School Boards Vary On No-Bid Deals

Christopher Peak photoThe Board of Education’s two elected members say they want to move away from unchecked “no-bid” contracts. The outgoing superintendent said they’re necessary to send highly specialized work to the right experts.

Who’s right? Is a more competitive process for professional services simply impractical in the Elm City? Or is it necessary to find the best people doing the best work at the best price?

The Independent contacted state agencies and other school districts to hear how their procurement systems work, especially for professional services. Based on their answers, a proposal to cut down on no-bid contracts wouldn’t be unheard of. But relying on no-bid contracts — especially for social services as opposed to, say, security or maintenance, where it’s easier to make direct comparisons — would also continue a longstanding tradition not only in New Haven, but at the boards of education in some other Connecticut cities, as well.

But that’s not true in all cities. The boards of education in Bridgeport and New Britain rarely solicit prices, while bidding is the norm in Stamford and Greenwich. Hartford falls somewhere in between.

Since the school year started, New Haven went out to bid on three items: for a refrigerated truck, choir robes, and replacement computer servers. Those contracts made just up a fraction of the $11 million the Board of Education handed out during the last five months.

In the same time frame, according to a state database, Greenwich sought bids for 15 contracts; Stamford, 6; Hartford, 5; and Bridgeport, 1. In many cases, those districts accepted bids for complicated jobs, like a report on the school day’s ideal start time or on-call therapists for special education students.

In recent weeks, the Independent reported on several issues involving Board of Education’s contracts: Board of Ed President Darnell Goldson’s employer offered city-reimbursed payday loans to the district’s handyman; board member Jamell Cotto advocated for more daycare seats at his workplace. Five separate contracts for social services, like trauma intervention and socio-emotional learning, were approved without seeking competitive bids in a late add-on.

The board’s two elected members, Goldson and Ed Joyner both said they’ve tried to clean up the process by limiting contract extensions and demanding proof of results.

Representatives from NHPS Advocates, a new coalition of parents and teachers, said they too are seeking more transparency. To hold the board accountable, they’re sending monitors to each Finance & Operations Committee meeting, where, twice a month, school administrators explain why they’re asking for hundreds of thousands of dollars in contracts.

As new leaders take over in the coming months, on the school board and in the superintendent’s office, other school districts might offer New Haven an idea of the way forward toward a more open contracting process.

City-Run Bidding

 

New Haven Public Schools allocates tens of millions of dollars in contracts each year through informal processes.

Depending on what’s being requested, the city’s purchasing agent might put out an open call and calculate the lowest bidder; school employees might request pitches and internally decide who’s the most qualified candidate; or a department head can pick a one-of-a-kind “sole-source provider” straightaway without any competition. After those initial selections, contracts can be renewed year after year.

None of those processes is codified in the Board of Education’s guiding document. The 521-page policy manual, which is currently being revised, doesn’t set out many hard-and-fast rules for the procurement process, aside from where it starts and ends.

Any request for goods and services should start with the employees “directly responsible for their use,” it states. From there, the chief operating officer conducts the transaction, placing orders “based on quality, price and delivery, with past service being a factor if all other considerations are equal.” The contracts can then be reviewed by a legal advisor or a committee, before they head to the full board for approval.

That’s pretty much all the policies say, leaving the rest up to staff.

William Clark, the COO, said the district generally follows the city’s procedures.

When it comes to operations, like lawn-mowing or painting, and commodities, like bread or glass, Clark relies on the city’s purchasing agent to run the bidding. School staff write up a draft report that scopes out the desired work, and based on that, the purchasing agent solicit bids according to set rules. After some number-crunching to factor in a bonus for being local, as the charter mandates, the purchasing agent determines the low bidder who wins.

That’s what happened in September when Michael Fumiatti, the city’s purchasing agent, obtained two bids from for a refrigerated box truck. The $101,701 contract went to Gabrielli Truck Sales, a Milford dealership, who beat out the competitor by $379.

“Once we have the price, we are going to award to the lowest bidder,” Fumiatti said. “No negotiation, nothing.”

The district also sometimes adds on “change orders” through the city. These extend business to those who’ve already won a recent contract.

