EDITOR'S NOTE: This is the second installment of a series investigating Nomi Health and its deals with GOP governors to secure lucrative COVID-19 testing contracts. Read the first story here.

Under intense pressure to deal with the COVID-19 crisis, state leaders across the country needed solutions and quick results in early 2020 to slow the spread of the coronavirus and repair battered economies.

And long-standing connections seemed to pave the way to those goals in a handful of Republican-led states.

Thanks, at least in part, to its ties with high-ranking Utah politicians, four companies within the tech business community in greater Salt Lake City got their first no-bid contract on March 31, 2020.

That deal was just the start. Those companies would within a year leverage their connections to sign deals that would pay them at least $219 million in five GOP-led states. Two of the companies would donate more than $1 million to Republican campaigns after getting those deals.

Here’s how USA TODAY got the story about the Nomi Health.

The contracts as well as political donations have raised questions from critics and observers about favoritism and pay-to-play campaign contributions.

Leading the way in getting those contracts was Nomi Health, a startup with no public health experience that would oversee COVID-19 testing and provide personal protective equipment (PPE) in Florida, Iowa, Nebraska, Tennessee and Utah.

Nomi would hire Domo and Qualtrics, two software companies whose executives were on the board of Silicon Slopes, a nonprofit business group that promotes tech companies. Several of those board members had strong ties to Utah political leaders. 

Those two companies would provide electronic dashboards and test surveys. The tests would come from Co-Diagnostics, a molecular testing company that had "no major customers" in 2019, according to the company's annual report. The small firm, with a few dozen employees, used its connections with an influential former mayor of a Salt Lake City suburb and U.S. Sen. Mitt Romney's office to lobby the U.S. Food and Drug Administration to gain emergency approval for its test.

A USA TODAY investigation based on more than 30,000 documents and dozens of interviews found that a web of business relationships, money and connected political leaders in five states tipped the scales in favor of Nomi Health, its subcontractors and supplier. These state Republican leaders awarded contracts to Nomi for tens of thousands of COVID-19 tests and PPE despite the company's inexperience.

Lt. Gov. Spencer Cox, Utah's COVID-19 czar who would become governor, told USA TODAY he had never heard of Nomi, but the company came recommended by leaders within Silicon Slopes, and he was told Nomi had access to COVID-19 tests that were in short supply.

"It's really interesting that people forgot what the first few weeks and months were like. We had a total shutdown," Cox told USA TODAY in May 2022, referring to the early stretch of the pandemic. "The only way to get it open was testing until we had a vaccine. … I didn't care where the tests came from, and I didn't care if they came from Mars. We would have given a no-bid contract to anyone who had tests."

Cox said he was contacted by his counterparts in other states who noticed Utah was having success by "testing at a higher rate," and "we said we have these people helping us."

Those conversations – and recommendations from Cox, Gov. Gary Herbert and others –would quickly broaden Nomi's access to governors in Iowa, Nebraska and Tennessee.

In Iowa, Nomi also benefited from a connection to actor Ashton Kutcher, who was friends with Qualtrics founder and Utah Jazz owner Ryan Smith. Kutcher, according to The Des Moines Register, pitched Nomi to Iowa Gov. Kim Reynolds, who gave the company a no-bid contract on April 15, 2020.

On April 23 – about three weeks after Nomi obtained its first contract in Utah – Vice President Mike Pence praised Reynolds and her partnership with Nomi and Domo at a White House COVID-19 briefing.

Also in April came Nebraska, which awarded Nomi a no-bid contract two days before Pence's announcement. Nebraska Gov. Pete Ricketts at the time said he hired Nomi after a conversation with fellow Republicans Reynolds and Herbert, according to The Associated Press.  

The momentum carried into Tennessee, where a lobbyist and fundraiser for the Republican Governors Association pitched Nomi to the governor's chief of staff, who connected the company with that state's health commissioner.

In a month – March 31 to May 1 – Nomi had signed no-bid contracts in four states, and it would later win additional state contracts through the traditional competitive procurement process.

By the time Florida came on board a year later, taxpayers would pay Nomi roughly $219 million, the records show.

The breakdown: Utah ($78.5 million), Iowa ($26 million), Nebraska ($62 million), Tennessee ($5.9 million) and Florida ($46.5 million).

"As things opened up, we did go through a bidding process," Cox told USA TODAY. "Guess who showed up to bid? Nomi was the only one who bid."

