Working under a cloud of controversy, members of the Idaho health exchange met Friday afternoon in Boise to straighten out how the organization hires contractors.

The Idaho health exchange, a key piece of President Barack Obama’s health reform measure, found itself mired in controversy last week when a board member, Frank Chan, resigned the same day he received a lucrative no-bid technology contract from the entity.

Chan, under scrutiny for the deal, canceled the $370,000 no-bid contract three days ago. The board also voted to terminate the contract as well. Exchange executive director Amy Dowd defended the agreement, noting that Idaho is under a tight timeline and the board hadn’t approved an official procurement policy.

Subsequently, board members Friday took the first step to develop a comprehensive contracting policy that would prevent the Chan scenario from happening again.

The target guideline developed by the board members isn’t, however, as strong as it could have been.

Board member Sen. Jim Rice, R-Caldwell, initially called for a one-year “cooling off” period between when a board member leaves and when he or she, or a company he or she controls, would be eligible for a contract from the entity.

“I think a year would be appropriate,” said Rice, who called for Dowd to resign over the Chan controversy.

Initially, his proposal won the support of Rep. Kelley Packer, R-McCammon. “I think that this makes sense,” Packer affirmed.

House Minority Leader John Rusche, D-Lewiston, also a board member, led the charge to weaken the proposal and hand more flexibility to the board. Rusche noted that because Idaho’s economy isn’t massive, the state and political entities “don’t have a deep bench” to pull from when searching for competent and qualified vendors.
Rusche’s proposal includes the one-year cooling-off period, but authorizes the board to override the ban with a two-thirds vote.

Rice accepted the compromise. “I’m fine with that,” he said, adding that placing the 365-day restriction would prevent board members from negotiating contracts while still holding sway over the exchange’s operational direction.

The members voted unanimously to initially adopt the proposal. The exchange legal team, Hawley Troxell of Boise, will now refine the wording on the ban before sending it before the full board at the end of the month.

The exchange, still in its infancy after launching just a few months ago, didn’t get any help from the state on the issue. Several state departments don’t have policies that would address a similar situation, while others do.

“The policy is that there is no policy,” said exchange attorney Michael Stoddard.

Chan’s deal infuriated many state lawmakers because the exchange agreed to pay him $180 per hour, while he simultaneously holds two contracts for other state departments worth $95 per hour, according to the Associated Press.

The full board meets again on Oct. 30 in Boise.