Two Crime Lab contracts going back for rebids

Second-in-command’s conflict moves governor to take step

Gov. Asa Hutchinson directed the state Crime Laboratory to redo two contracts involving a Little Rock firm co-owned by the lab’s second-in-command, he said in an interview.

PinPoint Testing LLC, co-founded by assistant lab director Cindy Moran, has benefited from more than $150,000 in direct and indirect business with the lab since 2017, records show. According to the affected contracts, PinPoint was in line to potentially earn millions from the Crime Lab by 2024 for toxicology services and equipment known as “ToxBox” kits.

Hutchinson gave the order during a meeting last week with Kermit Channell, the lab’s executive director, he said. An Arkansas Democrat-Gazette article on June 2 revealed the business dealings and raised questions about Moran’s independence from PinPoint’s work at the Crime Lab.

Moran received an email with unpublished bid specifications, for instance, and she signed paperwork allowing the lab to receive federal grant money to pay the company.

“There’s a conflict without any question,” Hutchinson said during a 20-minute interview in his office.

“There should have been a proper recusal from this. And I don’t think — in my judgment, the proper steps were not taken [for Moran] to clearly recuse from all knowledge [about the contracts], and it was not documented properly.”

Hutchinson said he would have no qualms if PinPoint wins the rebid contracts, provided the bid process is fair and the lab follows additional directives meant to keep Moran out of the loop on PinPoint’s work at the lab. The governor said he does not believe Moran should resign.

“We’ll see how the [bid solicitation] develops and whether anybody else bids on it,” Hutchinson said. “But it’s my understanding that this is a very unique product that saves a great deal of time for the Crime Lab and that other states are moving to that type of process.”

“But despite the fact that is unique,” he added, “we need to do a competitive bid on it to make sure that anybody out there can bid on it and the proper decisions are made.”

In a letter dated Friday, Moran informed Larry Walther, director of the Department of Finance and Administration, that she will “recuse myself from all activities that involve PinPoint’s relationship” with the Crime Lab.

Moran, whose annual Crime Lab salary is $82,144, will no longer supervise the lab’s toxicology section, for which PinPoint has provided the work. She also will stop conducting annual performance evaluations for the section supervisor, Kristen Mauldin.

“This recusal extends to my role at PinPoint,” wrote Moran, who holds 12% interest in the company. “I will not advise PinPoint on any matters that involve PinPoint’s relationship with [the Crime Lab], whether that relationship be direct or through a third party.”

Moran’s husband, Jeffery Moran, a former branch chief at the Arkansas Department of Health, is PinPoint’s chief executive and holds a 12.4% interest in the company, she wrote.

Channell, in a memo sent Friday to Cindy Moran, said her recusal was “appropriate” and that he would take over supervision of the toxicology section.

“Further, all procurement processes, workflows, and anything involving the bid process and associated [specifications] will be handled exclusively by me,” says the memo, which was copied to the lab’s financial officer.

Channell was out of the office and unavailable for comment, said Crime Lab attorney Kelli LaPorte, who provided Moran’s recusal and Channell’s memo.

State law does not prohibit state employees’ private business ventures from doing business with the state agencies for whom the employees work.

It requires that the employee not be “directly or indirectly” involved in the procurement process, but that law can be waived if the Department of Finance and Administration’s director finds the contract is in the state’s best interest.

The governor’s directives are meant to ensure Moran is not involved in PinPoint’s work for the state.

In a May interview, Channell and Mauldin said PinPoint’s work and its ToxBox kits have made the toxicology section’s drug screenings more efficient and reliable.

The lab receives thousands of cases a year from law enforcement officials, coroners and the state medical examiner — crucial evidence that underpins death investigations, criminal charges and trials. Turnaround times have shortened from six months or more to 30 days or less, Channell said.

LaPorte confirmed that the lab would rebid two contracts involving PinPoint.

