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News Story
Tensions rise over new contract controversy
A day after finishing a distant third in a bid to become the Republican nominee for lieutenant governor, state schools Superintendent Mark Johnson took a jab at State Board of Education (SBE) colleagues over a contract he contends was improperly administered.
SBE members have been critical of Johnson’s handling of contracts, most recently his controversial “emergency purchase” of services from Istation to continue K-3 reading assessments.
The contract in question Wednesday is between the SBE and Southern Regional Education Board (SREB). It amounts to more than $30,000 for a study of the state’s accountability system, including the controversial A-F letter grading used to rate North Carolina’s schools.
Johnson said the contract is illegal because there was no competitive bid process, which is required for purchase of more than $25,000.
“We cannot find any evidence that a competitive bid was done for this work,” Johnson said during the SBE’s monthly business meeting. “We also don’t find any evidence that the state board voted to execute this contract.”
In addition, Johnson said the contract violates N.C. Department of Public Instruction (DPI) policy that requires the Chief Financial Officer to sign such contracts to ensure funding is available to pay vendors.
SBE Chairman Eric Davis acknowledged mistakes.
“There are some matters dealing with that contract that need to be corrected,” Davis said. “One of the first steps was to contact the vendor and explain to them the limitation on the fee and get the fee back into the right amounts so it doesn’t trip some of those stipulations.”
Davis said other corrections are being made and will be brought back to the board.
Eric Snider, the SBE attorney, said it’s important to follow board policy and state procurement law. “When we deviate from those processes we run into trouble,” Snider said.
Snider cited Johnson’s “emergency purchase” from Istation without SBE approval as an example.
The $928,570 purchase was rescinded by former state Chief Information Officer Eric Boyette, who didn’t believe an emergency existed. Johnson can make such purchases without SBE approval if there is an emergency.
The contract was awarded to Istation after a rebid.
On Wednesday, Johnson was unsatisfied with Davis’ explanation. He demanded answers.
“So. what happened here?” Johnson asked. “Who was involved in this contract? It was signed by Eric Davis.”
Davis responded: “Yeah, I’m responsible for this. I take full responsibility for not following the process and that’s why we’re going back and correcting it.”
Johnson pressed on: “Why was the state board not made aware of this contract?”
Davis again acknowledged he was responsible for the missteps: “I’ll just say it was my responsibility and I’ll own up to it.”
Johnson questioned whether it was appropriate to lower the cost of the contract to avoid the $25,000 threshold after SREB has done the work.
“So, we’re admitting that we were using taxpayer dollars, and without a competitive bid, overpaying someone to do the work,” Johnson said.
Johnson also asked if there were any conflicts of interest between SBE members and SREB.
SBE member J.B. Buxton acknowledged working with SREB through his education consulting firm.
Davis explained that Buxton was responsible for developing the scope of the work while he handled the contract.
Johnson pounced: “You [Davis] signed it [the contract] in violation of policies you all put on this agency for contracts to be approved by the [state] board of education for these exact reasons, so they follow the rules, so there’s no appearance of conflict, so no one can actually say this doesn’t look right. All of that was ignored.”
The blowback on the SREB contract came on the eve of a State Board of Education vote to restrict the state superintendent’s spending powers.
The SBE is weighing a policy revision that would set $500,000 as the maximum amount the state superintendent could spend on goods and services without board approval. The current limit is $1 million.
The proposed change is clearly in response to Johnson’s emergency Istation purchase.
Some SBE members have questioned why Johnson didn’t first consult with the board before making the purchase. And educators and others have questioned whether the expiration of the “no-pay” contract with Istation constituted an emergency.
Istation had implemented its program in state schools for free but the arrangement ended in December. That left state teachers without a tool to test reading levels during mid-year reading assessments.
Johnson’s initial contract award to Istation in August has also been a source of contention. Amplify, an Istation competitor, filed a complaint with the state Department of Information Technology after it lost the state reading assessment contract, which it held for several years.
More recently, allegations have arisen that Johnson and his staff engaged in unlawful eavesdropping on a former DPI employee as part of the process of selecting Istation for the contract.
Litigation is still pending over the award.
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