Recently, the district allocated $71,000 in leftover grant funds to B&G Mechanical Services’s $528,000 bill to upgrade the air-conditioning at High School in the Community. They also added $53,000 to Amazon Landscaping Design & Handyman Service’s $35,000 contract for painting at four extra schools, and they added $36,000 to All American Waste’s $25,000 contract for install dumpsters at three extra schools.

Goldson also noted that, despite needing approval from alders for a multi-year contract, some of the board’s contractors receive one-year extensions every year.

In a way, “it seems like a no-brainer. We want quick and fast systems to do this, and we already work with these people. We trust them and know the quality of their work,” Goldson said. “Unfortunately, the easy way may not be the best way.”

He added that ending this “loophole” would attract a more diverse set of contractors. “I want those who were not able to participate in the past, because they weren’t part of the old boys club, to have the opportunity to fairly compete for work,” Goldson said.

Past Practice, Charter Limit

For professional services, the process is less firm than the city’s procurement.

“You could choose to bid,” Clark said, “but it’s not required.”

That exemption was added to the city charter, as a way to stop contractors from impinging on the civil service. “The City of New Haven hereby declares that it narrowly construes the types of personal services that can be provided through the bidding procedures,” the charter reads.

The provision exempts the city from going out to bid for architects and engineers, physicians and dentists, lawyers, accountants, artists and other “expert professional consultants.”

In other large cities, like Hartford and Bridgeport, the charters don’t require schools to bid on anything related to children’s instruction. “But just because it’s not required doesn’t mean they don’t do it,” noted Pedro Zayas, Hartford Public Schools’s spokesperson. In the last year, for example, his district hired an independent monitor for its turnaround plans and a neuropsychologist for student evaluations, despite not being required to by law.

Fumiatti said requests for professional services only “occasionally” come to his office.

When he gets them, he usually puts out a request for proposals (RFP), a more comprehensive way to evaluate contractors. “In an RFP, we know what we want but we don’t know how to get there,” leaving it up to the contractor’s expertise, Fumiatti explained. “There may be other factors involved. That could be qualifications, like experience in a municipality of similar size, education or experience. Cost can be a factor, but it’s not necessarily decisive.”

More often, though, the school system handles professional services itself. Each department vets their own contractors and submits them for approval, Clark said.

In some cases, they do an RFP themselves. But unlike the city’s forms, the responses to those RFPs are not shared with the Finance & Operations Committee.

Staff said they used that process to pick out Arts for Learning CT for a $,7500 contract to run an after-school theater program at East Rock Magnet School, and the American Red Cross for a $27,360 contract to license students as nurses at Hillhouse High School.

Contractors that previously came out on top in an RFP routinely get extensions.

Recently, those extensions included a first-year renewal to Edgenuity, virtual learning software; a second-year renewal to Medical Billing of Connecticut; and a fourth-year renewal to Daughters of Divine Destiny, Hillhouse’s all-girls mentorship program, and the Boys and Girls Club.

But most commonly, funds are awarded to “sole-source providers,” the only contractor offering a unique service. Three dozen contractors were stamped with that designation over the last five months, including universities, museums, instructional coaches, therapists and software companies.

Among the sole-source providers were:

  • Eli Whitney Museum, a Hamden learning center: $28,250
  • New Haven Reads, a literacy nonprofit: $55,000
  • Little Scientists, a Milford STEM workshop: $37,450
  • American Education Solutions, a New York magnet-school evaluator: $221,500
  • Clifford Beers, a mental health clinic: $22,680
  • Foundation for the Arts and Trauma, a developmental specialist: $277,000
  • CompuClaim, a Rhode Island billing service: $75,000
  • Frontline Education, a Pennsylvania software provider: $24,441
  • and
  • 3PRIME Web Solutions, a Hamden web developer: $21,300.

Reggie Mayo, the interim superintendent, said he has run the district for decades without putting professional services out to bid.

“The administration had the right to select people without going to bid if it was technical assistance. These consultants fell in that category. It’s almost like the attorneys you hire: all of that is considered technical expertise,” he said. “We have not gone out for that since my previous days as superintendent.”

Reform Debated

Just because a policy’s longstanding doesn’t make it right, Joyner countered at the board’s last meeting. He and Goldson argued for opening contracts up to competition.

