DPS IT contract bid an unbelievably tangled mess

Category: Chronicle Archives Published on Tuesday, 29 August 2006 20:00 Written by Michigan Chronicle

To refresh your memory, Compuware Corporation had a $13 million contract to provide the school district’s IT requirements. This year, the district chose to re-bid it and received 17 responses to the Request for Proposal (RFP) for a new five-year agreement.

At the urging of School Supt. William Coleman, the Board of Education selected what it said were four minority-owned firms, three of them Detroit-based. Coleman also claimed that the district would save approximately $2 million over the term of the contract under this arrangement. What he didn’t say is that the contract has financial escalator clauses that could take the contract above the $18 million bid submitted by Compuware. And of the three major respondents to the bid, one was lower than all of the selected bidders combined.

Since the contract announcement, the Michigan Chronicle has reason to believe that the procurement process may have been corrupted. The first red flag was that the RFP unequivocally stated that the District was seeking one lead company, with a portion of the work to be shared with a minority subcontractor in the event the winner of the bid was not a minority.

           
According to IT experts, it’s preferable to have one lead company and divide some of the   responsibilities among subcontractors. This is the only way the District can build in accountability. As presently structured — by paying four companies separately and directly — the District has no way to ensure that all the pieces of this project come together and effectively communicate with each other. It’s a recipe for disaster. 

Vision IT is a Latino-owned company that claims to have offices in Chicago and Atlanta. By no stretch of the imagination can this selection be considered a major player in the IT industry. The Chronicle could not find any evidence showing Vision IT has ever been involved in a major contract of this magnitude. Its claim of having assets of $5.2 billion is also misleading. The truth of the matter is that the $5.2 billion represents the combined assets of three separate but related companies of which Vision IT is only one. The other two companies are UNISYS, with assets of $5 billion, and SYNC Technologies (a good company, by the way), which shows assets of a little over $3 million. Last year, Vision IT by itself had $9 million in sales and saw its credit-rating drop according to Dunn and Bradstreet. But if you add that $9 million to the UNISYS $5 billion and the SYNC $3 million plus, then – presto! – you have $5.2 billion in assets.

Just in case you’re interested, Vision IT owns 52 percent of the deal, SYNC Technologies, owns 28 percent, and UNISYS owns 20 percent.

GVC Networks is supposed to provide telecommunications and information technology services in 41 states. However, this firm’s Dun and Bradstreet Business Information Report revealS the company was only started in 2005. GVC’s principal, Kirkland Dudley, however, is no stranger to the business world. He has gone through at least three failed companies and has a reputation for not paying bills and not finishing projects; Pontiac and Detroit School District are two examples where he came up short. Recently he was evicted for not paying approximately $150,000 in rent. The company’s business history is so shaky that Dun and Bradstreet isn’t able to give it a rating. So how did he end up in this deal? 

Universal Sales says its employees collectively have more than 170 years of audio-visual experience. However, the Chronicle has learned that its owner, Gregory Dooley, once worked for Compuware, where he signed a “no compete” agreement, which meant that he could not bid against Compuware. By becoming part of this deal, he has now violated that agreement. Yet Dooley  works out of his home. Furthermore, he has no equipment of his own to support the operation, but plans on using all DPS-owned equipment to meet his contract obligations. Given this information, how in the world  was this man given a contract worth over $3 million?

The Dun and Bradstreet report on Management Systems Consultants and its owner, Burgoyne Jones, is no better. In fact, except for Vision IT, we could not find any of these companies with significant business histories. Most are one-man operations. What few contracts they’ve been able to muster have usually resulted from political connections that give them a small piece of a big pie. So who brought these firms into the school IT contract? Was the corrupting of the procurement process an inside job?

The Chronicle has interviewed people who will testify, if asked, that they received a call from a “broker” from Dallas who goes by the name of Ruben Bohuchot. He allegedly called the IT companies that submitted bids and told them if they included him in their deal, he could guarantee them a portion of the contract.

Who is Ruben Bohuchot?

This year, the Dallas Morning News connected Bohuchot, once the technology chief in the Dallas Independent School District, to a major federal probe. The Federal Communications Commission (FCC) is looking at the relationship between Bohuchot and a major vendor who received “hundreds of millions of dollars” in contracts since 2003. For the record, Detroit Supt. Coleman came to Detroit after serving as the chief financial officer for the Dallas School District. And according to the Dallas paper, the FCC has issued subpoenas for “e-mails, telephone message slips and telephone records to nearly two dozen individuals,” including those made to and received from “William Coleman.”

Our research also reveals that in 2001, the San Francisco Chronicle published a series of stories that said, “San Francisco school officials misspent and mismanaged tens of millions of dollars for school repairs and modernization projects — and then covered it up to win voter approval for more funds.” The paper called the squandering of as much as $10 million “a grave injustice against the children.” At the time, the San Francisco school district’s CFO was William Coleman. He later left San Francisco when his former boss, Bill Rojas, resigned from his job as superintendent. Coleman followed Rojas to Dallas and later ended up in Detroit.

Supt. Coleman’s involvement in these probes may be entirely coincidental. The Chronicle can do no more than raise the questions. I wanted to raise this issue with Coleman, who requested a meeting almost two weeks ago following my initial report on this issue (“DPS; What’s wrong with this picture?”, Aug. 16-22 edition), but no one  showed up, nor did anyone call to re-schedule the appointment, originally scheduled for Wednesday. Aug 23, or at least to explain why he missed the first one. I’m sure Mr. Coleman has his reasons, but the issues cannot be put on hold and they certainly cannot be ignored.

School board member Joyce Hayes-Giles chairs the District’s Finance and Contracts committees. As such, she has the ability to reconsider the contract, rescind it and re-bid it. She should immediately avail herself of the opportunity to appoint an independent body to get answers to the following questions:

• Was this the first time that scoring of the proposals was done without the selection committee being able to compare one company to another?

• If these companies do not have the qualifications to get the job done independently, will the contract end up being an additional cost to taxpayers?

• How much will the escalator clauses cost taxpayers  above the bid price?

• Are the selected companies capable of securing a performance bond? 

• Because federal funds are involved, can the contractors meet the stringent requirements of the feds?

• What criteria were used to select the companies in question?

• Who determined that they were qualified?

• How much influence did Supt. Coleman have? What is Coleman’s connection to Bohuchot?

• How did individual board members influence the final selection?

The Michigan Chronicle has personal knowledge that the Wayne County Prosecutor and federal authorities have information relating to the letting of this contract. We also have information that some members of the Board of Education are involved in substantial conflicts of interest. I would encourage the proper authorities to immediately launch an investigation into what could be serious improprieties to ensure that individual greed does not take precedence over the public good.    

(To be continued.)