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Posts tagged: Education Networks of America

Boyle on IEN: ‘Crony capitalism, corruption, special favors’

Idaho Rep. Judy Boyle, R-Midvale, last week sent a guest editorial out to Idaho newspapers that's sharply critical of the Otter Administration's handling of the now-voided $60 million contract for the Idaho Education Network high school broadband project. “Why did this occur? It is an example of crony capitalism, corruption, special favors for campaign donors, the Governor’s staff moving to lobby and/or work for the very businesses receiving the contracts or from those companies to the Governor’s staff,” she writes. “It is back-slapping, good old boy networks, winks and nods, cover ups, denying involvement, blaming others, attacking those asking questions or with the courage to say the Emperor has NO clothes.” Click below for her full article.

Lawmakers concerned as state tries to salvage school broadband network

State Department of Administration Director Teresa Luna told Idaho EdNews today that the state is “exploring all opportunities” to keep broadband in the state’s high schools, as the state contests a court decision earlier this week voiding the $60 million contract for the Idaho Education Network. EdNews reporter Kevin Richert has a report here on what’s next for the IEN.

Meanwhile, I spoke with House Speaker Scott Bedke, R-Oakley, about it today.  “At the end of the day, this is an important thing,” he said. “We need to get a new contract as quickly as possible and keep the service up and going during the school year.” He said, “You have school districts that are dependent on this service, they’re in the middle of a term, and … the less disruption the better here, on our way to a new contract that addresses the issues that have been raised.”

Two lawmakers who serve on the IEN Program Resources Advisory Council, or IPRAC, that oversees the network, told Richert they have concerns over the state’s motion this week for the judge to reconsider his ruling. “I’m a little frustrated, quite frankly,” said Sen. Shawn Keough, R-Sandpoint. “It just seems like this is just another chapter in legal maneuvering, as opposed to solving the problem.” Sen. Dan Schmidt, D-Moscow, doesn’t think the judge will be persuaded. “I think the odds of that are pretty low.” The panel has a special meeting scheduled for tomorrow morning, but the only item on its agenda is a closed-door executive session for a legal briefing on the case.

House Minority Leader John Rusche, D-Lewiston, told Eye on Boise, “I think that we sometimes have trouble identifying when the horse we’ve been beating is dead. … My guess is if we want to get the e-rate money flowing back, we have to follow the judge’s rules and get that contract re-bid in some manner. And I think that’s the important thing, is to get the support for the telecommunications and broadband services the schools need.”

Federal e-rate money, which comes from a tax on telephones, was supposed to pay for three-quarters of the cost of the IEN, but the feds cut off the payments because of concerns about the contract issuance, forcing lawmakers to approve an $11.4 million bailout to keep the service from going dark. “Going to the mat to defend a process that’s not clean doesn’t make sense,” Rusche said. “To have that money sitting on the sidelines because we don’t want to do it in a clean manner, I don’t think that makes sense.”

State asks judge to reconsider ruling voiding $60 million IEN contract

The Otter Administration is asking an Ada County judge to reconsider his ruling that the $60 million Idaho Education Network broadband contract was issued illegally and is void, reports Kevin Richert of Idaho Education News. Richert reports that the private attorneys for the state filed a 12-page motion Tuesday asking 4th District Judge Patrick Owen to either clarify or reconsider his decision; you can read his full report here.

The legal problems have thrown into limbo a broadband network that serves 219 high schools across Idaho, and already have cost the state millions. The judge ruled that then-state Department of Administration Director Mike Gwartney illegally cut Syringa Networks out of the contract in 2009 in favor of Qwest, now CenturyLink, and Education Networks of America, both of which are big donors to Idaho Gov. Butch Otter’s campaigns.

Latest tally on state’s legal costs for IEN lawsuit: $874,775

The state’s legal bills for defending its now-voided contract for the Idaho Education Network high school broadband service is climbing toward $1 million; you can read my full story here at spokesman.com. The State Department of Administration, in response to a request from The Spokesman-Review, reported last night that it's paid $605,070.73 in legal fees to date for the case, in which private attorney Merlyn Clark of Hawley Troxell is representing the state. “There are additional legal fees paid by the Attorney General’s office that are not included in this number,” IEN spokeswoman Camille Wells said in an email.

