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Members of the revived Panel for Educational Policy approved more than a dozen Department of Education contracts last night over the protests of colleagues who demanded that they be allowed to read the full documents.

Reconvened for the first time since mayoral control’s renewal, the panel now has the authority to approve contracts worth over one million dollars. It also reviews any contracts that were handed out without competitive bidding.

But the biggest change on panel last night was not a result of those contracts, $250 million of which sailed to approval with a nearly unanimous vote, including contracts with Octagon and the Future Technology Associates, which have come under criticism.

The main difference was that the person who has been the panel’s single active dissident, Patrick Sullivan, the representative from Manhattan, yesterday was joined in his protests by Anna Santos of the Bronx. Both objected to voting on the contracts because, they said, none of the panel members had read them in full. (more…)

I was just wondering whatever happened to that Green Dot charter school contract that Steve Barr told me was imminent kind of a while ago. Then we got this advisory from the UFT:

Contract Signing Ceremony for Green Dot Charter High School Indicates New Era of Teacher Union/Charter School Partnership

WHO:            American Federation of Teachers President and United Federation of Teachers President Randi Weingarten; Steve Barr, founder and CEO of Green Dot Public Schools, Inc. and Green Dot New York Charter School Chairman Jeffrey T. Leeds.

WHAT:         Contract signing ceremony for the groundbreaking three-year contract agreement for the Green Dot New York Charter School in the Bronx with Green Dot Public Schools, the prominent charter school operator and educational reform organization based in Los Angeles, CA, and the United Federation of Teachers, the labor union representing New York City’s 100,000 public school educators. (more…)

A testy back-and-forth between school officials and the office of Comptroller William Thompson offers a concrete example of what could change if some of the Department of Education’s critics get their way.

Throughout the school governance debate this spring, some have argued for a significant curb on the mayor’s power: to require the DOE to follow the same rules as other city agencies when it comes to budgeting, oversight by the comptroller and public advocate, and public notification about policy changes. That argument reappeared in correspondence from the comptroller’s office this week.

The exchange began last week when Thompson told the DOE that he would not approve a $150 million contract with a school supplies provider because the selected vendor charged more than many stores for the supplies. His critique of the contract and the process the department went through before entering into it was the focus of a Daily News column by Juan Gonzalez earlier this week.

Yesterday, the DOE responded to Thompson’s criticism, explaining in a public letter that the new contract would actually save the city money. In a rejoinder sent last night, Thompson’s office questioned why it took media attention before the department answered its questions about the contracting process. (more…)

In a reminder that only six months remain before the current city teachers contract expires, the teachers’ union is now telephone-polling members with questions like “How do you feel about seniority?” and “How do you feel about paying for health care?”

The teacher-blogger NYC Educator first reported the questions on his blog yesterday, relaying questions that were posed to an unnamed teacher in a phone call.

One of the most prescient questions on that list asks teachers when they’d like contract negotiations to end — before or after the 2009 mayoral election? The contract is set to expire in October, and the election is in November. Negotiating a contract before the election would mean working with Mayor Bloomberg for sure, rather than whoever wins the 2009 mayoral race. It could also offer a boost to the mayor’s re-election campaign, as happened in 2005.

Nailing down a contract before the 2009 election could also have an impact on the debate on mayoral control. Some have suggested that the union could, for instance, make a concession on its demanded checks and balances to the mayor’s power over schools now in exchange for help in the contract later. (more…)

Elizabeth reported last week about Comptroller William Thompson’s claim that the Department of Education overspent on some of its contracts with external vendors. At the time, the department argued that Thompson’s analysis overstated the difference between projected and actual costs, sometimes “wildly.”

In a strongly worded letter of his own sent to Thompson this weekend, Klein elaborated on the department’s defense, saying that the comptroller disregarded information about how the department structures contracts and pays for services when he put together his report. One example of the “distortions and misrepresentations” in Thompson’s claims, Klein wrote, was that a contract with the Xerox Corporation had cost the city 6700 percent more than it was supposed to:

The Xerox contract was actually registered for $31 million. We originally registered the contract for $20 million in 2002, and later extended it twice, once by $10 million and a second time by $1 million. It appears that you cite the amount of this last extension as if it were the entire registration amount. 

Klein’s entire letter to Thompson is posted after the jump. (more…)

I have a story up about the growing pressure on the Department of Education to change the way it gives out contracts.

One of the main defenses school officials give is that the city rules that govern contracts for all other agencies, from the NYPD to the parks department, are just too cumbersome for the school system, which needs to have the chance to either cut off a contract at a moment’s notice — or hand one away with extreme speed:

David Ross, the department’s head of contracting, told City Council members Wednesday that Schools Chancellor Joel Klein awarded Alvarez & Marsal the contract without any competitive bidding because he felt a time crunch. “The chancellor had an interest in completely making extensive changes to the school system and operations,” Ross said. “It was felt that it was just not practical or possible to do an RFP or competitive process and make the reforms and changes that were needed in the schools.”

