The purchase of millions of dollars in technology equipment and services without competitive bids or school board approval signals possible collusion among Bibb County school officials and several vendors they did business with, a state report alleges.
During the waning months of former school Superintendent Romain Dallemand’s administration, the school system paid millions of dollars for technology products the district has never used, and companies repeatedly obtained contracts from the system after sidestepping the district’s bidding policies, the report says.
At least one of the vendors, Progressive Consulting Technologies of Macon, “systematically and blatantly violated the terms of their agreement with the district and all without district approval,” the report contends.
And a school system attorney said in a letter to the district that, in her opinion, another vendor was a “straw corporation” and its equipment purchase was a “sham.”
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The Telegraph obtained the report from the state’s Professional Standards Commission through an Open Records Act request. The report was compiled by the PSC, based on probes by both PSC and school system investigators.
During Dallemand’s tenure, several of the contracts he signed for technology work contained provisions that violated state law, the report said.
It cited violations of standards or laws dealing with public funds and property. They included the misuse of public or school-related funds and violations of the system’s bidding policy and provisions of the educator Code of Professional Conduct.
Dallemand was hired as Bibb County’s superintendent in early 2011. About two years later, after heavy criticism of some of his initiatives and legal action against him, the school board bought out his contract for $350,000 plus benefits -- less than three months after renewing it.
After reviewing allegations against him in recent months, the PSC revoked his license in October as well as that of Tom Tourand, whom Dallemand hired as the system’s technology director. Tourand is appealing the revocation of his certificate.
In taking that action, the educator regulatory agency found that Dallemand “failed to follow local policies and state laws pertaining to bidding, contracts and payment for goods and services. The educator authorized staff to execute transactions that violated the law and local Board of Education policies. The educator also hired employees in such a manner that the employees could be easily manipulated,” the report said.
But Dallemand could face more than administrative sanctions. The FBI has investigated possible criminal wrongdoing by Dallemand, and state law enforcement authorities are also examining the case.
After results of the school system’s latest audit were released this past February, the system conducted its own investigation and forwarded its findings to the PSC and the state Attorney General’s Office.
From July to December 2012, Dallemand ordered more than $26 million in technology equipment and services without the required, prior approval of the school board, the audit said. Dallemand was not authorized to obligate the school system for any purchase order above $500,000, and any order above $500,000 also required prior board approval.
In all, Dallemand executed nine contracts or purchase orders during that time without going through the competitive bidding process, the audit said. The school board later ratified five of the nine transactions on the advice of attorneys.
After Dallemand left, school employees said an atmosphere of fear and intimidation had pervaded his administration, especially during his last six months on the job. It ranged from threats to in-house investigations, which intimidated employees and paved the way for Dallemand to spend money the way he wanted, staff members said. They said they were told not to communicate with school board members and were in continual fear of losing their jobs or being demoted.
Dallemand, a Haiti native whose whereabouts have been the subject of conjecture for months, denies any wrongdoing.
In a letter to the PSC this past August, a copy of which was included in the report, he said school board records would bear that out.
The letter says in part, “For capital improvement projects, board policy did not require for the superintendent to seek approval for items over $500,000. Though the policy was changed in 2013 under a different superintend. (sic) It still provides autonomy for the superintendent to spend over $500,000 in capital improvement funds without board approval.
“The section in policy that required for superintendent to seek board approval for items over $500,000 was only for the general fund not for capital improvement fund. In 2012, the capital improvement policy stated that once the board approves the overall project, overall budget and a project manager than (sic) authorizes the superintendent to negotiate with the project manager. The board did not need to have further involvement. Therefore, I did not violate board policy.”
In 2013, after Dallemand had left the system, the school board amended its policy to put in place a $100,000 cap on superintendent spending.
Executives of two of the companies in question denied any wrongdoing and said there was no collusion in their seeking or winning contracts with the school district. Attempts to reach officials of the third company named in the report were unsuccessful.
Steve Smith, the system’s interim superintendent, said he had a responsibility to report suspected ethics violations to the PSC.
“I regret that this whole situation occurred,” he said. “However, I feel like the evidence we have discovered certainly warrants a thorough investigation to ensure that justice is administered in a fair and equitable way.”
DETAILS FROM THE REPORT
The PSC report, more than 300 pages in all, takes a closer look at details of about $52 million in long-range technology upgrades that the system planned to implement during Dallemand’s administration. Almost $20 million was in capital improvement funds, from education sales tax proceeds, and about $32 million was from “E-rate” funds, to be used to improve broadband capability in schools, among other uses.
