serious charge than the charges Hidalgo’s staff members are currently facing.  I suspect that the next round of inquires from investigators will center on these payments and how the County came to pay hundreds of thousands of dollars for services that were not performed.  

Note 1 – The payment provisions of the contract are found on pp. 3-4.  “Services” is a defined term in the Contract and refers to a Scope of Services which is attached to the Contract as Exhibit “B”.

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