The four Utah businesses, like many firms during the pandemic, capitalized on limited oversight as elected officials in all states signed no-bid government contracts with an urgency driven by a desire to reopen their battered economies, records show.

Health department infectious disease officials from those states were stunned that they were not consulted or offered the opportunity to lead the testing effort, and lawmakers in Nebraska questioned why their highly regarded university hospital was bypassed in favor of Nomi.

'Got Utah moving'

Nomi officials said that while the value of their contracts with states may grab headlines, there is more to the story.

Mark Newman, CEO of Nomi, said the company provided a one-stop testing service that included remote areas in the states at a great value for taxpayers.

He declined to disclose the privately held company's profits since getting its first COVID-19 testing contract in spring 2020 but said its profit-margin percentage was "in the teens," resulting in Nomi making millions of dollars.

Newman, who incorporated Nomi on May 1, 2019, as a way to cut bureaucracy for patients and providers in health care, said that when COVID-19 hit, the Utah business community came together "to deliver solutions and access" for PPE and testing.

He said executives from Nomi, Domo, Qualtrics and Co-Diagnostics knew one another and "got Utah moving."

"All the states realized they were on their own in 2020," Newman said.

He said that "there was no cohesive federal response around the pandemic," and governors had to figure out how to get their residents tested to stay safe.

Newman said governors and their chiefs of staff were talking daily, and with the launch of Utah's testing program, called TestUtah, other states wanted their services.

"They called everyone else, and we were the last call," Newman said. "We were approached by every small and large state governor in the nation…We completely crushed the price of COVID tests in their markets."

Utah auditor: Cost 'unreasonable'

In Newman's home state, a 2020 report on emergency procurements from the Utah State Auditor found the costs per test administered by Nomi were “unreasonable” at roughly $235 a test.

Nomi argued that the report, which also examined work done by Nomi subcontractors Qualtrics and Domo and other firms, didn’t take into account the entire Nomi operation, which includes setting up testing centers across states, hiring nurses and support staff and purchasing testing and lab equipment. Company officials say costs ended up closer to $42 a test after two years. The auditor’s office declined to answer questions, but its report said tests from other companies were $125 a test or less.

Josh Walker, Nomi's chief operating officer and co-founder, said the company didn’t just deliver a “test mechanism” but created a testing operation "that could be scaled up or down and used to their desire of how far they wanted to go” in each state.

He added Nomi Health experienced “initial build costs,” and “the more you use it, the more you scale it, the more the per-unit costs fluctuate and go down.”

Yet the Utah audit expressed concern that the contract paid a flat rate for startup costs plus a flat rate per testing site. The contract contained no provision for adjustment based on the number of tests performed.

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The audit also noted that Utah’s governor and lieutenant governor “had a relatively close relationship” with Silicon Slopes and various member companies.

“This causes particular concern when contracts are steered to those companies,” the audit said.

Auditors also said it’s possible the governor’s office “may have engaged in the sunk cost fallacy,” pivoting into contracts with certain Silicon Slopes vendors without reconsidering other alternatives when the initial arrangements changed.

Nomi, Domo gave $1M to GOP

While all of the states Nomi served had Republican governors, those state leaders also had strong ties to the Republican Governors Association (RGA), a powerhouse fundraising organization, with some holding leadership positions.

Nomi and Domo, the software subcontractor, gave more than $1 million in total to the RGA or other GOP-related campaigns after the deals were awarded, USA TODAY found in state and federal campaign finance reports.

Domo did not return calls or emails, but Newman told USA TODAY that campaign contributions were made in part so the company could continue to "be at the table" and compete for future health contracts against other businesses.

He said Nomi is not unique in its financial support of public officials, noting other companies make campaign contributions to politicians. Nomi also has made contributions to Democrats, according to the company.

“If we are going to have long-term business in these states,” Newman said, “why wouldn’t we also participate in the political process and contribute in 50 of those states just like every other health care organization does?"

Walker, Nomi's COO, was at the table during the Republican Governors Association Summit in May 2021, where he was on a medical panel with governors from New Hampshire, Missouri, Maryland and South Carolina. The event attracted 21 governors.

Meanwhile, on July 20, 2022, Newman was among several Utah hosts for a fundraiser for Florida Gov. Ron DeSantis, a potential 2024 GOP presidential nominee.

