Luna plans 15-year wireless contract, lawmakers aghast

BOISE – Idaho state schools chief Tom Luna is about to sign a 15-year, multimillion-dollar sole-source contract for a private firm to set up WiFi networks in every high school in the state – even though the Legislature never approved the move. Luna is scheduled to award the contract Wednesday. The three finalists include Education Networks of America, a firm that was awarded a contract, later canceled, under the voter-rejected Students Come First laws last year to do the very same thing. ENA was a subcontractor to Hewlett-Packard, which would have provided laptop computers to every Idaho high school student. “It was part of a Senate bill that we should do a statewide contract,” said Melissa McGrath, Luna’s spokeswoman. But the only bill she cited was SB 1200, the public school budget. It allocated $2.25 million to set up wireless infrastructure in Idaho high schools next year and said nothing about a long-term contract. “We did not agree and probably would not have agreed to a multi-year contract during last session, particularly given the financial straits that we believed we were under,” said Idaho Senate Finance Chairman Dean Cameron, R-Rupert. “This shows in my opinion a little bit of a lack of judgment.” He called the suggestion that SB 1200 authorized the contract “certainly a stretch, and perhaps borderline on a lack of honesty, because there was no provision in SB 1200 that addressed it.” Rep. Maxine Bell, R-Jerome, the House Appropriations chairwoman, said, “My word – how can they? That doesn’t sound like the budget I set every year, which dies, positively dies out of money on the 30th of June.” To make matters worse, the State Department of Education’s request for proposals for the big contract specifies that the successful vendor will own all the equipment it installs in roughly 340 Idaho high schools. And if the contract is canceled for any reason – including because the Legislature doesn’t ante up in future years – it’d be required to “de-install” all that equipment, removing the wireless networks from schools. Senate Education Chairman John Goedde, R-Coeur d’Alene, said, “If the contract says the vendor owns the equipment, then where are what we spent our $2.25 million for?” Senate President Pro-Tem Brent Hill, R-Rexburg, shared Goedde’s concern. The contract calls for an initial term of five years, with options to renew up to 15 years. “It sounds to me like we could get into it five years and have many millions of dollars invested, but you’re still going to forfeit it if you don’t go the full length of the contract,” he said. “That just doesn’t seem like a prudent way to do it.” Hill, who like Cameron and Bell just learned of the contract when a Spokesman-Review reporter called on Tuesday, said, “It needs to come to light.” Goedde said Luna aide Jason Hancock had mentioned in passing that there would be a contract associated with the $2.25 million, but he didn’t know about the long term or the vendor ownership of the equipment. The RFP doesn’t include amounts, but if the contract stayed even at $2.25 million a year, it would cost the state $11.25 million over five years and $33.75 million over the full 15 years. Cameron said the Joint Finance-Appropriations Committee, when it approved the $2.25 million in the public school budget for next year, viewed it as “seed money” that would help some school districts to get wireless service that they don’t now have. McGrath said school districts will have the option of participating in the statewide contract or not; they won’t have to if they already have their own school-wide wireless set-up. “We do not have a count of schools that already have high-speed wireless,” she said. Sen. Shawn Keough, R-Sandpoint, Senate Finance vice-chair, said, “That seems like that ought to be homework we need to be doing ahead of awarding a contract like this.” Hill said, “I remember us talking about that, and that it was good seed money and that it was an important thing that we needed to pursue. But I don’t think the Legislature is ready to make that kind of commitment, and I’m very concerned that someone is painting us into a corner by starting something and spending that kind of money, and then if we don’t continue to fund it … we’re going to lose that investment. We certainly assumed that what we did approve would be an investment that we would be able to keep on a long-term basis.” Rep. Shirley Ringo, D-Moscow, who serves on JFAC, said, “I don’t know if that’s a ploy on the state superintendent’s part to try to force our hand, but if they do own it all, then of course if we couldn’t pay them, they could come and take it back. That would be extremely disruptive.” Ringo said, “It’s just all quite astonishing. … It just feels like an attempt to force our hand on something that we didn’t plan for and didn’t approve.” She added, “We gave him a toe in the door and he’s wriggled his whole body in.” Bell said, “We have enough issues with education without this one. We have a task force that’s looking at everything and they’re going to come forth with many, many … recommendations that are going to take some funding.” Cameron said the department will be “competing against themselves for the dollars within that budget, and I think they should be very cautious. I would not be in favor of signing that long of a contract.” The department is handling the contract award itself, without involving the Division of Purchasing at the state Department of Administration. McGrath said, “If the legislation does not specify that the Department of Administration should handle, they will not handle it.” Hill responded, “Within their charge, they do a lot of things without clearing every single detail, but this is a big issue, not a detail.” Nine firms bid on the contract. McGrath said, “There’s always a clause in any contract that we have where it’s renewed every year based on the money we receive from the Legislature. So if the Legislature doesn’t approve money for fiscal year ’15, we could cancel the contract.” She declined to answer questions about why the RFP requires the vendor to maintain ownership of all the equipment it installs in the schools. “At the conclusion of the Agreement, the Assets will be de-installed by the successful Offeror,” it says.