The department has been paying all the legal bills since fiscal year 2012, but in 2010 and 2011, the Idaho Attorney General’s office paid 75 percent and the state’s risk management bureau paid 25 percent. The AG’s office paid $269,704 during that time period, with the risk management share coming in at $89,901.33; but Wells clarified late this afternoon that the risk management share was included in the Admin Department amount. So all told, that brings the total cost to taxpayers to date to $874,775.

Idaho officials scramble to keep broadband to schools after court voids IEN contract as illegal

State officials and legislative leaders are scrambling to find a way to keep the statewide broadband network that serves Idaho high schools running, after a judge tossed out the five-year-old $60 million contract for the service on Monday. The head of Syringa Networks, the company that sued and won, is calling for a re-bid of the contract, and House Speaker Scott Bedke says that's likely where the state is headed. But in the meantime, he said emergency or bridge efforts are called for so school kids taking distance courses on the network don't get interrupted mid-term.

“This is about the kids’ education,” Bedke said Wednesday. “The judge has pointed out some problems, obviously. But we’re in the middle of a school year.” Officials from the state Department of Administration, the Legislature, the governor’s office and more were meeting or holding conversations about the issue on Wednesday. “We’re working on a path to ensure that this distance learning continues around the state,” Bedke said. Jon Hanian, spokesman for Gov. Butch Otter, said, “They’re still evaluating the decision and then determining the path forward.”

The network didn’t go down today, Department of Administration spokeswoman Jennifer Pike confirmed, even though a 4th District judge ruled that the contract between the state and Education Networks of America and Qwest, now known as CenturyLink, to provide the service was issued illegally. Judge Patrick Owen declared the contract void. You can read my full story here at spokesman.com.

Qwest gave $35,000 to Otter campaigns since ‘06, Syringa donated to 2 of his rivals

Yesterday, I noted that Education Networks of America, the company that got the now-voided Idaho Education Network contract along with Qwest, has donated $18,250 to Gov. Butch Otter’s campaign, including $5,000 in September; and also has given $6,000 to state schools Superintendent Tom Luna’s campaign since 2009.

But it’s not the only player in the IEN deal that is a big campaign contributor. Qwest, now known as CenturyLink, is a prodigious contributor to Idaho political campaigns that has given even more to Otter. Since 2006, through its political action committee, formerly Qwest Idaho PAC and now CenturyLink Idaho PAC, it gave Otter’s campaigns a whopping $35,000.

Qwest also has given $3,500 to Luna’s campaign since 2011. And it’s donated to an array of other candidates from both parties, according to state campaign finance records.

Syringa Networks, the company that won the lawsuit over the contract, has, like Qwest/CenturyLink, donated to an array of candidates from both parties, though not near as many. Syringa gave $2,000 to Otter’s campaign in 2008. But in 2010, it donated $5,000 to the campaign of Keith Allred, Otter’s Democratic opponent that year. And in April of this year, it donated $5,000 to the campaign of Sen. Russ Fulcher, who ran against Otter in the GOP primary.

Syringa CEO calls for state to re-bid voided contract for Idaho Education Network

Syringa Networks, the company that won the lawsuit this week that threw out the $60 million state contract for the Idaho Education Network, is calling for the state to re-bid the deal, Idaho Education News reports today. EdNews reporter Kevin Richert reported that Syringa CEO Greg Lowe issued this statement:

“The District Court concluded that the procurement was ‘fatally flawed.’ The court’s decision speaks volumes with the undisputed facts and history of the case in reaching its conclusion. While Syringa Networks is supportive of the IEN, it pursued this action to prevent vendors such as ENA and Century Link from improperly benefiting from an unfair procurement process at the expense of Idaho’s taxpayers. We are pleased that the District Court agreed with our position by voiding the IEN contracts. With the District Court’s recent opinion, Syringa Networks remains hopeful that the Department of Administration will recognize that this litigation, funded by taxpayer dollars, was a wasteful attempt to ‘fix what cannot be fixed,’ and move forward to rebidding the IEN procurement.”

