Split decision in no-bid contract suit against county health agency

Michael Weinstein is president of the AIDS Healthcare Foundation, which lost a legal challenge to the awarding of two county contracts. In ruling on a third contract, however, the Superior Court judge found the L.A. County Department of Public Health had "abused its discretion."
(Mark Boster / Los Angeles Times)

Both sides are claiming victory in the latest flare-up between Los Angeles County and the AIDS Healthcare Foundation.

In a March 7 decision, Los Angeles County Superior Court Judge Luis A. Lavin struck down the foundation’s challenge to two county contracts that were awarded without a competitive bidding process. The contracts went to UCLA and St. John’s Well Child and Family Center for providing healthcare and other services to young people living with or at risk for HIV.

Officials said that the ruling “clearly validates the county’s contracting efforts.”


But Lavin also ruled that the county’s Department of Public Health had “abused its discretion” when it did not initiate competitive bidding for a third contract challenged in the suit. The judge ordered the county to terminate its agreement with South Los Angeles services provider Realistic Education in Action Coalition to Foster Health, or REACH LA, within 45 days.

“[The county] did not make an adequate determination that contracting through competition was not feasible,” Lavin wrote.

The AIDS Healthcare Foundation said in a statement that the ruling “highlights [the] ongoing county practice of illegally handing out no-bid, single source contracts.”

Dr. Jonathan Fielding, director of the county’s public health department, said that he was disappointed by the REACH decision, expressing concern that it would interrupt needed medical care for young African American and Latino gay men living in South L.A.

Targeted patients “will not have access to critical outreach services and linkage to medical care,” he said in a statement.

AIDS Healthcare Foundation President Michael Weinstein countered that the ruling would not interrupt services “at all.”

“If the county could get its act together, they could do a modified request for proposals,” he said. “They could even get an emergency extension for 30 days, over no objection from us.”

The decision marked another turn in the long-running dispute between the county and the AIDS Healthcare Foundation, which is the largest provider of AIDS services in the U.S. (In January, The Times reported on the contentious relationship between Weinstein and his county critics.)

In last week’s decision, Judge Lavin wrote that the foundation’s chief of managed care, Donna Stidham, told the court that her group and other healthcare providers were capable of providing all the services covered by the contracts in question. The county did not approach the foundation about the contracts, according to the decision.

As of January, the AIDS Healthcare Foundation had $30 million in contracts with the county.

In 2013, the foundation twice successfully sued the county’s Department of Health Services over a $75-million sole source contract with a pharmacy benefits management provider.

Weinstein said that he did not consider Lavin’s decision to uphold the UCLA and St. John’s contracts a defeat.

“Meeting the standard of abuse of discretion is a very high legal standard,” he said. “Proving that this is a pattern and a practice that’s improper is a vindication.”

The Department of Public Health said that the AIDS foundation had previously dropped challenges against two additional contracts between the county and HIV/AIDS service providers.


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