R.I. agreed to pay consulting firm $12.4m to help with COVID-19 response

Alvarez & Marsal is the same N.Y. firm hired to help Rhode Island College manage their budget, a contract the state quickly cancelled.

Pharmacy Manager Shannon Baker prepares a syringe for the new COVID-19 vaccine to be administered to a Lifespan Health Care worker on Dec. 14, 2020, in Providence, R.I.Elise Amendola/Associated Press

PROVIDENCE — In June 2020, when Rhode Island officials were juggling the second phase of reopening the economy and ongoing pandemic response efforts, Governor Gina M. Raimondo’s administration hired an outside consultant to help.

In September, the administration drew a second contract with the same firm, N.Y.-based global management consultants Alvarez & Marsal, to assist with COVID-19 testing efforts and the eventual vaccine rollout.

The total cost for both contracts: Nearly $12.4 million, $2,496,000 million of which has already been paid through the end of January, according to records obtained by the Globe.

State officials told the Globe that the consultants were necessary to help the state navigate the pandemic, and pointed out that much of the $12.4 million the state has agreed to pay Alvarez & Marsal will be reimbursed by the Federal Emergency Management Agency.

“State employees have worked hard and been committed throughout the pandemic, yet additional support has been necessary because of the unprecedented challenges presented by the pandemic,” said Robert Dulski, a spokesman for the Rhode Island Department of Administration.

“In order to meet these demands, the State has contracted with Alvarez & Marsal to provide necessary and timely support to ensure Rhode Island meets its ambitious testing goals, maximizes the value of every dollar in federal aid, and administers the vaccine to as many Rhode Islanders as quickly and carefully as possible.”

Alvarez & Marsal is a familiar name among Rhode Island state agencies.

In January, the state cancelled a no-bid, $76,000-a-week contract with the firm after the Globe reported the pricy consultants had been hired to help cash-strapped Rhode Island College manage its budget.

The firm earned $1.25 million in the 2020-’21 fiscal year, $1.4 million in the 2019-’20 fiscal year, and $936,000 during the 2017-’18 fiscal year for work with agencies including the Department of Administration, Department of Children, Youth and Families, Office of Health and Human Services, and the Department of Health.

On Friday morning, McKenzie Morton, a manager at Alvarez & Marsal, conducted the state’s regular vaccine subcommittee meeting. Previously, the meetings had been hosted by Tricia Washburn, Rhode Island’s chief of immunization health.

“Then one day, we were told that McKenzie, who’s a consultant, would be taking over,” said Dr. Pablo Rodriguez, a subcommittee member.

While questions were accepted via the video conferencing platform’s chat function for Friday’s meeting, which was conducted over Zoom, attendees — including reporters and Rhode Island Health Department Director Dr. Nicole-Alexander-Scott — were told that those questions not answered live would be answered when meeting minutes were posted, up to 48 hours later.

“This is a problem. When you go to a public meeting in person, you see who is there and can voice your opinion or ask questions. But not here,” said SEIU Local 580 president Matthew Gunnip, who tuned in the meeting. “This is just a transparency issue.”

Dulski said the pandemic has forced state governments to create and run complex systems for testing, vaccine distribution, processing additional unemployment benefits, and distributing grants in a matter of days and weeks.

“While the federal government has provided financial assistance, it has not provided a strategic roadmap on how to develop and effectively administer these complex systems,” said Dulski. The state contracted with Alvarez & Marsal to fill that role, he explained.

According to state records, the state agreed to pay the consultants $6,448,000 for COVID vaccination support for the Department of Health; $4,344,000 for COVID testing support; and $1,590,000 for “budgeting and financial controls” work that is not eligible for FEMA reimbursement.

The Rhode Island Department of Health did not immediately respond to questions about how much was paid to the firm for the subcommittee.

According to guidance from FEMA, the state can request reimbursement of $10,792,000 for costs associated with testing and vaccination support. The federal government is expected to cover 75 percent of that cost, and the remaining 25 percent would be reimbursed using federal coronavirus relief funds, not local taxpayer dollars.