The Florida governor's office, from Feb. 4 to June 17, 2021, paid Nomi at least $46.5 million for COVID-19 testing and vaccine work, records show. Nomi gave $100,000 to a political committee of DeSantis on July 23, 2021, and four days later Newman contributed $10,000.

Donald Sherman, senior vice president for the political watchdog group CREW, said campaign contributions following no-bid government contracts are not illegal, but "it's obviously ethically dubious and undermines public faith in our institutions."

In Utah, Cox, who would become governor in November 2020, received at least $290,000 from the RGA and Republican State Leadership Committee, two political action committees to which Nomi and Domo were donors.

He said there were no direct ties between the campaign contributions and contracts.

"I got a very small amount from the Republican Governors Association, and I was going to win (the general election) by a very large margin. Anyone who ties a donation or quid pro quo is drinking," said Cox, who narrowly won the GOP primary and handily won the general election.

The governors' offices in Florida, Iowa, Nebraska and Tennessee said contracts to Nomi were awarded based upon the company being able to quickly provide emergency services, and there were no connections to campaign contributions.

“Vendors were selected if they could provide equipment and services that supported Florida’s response to COVID-19,” said Samantha Bequer, communications director for that state’s emergency management division. “The division does not track the political donations or political affiliations of any vendor.”

GOP lobbyist helps Nomi

In Tennessee, Tony Simon, a lobbyist and fundraiser for the RGA, reached out to that state's health commissioner to hire Nomi after trading emails with Blake Harris, the governor's chief of staff.

Simon, a partner for ConnectSouth Public Affairs in Atlanta, told the Tennessee governor's office in an email to not "freak" about the contract's cost. Instead, the number was a "reimbursement opportunity from the feds" over the next year as the federal government was reimbursing states for COVID-19-related expenses.

Seven days later, on May 1, 2020, Tennessee would sign a a $26.5 million contract with Nomi.

A Nomi spokeswoman acknowledged that Simon "made an introduction" for the company. Newman, Nomi's CEO, declined to answer repeated questions about Simon, who also did not respond to questions from USA TODAY.

Harris, the Tennessee governor's chief of staff, left that position in November 2021 to assist in Gov. Bill Lee's reelection efforts and to help the RGA, according to Lee’s office.

“As for Nomi’s work with the state in early 2020, there are public records that speak to the state’s brief testing contract with the company. My role in that was limited and work with Nomi followed state of emergency procurement requirements,” Harris told USA TODAY in a statement.

Lee’s office downplayed the connection to the RGA.

“At the start of the COVID-19 pandemic, every state in the nation was competing for personal protective equipment and testing,” said Laine Arnold, a Lee spokeswoman. “All work with Nomi was in accordance with Tennessee laws governing emergency procurement and no external influences were a factor in the limited work with the state.”

Five days after Nomi secured its contract in Tennessee, then-state Laboratory Services Deputy Director Kara Levinson raised her concerns in a six-bullet-point email to her bosses.

Tennessee Laboratory Services Deputy Director Kara Levinson email

Levinson, promoted to director in May, wrote that in conversations with other states involved with Nomi, the COVID-19 test it provided "appears to be 4-fold less sensitive" than the Centers for Disease Control and Prevention's COVID-19 test.

"Using a less sensitive test has the potential to give false negative results, which has significantly implications for individual patients that may be sick and for public health staff that perform contract tracing," she wrote.

"Additionally, the optics of using a less sensitive/inferior test, especially when the Governor has stated that we are targeting vulnerable populations for testing … has the potential to create strong political backlash."

Tennessee then conducted a verification/validation exam on Nomi's test system and determined it was unreliable and had “no confidence that testing clinical samples on this platform will provide reliable and reproducible results."

Tennessee's Nomi validation report and executive summary

That report also said lab officials doubted “the robustness and endurance of the Nomi test system and its ability to meet the testing capacity advertised when put into clinical use.” The state health laboratory director and his deputy wrote: “We cannot endorse the use of the Nomi test system for clinical testing of COVID-19.”

The state moved to end its contract with the company June 15, 2020, and paid Nomi $5.9 million. Nomi said there was a mutual separation and the money was paid for services provided. 

Email records among health department officials in Utah, Iowa, and Nebraska show infectious disease and health experts expressed concern about the reporting and accuracy of the Nomi test process, although no other state ended its contracts.

Other states

USA TODAY contacted 20 additional states that had Republican governors at the start of the pandemic to find out if they had been lobbied to use Nomi and the other companies’ COVID-19 testing and tracking services.

