HealthcareStatewide NewsTaxes & SpendingContact Tracing Program Challenged by Five Texas GOP Legislators in Lawsuit

Several Republican lawmakers have filed a lawsuit calling for the cancellation of the state's $295 million contact tracing contract.
August 5, 2020
Governor Abbott finds himself before a Texas District Court once again, this time over the $295 million contact tracing program with MTX Group, Inc (MTX).

Back in April, Abbott announced the state would take bids from private companies to design and implement a contact tracing program, a method of tracking individuals that may have come into contact with coronavirus.

After a very brief bidding period, MTX Group was awarded the bid to the tune of nearly $300 million. The contract spans 27 months and provides for over 2,000 tracers and a 5,000-person call center.

The plan has been criticized by some both for its abrupt decision and civil liberties implications. But this week that criticism was taken a step further as five legislators filed suit against Abbott appealing to the court for a cancellation of the program’s contract.

State Sen. Bob Hall (R-Edgewood) and Reps. Mike Lang (R-Granbury), Kyle Biedermann (R-Fredericksburg), Bill Zedler (R-Arlington), and Steve Toth (R-The Woodlands) make up the plaintiffs against Governor Abbott, Texas Health and Human Services Acting Commissioner Phil Wilson, and MTX.

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The case was filed on Monday, August 3 in the 261st District Court of Travis County.

The plaintiffs seek injunctive relief in the form of voidance of the contract and a temporary injunction stopping the program while the case is under review.

Two specific arguments are made by the plaintiffs in the filing.

First, that Abbott has superseded the authority given to him by the Texas Constitution — both in his arbitrary application of measures he has implemented (essential vs. non-essential business designations) and by conducting legislative functions without the consent of the legislature.

Article III, Section 30 of the Texas Constitution reads, “No law shall be passed, except by bill.”

Trumpeting the state’s separation of powers, it reads, “In the current case, an agency is spending funds on a program where no appropriation was ever made, so any expenditure on contact tracing is one exceeding its appropriation.”

The second argument is that the bidding process for the program contract was hastily done, awarded taxpayer dollars without legislative appropriation, and granted for an unacceptable period of time.

According to the brief, the bidding process took only a couple of days and MTX was awarded the bid neither having the reputation of its competitors nor work history with the state. MTX, reportedly, low-balled the other main contender by $15 million.

Further, the brief criticizes the program for its inefficiency, an accusation backed up by testimonies from four former employees of the MTX program.

Additionally, the call center is not HIPAA-certified, meaning the usual confidentiality protocols involved with health programs is not a part of this specific one.

And finally, it notes that the Texas Constitution requires appropriations to be limited to fewer than two years, or the state’s typical biennium from which its budget operates.

In arguing their standing before the court, the brief reads, “[T]he Governor has opted to create a new 5,000-person business for an unproven vendor to enact a contract tracing policy the Texas Legislature has not approved.”

Back in April, a group of judges who had sued Abbott over an order prohibiting the release of violent felons was denied standing by the Texas Supreme Court. And so, standing must be proven before any other arguments can be judged on their merits.

Toth told The Texan, “It’s the most ridiculous, thoughtless thing the State of Texas has ever done.”

Specifically pointing to the HIPAA implications, Toth stated, “You would think that the Department of State Health Services (DSHS) would think about the potential violation of HIPAA guidelines — the fact that you will have third-parties calling and asking about the medical condition of others without certification.”

Other security risks include the fact that the individuals in the call center must use their own computers, thus having no virtual private network (VPN) to protect sensitive information.

Toth then called into question the association by the state with the MTX CEO, Das Nobel, who lied about his degree status from Colorado Technical University.

“Even in the contract, it states the legislature has to approve it,” he said, pointing to Article III, Section 3.1 of the contract which reads:

“The contract is subject to termination or cancelation, without penalty to the [DSHS], either in whole or in part, subject to the availability of state funds. [DSHS] is a state agency whose authority and appropriations are subject to actions of the Texas Legislature.”

The House Appropriations Committee, on which Toth sits, has convened no meeting, either in-person or virtual, to discuss this contract.

Toth further said he hasn’t heard anything from the Governor’s office.

Abbott’s office did not reply to request for comment by this article’s publishing.

“We’re not trying to gang up on the Governor at all,” Toth concluded, warning about the precedent this may set for future Democratic governors to unilaterally implement their policies and programs, “but process matters and the ends don’t justify the means.”


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.