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How Small Tech Company Got $10.2 Million Contract To Build COVID-19 Database

ARI SHAPIRO, HOST:

This month, the Trump administration announced that a small private company, TeleTracking Technologies, would begin collecting vital stats about the coronavirus, like the number of cases and hospitalizations. The Centers for Disease Control and Prevention, the CDC, had been responsible for tracking such things for years, so this move was controversial. Now an NPR investigation has identified some unusual decisions around the contract process and personal connections in the New York real estate world. NPR's Tim Mak and Dina Temple-Raston report.

DINA TEMPLE-RASTON, BYLINE: Those COVID numbers we all see on TV or hear about online or on the radio come from numbers collected by the CDC, among others - or at least they did. Hospitals were only given days to start sending them to TeleTracking, a Pittsburgh company that officials at the Department of Health and Human Services said would streamline data gathering and help the White House Coronavirus Task Force allocate PPE and therapeutics. But experts like Indiana University epidemiologist Brian Dixon were irked on the timing of the decision.

BRIAN DIXON: Well, it's weird in the sense that we're in the middle of a pandemic and we're switching information systems. I mean, probably the worst time ever to switch an information system is when you're busy trying to do contact tracing and monitor the situation and do response.

TIM MAK, BYLINE: There's something else strange about this $10.2 million contract. Initially, public records showed it was a sole source, essentially a no-bid deal. But when asked about it, the Department of Health and Human Services said there had been a coding error and that the contract was actually competitively bid.

JOSE ARRIETA: I do know from our responses that it was awarded via a BAA and in a competitive way through that contracting process.

MAK: That's HHS Chief Information Officer Jose Arrieta. In fact, the process of awarding the TeleTracking contract was filled with irregularities. For example, those BAAs, or broad agency announcements, are usually used for research or prototypes, not something like a government database. And NPR reached out to more than 20 TeleTracking competitors in the fields of hospital workflow management and infection control data. We were unable to find a single one who had bid on this contract. Chief ethics counsel at Citizens for Responsibility and Ethics in Washington, Virginia Canter, saw other problems.

VIRGINIA CANTER: I think, for this type of contract, it's unusual. Here you're talking about, you know, plussing (ph) it up from what previously existed and to now require 6,000 hospitals to enter into this data, and you're turning it over, it looks like you're using proprietary software.

TEMPLE-RASTON: And here's something else unusual. A TeleTracking spokesperson said that HHS had reached out directly to the company by phone. It's unclear when the phone call happened. But the spokesperson said HHS contacted them because they knew the company from its hurricane and disaster preparedness work.

So TeleTracking's CEO is a man named Michael Zamagias. His background is in real estate. And that's another oddity about all of this. Zamagias has connections to the New York real estate world, the same world in which the Trump Organization operates. In particular, Cooper Horowitz, one of the largest privately held real estate financing firms in the country. Zamagias knew the founder, Howard Cooper, and mentor to his son, Neal Cooper. Neal Cooper has been in meetings with Trump, he told NPR. And Cooper Horowitz did a lot of business with the Trump Organization, billions of dollars' worth, including investments in projects like the Trump International Hotel and Tower in Chicago.

Now, there's no evidence that these real estate connections are why Zamagias and TeleTracking received the HHS COVID contract. And a Zamagias spokesperson said he hadn't been in touch with anyone at Cooper Horowitz for years. But the question of whether that played a role is something that congressional investigators are now eager to answer.

MAK: In the grand scheme of things, $10.2 million is not a huge amount of money. But the contract is just for five months. Now that TeleTracking has started gathering the nation's COVID data, it's unclear whether it stands to win follow-on contracts that could mean millions more.

So this is what we know. Zamagias has links to the New York real estate world. HHS had an apparent coding error that originally listed this contract as a no-bid contract. And now it's listed as competitive, an unusual use of the contracting process to pay out millions of dollars to TeleTracking, including the agency's decision to reach out to the company by phone. These circumstances are leading congressional investigators to demand answers. And now a House committee set up to oversee the coronavirus crisis is investigating the circumstances of the contract and the company TeleTracking itself.

For NPR News, I'm Tim Mak.

TEMPLE-RASTON: And I'm Dina Temple-Raston. Transcript provided by NPR, Copyright NPR.

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