SACRAMENTO — Inspectors found “significant deficiencies” at California’s new coronavirus testing laboratory, problems that state officials on Monday partly blamed on the rapid ramp-up they required from the lab’s private operator under terms of a $1.4 billion contract.

A fraction of 1% of the more than 1.5 million tests processed at the Valencia Branch Laboratory had problems, the state said in a preliminary report, but Health and Human Services Secretary Dr. Mark Ghaly said “one incorrect test result is one too many.”

The $25 million lab that opened in October north of Los Angeles was unable to test about 250 samples (0.017%) due to lab errors, the state said. It issued corrected reports for about 60 (0.0039%) samples.

“California takes these findings seriously” and continues working with the contractor “to ensure Californians have the accurate, timely, high-quality test results,” Ghaly said in a statement.

Findings Came from Routine Inspection

Massachusetts-based diagnostics company PerkinElmer, which operates the lab as part of the agreement signed with the state last fall, said it believes “the deficiencies … have long since been resolved.”

The California Department of Public Health, which regulates laboratories, said the findings came from its initial routine inspection in early December. The company said it appeared some of the information it provided since then had not been included in that inspection report.

But the department said earlier this month that it also is investigating whistleblower allegations of incompetence and mismanagement, including reports of workers sleeping on the job.

Records obtained by CBS13 TV in Sacramento alleged problems including swapped samples, inconclusive tests caused by contamination, and inaccurate results sent to patients. The health department acknowledged then that at least “38 samples were reported incorrectly” because of mix-ups in samples, but said patients were promptly notified.

Some Employees Unlicensed, Inadequately Trained

The station said documents showed some employees handling patient specimens were unlicensed and inadequately trained. State officials said then that it had identified “a handful of individuals” who were retrained or moved to assignments that fit their credentials.

The reports have “unfortunately caused confusion about laboratory practices … and sown concern about the reliability of testing,” the company said in a statement. “That concern is misplaced.”

The company learned about the findings from the inspection last week and has until next Monday to formally say how it has or will corrected them. Ghaly said the company and state released the initial summary “in the interest of transparency” rather than wait until the full report is final in mid-March.

The state pushed for the rapid opening and ramp-up of the laboratory at a time when it was often difficult to get tests, which were sometimes delayed until the results were relatively useless because they came too late.

“The deficiencies identified by Laboratory Field Services, although they are taken very seriously, do reflect that we established the laboratory on an accelerated timeframe, and we knew that there might be growing pains that would require work and process improvements,” Ghaly said.

State Sen. Patricia Bates, top Republican on the Senate’s Special Committee on Pandemic Emergency Response led by Democrats, called the findings “the first step towards addressing the disturbing allegations made by whistleblowers.”

But more needs to be done, she said. Bates called again for oversight hearings by the committee, saying in a statement that “The serious questions that have been raised about this testing facility are truly troubling.”

State Counting on Rapid Test Results

State officials still are counting on rapid testing results to help restore some normalcy amid quickly falling virus cases statewide. The lab gets samples from more than 1,500 collection sites to aid schools, churches, clinics, workplaces, and community-based organizations.

It has 600 employees and the capacity for 100,000 tests per day, the company said. The state initially expected the lab to reach its full capacity of 150,000 tests a day by March.

However, testing volume is down statewide as California’s worst coronavirus surge eases, state health department spokeswoman Kate Folmar said. The collection sites are expected to feed the Valencia lab 502,000 specimens each week, or about 72,000 tests per day.

“We uphold the highest quality and safety standards across all of our operations, and we have already addressed the issues that emerged in the early days since the Valencia testing site was established, despite just receiving the formal report from the December inspection,” Prahlad Singh, the company’s president and chief executive officer, said in a statement.

State Sen. Richard Pan, a Democrat who heads the Senate Health Committee, said the lab increased testing capacity and cut costs during the recent surge.

“While quickly starting up a large lab during a pandemic brings many challenges, I appreciate that the state is seeking independent lab accreditation from the American College of Pathologists as a standard of quality in addition to CDPH’s review of laboratory performance,” Pan said in a statement.