Of the handful of states that provided records in response, several were contacted by Domo, Qualtrics or both, but none had email records indicating direct contact with Nomi.

One of the email pitches to a staffer for Arizona Gov. Doug Ducey, chairman of the RGA, includes a reference to Pence’s shout-out to the work of Nomi subcontractor Domo in Iowa.

“Vice President Mike Pence referenced Domo and the state of Iowa and how our platform increased their testing capacity 3X,” the email sent by account executive for Domo Jason Penrose on April 28, 2020 says.

Several Qualtrics employees had a virtual meeting with at least one Ducey staffer on May 8, 2020 to discuss their COVID tracking services. A Ducey spokesperson hasn’t answered questions about why the state didn’t pursue a contract with Qualtrics or other partners.

Domo also sent similar pitch emails to North Dakota Governor Doug Burgum's office.

His staff didn’t meet with Domo about the pitch because the state already had a COVID-19 dashboard and testing system in place, according to Mike Nowatzki, communications director for the North Dakota governor's office.

Nowatzki said North Dakota had scaled up testing capacity at its state lab and developed its own data tools and dashboards. The state also had a contract with another company for surge and backup testing.

University hospitals bypassed for Nomi

Several Republican governors who paid for Nomi's large-scale testing services bypassed their own state university hospitals.

"Nomi executives, by their own admission, have no knowledge of public health practice in this area and little understanding of the Nebraska healthcare delivery system in general," four Nebraska state senators wrote in a letter May 11, 2020, to Gov. Pete Ricketts. "Nebraskans do not have the luxury to wait for Nomi leadership to learn on the job."

The four Democratic senators – Machaela Cavanaugh, Megan Hunt, Rick Kolowski and Carol Blood – said the University of Nebraska Medical Center, which is "world-renowned in infection control and treatment," should be leading the testing effort.

Cavanaugh, in a recent interview with USA TODAY, said Nebraska didn't get its money's worth from Nomi.

She said there were problems getting tests for those who were disabled or didn't have internet access, and the state had to hire its own call center and have the National Guard help administer tests.

Cavanaugh remains puzzled why there was such a lack of coordination with established health care providers and why the state didn't use its own information exchange for COVID-19 reporting instead of relying upon Nomi.

She said the campaign contributions from Nomi after getting contracts are "improper."

"It looks as if they are using their relationship to get business, and that is a kickback when they give a campaign contribution shortly after getting an enormous contract that had a no-bid process," Cavanaugh said. "If it had gone through a bidding process that might be different, but I would still think it's not proper."

In Utah, State Rep. Suzanne Harrison, a Democrat from the Salt Lake City suburb of Draper and an anesthesiologist, added Utah also had a "tremendous health infrastructure, a nationally ranked medical school and a nonprofit testing lab" that were bypassed for Nomi.

"That would have been a good place to start," Harrison told USA TODAY. "We missed an opportunity to invest in the experience we had in Utah and should have done a rudimentary bidding process to get a good value for taxpayers and more importantly the expertise to protect the health of the community."

She also said the campaign contributions after contracts were awarded to Nomi "speaks for itself."

'Highly accurate COVID tests'

The states also bypassed other established companies like Thermo Fisher Scientific, a Massachusetts-based company with $40 billion in annual revenue which, as of mid-March 2020, had one of the first PCR testing kits for COVID-19 on the market.

In Nebraska, Ricketts' office told USA TODAY in June that it had tried to purchase testing equipment from Thermo Fisher but was put on a waiting list because no equipment was available, and that was one of the reasons the state went with Nomi.

Ricketts' office added that Nomi helped the state more than triple its daily COVID-19 testing to 6,300 tests, and it was able to provide much-needed tests when others couldn't deliver.

"Nomi Health was used because they were the only company that could provide large quantities of highly accurate COVID tests to the citizens of Nebraska," said Alex Reuss, the governor's spokeswoman.

Reuss added that an analysis by The New York Times found Nebraska ranked among the top 10 states for the fewest COVID-19 deaths per 100,000 residents, which she credited to the state's "free, mass COVID testing."

Reuss also noted that Nebraska, along with Utah, Nomi's first customer, received the highest ratings from the National Bureau of Economic Research for its pandemic response.

This article originally appeared on USA TODAY: Utah firms gave $1M to GOP campaigns after getting no-bid COVID deals