Afterwards, Jason Bartlett, the mayor’s school board liaison, protested that a process reliant on bidding would be too inflexible.

Goldson argued that a competitive process ensures the school is getting “the best bank for its buck.”

New Haven is not alone in having this debate. A recent data analysis by the State Contracting Standards Board projected that applying competitive bidding to all the state’s open contracts, particularly professional services, could drive down costs by as much as 12 percent.

But at the most recent full board meeting, held last week, questions arose about how to determine what’s a good price for complicated services.

Joyner argued that the district should issue more RFPs. Not only would these help identify the right professional, he said; they’d also help staff lay out their vision for the district.

“Are you creating a demand without a need? How do we know? I haven’t seen documents about the number needing therapy,” he said. “In the middle of the year, where is the overarching plan? Is it a knee-jerk reaction? It does not look, to me, like we have what I would consider a comprehensive plan.”

He also questioned why no-bid contracts were being given for socioemotional work without more evidence of past results. The only exceptions to putting out an RFP, he suggested, should be if a contractor is the sole-source provider or recognized expert, as backed up by data.

As a sole-source provider himself, advising districts on the Comer model, Joyner said collecting data is a standard part of a contractor’s job responsibilities. Even if an upstart didn’t have an independent study done about their work at first, they should be able to point to related research and then start collecting numbers before a renewal, he said.

“How many kids have you served? What were the treatment goals? How do you identify the efficacy of the program?” Joyner said. “‘Lots of progress’ is not a psychometric term. We need data to indicate effectiveness and figure out whether competitors might do a better job.”

At the very least, he said, social workers and psychologists should be able to document a decrease in the number of referrals for individual students in the program.

That’s true even for established providers, he added. “Variables change. We want to make sure the provider is adaptable enough to make the necessary changes.”

“If we’re spending lots of money and we don’t have the evidence that we’re helping them get better in whatever goal they set, that’s a disservice to the community, a waste of taxpayer money and an undermining of the reputation of the district,” Joyner added.

Gary Highsmith, a superintendent finalist and father of a sophomore at Cooperative Arts & Humanities High School, agreed. He said the “lack of transparency” concerned him. “I wasn’t aware that the standard [for a ‘no-bid’ renewal] is ‘doing great work,’” he said. “Companies with confidence would submit to a third-party independent assessment.”

Mayo said he is unsure what to measure, because technical services can be tough to quantify. “In terms of social-emotional learning, this is not like the SAT, where there’s a score,” he said. “You’re not going to see [grades of] A, B or D. When we’re working with kids, you see other kids improve.”

Joyner voted against the package of social-emotional contracts. It passed 5-1.

Jon Greenberg PhotoThe following week, Bartlett, who hand-picked out the mental health providers whose contracts were approved at the board meeting at a 2014 meeting where YouthStat began, explained why he thought the district didn’t need a competitive bidding process.

For one, he said, the extra work involved in competitive bidding could block new ideas.

“Innovation is not something the BOE is known for, so setting up another bureaucratic road block is an easy way to kill innovation,” he said. Plus, “it’s a long and cumbersome process. If budgets and grants don’t come through on time, like this year, you are delaying implementation. The school year is finite, so you need to do all RFPs before the school year starts,” a problem with turnover in central office staff and principals that could derail a program.

Outside Advice

Compare that to Stamford, where the charter requires any item over $10,000 to go out to bid.

“We think it’s good business practice,” said Jay Fountain, the city’s budget director, who had a role in revising the procurement process as a city representative. “It makes for good government, makes it open and competitive. It’s the opportunity for citizens to know what’s going on and feel that the government is doing the best it can in its decisions to get competition for their services.”

Those principles apply even for tougher projects, like special education or mental health, said Hugh Murphy, the school’s director of financing and purchasing.

When a student needs a psychological evaluation, for instance, some students might got to a specific psychologist mandated by their plan. but others are referred out based on price sheets that providers have submitted ahead of time. The district pulls out the hourly rates and sees if the lowest one is available.

