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LANSING, Mich. (AP) — The Michigan Democratic Party on Monday accused Republican Gov. Rick Snyder's administration of twice extending a state contract without competitive bidding last year and increasing its worth earlier this year just a day after the company's executives held a fundraiser for his campaign.
Snyder spokeswoman Sara Wurfel called the allegations — levied nearly two weeks before he faces Democrat Mark Schauer in the Nov. 4 election— "ridiculous, offensive and baseless."
The State Administrative Board in 2013 granted six-month and one-year extensions worth up to $26.4 million to J&B Medical Supply, which supplies diapers and other incontinence products to Medicaid recipients. Then this past June, it unanimously increased the contract's value by up to $390,000 a day after J&B executives hosted a fundraiser for Snyder that raised more than $54,000 after expenses.
Party Chairman Lon Johnson said documents uncovered by Democrats "raise serious questions regarding whether pay to play is standard operating procedure inside Rick Snyder's administration."
The Snyder administration, however, said the timing was a coincidence and extensions are not unprecedented in state contracts.
Administration officials said the $390,000 change to the contract was necessitated by 18,000 new recipients becoming eligible when Michigan's Medicaid expansion program began in April and had been in the works at least a month before the June 9 fundraiser.
"We're not going to apologize for helping make sure Michiganders got the supplies they need to live healthy, productive lives," Wurfel said.
Wixom-based J&B requested the adjustment on May 5 and an Administrative Board committee preliminarily approved it on June 3, said Caleb Buhs, spokesman for the state Department of Technology, Management and Budget.
"This was well, well into motion before the Administrative Board meeting took place on June 10," he said.
Democrats — including Schauer and GOP Attorney General Bill Schuette's opponent Mark Totten — also questioned why the $113 million contract, first authorized by then-Democratic Gov. Jennifer Granholm's administration in 2008, was not rebid in 2013 after Granholm officials exercised allowable one-year options in 2009 in exchange for a 1 percent price reduction.
"These actions by the governor to approve no-bid contracts with J&B are an apparent violation of provisions of the Michigan Management and Budget Act," Johnson said.
Snyder officials said they twice extended the contract because a new integrated care program serving dual Medicaid-Medicare enrollees had made it difficult to estimate future purchasing volumes.
"It didn't make sense to bid out a multiyear contract until those questions could be answered," Buhs said.
He said discussions continue on how to proceed with the J&B contract, which is due to expire at the end of the year.
The Democratic Party found an Internet video of the fundraiser in Bloomfield Hills, which was hosted by Fawzi and Mary Shaya and Abu-Bakar Sheikh. Sheikh is J&B's chief financial officer; and the Shayas founded the business.
The administrative board approves state contracts and is comprised of representatives for the governor, lieutenant governor, secretary of state, attorney general, state treasurer, school superintendent and transportation director.
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