BOISE – Idaho lawmakers who agreed under pressure this week to pay $6.6 million to a broadband contractor say they were dismayed and alarmed to learn that the state last year extended the contract through 2019 without informing them.
The contract extension with Nashville, Tenn.-based Education Networks of America to operate the Idaho Education Network through 2019 is worth $10 million. The original five-year contract wasn’t up for renewal until January of this year, but the state Department of Administration opted to renew it in January 2013.
The Idaho Education Network connects every Idaho high school. The state signed a $60 million contract with ENA in 2009 to launch the service, which also includes video teleconferencing equipment at every high school.
“We saw opportunities for less-expensive, higher-capacity technology and worked with our vendor partners to take advantage of those savings now,” said Jennifer Pike, department spokeswoman. She said ENA was willing to invest in pricey upgrades for higher bandwidth at schools that would save the state money in the long term if it got the early contract renewal.
Three months after the renewal was granted, federal funds that paid for three-quarters of the education network’s costs stopped arriving. The Federal Communications Commission said a March 2013 Idaho Supreme Court decision raised questions about whether the state’s original award of the contract complied with procurement rules. The money has been held up since then as the agency investigates.
Now, the state has been asked to pay $14.45 million to ENA to make up for the missing federal payments, which come from a federal telephone tax. If the federal investigation finds the contract faulty, Idaho could also have to pay back another $13 million in past such payments.
“We’ve got something terribly wrong – we’re on the hook for millions of dollars,” said Sen. Shawn Keough, a Sandpoint Republican who is vice chair of the Legislature’s joint budget committee. “It’s really a mess.”
State law puts an advisory council that includes four members of the budget committee in charge of procurement of telecommunications services and equipment for the Idaho Education Network. But minutes of that council for the past year and a half show it was never consulted about the contract extension or informed of the missing federal funds.
Pike said a technical advisory committee that is a subset of the council discussed the contract extension on two occasions; it doesn’t include any legislators.
Sen. Dean Cameron, R-Rupert, co-chairman of the Joint Finance-Appropriations Committee, said lawmakers were informed at a meeting last week that if they didn’t approve a payment to ENA and get it to the governor’s desk by the end of this week, the school network would “go black” and service would be cut off. Schools across the state are using the network for distance-education classes and school Internet access.
“There was significant pressure that we have something passed for 2014 by this week,” Cameron said.
So he and Rep. Maxine Bell, R-Jerome, the House co-chair of the joint budget committee, led a move to approve a $6.6 million payment right away for the current year, which runs through July 1. Cameron said they wanted to “take that worry off of school districts.”
However, lawmakers didn’t take action on the rest of the request from the state Department of Administration. “I’ve got real pushback from my committee members,” Cameron said. Rep. Jeff Thompson, R-Idaho Falls, who serves on the budget panel, said, “There’s a lot of questions from the Senate and from the House as to this entire contract the way it was, before they got the five-year extension.”
Cameron called the contract extension “inappropriate and unfortunate.”
Asked if the state might want to rebid the disputed contract before the coming year, Cameron said, “That’s something that’s being discussed,” though he said he doubted a full rebid could be completed by July 1.
Senate Education Chairman John Goedde, R-Coeur d’Alene, who serves on the education network council, said he wasn’t advised of the contract extension or the missing funds until lawmakers were informed in January. “I feel concerned that we were not apprised of the situation,” he said.
Asked if the contract extension makes it harder for the state to get out of the deal and rebid it, Goedde said, “There are legal minds working on that.”
Administration Department Director Teresa Luna wasn’t available for comment. Pike said in an email, “Any speculation by the department about if the contract could/should be re-bid is premature.” If the feds ruled against the state on the contract, she said, “The state would then have an appeal avenue it would follow through the FCC. A successful appeal would release the funds currently being held.”