Court ruling, illegal contract threaten one of Gov. Otter’s proudest achievements

Here’s a link to my full story at spokesman.com on the ruling in the Syringa Networks lawsuit, in which the $60 million contract for a statewide school broadband network – one of Idaho Gov. Butch Otter’s proudest achievements – was voided after a judge ruled it was awarded illegally. The ruling leaves the fate of the five-year-old broadband and video-conferencing network in limbo, along with the tens of millions of dollars already spent on the project linking Idaho high schools, dubbed the Idaho Education Network.

Education Networks of America and Qwest, now known as CenturyLink, the two firms that got the contract, could end up the biggest losers in the deal. The judge cited an Idaho law that says when a state contract is issued illegally, all money paid by the state under the contract “shall be repaid forthwith.” Spokesmen for both companies didn’t immediately respond to a request for comment on Tuesday. But Garry Lough, Idaho sales director for ENA, told Idaho Education News his firm “will focus on continuing to provide stellar service as we allow time for the process to run its course.” You can see reporter Kevin Richert’s full report here.

Otter: ‘Legal decision does not detract from the value of the IEN’

Idaho Gov. Butch Otter has issued this statement about the court ruling voiding the state’s contract for the Idaho Education Network:

“There has never been a question about the opportunities the Idaho Education Network (IEN) provides to our students and teachers. Yesterday’s legal decision does not detract from the value of the IEN. I support the IEN and recognize the significance of this service for all of Idaho, especially our rural communities.  I call upon all of the parties and stakeholders to commit to preserving this valuable service and unprecedented access to technology for Idaho’s students, teachers and communities while we work through the process.”  

The governor's statement came in a news release from the IEN; you can read it here. It says, “The Department of Administration is currently reviewing the District Court's ruling, and a decision about how to proceed will be forthcoming. The state is committed to continuing to provide course access and opportunities to Idaho's students.”

Goedde: Attorneys for the state were confident, voiding of IEN contract a surprise

Outgoing Senate Education Chairman John Goedde, R-Coeur d’Alene, said he’s concerned about the future of state-provided broadband for Idaho schools, after a judge voided the state’s contract for the Idaho Education Network, ruling it was issued illegally. “Certainly the attorneys for the state all along have expressed confidence in what had been done,” Goedde said. “So it kind of takes me aback a little bit, to find out that the summary judgment was issued.”

“There have been issues with the IEN all along,” Goedde said. But he said the concept behind it is important. “Expanding broadband to schools is, from my perspective, one of the great equalizers,” he said. “It certainly brings the whole world to students, and to teachers. So it’s become an integral part of the everyday classroom, and I just can’t envision that changing. We owe that to Idaho’s students.”

The state Department of Administration and the state’s outside attorneys had been so confident of the state’s chances of success in the case that the state department didn’t even bother to inform lawmakers in 2013 that it had extended the contract through 2019, promising another $10 million to Education Networks of America, even though the deal wasn’t yet up for renewal. State Administration Director Teresa Luna told the Joint Finance-Appropriations Committee in February that the department anticipated some state savings from the early renewal. In addition to broadband connections, the network provides video tele-conferencing equipment at Idaho high schools.

ENA and Qwest may be the ones out millions from IEN ruling, not the state…

It may not be the state that’s out tens of millions of dollars because of an illegal contract for the Idaho Education Network – it may be the contractors, Education Networks of America and Qwest. In his ruling declaring the $60 million IEN contract illegal and void, 4th District Judge Patrick Owen wrote, “Because these contract awards are void, the provisions of Idaho Code 67-5725 now apply.”

That section of state law says:

“All contracts or agreements made in violation of the provisions of this chapter shall be void and any sum of money advanced by the state of Idaho in consideration of any such contract or agreement shall be repaid forthwith. In the event of refusal or delay when repayment is demanded by the proper officer of the state of Idaho, under whose authority such contract or agreement shall have been made or entered into, every person so refusing or delaying, together with his surety or sureties, shall be forthwith prosecuted at law for the recovery of such sum of money so advanced.”

“ENA and Qwest would have to pay the money back,” said Sen. Dean Cameron, R-Rupert, co-chairman of the Legislature’s Joint Finance-Appropriations Committee. “If I understand the ruling correctly, the contract is considered null and void and money that the state has paid out to ENA and Qwest are to be refunded to the state.”

