Florida made $283 million in deals because it feared COVID-19

TALLAHASSEE — Gov. Ron DeSantis has chastised the media for quoting public health modelers who predicted the state would run out of hospital bed space if he didn’t issue a state-wide stay-home order in April. But the governor’s emergency managers, using those same models, were so concerned they would run out of space that they signed $283 million in no-bid deals to build alternative hospitals to hold the overflow, a Times/Herald analysis has found.

One of those hospitals, the now-shuttered Pan American Hospital near the Miami airport, received the heftiest of the offers: a $42 million-a-month agreement to repair, lease and operate a 200-bed facility to house COVID-19 patients. The deal to use Children & Family Hospital, as it was being called, was put together by Alex Heckler, a Miami lawyer who is a Democratic Party operative and close friend of Division of Emergency Management Director Jared Moskowitz.

The purchase order was signed in late March with Nicklaus Children’s Hospital, which owns the property known as the Miami Medical Center that is for sale. The state spent $3.5 million in emergency funds to make repairs to the building and pay its taxes, but the hospital was never used, and the initial purchase order was canceled in mid-April after the governor signed a stay-home order.

Now, the deal is being revived to house COVID-19 patients as Florida health officials are considering using it to place residents of nursing homes and assisted living facilities who have tested positive for the virus but do not need full hospital care. The Agency for Health Care Administration confirmed Tuesday it would offer a no-bid contract to a willing provider who will be given a license to operate the hospital as a nursing home. A decision is expected this week.

The prospect of using a middleman to lease Children & Family Hospital of South Florida stands as another example of the role relationships played as the DeSantis administration dished out millions in emergency funds in March and April as it privately prepared for a projected influx of COVID-19 patients while publicly denying the epidemic in Florida was widespread.

The Times/Herald reviewed publicly available purchase orders and contracts to analyze the data. Division of Emergency Management officials would not release documents that show how much Heckler’s firm made to represent his client, SLSCO, a Galveston, Texas-based general contractor and affiliate of Sullivan Interests, a company run by brothers Todd, William and John Sullivan.

Well-connected representatives

SLSCO is represented in Tallahassee by Cissy Proctor, Heckler’s partner and the former head of the Division of Economic Opportunity during the Rick Scott administration. She, Heckler, and former state Rep. Marcello Llorente are principals in their lobbying firm LSN Partners.

SLSCO is also the subcontractor for Aptim Environmental, which won a state “emergency standby material and services contract” on March 2 to provide base camps and emergency shelters during the 2020 hurricane season. The contract was expected to be completed in May, but state officials quickly signed it in March so they could have a stable of contracts to turn to for emergency supplies as the coronavirus became more menacing.

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“Pre-disaster contracts for logistics vendors were executed in order to save taxpayer dollars while also enabling Florida to respond quickly to any emergency,’’ said Jason Mahon, spokesman for the Division of Emergency Management. “Through this process, prices were competitively bid on over 1,000 items, which would otherwise have a higher cost during an emergency when supplies are short. By having these contracts in place, the state was able to develop a quick and thorough response to COVID-19, and enabled the division to execute the largest logistics operation in state history.”

Although Heckler represented one of the subcontractors, Moskowitz “did not take part in the evaluation of any proposals,’’ Mahon said. The agreements signed for the emergency hospitals “in response to COVID-19 were divided between these pre-event vendors,’’ he said.

Although Aptim and SLSCO received the largest single contract, which appears as purchase orders totaling $84 million for two months, the state also turned to two other logistics companies to build field hospitals that have since also been canceled.

According to the Times/Herald analysis, purchase orders totaling at least $47 million were signed with Garner Environmental Services for staffing and services at the emergency hospital built in the Miami Beach Convention Center. Louis Berger, an engineering firm, received purchase orders totaling at least $2.6 million for a Jacksonville field hospital. Purchase orders totaling $30 million for medical facilities were also signed with CDR Maguire, a transportation firm. And Aptim Corp. was also given the bid to handle building a facility at the Miami Youth Fairgrounds.

None of the facilities have been used as hospitals because the surge in demand for hospital beds in Florida didn’t materialize.

Social distancing started at home

Data now shows that while DeSantis was slow to halt business activity, Floridians mostly on their own had slowed their interactions and travel weeks before. When hospitals halted elective surgeries and reconfigured their bed space to accommodate the anticipated surge in COVID-19 patients, the extra space wasn’t needed.

DeSantis has repeatedly criticized the media for quoting models that predicted that if the state continued on the then-current course without social distancing and stay-home orders, little isolation and testing, the virus would have exploded in Florida, overwhelming hospitals.

The projections from the University of Washington’s Institute for Health Metrics and Evaluation that were reported by the Times/Herald and other news organizations were used by President Donald Trump’s administration in developing national guidelines to mitigate the coronavirus outbreak. The governor and his staff put their focus on how to handle patients who became infected with the deadly virus, while downplaying talk of how to prevent it through social distancing.

Meanwhile, they were watching closely what was happening in New York as hospitals maxed out bed space, and they feared Florida could face the same fate.

Records of the state’s vendor list show that by mid March, state emergency managers were using the governor’s executive order which allowed it to deficit spend to buy nasal swabs, gowns, masks, boot covers and ventilators. By the first week of May, they had signed at least 763 purchase orders.

They also signed contracts for hospitals. According to the background provided to the state by SLSCO and obtained by the Times/Herald, it has no experience developing and managing hospitals but has deep experience in housing construction in emergencies. It also was awarded a $789 million contract by the Army Corps of Engineers to build the border wall.

Getting vacant facility ready

Nicklaus Children’s Hospital confirmed that it “offered the site formerly known as The Miami Medical Center for lease as part of the regional response to provide care for anticipated COVID-19 surge patients” but that while it owns the property, “it is not involved in the operation of the facility.”

That task was assigned to SLSCO. Its proposal to the state showed that it offered to supply all medical equipment and personnel to staff the hospital by subcontracting with a doctors group, initially expected to be a group called CHS. The cost of travel to Florida for medical staff would be billed at the cost plus 18%, as would any fuel or utilities for an estimated monthly total of $15.8 million.

Estimated monthly cost of medical equipment and staffing was $13.9 million. Nicklaus Children’s Hospital would receive monthly rent of $150,000 to cover taxes and utilities.

The plans were vetted and approved by FEMA, said Mahon, the Division of Emergency Management spokesman, “and all costs associated with bringing this hospital online will be sent to FEMA for reimbursement.”

Now, the contract with DEM is being considered for use by the Agency for Health Care Administration, which regulates nursing homes.

“The agency and DEM have been in conversations on how to best utilize this established alternative care site to support the appropriate isolation and care of COVID-positive long-term care residents in the Miami-Dade area,’’ said Katie Strickland, spokeswoman for AHCA.

She said the state would “quickly license the facility operator and enroll a provider in Medicaid if necessary, and neither of these processes involve competitive bids.”

McClatchy DC reporter Ben Wieder contributed to this story. Mary Ellen Klas can be reached at meklas@miamiherald.com and @MaryEllenKlas

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