Chester County is suing for an $11 million refund from a company that sold it COVID-19 antibody tests

Chester County is seeking more than $11 million in refunds from a local company that it says failed to provide one million COVID-19 antibody tests last year.

The county, in a lawsuit filed Friday, claimed that Malvern-based Advaite Inc. and its CEO, Karthik Musunuri, failed to abide by a contract to deliver antibody tests in April and May, and have refused to refund some of the $13 million that the county had already paid.

The breach-of-contract complaint portrays a months-long struggle for the county to receive the antibody tests, which officials had planned to use to test Chester County residents — as well as those in neighboring Delaware County, which does not have its own health department — to determine if they had already been exposed to and developed antibodies for the virus.

Chester County became the first in the state to offer antibody tests to first responders and health-care workers in May, but quietly shelved the program weeks later after it resulted in more positive tests than plausible. (False positives have been a common problem with COVID-19 antibody testing). After The Inquirer reported in September on the false positives and the program’s quiet end, county officials said they would notify residents who had received “questionable test results.”

“In March and April of 2020, Chester County was focused on doing everything it could in the moment to protect its frontline workers and the greater public during this ever-evolving crisis,” county spokesperson Rebecca Brain said in a statement Monday about the lawsuit.

» READ MORE: Chester County will notify thousands of ‘questionable’ COVID results, in wake of Inquirer story

Ajay Raju, a lawyer for Advaite and Musunuri, said the company stands by its antibody tests, disputes the claims in the lawsuit, and plans to file a countersuit against the county. Raju said the county commissioners “schemed to get out of the contract” and failed to pick up test kits as they were made available.

“It’s quite evident by now that this lawsuit is a thinly veiled attempt on the part of Chester County to divert attention from its own internecine squabbling and incompetence around the distribution of Advaite’s test kits,” Raju said in a statement. “But the real tragedy is the county leadership’s failure to do the right thing and to do it correctly.”

Despite the company’s promise of an aggressive timeline to deliver one million tests, the county’s lawsuit claims it only received about 39,000 tests by the end of May, when the contract specified all one million would be delivered. The complaint does not reference the high number of false positive results, but notes that the county returned about 2,000 tests to the company in May due to “defects and component issues.”

According to an email quoted in the lawsuit, Advaite promised the county on May 22 that it would be receiving tests “from all the new equipment lines,” promising that quality and quantity would improve.

The company provided more than 52,000 additional tests after the county gave notice that it wouldn’t continue payments on the $20 million contract, according to the complaint. But that left the county with less than one-tenth of the tests stipulated in the contract.

In July, the county gave notice that it would terminate the contract and requested a refund.

The lawsuit alleges that Advaite failed to provide one and instead demanded the county take more test kits off of the company’s hands and pay the remaining $7 million in the contract.

Raju, the company’s attorney, said the county allowed the test kits to languish in a warehouse and that a county official at one point said the county was “having trouble getting a truck” to transport them.

The company maintains that its tests have strong reliability ratings from three independent laboratories. The county, meanwhile, claims that the company’s promises changed. It initially said the tests could detect two different kinds of antibodies, according to the lawsuit, but as of December only marketed the tests to detect one of those antibody types.

More than $11.7 million in taxpayer money hangs in the balance. The county requested reimbursement for $11.2 million in payments to the company, $275,000 in laboratory costs, and $331,500 in costs for professionals to administer the antibody tests.