“It’s what we had expected,” Cameron said. “It is why we had strongly and repeatedly encouraged the Department of Administration to resolve it and settle it before it got to this point.” The case went to mediation last month, but state officials said they were outraged that Syringa asked for damages, starting with a $17 million request, later dropped to roughly $5 million. Gov. Butch Otter said in a campaign statement Oct. 16 that Syringa has no right to any state payment. “It has no legitimate claim for monetary damages,” his statement said.

Cameron said, “I don’t know whether there’s any way of settling it at this point or not. It’s why we were very direct in all of our JFAC meetings in encouraging a settlement to occur, because if the court ruled as it looked like they might and they did, the Idaho Education Network would certainly be in jeopardy. And for whatever reason, the Department of Administration did not see fit to heed that counsel.”

Cameron said any settlement figure that the state had agreed to at least would have been a one-time payment, as opposed to the continuing requests the Legislature has received to bail out the IEN with millions in state funds each year because of the missing federal e-rate funds, which were supposed to cover 75 percent of the costs. The feds put those payments on hold in 2013 when the Idaho Supreme Court issued its initial ruling in the lawsuit over the contract award.

Cameron said, “I suspect they have an ability to appeal, but it seems futile, if they're going to appeal back to the same Supreme Court who essentially agreed with Syringa in the first place.”

Cameron said, “It would be, in my opinion, foolhardy for us to give additional money to a contract that is now considered to be void, and yet I think all of us would like to see the IEN succeed.” He said, “It’ll be a challenge, and I’m sure we’ll figure out a way to work through it. … I think long-term the IEN will exist, but I think the short-term ability for it to be available is in question.”

Bedke: Broadband for schools still a ‘worthy effort,’ hopes for a ‘do-over’

Idaho House Speaker Scott Bedke, R-Oakley, said this morning that he’s hopeful a “do-over” can happen on the voided contract to operate the Idaho Education Network statewide broadband network, to find a way to keep the service linking Idaho schools running. “I think that’s probably in everyone’s best interest,” Bedke said from a bus on the North Idaho Legislative Tour. “No one questions the need for getting broadband accessibility out in all the schools, and so that needs to be our goal.”

“To the extent we’re culpable, we’ll shoulder our responsibilities, I believe, collectively as a state, but that doesn’t diminish the fact that this is a worthy effort,” he said. “I don’t think the Legislature is going to be willing to walk away from the network. In this day and age, I think it’s a necessary component of our education system.”

Bedke said he hadn’t yet had a chance to review the judge’s ruling. “I suspect that this will be the topic of most of the conversations tomorrow,” he said. “The high ground is that the system and the need is valid, and we need to get everything squared away so that we can accomplish that.”

Link to full judge’s ruling; successful bidder was big giver to Otter, Luna campaigns

Here’s a link to 4th District Judge Patrick Owen’s full ruling in the Syringa Networks case, declaring the multimillion-dollar contract award for the Idaho Education Network illegal and void. The judge’s ruling could cost the state tens of millions as it has to repay federal funds that were supposed to cover three-quarters of the cost of the broadband network linking every Idaho high school. Idaho Gov. Butch Otter has steadfastly defended the contract for the past five years, even as courts including the Idaho Supreme Court continued to rule against it; the contract was awarded by Otter’s best friend, Mike Gwartney, who at the time was serving as the director of his state Department of Administration.

Education Networks of America, the company that got the contract along with Qwest, has donated $18,250 to Otter’s campaign, including $5,000 on Sept. 26 of this year. The firm also was awarded a second multimillion-dollar contract in July of 2013 to provide WiFi networks in Idaho high schools; state Superintendent of Schools Tom Luna awarded that contract. ENA also has contributed $6,000 to Luna’s campaign since 2009.

