Top administrators, supported by a majority of the school board, are changing the Dallas school district’s contracting processes in advance of a multibillion-dollar bond offering, and it’s not sitting well with several trustees.
“We’re talking [about] going to the public with $3 billion with no control by the board,” trustee Joyce Foreman said in a committee meeting discussion of changes in the contracting process. “And the superintendent will have the right to spend the money as he so chooses.” She voted against the changes.
Among her concerns is a new policy, approved by the board last week in a 6-3 vote, that allows Superintendent Michael Hinojosa to determine how contractors are secured. The current policy gives the board more say in the process.
Now the board will provide Hinojosa and his advisors a choice of methods, which can include competitive bidding or the appointment of a construction manager with wider oversight over a project, who promises to complete it for a set price. Projects over $500,000 must be bid, regardless of the procurement method.
Board President Justin Henry, who also voted against the proposal, characterized it during the board meeting as a “complete shift in authority.”
Scott Layne, the district’s chief operating officer, said the change would expedite projects in a competitive construction environment when prices can rise quickly.
The change comes on the eve of an anticipated $3 billion bond proposal, which will include over 300 building projects.
It also comes a week after the district’s chief auditor, Steven Martin, resigned after being challenged by several board members and Hinojosa’s team over two audits that found the district overspent by hundreds of thousands of dollars on construction projects between 2015 and 2018.
The audits, previously posted along with the rest of the department’s work, have been removed from the school district’s website. A district spokeswoman did not respond to an email seeking comment. See them here and here.
Shortly before Martin left, a board subcommittee considered, then dropped, a new plan that would move authority for investigating complaints of impropriety away from the internal auditor’s office and into the domain of an office overseen by Hinojosa.
The new policy approved by the board is an extension of that process — to move away from board oversight and hand more control to the administration.
Under that policy, Foreman said, by the time the school board gets to vote on a project, it would be very difficult to turn back.
“It would be too late to start over,” Foreman said. Substantial money would already have been spent and switching to another method of procurement would delay the project.
Under the former system, the board would first sign off on the method of procurement. The administration would use that and then seek the board’s approval of the deal obtained.
“Under this, whatever the administration brings to us, we would be in a position where we could not say no,” Foreman said. “We would have no control over how our dollars are spent.”
Foreman sent a note to Dwayne Thompson, the district’s CFO, in advance of the meeting last week, asking how the proposed changes will address potential fraud and waste.
“Many of the changes focus on issues other than fraud and waste,” Thompson replied in his written response.
Among the options when there is only one bidder is to give the lone bidder the deal, rebid the project right away, or wait a while before putting it out for bids again.
Many government entities, to avoid the appearance of any conflict, require a full, publicly available disclosure of any sole-source contracts. It’s unclear how the new rules will ensure that the process is transparent.
Layne and Thompson insisted that while the new policy may involve less board scrutiny of construction projects, it will streamline a procedure that has tied up projects in the past.
The Dallas school district has a checkered past on building contracts, however.
In 2009, former chief technology officer Ruben Bohuchot was sentenced to 11 years in federal prison for his role in a bribery and money-laundering scheme involving computer contracts. He was released in 2018.
In 2013, former Superintendent Mike Miles was accused of influencing a service contract, then tried to shut down an investigation by the Office of Professional Responsibility, which he oversaw.
An outside investigation found that he committed no crime. Miles resigned in 2015.
In 2016, Zach Manning, who oversaw construction for the Dallas school district, alerted his superiors that his colleagues were playing with the numbers on construction projects to avoid going over the $500,000 threshold that triggers a board vote. Manning was fired. A subsequent inquiry by a member of the district’s internal audit team backed Manning’s claims, but district leaders did not accept the findings.
Given the history of illegal or questionable behavior involved in contracting at the Dallas school district, “what they need is someone to review their policies and procedures,” said Bill Curry, a former U.S. Air Force systems procurement officer and author of “Government Contracting: Promises and Perils.”
Giving an elected board too much of a say in procurement is unnecessary, “unless that board has some kind of expertise in procurement,” he added.
But Curry said that claiming time constraints as a reason to move faster on contracts isn’t wise.
Getting competitive bids is “almost always better,” he said, regardless of the size of a contract.
Steve Miller can be reached at [email protected].