Government & Politics

Democrats say Parson should fire his COO, cancel contract that is a ‘shady deal’

Parson addresses Missouri legislature as governor for the first time

Missouri Gov. Mike Parson made a point to remind legislators whom they work for.
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Missouri Gov. Mike Parson made a point to remind legislators whom they work for.

Missouri Democrats on Monday called for Gov. Mike Parson to fire his chief operating officer and cancel a state contract awarded to the COO's former employer.

Parson responded Monday evening through his spokesman by defending the state's bidding process and the agency that granted the contract in question.

The St. Louis Post-Dispatch reported Sunday that on June 7, the state’s Office of Administration awarded a $2.7 million contract to New York-based McKinsey & Co.. The company's job would be to assess Missouri’s Medicaid program to identify any fraud, waste or abuse.

McKinsey & Co. is the former employer of Drew Erdmann, who last year accepted the position of COO, which was created by an executive order issued by former Gov. Eric Greitens. Missouri's executive branch had never had a COO before Greitens created the position.

There was one bid for the Medicaid contract that was more expensive than McKinsey’s. The three other bids combined were still less than the $2.7 million the state agreed to pay for McKinsey’s services.

McKinsey’s bid also was the only one that contained redacted information.

House Democrats issued a statement Monday decrying the contract and calling for the new governor to eliminate the position of COO and cancel the "shady deal."

“The so-called ‘chief operating officer’ hired by Eric Greitens was always just an excessively paid staffer with an empty title,” said House Minority Leader Gail McCann Beatty, D-Kansas City.

“With the revelation that the former administration apparently rigged state bidding rules to award a bloated $2.7 million consulting contract to the COO’s former employer while keeping key portions of the bidding documents secret from the public, Missouri taxpayers should demand action to prevent the disgraced former governor’s cronies from further raiding the state treasury.”

Rep. Crystal Quade, D-Springfield, is a member of the House budget committee. She said on Twitter Sunday that the situation has played out "exactly as we said it would in the budget hearings."

"A COO instead of a governor to find efficiencies," she wrote. "Then we pay an outside firm to find efficiencies. And surprise, it happens to be the COO's old firm."

One of the companies that lost out on the contract is also calling for it to be rescinded and rebid, and the attorney general's office is questioning the legality of McKinsey’s bid containing redacted information.

Steele Shippy, Parson's communications director, said in a statement that the governor's office "has a long standing practice of wholly excluding itself from participating directly or indirectly with the procurement decision making process. It is a process that is exclusively left to the Office of Administration and is a fully transparent process that this office supports."

In an email to The Star, Sarah Steelman, commissioner of the Office of Administration, denounced the Post-Dispatch report, saying it omitted "critical information about the new contract award."

The evaluation criteria communicate to bidders more transparently the state's specific needs, she said, and the approach Missouri used on this contract is the same used by other states for Medicaid analysis.

"The (Office of Administration's) procurement process is transparent, fair, and objective," Steelman said, later adding: "Medicaid constitutes approximately one third of our state’s budget. (The Department of Social Services) needed the emphasis in this procurement placed on the expertise and experience of the services it was contracting for relative to the cost of those services."