Otter statement on IEN: Syringa ‘has no legitimate claim for monetary damages’ from state

Idaho Gov. Butch Otter, through his campaign, has released a lengthy statement on the legal dispute over the contract award for the Idaho Education Network, the statewide broadband network designed to link every high school; the state is embroiled in a lawsuit from Syringa Networks over the award of the $60 million contract to Qwest and Education Networks of America. The legal questions over the contract award prompted the federal government to stop paying its three-quarters share of the project in 2013, and lawmakers had to bail out the IEN with $11.4 million in extra state funds this year to offset the missing federal “e-rate” money; millions more may be requested when the Legislature convenes again in January.

In response to questions raised by Democratic challenger A.J. Balukoff about news reports that the state was seeking a confidentiality agreement in its negotiations with Syringa, Otter's statement says, “Confidentiality agreements are common in mediations to ensure both parties negotiate in good faith. Syringa refused to sign a confidentiality agreement; nevertheless, the state proceeded with mediation. There are no 'secret' negotiations taking place.” Click below for Otter's full statement, which includes several references to court documents in the case. It also asserts that Syringa “has no legitimate claim for monetary damages” from the state. You can read the full Idaho Supreme Court decision here in the case, which remanded it back to the district court on a single question: whether the contract was awarded illegally.

Balukoff calls on Otter to ‘come clean’ about IEN contract; records show ENA gave more than $18K to Otter’s campaigns since 2006

A.J. Balukoff, the Democratic candidate for governor, says GOP Gov. Butch Otter’s handling of a troubled $60 million broadband contract shows “incompetence,” and is calling on Otter to “come clean” on the deal, after reports today that state officials negotiating with Syringa Networks over the deal have been attempting to secure a secrecy agreement.

“Gov. Otter’s incompetence in his role as guardian of taxpayer dollars is shocking,” Balukoff said in a news release today. “But even worse, he has never explained to the people of Idaho how and why this contract was awarded to a campaign donor in violation of state law. Before asking voters to give him a third term in office, he needs to come clean on that. This case fails the smell test badly.”

The $60 million contract was awarded in 2009 to Qwest, now CenturyLink, and Education Networks of America, which new campaign finance reports show donated $5,000 to Otter’s campaign this year. But those weren’t the first ENA donations to Otter; records filed with the Idaho Secretary of State show ENA has donated $18,250 to Otter’s campaigns since 2006. That included $5,000 in October of 2006; $1,000 in 2009; $2,000 in 2010; $1,250 in 2012; and $4,000 in 2013. Add in the $5,000 that ENA donated on Sept. 26 of this year, and it comes to a total $18,250.

Otter’s campaign spokesman couldn’t immediately be reached for comment. Balukoff’s full news release is online here; Idaho Education News reporter Kevin Richert, who scrutinized the most recent campaign finance reports filed last week and noted the September donation, has a full report here.

IEN contract dispute shows no signs of resolution, state could be on hook for millions more…

Syringa Networks, the company that sued over the 2009 broadband contract for the Idaho Education Network, is now demanding $17 million to settle the dispute, Idaho Education News reports. House Education Committee Chairman Reed DeMordaunt today dubbed the request “outrageous,” and the dispute appears unlikely to end soon. It’s already forced the state to put $11.4 million in state taxpayer funds into the IEN because the feds have refused to provide their three-quarters of the IEN’s funding with the contract award in dispute. The disputed contract went to Education Networks of America and Qwest, now known as CenturyLink. In the coming legislative session, lawmakers could be asked to hand over millions more. EdNews reporter Kevin Richert has a full report here.

Only 30 schools have WiFi so far under statewide contract, but ENA says project’s on schedule

Only 30 of the more than 200 Idaho high schools and junior highs set to get state-funded WiFi service under a statewide contract are up and running with the service, Kevin Richert of Idaho Education News reports, but the contractor, Education Networks of America, says the project is on schedule to reach completion by March. Lawmakers this year will have to decide whether to continue to fund the project, for which state Superintendent of Schools Tom Luna signed a five- to 15-year contract based only on this year’s funding. You can read Richert’s full report here.

Even after downward adjustment, ENA price still higher than low bidders

Idaho Education News has a report this afternoon noting that even after the downward adjustment in the price tag for the controversial statewide high school WiFi contract (see my story here), the cost is still higher than the low bid submitted by a different firm, Tek-Hut Inc. of Twin Falls; you can read their full report here. Tek-Hut bid $1.65 million a year for the contract; Education Networks of America’s successful bid was $2.11 million a year, which now, due to an agreement to charge only for schools ENA actually connects, will drop next year to about $1.89 million. Another bid, from ID Consulting, which unlike Tek-Hut didn’t make the short list of three finalists for the contract, came in at $1.86 million a year.