He said that Alvarez & Marsal “had the advantage” because they had already begun working with the school system under a contract with the Fund for Public Schools, which used private philanthropic donations to start off work with the firm. “They were already there. They had done a lot of the work,” Ross said. “So the inertia behind them was already very significant.”

City Council Member Melinda Katz introduced a resolution asking the state to change the law so that the Department of Education is required to follow city contracting rules. (Via Azi's Flickr)

Comptroller Bill Thompson attracted lots of press Wednesday by accusing the Department of Education of “runaway spending” on contracts. But another, less sexy development could have a much greater impact.

That’s the fact that momentum is growing to force the department to follow the same contracting rules as other city agencies, in the form of endorsements from a list of advocates, including one office that rarely butts into policy debates, and a new City Council resolution calling on a change in the state law that allows the DOE to duck the usual regulations.

Agencies from the NYPD to the parks department cannot hand taxpayer dollars over to an outside contractor without first following the rules of a citywide office called the Procurement Policy Board. The DOE is the only city agency that does not have to follow the board’s rules, which do everything from forcing public hearings on contracts above a certain price to imposing strict guidelines on what contracts have to be bid competitively.

The DOE’s exception was born well before the 2002 mayoral control law gave the mayor authority over the schools, but it has gotten more attention under the new structure, which makes school contracts harder to track. While the old Board of Education reviewed all contracts above a certain size before they were signed and held public hearings where citizens could respond to the contracts, the Department of Education has presented only a small number of contracts before the new version of the board, the Panel for Educational Policy.

The result is that hundreds of contracts have been offered without competitive bidding — and without a public hearing to discuss what the contracts include.

A group of Columbia Journalism students has reported that the DOE also makes it difficult to find contracts once they’ve been signed. The department does not maintain reading rooms for the public to review contract documents, against the requirements of the Freedom of Information Law, and many contracts simply aren’t available for review, they reported. Asked about the concerns at a City Council hearing Wednesday, school officials said they would look into them.

A Public Airing

The lack of PEP hearings is despite language in the state law that gives the panel the power to “approve contracts that would significantly impact the provision of educational services or programming within the district.” (Read a PDF of the law here.)

Patrick Sullivan, a PEP representative from Manhattan who is a critic of the Bloomberg administration, told me that he has seen only labor contracts come before the PEP, never a goods-and-services contract. Sullivan said that he recently asked the department to submit a new $79 million contract with a firm called MAXIMUS to manage special education data for a PEP vote.

The department’s general counsel, Michael Best, denied Sullivan’s request in an e-mail message that I obtained, though he did offer to share some information about the contract — after the meeting had happened. Best wrote:

If you really want to see the contract, we do not have an electronic version to send around, but if you were willing to come down to tweed we can arrange to let you take a look at it.

Sullivan, who was appointed by the Manhattan borough president, Scott Stringer, said he was not satisfied. “If the PEP had to vote on the contracts, then there would be some accountability there. Then we would be holding Klein accountable for the spending,” he said. “Because they refuse to allow any of those, and they just spend whatever they want and whenever they want, they’re refusing to comply with the accountability requirements of the law.”

A spokeswoman for the department, Ann Forte, said of the contract, “We do not believe Panel approval was required.”

City Council members would urge state lawmakers to make that change under a resolution introduced this week by Council member (and comptroller candidate) Melinda Katz. “It is amazing to me that there would be allowed any exception to what any city agency must do,” Katz said at a hearing Wednesday, announcing the resolution.

School officials yesterday declined to follow an invitation from Katz to self-impose the restrictions other agencies follow. They said the department’s exception is important because it allows the system’s 1,400-odd schools to buy things like copy machines and textbooks on their own, without having to navigate a maze of regulations. “They need the flexibility, within accountability guidelines, to actually make the purchases necessary for their students,” the department’s chief operating officer, Photo Anagnostopoulos, said.

Best, the department’s general counsel, said other mayoral agencies must get every contract they write reviewed by a chief contracting officer. That would be very difficult in a system of 1,500 schools, he said.

Katz and other advocates said Wednesday that the exception means the department’s contracts fly under the radar of proper oversight.

George Sweeting, the deputy director of the city’s Independent Budget Office, added his endorsement to the resolution, in a move he said was unusual for the IBO, which usually stays out of policy debates.

“The PPB rules are intended to improve transparency, avoid excessive costs, and reduce the potential for favoritism that can result in the absence of competitive bidding,” Sweeting said in prepared testimony. “It is difficult to understand how those rules are considered useful when other city agencies procure goods and services, but unnecessary or too cumbersome for the DOE.”