The Crime Lab in 2017 signed a term contract with the national supply company Fisher Scientific for the purchase of up to 800 PinPoint-produced ToxBox kits a year at a cost of $441,360.

ToxBox kits are pre-made, prepackaged and customized well plates used in drug-testing. A well plate is a tray with dozens of wells in which specific amounts of often-liquid “standards” are placed.

Standards are a known amount of specific drugs, such as cocaine or methamphetamine. Because technicians know how much of a drug is present in a standard, they can reliably gauge its presence in an evidence sample, such as blood or urine.

One factor that distinguishes PinPoint from other companies’ pre-filled plates is that its ToxBox kits are tailored to an individual lab’s testing needs, Moran said last month.

Term contracts run in one-year intervals but can be extended annually for up to seven years total, meaning the maximum value for the Fisher Scientific supply — if the lab buys 800 kits a year for seven years — would be $3.1 million.

Through mid-May, including earlier purchases from a different vendor, the Crime Lab ordered 204 ToxBoxes at a cost of $101,337, a Democrat-Gazette review of invoices found. Mauldin has said she does not foresee the lab buying 800 kits a year.

A spokesman for Thermo Fisher Scientific, the parent

company, has said it began selling ToxBoxes at request of the “State of Arkansas” and has not sold any kits to other buyers. Fisher Scientific does not stock the kits — they are shipped directly from PinPoint to the Crime Lab — and the spokesman would not say how much it makes from each sale.

Hutchinson instructed Channell to rebid this contract at the end of its current one-year term, which expires Oct. 31, he said.

Additionally, PinPoint was the sole bidder last month for another contract — one to validate and develop testing methods on three drug-testing instruments, expensive machines that screen the filled well plates.

PinPoint submitted a $239,000 proposal, and Walther signed off on the proposed contract after the Crime Lab told him in May that Moran had no involvement in the purchasing process.

Scott Hardin, spokesman for the finance department, said Thursday that the contract “was not officially awarded” to PinPoint and is “in the early stages of being rebid based on a request from the Governor and Crime Lab.”

The lab will provide revised bid solicitation documents to the state procurement office, whose officials will review the documents before publicly advertising the opportunity, Hardin said.

Hutchinson’s office first learned of the Crime Lab-PinPoint business in advance of the newspaper’s article, he said.

“My team, our office, was alerted to this shortly before the story kind of came out,” Hutchinson said. “We were alerted to the existence of a conflict and some of the details on it. That’s when I really first learned about it. I obviously subsequently looked into it and became more familiar with it and aware of it.”

At times glancing at a piece of paper in his hand, Hutchinson during the interview described other actions his office has taken — or will — on issues involving both the Crime Lab and broader matters of conflict of interest regarding purchasing.

Hutchinson called for Moran to submit her recusal in writing — a practice not required by law but one that he will urge his Cabinet leaders to adopt in the future, he said. He directed Channell to make clear to Moran’s subordinates that her recusal means she should not be sent information regarding the contract.

“Clearly the employees need to understand more about what it means to recuse,” Hutchinson said. “So I’ve asked my general counsel to go through a tutorial with the Crime Lab and particularly Ms. Moran on what constitutes a recusal and how that should function.”

Hutchinson also said he will emphasize training on how to handle potential conflicts of interest in purchasing matters for all of his Cabinet secretaries.

“If you’re going to recuse, document it,” he said. “Don’t just tell somebody, whisper in her ear — you’ve got to document it, and to make sure then that the employees that report to you know that you’ve recused from this so that there’s not a flow of information to you.

“I think if that had been done in this case, there would have been fewer questions, it would have been well-documented, it would have been better for everyone.”

“There’s a conflict without any question. There should have been a proper recusal from this. And I don’t think — in my judgment, the proper steps were not taken [for Moran] to clearly recuse from all knowledge [about the contracts], and it was not documented properly.”

— Gov. Asa Hutchinson

Moran

Channell