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$40-Mil Breach of Contract Suit Against DISD Gets New Defendant: Ex-DISD Trustee Price

Earlier this month we outlined Lewisville-based Delcom Group's $40-million breach of contract claim against the Dallas Independent School District, which was filed after the district suddenly and surreptitiously yanked its board-approved contract to give classrooms a high-tech makeover and went with second-place finisher Prime Systems out of Houston. Delcom alleges that the DISD backed out of the contract only after Delcom turned over to the district its propriety designs, which were then handed over to Prime. The suit also alleges that the district rationalized its reasons for killing the sealed deal by claiming it had received information from an anonymous John Doe, who ratted out a Delcom employee with a long-ago felony on his record involving some stolen fishing equipment.

Well, this morning Delcom's attorneys filed a second amended petition in which it names that John Doe: none other than former DISD trustee Ron Price, who spent much of this '06 Observer cover story insisting he was not ethically challenged. Price is now named in the suit, as is Prime President Hsiangpin Michael Chang. The suit now alleges that Chang "contacted Price to assert Price's influence with the employees and Trustees of DISD and to intentionally interfere with the formation of the relationship between DISD and Delcom."

According to the complaint, Price contacted interim Superintendent Alan King, then the chief financial officer, and Price's one-time challenger Bernadette Nutall and told them about the Delcom employee. This was in mid-May, before the May 27 board meeting at which Delcom's contract was OK'd by the trustees. But shortly after Michael Hinojosa resigned in early June, alleges the suit:

One of King's initial moves as Interim Superintendent was to again direct [Gary] Kerbow [the district's director of purchasing] to investigate the Delcom employee's felony, but this time without any input whatsoever from Delcom. Indeed, the District kept secret the fact that it was internally "investigating" Delcom even as the two parties were working together on an expedited basis in order to have as many classrooms outfitted with Delcom's plan, structure, and design of the Digital Classrooms project by the start of the 2011-2012 school year. The internal investigation consisted of felony conviction documents provided by Ron Price to Bernadette Nutall and internet printouts from various websites purporting to outline Delcom's organizational structure.

King and Nutall in fact never intended Delcom to implement its own design, even though DISD had in fact already awarded the contract to Delcom.

DISD policy is not to comment on pending litigation, though I have asked if King will comment. And attorneys for both sides are, at this very moment, at the George Allen for a hearing. Updates forthcoming. Till then, this morning's filing follows.

DISD v Delcom Second Amd. Petition


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