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Eye On Boise

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.

Statement from Gov. Butch Otter’s campaign on IEN contract dispute, forwarded by campaign spokeswoman Kaycee Emery:

Let’s take a look at the well-documented facts surrounding Governor Otter, the Idaho Education Network – which provides broadband Internet learning capability to every Idaho high school – and a company that by its own admission did not bid on the project:  

* Syringa Networks was never a bidder for the Idaho Education Network.

* In Syringa’s Reply Brief to the Idaho Supreme Court dated June 4, 2012, it states:

§  P. 22 “The DOA (Idaho Department of Administration) decision to make a lawful multiple award (as suggested by the Letter of Intent and the first SBPO) was not a rejection of the ENA proposal because it would allow ENA (with Syringa as a subcontractor) to compete against Qwest site by site to provide ‘all services’ to selected schools and libraries under I.C. Section 48-67-5718A.”

 * The contracts were evaluated by an independent review panel consisting of K-12 educators, representatives from higher education and State IT professionals. There were no Idaho Department of Administration employees scoring the proposals. 

* The original contracts were found to be valid by the District Court and the Idaho Supreme Court. In the District Court’s Decision dated June 24, 2014, it states:  

§  P. 7 “The Supreme Court found that when DOA made the multiple award on January 28, 2009, the original SBPOs (Statewide Blanket Purchase Orders) complied with this requirement [Section 67-5718A] because the initial contracts “constituted an award to two (2) or more bidders to furnish same or similar property.”   In the appeal, Syringa did not raise any challenge to the original multiple awards to ENA and Qwest.

§  P. 12 “On appeal, Syringa did not challenge the award of the original SBPOs, and conceded that that the original SBPOs were lawful.  See Reply Brief of Syringa at 8. (“Syringa does not challenge the Letter of Intent or the identical and lawful SBPOs issued to Qwest and ENA on January 28, 2009 because they did not split the IEN Project”).

§  P. 13 “Because Syringa has previously conceded that the original SBPOs were lawful, Syringa will be estopped from taking the opposite position now.”

* 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. 

* Syringa has absolutely no claim or right to recover monetary damages in its lawsuit. Syringa originally filed six counts against the Idaho Education Network.  All six counts were dismissed by the District Court.  On appeal, the Idaho Supreme Court remanded a single count back to the District Court.  Should the District Court rule in Syringa’s favor on the remaining count, there is no legal means for Syringa to receive any monetary damages for its claim.

* Syringa demanded $17 million from the State. There is no logical basis for Syringa’s monetary demand when, once again, it has no legitimate claim for monetary damages. 

* Syringa was offered the right to compete for State agency work and rejected the offer. By Syringa’s own estimations, the State agency work was valued at $5 million.

* When informed by the State that it would pay no monetary damages, Syringa terminated the mediation.

* Syringa now is providing services for the IEN in its member territories and beyond.  Syringa has been paid over $1.4 million for its services since 2011. 

* The decision to appoint outside legal counsel for the Syringa case was made cooperatively by the Idaho Department of Administration’s Bureau of Risk Management and the Attorney General’s office based on availability and expertise of counsel.

Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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