Schools contract balloons unchecked

City's $5.2 million deal for computer systems on pace to double by July

Payouts weren't made public

March 26, 2000|By JoAnna Daemmrich and Liz Bowie | JoAnna Daemmrich and Liz Bowie,SUN STAFF

For a school district unable to keep track of its students or buy basic supplies without reams of paperwork, the deal from a local computer company sounded too good to refuse.

Give us $5.2 million and 18 months, Information Control Systems told Baltimore school officials, and we will deliver what you need: reliable computer systems.

Eight months later, the ICS consultants wanted an additional $1.5 million for more work. They got it.

Two months after that, the consultants brought in a new bill for $750,000. They got it.

Now, school officials are spending $744,205 a month on extra services -- which could bring the contract to $11 million by July -- at a time they are warning that the district is strapped for cash for critical classroom reforms.

They have quietly paid -- without public discussion and without contract revision -- to cover expensive subcontracting and a burgeoning number of computer technicians on temporary visas whose work gets billed at rates from $65 to $148 an hour.

Eager for the system to become more cyber-savvy, the city schools chief and school board have failed to follow standard contracting practices designed to ensure that tax dollars are well spent.

Education chief Robert Booker praises ICS but acknowledges that costs have soared -- even while a major piece of the work remains unfinished. He attributes this to a "broad interpretation" of the contract. However, Booker said he will present a revision to the school board this week.

ICS President Garland O. Williamson declined to discuss his billing. Williamson, 53, who serves on the boards of the Enoch Pratt Free Library and Associated Black Charities, said the school contract is not his largest.

"It's going fine," Williamson said of the contract. "Everyone has said we've made remarkable progress in a short period of time. There were many issues to resolve, a lot of technical things that come up when you have a system with this many schools, this many computers."

The lucrative expansion has resulted from unconventional contract permutations that raise questions about how the school system is doing business, according to a review of financial documents and internal correspondence and interviews with school officials and ICS employees.

At the time Williamson won the contract by underbidding International Business Machines Corp., he was being pursued by two companies that had won more than $200,000 in combined court judgments against him. He had recently settled a third delinquent account after the sheriff tagged the furniture in his home, according to court records.

Williamson says that his assets were tied up while he disputed the largest claim. He settled everything after getting the school contract, court records show.

Even before the school board had voted to approve the contract, ICS had begun to bill for its work. Donald G. Hall Sr., the ICS project manager, his brother, Mike, and his son, Don Jr., set up shop in March 1999 in the basement of the school administration building. The next month, the board finalized the deal.

ICS had few employees, so Hall hired most of his computer programmers from so-called "body shops," companies set up to bring in high-tech foreign workers on temporary visas.

Soon after getting the contract, ICS warned that 10 times more work than planned was needed to avert a Y2K computer crash. The job was handled by a subcontractor -- NuSource, directed by Lalit Gadhia, a once-prominent Maryland Democratic fund-raiser who served a prison sentence in 1996 for laundering illegal campaign contributions.

Other work was turned over to Carnegie Morgan, a financial advisory business owned by Larry E. Jennings Jr. Jennings served on the city housing board in the early 1990s, when his relatives won more than $1.18 million in a no-bid housing repair scandal. He denied involvement. His father was convicted of bribery.

Checks were cut before the school board had authorized additional ICS services. The board approved $2.25 million as "walk-on" amendments in December and last month that weren't on the public agenda or discussed.

The board met privately Dec. 28 with Hall to seek an explanation for the additional payments. No minutes were kept.

Official unaware of details

Board President J. Tyson Tildon said he was unaware of certain details about ICS, such as its hiring of Gadhia's firm for the Y2K work. "You're kidding," he said. "That's very interesting."

The costly changes to the ICS contract would likely have been noticed three years ago. Until 1997, the Board of Estimates, the city's financial control panel, had to approve school expenditures.

Then, the General Assembly made the school district more independent as part of a $254 million effort to rescue the schools from decades of decline. The move was intended to free the schools of political interference, but it also limited financial oversight.

"What do they think they have -- an unlimited checkbook up there?" said Baltimore Comptroller Joan M. Pratt.

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