Then, roughly every three years, providers submit new numbers. “It takes a long time to craft an RFP and assemble an evaluation committee to make a recommendation for the contract,” he said. “It’s a lot of effort to do that, so we get three or four years of prices, whatever the board allows. Some will hold the price constant; some will ask for small increases. They can request whatever they want.”

That’s the way the system works for behavioral therapists, speech pathologists, and psychologists, Murphy said. The district recently went out to bid on music and art therapy, as well as nursing services, he added.

Usually, for those professional services, he can expect anywhere from two to eight vendors to respond. Sometimes, the prices differ wildly.

“We’ll get bids where somebody is quoting $200 an hour and somebody is quoting $800. I’ll say, ‘Wait a second. It never ceases to amaze me that the pricing is so different,” Murphy said. “But it’s not our function to tell them that their prices are too low. If it works for them and for us, that’s fine.”

He added that the evaluation committee always has to double check to see what the price includes, if it’s far under the competition.

The process is now so routine in Stamford that the school board’s president didn’t know what to say about it.

“I’ve never had to think about it,” said David Mannis. “The nine elected people have no discretion over any of it. We approve contracts of $100,000 or more, but we have no real involvement in their creation. They’re presented to us in finality.”

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posted by: Jill_the_Pill on January 31, 2018  2:26pm

>> “setting up another bureaucratic road block is an easy way to kill innovation”

Let’s re-write that: “setting up a responsible fiscal measure is an easy way to kill feckless disruption, cronyism, and experimentation with our students’ education.” 

Overpaying for services diverts funds from real educational needs.

posted by: duncanidaho645 on January 31, 2018  3:18pm

The best part of no bid contracts is the kickbacks being built in.

posted by: Bluegirl on January 31, 2018  5:20pm

All contracts should go out to bid! NHPS is riddled with contracts with ‘their friends”. All of the contracts with the Choice & Enrollment Office should go out to bid, as well.

posted by: RHeerema on January 31, 2018  9:50pm

If the federal government can review and score multi-million grant proposals based on organizational capacity, financial, and performance metrics than surely NHPS can. It will take a while for NHPS to operationalize this new (?) way of doing business, but incredibly important for transparency, cost-controls and outcome measurement.

posted by: Brian L. Jenkins on February 1, 2018  2:15pm

@duncanidaho645,

The bid process doesn’t preclude the allegation of “kickbacks” from occurring if what say is accurate.  Moreover, the idea that you would even infer that any board member or administrative staff would involve themselves in an illegal act is shameful.  Not all people who work around money, take money.

To further substantiate my point, the bid process does not mean that you must take the lowest bid.  If the board has a working and productive relationship with a provider, then it stands to reason that that contract should be renewed effortlessly.  It is widely known that children need consistency for nurturing purposes.  And as a grandparent of three NHPS students, if a provider is making positive and effective inroads, keep them.

posted by: 1644 on February 1, 2018  3:27pm

Interesting that the mayor’s political crony, Josh Bartlett, is saying that putting work out to bid will stifle innovation.  The fact is the BoE is returning year after year, decade after decade,  to the same contractors.  Where are the new ideas?  Put out RFP’s, and see what you get.  So sorry that New Haven wants to be like Bridgeport, not Greenwich and Stamford. I mean, which has more, and which has less corruption?

posted by: Brian L. Jenkins on February 1, 2018  4:24pm

@1644,

Where is the corruption?

posted by: 1644 on February 1, 2018  5:32pm

In Bridgeport.

posted by: HenryCT on February 1, 2018  6:56pm

The debate about bid or no-bid misses an important point. What quality result is the school system getting? There are plenty of examples of contractors who rehabbed schools with shoddy materials and workmanship. Who in the school system didn’t assure quality control? Who is responsible for assuring a quality outcome? The Independent ought to do an exposé. Under the previous administration the school system became the repository for patronage, unqualified appointments. Does that continue with these service contracts? Where are the evaluations of the qualifications of providers and work done? Shouldn’t those evaluations and the personnel responsible for them be made public?

posted by: Jill_the_Pill on February 2, 2018  11:42am

“There are plenty of examples of contractors who rehabbed schools with shoddy materials and workmanship.”

Amen.  Apparently there is a monthly public meeting on school construction.  It is held by the city finance office, not the school district, but I never did manage to track it down.