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Amid Health Commission Contracting Fallout, Abbott Calls for Review

UPDATED: Gov.-elect Greg Abbott announced Wednesday the creation of an independent "strike force" to review the state's largest health agency, specifically how it awards contracts to private vendors.

Health and Human Services Executive Commissioner Kyle Janek whispers to an aide at a hearing of the Sunset Advisory Commission on Jan. 14, 2015.

Editor's note: This story has been updated with Gov.-elect Greg Abbott's announcement of an independent review of the Health and Human Services Commission.

Gov.-elect Greg Abbott announced Wednesday the creation of an independent "strike force" to review the state's largest health agency, specifically how it awards contracts to private vendors.

"In the wake of recent revelations at the Health and Human Services Commission, my transition team has taken steps to ensure there is a full and thorough outside review of management, operations, and contracting at the agency," Abbott said in a written statement.

The agency has been the subject of heavy criticism for awarding a $110 million contract outside of the competitive bidding process. 

In a statement, HHSC Executive Commissioner Kyle Janek said his agency would fully cooperate with the review. He also announced the hiring of Ron Pigott, who headed procurement at the Texas comptroller's office, and Matthew Chaplin, who was in charge of contract compliance at the Texas General Land Office, to strengthen oversight of health agency contracts.

"I'm grateful for Governor-elect Abbott's help and support as we work to improve contracting and agency operations," Janek said.

Billy Hamilton, executive vice chancellor and chief financial Officer of the Texas A&M University System, and Heather Griffith Peterson, chief financial officer of the Texas Department of Agriculture, will lead the strike force. On Thursday, Abbott announced that F. Scott McCown, a professor and director of the Children’s Rights Clinic at the University of Texas at Austin School of Law, and Talmadge Heflin, director of the Center for Fiscal Policy at the conservative Texas Public Policy Foundation, had also joined the team.

Earlier Wednesday at a meeting of the Sunset Advisory Commission, which evaluates the efficiency of state agencies, lawmakers had stern words for the health commission. 

“These reports demonstrate just how dysfunctional the current agency structure has become,” state Sen. Jane Nelson, R-Flower Mound, said at a hearing to evaluate the state agency. “Contracts are being procured under a patchwork of different protocols across independent agencies.” 

The situation at the commission’s office of inspector general, which investigates fraud at the agency, was “first smoke, now fire,” said state Sen. Juan “Chuy” Hinojosa, D-McAllen. In December, Gov. Rick Perry fired the agency’s inspector general, Doug Wilson, amid questions over how the contracts were awarded. 

Lawmakers on the Sunset Commission said the heightened scrutiny of the agency’s contracting process would not affect their recommendation to consolidate HHSC with four other health-related agencies this year.

“I firmly believe that consolidation of HHSC is still needed,” said state Rep. Four Price, R-Amarillo.

Janek attended the hearing but was not called to testify. Instead, lawmakers traded remarks about whether anything should be done about agency personnel.

“The question I had is, is this a system failure? Or a people failure?” said state Rep. Harold Dutton, D-Houston.

“My initial response is both,” answered Nelson.

“We can fix the system failure,” Dutton said. “I’m not sure how we fix the people failure.”

Disclosure: The Texas A&M University System, the University of Texas at Austin and The Texas Public Policy Foundation are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

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