The Baltimore County school system has paid a Georgia software company hand-selected by Superintendent Joe A. Hairston at least $4 million over the past decade without seeking competitive offers from other companies.
In doing so, procurement experts say, the school system did not follow commonly accepted purchasing practices that would have required the system to fully explore whether similar products were on the market.
Concern about the lack of transparency in the school system's business practices has been growing among county lawmakers for the past year, since they began questioning the ethics of another deal that Hairston struck with a colleague. Now legislators are calling for more openness in school spending.
The school system first awarded the contract, for a student data tracking system, in November 2000 to EduTrax, four months after Hairston left the superintendent's job in the Clayton County public school system in Georgia to come to Baltimore County. EduTrax is owned by Steve Holmes, who worked as Clayton County's technology officer under Hairston and started the company that year.
The school board has continued to approve the arrangement, revising the contract in 2002 and 2006 to allow for the purchase of two other products from the company, whose software gives school systems a way to manage and analyze student test data. As recently as June, the board agreed to make another $1.19 million payment to the company for maintenance of software, according to public records.
Hairston said the contract has always been handled properly. The products EduTrax offered in 2000 were new to the market and unavailable from other companies, he said. Today, Hairston said, "there are companies that would claim" to sell the same databases that EduTrax developed for the county but none that would deliver the same customized product.
But Jonathon Harber, the CEO of Schoolnet, a software company founded in 1998 whose products are used by a third of large urban districts, said he would like to have done business with the county schools. "Had Baltimore County put out a request for proposal, we would certainly have responded and I think we would have responded favorably," he said.
Del. Stephen Lafferty, a Baltimore County Democrat, said he was "surprised [EduTrax] was a no-bid process. … I can't imagine that there wouldn't have been some bids" if the county had sought them. Lafferty has introduced legislation, co-sponsored by half of the county delegation, that would require the school system to post payments to contractors on a website.
"I think the experience that many of us have had over the past two years have raised concerns about the transparency, the openness and the responsiveness" of the school system, Lafferty said.
On the state level, a contract handled this way would raise questions, said William Kahn, an expert in state procurement and a retired assistant attorney general. "Normally, the agency would take some steps to test the market," he said.
Typically, most government agencies, including school systems, have three choices in how they can make large purchases, according to Kahn.
If a school system is spending more than $25,000 — be it to build a new school or buy food for the cafeteria — state law requires it to competitively bid the purchase and have the school board approve it.
But when state agencies want to analyze the quality of a product and not just its price, they commonly use a "request for proposal," said Kahn, who was in charge of a unit that specialized in procurement for the state from 1983 to 2003. In such cases, the system publishes details about what it wants and waits for vendors to submit competing bids.
For the EduTrax contract, however, Baltimore County officials used a third option that allowed them to forgo the competitive process by claiming that the software to track student data was unique and no competing products were available.
The county rules say that a so-called "sole source" purchase can be made when the school system staff has satisfied the purchasing office that only one company can provide the product and "that it would be advantageous or [that it would be] impractical to seek or utilize another source," said Rick Gay, head of the office school system's office of purchasing.
Hairston said his support of the EduTrax deal was partly a result of his desire to avoid the one-size-fits-all software used by many other school districts. By purchasing customized software, he said, the district can avoid potentially costly fixes later.
When asked if the school system had checked whether any other companies made software similar to EduTrax, Hairston said it wasn't necessary. He said he had a deep knowledge of what was available because of his technology background and he knew nothing similar was on the market.