SACRAMENTO (KCBS) — The race to meet federal deadlines meant millions of dollars in no-bid contracts by the California health insurance exchange, a new investigative report reveals. Officials with Covered California, however, are defending the decisions that were made.

The Associated Press reported on Sunday that Covered California awarded $184 million in contracts to get the health exchange up and running earlier this year.

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Several of those contracts worth a total of $4.2 million went to a consulting firm, The Tori Group, whose founder has strong professional ties to agency Executive Director Peter Lee, while others were awarded to a subsidiary of a health care company he once headed.

“This about finding the right people to do this job,” Covered California spokesman Dana Howard said in defense for the lack of competitive bidding overseen by its executive director, Peter Lee. “The knowledge of who those people were came in with Peter Lee. He had worked in exchanges before, managed the exchange and knew the right people who would be able to do this in California. There was a very narrow field of people who have this kind of expertise.”

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Howard said the lack of competitive bids was anticipated and approved by the state legislature, adding that there will be more transparency as the health exchange grows and matures.

Covered California was created in 2010 and given broad authority to award no-bid contracts as a way to meet tight federal deadlines for getting the new health insurance marketplace operational by last year. The same law also exempted it from sections of the state’s public records law, a loophole lawmakers closed last year after it was disclosed by the AP.

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