DISD Board to Vote (Again) on $40-Mil Tech Deal. You Know, the One It's Being Sued Over?
In August, we broke the news that Lewisville-based Delcom Group filed a $40 million suit against the Dallas Independent School District over a massive technology contract awarded by the board in May and then yanked, without explanation, a month later. Turned out, according to a subsequent filing, that former DISD board member Ron Price called interim Superintendent Alan King, who was then the district's chief financial officer, and told him and others that Delcom employed a man who 16 years ago had been convicted of a felony over some stolen fishing equipment.
District officials knew all this when the board approved the contract for its Digitial Classrooms initiative in May. And DISD and Delcom have worked together for eight years -- all of them happy ones, sources say. But on June 20, Gary Kerbow, the district's director of purchasing, sent Delcom's director of business operations Joe Mark Phillips a letter saying that Delcom "has not been forthright in reporting a Felony conviction for one of its operators ... [and] for this reason Dallas ISD has elected to end contract negotiations with Delcom." At which point the district opted to go with the second-best bidder: Prime Systems out of Houston.
Reason I mention all of this again: Today the DISD board is going to discuss ratifying that contract with Prime. Which is why, moments ago, three public speakers addressed the pending litigation.
The first to speak was Robert Witte, an attorney at Strasburger & Price, who represents Optoma Projectors, whose product was a big part of Delcom's classroom-makeover project. Witte asked the board, which has since gone behind closed doors into executive session, how "can it ratify a contract when it knows it's incorrect, especially when it's for $40 million?" Witte says the contract under consideration today says Prime will use Optoma projectors. Not so much: "We received word from the successful bidder, Prime, they wouldn't be using Optoma," he told the board "[And] if Optoma projectors are not being used in this project, then why is the board being asked to ratify a $40-million contract that says they are?"
[Update at 4:49 p.m.: The item was just pulled from the consent agenda, and the trustees were told it would be explained in a memo that will be sent to them tomorrow. It will also be discussed further in closed session, due to the ongoing litigation. Jump for the rest of the original item.]
Witte also noted "other circumstances we hope would cause the board some concern," chief among them testimony provided under oath about communications between Price and DISD officials, including, perhaps, some trustees.
At which point Doug Busey, director of AV services for Delcom, got up to speak. He told the board that Delcom's "pricing was complete and transparent," that "there were no hidden costs," that it guaranteed its product for five years and that the district "would have incurred zero costs" should something go wrong during that time frame. He then pointed to Prime's deal, which, he insists, is "fraught with hidden costs, a limited warranty and vague scope of work," and, echoing Witte's comments, noted that the list of vendors is incorrect.
In its litigation against the district, Delcom asserts that immediately after DISD killed the deal, it shared with Prime all of the info it initially provided -- from its list of vendors to its "propriety design solution," meaning: its trade secrets, which, Delcom said, could significantly harm its business. Busey said moments ago that "Delcom was never afforded the opportunity to discuss [the switch] with the district," and that when he asked why, he was told the district's in a hurry to begin installing those digital classrooms.
"But five months later," Busey said, "work hasn't even started." He then invited trustees to tour its facilities. "Then ask the second vendor if they'll do the same thing," he said. (The Rev. Peter Johnson then got up and said he'd toured the facilities -- and that he'd gotten interested in the story because of Schutze. Well, I never ...)
More to come once the board's out of executive session. One thing to keep in mind, though: DISD higher-ups have said they didn't even need to ratify the new contract because it already had board approval via the old one with Delcom, which it was just replacing with Prime, so there. So why's it even on the agenda?
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