By Craig DeLuz
OPINION – It’s no wonder 250,000 Californians are leaving the state permanently every year for places like Texas and Arizona. Sixty percent of moves in California beginning in 2020 were people leaving the Golden State. California state government officials must know what the ramifications are for hemorrhaging residents—major shakeups in the housing market, demographics, and corporate presence, not to mention a greatly-reduced tax base. This affects all of us who have chosen to stay in California despite its hostile business climate.
And yet, in the midst of all of this shakeup caused by the sudden lockdowns, government overreach, and health concerns, California’s Department of Public Health inexplicably rescinded, without warning or even an open bidding opportunity, the multi-million-dollar contract for Covid-19 test kits it had with a locally owned and operated DVBE (Disabled Veteran Business Enterprise) and California Certified Small Business. In a shadowy, secretive process, the health department awarded the contract to a large Chinese-owned company Andon Health and its subsidiary iHealth.
Maclean Health, LLC, owned by disabled Navy veteran John Deterding, was awarded the original contract—in keeping with California’s stated policy goals. Mr. Deterding ensured that his company was able to deliver an incredible 30,000,000 COVID test kits to the State, as well as many other types of critical health products, during one of the most challenging periods in California history in the midst of shortages and other supply chain issues. This locally owned business was able to remain agile, pivot when necessary, and maintain a perfect delivery record with the State. Even when prices of test kits soared, Maclean Health was able to successfully negotiate a reduced cost—saving California taxpayers millions of dollars.
Its reward? Our Department of Public Health, despite Maclean’s superior and competitive performance, engaged in a secretive deal with a Chinese company while bypassing any semblance of a fair procurement process. The state has effectively removed Mr. Deterding’s bread and butter in a time when the prices of both bread and butter are skyrocketing. The move is completely unfair, both to Maclean and its employees, as well as to taxpayers!
Yet, there is still time to reverse this terrible decision and the damage it will cause. State Assemblyman Ken Cooley recognized this injustice and has urged the Governor and Department of Public Health to publicly, and satisfactorily address Maclean’s situation. The contract can be rescinded if swift action is taken. There will be a lot of other small business owners who currently contract with the state who are anxiously awaiting the outcome of that decision.
We must do everything we can to support and value our own disabled veteran-owned, California-based businesses, lest they follow the well-worn path to Texas, Florida and other business-friendly states.
To recap: the State had no complaints about Maclean’s performance with regards to the quality of the test kits or their delivery. So, why was the contract cancelled with no warning? This does not seem to be an issue of better pricing offered by iHealth because the state refuses to release cost data so what is really going on? This sure smells like product dumping at the end of the pandemic. In fact, Ihealth donated test kits right before the contract terms were changed, but there was no mention of the donated product’s expiration date in their press release. The parent company has made a fortune selling into US markets, and now appears to want to wring out every last drop of profit on the way out of the pandemic no matter the effect on small business.
Every month in California, at least six business headquarters leave the state and set up shop elsewhere. Elected officials had better be paying attention. This could completely decimate our state that is already in a deficit of nearly 3 million residents since 2000.
As one who works with and is related to many who have served our country via military service, I find this to be outrageous. Giving a sizable taxpayer-funded contract to a large company based in a hostile foreign country quietly says a lot about the government that made the decision to do so. That in so doing, the State took away a hardworking, disabled American veteran’s bread and butter adds insult to what appears to be a very intentional injury—one who served his country, followed the rules, and had a perfect record of past performance.
If this can happen to him, it can happen to anyone. We demand to know who and what is driving this decision to hand a wooden nickel to one of our nation’s finest. Californians deserve to know.