In July 2012, Dallemand hired Tourand as the system’s technology director, even though a selection committee had recommended another candidate on two occasions. Tourand had not worked since 2009 after he resigned from a similar position with the city of Macon. Attempts to reach him Friday and Saturday were not successful.
One of Tourand’s references on his employment application was Isaac J. Culver III, the president and CEO of Progressive Consulting Technologies, a small, minority-owned company in Macon.
In September, just weeks after Tourand’s appointment, Dallemand signed a contract with Progressive Consulting to provide “technical project management services and E-Rate construction projects” for the school system, without board approval, the report said. Progressive would provide network engineering support for the system’s Technology Department.
The board had authorized Dallemand to negotiate a technology contract with Progressive, but the contract should have come back to the board for final approval, the report said. In time, the school system paid Progressive about $1.3 million for technology consulting work.
One name stood out on Progressive’s bid proposal, the report noted: Allen Stephen, the president of CompTech Computer Technologies Inc., a minority-owned company based in Dayton, Ohio.
Progressive Consulting later brought CompTech into the huge technology project. The PSC report contains a letter from Stephen vouching for Progressive’s program management on a “disaster recovery system” that Stephen said had helped his company during a severe storm.
Actually, the school system already had hired another company, Elert & Associates, to provide similar technology services just nine months earlier, the report said.
Elert received $141,000 over a five-month span for network engineering. There was no evidence that the earlier contract with Elert was ever canceled.
The contract with Progressive, signed by Dallemand and Culver, called for Progressive to oversee such projects as installation of new cabling, new wireless access points and devices, switches and routers, and new video technology.
After Dallemand hired Progressive, it, in turn, brought other companies into the project, including CompTech and Pinnacle Construction Support Group, a minority-owned company in Tallahassee, Florida.
“Bid bonds” were waived on the companies, in violation of state law, the report said. Bid bonds -- 5 percent of the total amount of the project bid, in Bibb County’s case -- provide a guarantee to the project owner that the bidder has the financial means to accept the job for the price quoted in the bid.
Questions started arising about decisions to hire the companies -- and what services they had actually provided, the report said.
Some of the companies “appeared to have been given special consideration,” the report said. It also noted: “Progressive Consultants, Pinnacle CSG, and CompTech Computer Technologies Incorporated were three companies that appear to have had or to have developed a relationship during their time of their existing contracts” with the school system.
“It appeared that three of the ... companies had existing relationships and colluded in an effort to defraud the Bibb County School District of public funds,” the report said.
Soon, bills for payment began arriving at the school system office.
In December 2012, CompTech billed the school district nearly $3.8 million for 15,000 “Ncomputing” devices -- virtual desktops -- and accompanying support services. The contract did not go through the bid process, and it was never presented to the board for initial approval, the report says.
The money for payment was wired Dec. 21, even though board policy says that such bills should be paid by check.
About 300 of the devices were installed in schools, but the rest are still sitting in a school system warehouse. The system declared them surplus and is still trying to sell the devices -- almost certainly at a huge loss, if it ever does so.
Progressive Consulting also brought Pinnacle/CSG into the project. “Allegedly, they are also licensed retailers of Proscenium Software Suite” -- financial software, the report said.
An exhibit in the documents showed a Dec. 18, 2012, invoice payable to Pinnacle for $3.2 million, but again there was no contract or bid for the software package.
That fact, the report said, offered a “further example of possible collusion.”
Culver, the school system’s program manager, authorized the payment, documents showed.
Sharon Roberts, the system’s interim chief financial officer at the time, “was coerced into wiring the $3.2 million immediately,” the report said, and it was sent Dec. 19. Roberts was acting as interim CFO because Ron Collier had been demoted in July 2012 and moved to a school system warehouse for previously refusing to wire a $1 million check for another transaction. (He was later reinstated after he filed suit.)
The decision to buy the software package was made without input from the district’s finance employees, the audit noted, and the school system has never used the software. When school officials opened a server to download the software, there was nothing there.
At one point, the company indicated it would buy back the software from the district for $1.1 million -- which would mean a loss of more than $2 million -- but that hasn’t happened.
The system could have bought comparable software for about $900,000, school officials said.
In time, the Bibb County school district said it “uncovered evidence of collusion” involving Culver, Stephen and a Bibb County school employee whose name was redacted from the report.
The report included a copy of an email from Culver to CompTech, also sent to the unnamed school employee. It read: “This is a template for your invoice to BCSD. The pricing includes 10% on each unit sale for CompTech. ... Just have your guys prepare the attached on your invoice and submit to (name redacted). It needs to be done pretty quickly so he can get a PO# generated today. Thanks, Isaac”
Progressive Consulting, the report said, “is providing the vendor with the details on an invoice that includes a 10% profit. ... The unnamed school employee, the report said, “is part of the scheme.”
