Top Texas health official to step down amid contracting missteps

May 04--Charles Smith, executive commissioner of the Texas Health and Human Services Commission, will retire May 31 in what will be the sixth and most high-profile departure from the troubled agency since major contracting errors were revealed last month.

Smith has come under fire over the last several weeks from lawmakers and Gov. Greg Abbott over missteps in awarding $600 million in contracts. Contracting problems have plagued the agency in recent years, leading to rapid turnover among the agency's top brass.

Smith, who announced his retirement Thursday, did not say in his letter to Abbott -- who appointed him to the post in 2016 -- why he was leaving. Smith had previously worked for Abbott when he was Texas attorney general.

"Serving with the thousands of dedicated professionals in the Health and Human Services system has been an honor, a privilege and the highlight of my career. There isn't a higher calling than providing services to the most vulnerable in our society," Smith said.

Abbott has appointed Tommy Williams, a former state senator turned aide to the governor, to serve as interim agency head after Smith leaves. Shortly after the contracting problems surfaced last month, Abbott dispatched Williams to the agency to address the problems.

Abbott in a news release Thursday thanked Smith for his service.

"Throughout his tenure, Charles has taken a hands-on approach to solving tough issues while displaying a tireless work ethic," Abbott said. "I am confident he will prove to be an invaluable asset wherever he should devote himself next."

State Sen. Charles Schwertner, R-Georgetown, who heads the Senate Health and Human Services Committee, said the health agency's latest contracting woes indicated a need for new leadership.

"Charles Smith is a good man and a dedicated public servant who has spent his entire career working to improve the lives of his fellow Texans. However, considering the persistent management challenges that continue to plague HHSC -- including substantial deficiencies in the procurement and supervision of billions in state contracts -- it has become clear that something at the agency needed to change," Schwertner said in a statement.

Last month, agency officials canceled five managed care contracts worth $580 million after they discovered a staff member had evaluated interested vendors with a tool that contained errors. The contractors were to provide health care for low-income children in rural areas and in Hidalgo County in the Children's Health Insurance Program.

A few weeks later, the State Auditor's Office released a report highlighting a series of problems with how the agency awarded a $17.5 million contract in 2016 to develop and maintain a database to track birth and death statistics across state. Auditing officials said the agency inaccurately scored the five interested vendors and used the wrong information to award the bid to Genesis Systems Inc.

Smith apologized for the mistakes before the House Appropriations Committee on April 18.

Five other employees have left the agency since the errors were revealed. The purchaser responsible for the incorrect scoring and her two superiors were fired. Ron Pigott, the agency's head of procurement, and his boss, Chief Operating Officer Heather Griffith Peterson, resigned.

Smith replaced Chris Traylor who served a year as the agency's executive commissioner after he had replaced Kyle Janek who resigned the post after the 21CT contract scandal. A $90 million contract extension with Austin data analytics firm 21CT was canceled in December 2014 after an American-Statesman investigation revealed an array of problems, including the lack of a traditional bidding process, little oversight and a possible conflict of interest.

In response to Smith's retirement announcement Thursday, House Speaker Joe Straus, R-San Antonio, said the latest contracting problems reveal a need for "a comprehensive, outside review" of the agency.

"The problems at HHSC are severe and longstanding, and they continue to warrant serious attention," Straus said.

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