August 3, 2013 in Idaho

Idaho split on Wi-Fi deal

Local companies baffled by award of school contract
By The Spokesman-Review
 
Jesse Tinsley photoBuy this photo

Shawn Swanby, one of the founders of Ednetics, stands in front of his building in Post Falls on Monday. Swanby’s company, which builds network systems for customers, was one of the losing bidders on an Idaho contract to provide Wi-Fi services to high schools.
(Full-size photo)

Shawn Swanby built his high-tech company from the ground up, starting in his living room in 1997 back when he was a University of Idaho student.

Now he runs a Post Falls-based firm that provides technology services to schools across the Northwest, from the Coeur d’Alene School District to Seattle Public Schools. But he couldn’t win a statewide contract in Idaho to provide wireless networks in high schools; nor could a Twin Falls, Idaho, education technology firm that already has worked with 71 of Idaho’s 113 school districts.

Instead, the 5- to 15-year, multimillion-dollar contract went to a politically connected Nashville, Tenn., firm.

Both Idaho firms – which were the two runners-up among nine bidders for the contract – say the state’s taxpayers will pay much more because of the way the deal’s been structured than they would if school districts had come to companies like them, as they’ve done in the past. The state maintains the contract is the most cost-effective solution to get Wi-Fi into all its high schools.

“We’ve been doing it for a long time,” said Swanby, president and CEO of Ednetics. “This isn’t like a new thing we decided to get into. We’ve actually been providing wireless network infrastructure design and implementation for 12 years. It’s a technology we really understand.”

Nate Bondelid, president of Tek-Hut Inc. in Twin Falls, said his company’s bid was for $1.6 million a year – $500,000 less than Education Networks of America’s successful $2.11 million-a-year bid. “I could understand if we were $50,000 or even $100,000 a year less,” he said. “ENA’s a huge company, we’re a small business in the state of Idaho.” But, he said, “That’s a lot of money. That’s a half a million dollars per year.”

The two born-and-bred Idaho firms are concerned over the bidding process and say some aspects of it were puzzling. “It was very much slanted,” Bondelid said.

Both expected the state to ask for a demonstration of their technology, but it never did. Both said they had numerous questions about the state’s request for proposals that the state declined to answer.

Oddest of all, the two said, was the decision to set an all-or-nothing price, regardless of how many schools participate in the service. “I think it’s highly irregular,” Swanby said, “because what it’s doing is it’s creating potentially a financial buffer in the contract for the out-of-state company that this was awarded to.”

As a result, any school that decides to sign on with one of the two Idaho firms instead of participating in the statewide contract means more profits for ENA – because it’ll be paid for work that it won’t have to do.

Plus, the contract requires that the vendor own all the equipment it installs in schools and remove it if the contract ends – including miles of cabling that would carry the wireless service to each access point in a school, with a typical high school needing about 40 access points. “It just seems weird,” Swanby said, adding that he’s never bid on a contract with that requirement. In the future, he said, “It creates a very large cost barrier for anyone else to come in and be competitive.”

Last week, the Coeur d’Alene School District announced that it has selected Ednetics to provide districtwide Wi-Fi in all 17 of its schools plus its district office and other locations, for a one-time cost of $278,000.

Swanby said his firm and a related high-bandwidth fiber company have invested $18 million in facilities and fiber optics in Idaho in the last few years. “We’re proud of the success that we’ve had here, and the work that we’ve been able to do for our customers, for the school districts both in Idaho and across the Northwest,” he said. “This award is not going to change that for us. I think that we’re still very committed to Idaho, and we’re very committed to the schools, our customers.”


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