Retired purchasing agent: ‘They’ve totally changed the terms of the contract’

Scott Sherman, a retired purchasing agent from Idaho Falls, has been raising questions for weeks about Idaho’s controversial high school WiFi contract with Education Networks of America; last Friday, state schools Superintendent Tom Luna replied to several questions Sherman had emailed him, including one about the fixed-price nature of the contract. In the Aug. 27 email, Luna defended that approach, writing, “The RFP was written intentionally with a fixed bid price component for two reasons: 1) to meet the language set forth in Senate Bill 1200 passed by the Idaho Legislature, and 2) to ensure the vendor assumed the risk involved, not the state.”

Sherman disputed that, saying, “It was totally inappropriate for a fixed-price contract, because they didn’t know how many users there were going to be.” Rather than shifting the risk to the vendor, he said, the approach shifted the risk to the state, by saying it would pay full-fare regardless of participation. That, in turn, gave vendors an incentive to up their price to protect themselves against the uncertainty. “They just about ate the whole budget up to protect themselves,” he said.

When Luna sent his Aug. 27 response to Sherman, the superintendent already knew that ENA had made a unilateral concession in an Aug. 6 letter, agreeing to bill the state only for actual work done at Idaho schools, not for the full contract amount, but he didn’t mention that; the state accepted the offer in an Aug. 22 letter. His spokeswoman, Melissa McGrath, said in an email today that the contract has not changed. “The original contract remains in the place,” she wrote. “These letters clarify the billing process and additional questions that were raised in initial meetings with ENA.”

Sherman, who has long been retired but was a purchasing agent with the atomic energy division of Philips Petroleum when the company was the main contractor at the Idaho National Laboratory, said, “In my mind what they’ve done is totally changed the terms of the contract. It’s gone from a fixed price – which given the kinds of things they were asking the potential suppliers to do was ridiculous – to a cost-plus contract.” He said, “That entirely changes how the others would have responded.” Nine companies bid on the contract; ENA was among three finalists, along with two Idaho companies. “I would think that the other suppliers or bidders would have every right to come back and say, people, what have you got?” he said. “You’ve just given these people a million bucks under totally different circumstances.”

Idaho alters school WiFi deal under pressure from lawmakers

Under pressure from state lawmakers, Idaho’s State Department of Education and Education Networks of America have agreed to a change in their statewide high school WiFi deal: ENA will be paid only for the schools it actually connects, rather than a flat fee for all eligible schools whether they participate or not.  hat could lower the price for the contract’s first year from $2.11 million to $1.89 million, but key lawmakers say they still have questions about the deal.

“To me, it made no sense being charged the same whether one school signed up or every school signed up,” said Senate Education Chairman John Goedde, R-Coeur d’Alene. But, he said, “The concessions didn’t necessarily satisfy all my concerns. Whether the concessions they’ve made will be palatable enough for the Legislature to appropriate funds again is the real issue.”

State Superintendent of Schools Tom Luna signed the five- to 15-year contract with Nashville, Tenn.-based ENA in July, based on a one-time appropriation from the Legislature of $2.25 million for the upcoming school year. But the contract runs for five years, with options to renew for up to 15 years. It includes a clause that if lawmakers don’t budget money in future years, the contract will end. But it also says the contractor – ENA – owns all the equipment it installs, including miles of cabling to be installed in every Idaho high school to provide wireless networks, and if the contract ends, it must remove everything it’s installed.

Goedde said the cabling issue is another one that concerns him. “I have no problem with them pulling out devices,” he said. “Devices age quickly, and what they install today, in two years will probably be outdated. But I do have an issue with the cable.” An insurance agent, Goedde said, “Any time anybody installs something in a building, it becomes a part of the building.” ENA offered only a partial concession on the cabling, saying it would renounce its ownership rights after the first full five-year term; you can read my full story here at spokesman.com.

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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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