Also, Progressive used CompTech’s General Services Administration number to obtain a contract from the school system, according to the PSC’s investigative findings. “They used other vendors’ GSA numbers to bypass bidding requirements. The GSA number allows companies to bypass the bid process because they are on an approved vendor list.”
By spring 2013, school officials -- and their attorneys -- were exchanging letters and having conversations with representatives of the companies, questioning contracts, work provided and more.
At one point, Ed Aaron, who led the school system’s investigation, along with school attorneys Andrea Jolliffe, Elizabeth Wharton and Randy Howard, met with Progressive Consulting representatives to try to get a better understanding of the company’s billing practices and its scope of work.
They concluded that Progressive had never undertaken a project so big and that its scope of work didn’t match the proposal the company had presented -- or the contract it had with the school system, according to the report.
Progressive changed its fee schedule without approval and submitted inflated hours, the report said, and the company also brought on additional workers without approval and could not account for all the work it said it had performed.
Wharton, a school attorney, said the unnamed employee should have exercised more control over the project and not allowed these actions to happen.
An April 30, 2013, letter from Jolliffe, another school attorney, to an attorney for CompTech noted that CompTech “had no role in the purchase of any of the software or equipment identified on the invoice. Rather, all software and equipment was procured by Progressive Technology Consultants Inc. We further understand that CompTech hired a subcontractor at the suggestion ... of Progressive and that the subcontractor installed 300 of the 15,000 Ncomputing (devices) delivered to the District.
“It is our client’s position that this purchase was ultra vires” -- exceeding the scope of authority -- “and that all funds paid to CompTech are fully recoverable by the District.”
Another letter from Jolliffe to Howard, the system’s in-house attorney, was among documents in the report. It was dated Aug. 4, 2014, and titled “CompTech Summary.” It alluded to an April conference with CompTech representatives, which was “abruptly terminated.”
It read in part, “So really, in my opinion, CompTech was a straw corporation for Progressive and CompTech’s alleged purchase of the devices was a ‘sham.’
“Although District employees repeatedly insisted that they did not have to ... bid out services on the GSA, CompTech was not an approved Ncomputing device vendor. ... Obviously, Progressive was acting as both a project manager and a vendor and using CompTech as a pass through entity. ... I suspect that is why Progressive was working with CompTech -- to sidestep the bidding policies by reference to a GSA vendor.
“If someone had been checking, they would have seen that the Ncomputing devices weren’t on CompTech’s GSA schedule,” the letter said.
“There does not appear to be any dispute that CompTech invoiced the District and was paid for installation services that were never performed and, by their own admission, Progressive was the one who purchased and installed the devices,” it says.
Another letter from Jolliffe, also dated Aug. 4, 2014, dealt with Pinnacle/CSG.
“As with CompTech, a careful look at the GSA Schedule reveals that Pinnacle was not an approved vendor for the items procured by the District,” it read in part. “Pinnacle is an approved vendor for professional engineering services, not for supplies or equipment.”
The Telegraph left multiple messages Friday with Pinnacle executive Cory McFarlane, seeking comment, but those calls weren’t returned.
Reached Friday evening, CompTech President Allen Stephen disputed any suggestion of collusion involving his company, Progressive and any Bibb County school employee, but he said he couldn’t remember details of the system’s Ncomputing purchase.
Early in the interview, Stephen said CompTech bought the equipment and the district took ownership of the devices. Progressive Consulting, he said, was responsible for installing and maintaining the devices.
Informed of Jolliffe’s letter, which said a CompTech representative had said during a conference call that CompTech did not buy the devices, Stephen said he hadn’t seen any of the documentation and would have to consult the employees who worked on the Bibb County project, which he planned to do over the weekend.
“There were several people involved in this process, so it’s hard to substantiate,” he said.
Since the order was placed nearly two years ago, he said, he would have to check the company’s invoices to clarify CompTech’s role.
The devices were delivered to the school district, and because of a change in district leadership, the devices were never installed, he said.
Culver, Progressive’s president, declined to say much on the record about the report’s findings Saturday, except to say that he had spoken with CompTech representatives and his attorneys about the matter. There was no collusion, he said, and no investigator ever contacted him about the allegations.
He said his company used the same bidding procedures that the school system has always used for such projects.
“I would have expected an attorney to contact us,” he said Saturday afternoon at his home. “When we put the facts out, it will all become clear. ... There was no collusion.”
Staff writers Phillip Ramati and Maggie Lee contributed to this report. To contact writer Oby Brown, call 744-4396.
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