The Speed Imperative

City Council members also pointed to the department’s $16 million contract with Alvarez & Marsal, the consulting firm that re-arranged the school system’s bureaucracy. The contract attracted attention because it was awarded without any bidding and because it led to the 2007 scandal where a midyear rerouting of school bus lines left many children stranded in the cold. The department has said the bus routing was a mistake but defends the rest of Alvarez & Marsal’s work, which it says saved the city $170 million.

David Ross, the department’s head of contracting, told City Council members Wednesday that Schools Chancellor Joel Klein awarded Alvarez & Marsal the contract without any competitive bidding because he felt a time crunch. “The chancellor had an interest in completely making extensive changes to the school system and operations,” Ross said. “It was felt that it was just not practical or possible to do an RFP or competitive process and make the reforms and changes that were needed in the schools.”

He said that Alvarez & Marsal “had the advantage” because they had already begun working with the school system under a contract with the Fund for Public Schools, which used private philanthropic donations to start off work with the firm. “They were already there. They had done a lot of the work,” Ross said. “So the inertia behind them was already very significant.”

School officials repeatedly called the Alvarez & Marsal contract unique. In an interview yesterday, Ross told me that the department handed out $28 million in no-bid contracts in 2008, a number he said is low compared to years past. In testimony to the City Council, Anagnostopoulos said the so-called “exceptions” contracts were all less than $5 million in value, and 85 percent of them were with community-based organizations that run pre-kindergarten classes.

The worst examples of overspending on DOE contracts, according to Comptroller William Thompson.

Department of Education contracts routinely cost the city far more than initially estimated, according to an analysis that City Comptroller William Thompson issued just before today’s City Council hearing. The under-estimations could be costing taxpayers a fortune in the price of things like Xerox machines and cafeteria equipment, whose prices could be negotiated at much lower rates if the city could accurately predict just how much schools would end up using them.

One out of every five DOE contracts that ended in the last two years went over its estimated cost by at least 25 percent, according to Thompson’s analysis. In the most egregious overrun, a contract with Xerox Corporation to lease copy machines to schools ended up costing the taxpayers more than $67 million. It had been estimated at a cost of $1 million.

In a crossly worded letter sent to Chancellor Joel Klein today, Thompson, a mayoral candidate who has been highlighting public school issues as part of his criticism of Mayor Bloomberg, called the overruns part of a “troubling pattern of mismanagement” at the department.

Department of Education officials strongly disputed Thompson’s accusations and his figures in an interview and in testimony to the City Council today. The contracts at issue, called “requirements” contracts, can stretch above their estimated costs because they never actually set a total amount of services to be provided. Instead, they set a certain price for the service — say, renting a copy machine, or of placing a classified ad — and let the number of times the department will buy the service stay open-ended. (more…)

The company that won the contract.

Here’s a story from yesterday’s New York Post that escaped our attention: Yoav Gonen reports that the Department of Education handed a $1.6 million contract to a vendor that wasn’t the lowest bidder — and whose services include a $315/hour consultant fee.

The contract went to the management consulting company Accenture, which you might recognize as one of several million companies whose spokesman is Tiger Woods. Accenture is promising to save the city school system $21 million in the next year by lowering the cost of books, equipment like overhead projectors, and software. The trick, according to schools spokeswoman Marge Feinberg, is bulk-purchasing of a variety the DOE previously could not accomplish. So whereas right now schools get about a 2% discount on books of the sort you’d buy at Barnes & Noble (as opposed to textbooks), when Accenture is done the discount will shoot to 35%, Feinberg said.

In the past, a contract with a different management consulting company that promised to save the school system money drew criticism for inflating its savings projections. Estimates of the cost-savings from the contract, with the firm Alvarez & Marsal, dropped over time, though the updated numbers remained far above the fee the company charged, about $16 million.

This contract is also attracting heat. The Post story quotes both a losing vendor and Public Advocate Betsy Gotbaum criticizing the department. But of course, won’t know whether these savings really materialize until next year.

The Department of Education created videos to explain the reports. View them here.

The Department of Education is moving to extend a program that judges teachers based on their students’ test scores — and it plans to start paying for the project with taxpayer dollars, at a projected cost of $1.5 million over the next three years. A formal request for vendor proposals released today indicates officials are also mulling an expansion of the program to more teachers.

The program, called the Teacher Data Initiative, launched quietly this school year after causing a politically explosive fight between the DOE and the teachers union the year before. The reports allow principals to track the “value” teachers add to students by looking at student test scores from one year to the next. The teachers union here has gone along with programs to judge entire schools based on test scores, but it drew the line at measuring individual teachers’ performance, arguing that so-called “value-added” models risk unfairly misjudging teachers. (Many academic researchers make this claim as well.)

After news of the effort surfaced, the union fought back by ushering a bill into state law that made it illegal for the city to use test scores when making decisions about job security. Both Mayor Bloomberg and Schools Chancellor Joel Klein decried the bill (Bloomberg called it a “special interest protection”), which the legislature passed with no public debate, and the data reports went out as planned. (more…)