HISD Trips Once Again on a $35 Million Shopping Spree

Google the words "HISD" or "Houston ISD" coupled with the words "procurement" and "audit" and you won't just find stories from last week. History has a tendency to repeat certain moments and not always in a glorious way.

So it was sad news last week that once again HISD has apparently tripped over itself in its procurement process, triggering an audit that found its new procedures as troubling as its old, albeit with some new wrinkles.

The district paid high dollar for contracts when there were lower bids; committee members can't come up with documentation to show how they reached their decisions and they set a new land-speed record for racing through 21 proposals that involve spending a huge amount of taxpayer money.

As a result, the audit investigators recommended that all this bundle of contracts approved by the board last year be re-bid. That's except for the two contracts that have already been executed and they recommend HISD's legal department take a look at them.

In 2012, concerns were raised about the way board members were interacting with vendors after a Texas Watchdog report said that trustee Paula Harris had voted on contracts totaling $28 million for a company run by a close friend. Also allegations were made that former board member Larry Marshall helped out his friends with contracts.

On December 2, 2014, the procurement committee members speed-read through 1,800 documents in just one day before recommending $35 million in contracts, dropped price as a consideration from 45 percent to only 30 percent of its weighted evaluation, and either shredded the documents (they shouldn't have destroyed) showing their work or now can't find the documents. Or were there ever any work documents? Maybe they just don't have any work to show.

On December 11, board members were presented with the package and told to vote. The only trustee to vote against them at the time, Juliet Stipeche, says she tried to argue against taking up the issue at that meeting but was told by an HISD administrator that an immediate vote was essential. (Rhonda Skillern-Jones was absent and Harris abstained because one of her BFFs is the head of Westco Ventures, one of the companies that got contracts.)

How many times have HISD trustees cratered to this special form of crisis management in the last five or so years? Vote now or kids won't have X. Take action even though you haven't had time to read through all the documents or our schools won't be able to have Y. The sky-is-falling approach little serves the district's children or taxpayers.

But before we hand out the Baa-Baa-Sheep-of-the-Year Award to the Houston school board, we all have to recognize that these are elected volunteers who have other lives, other jobs and generally don't have time to read all of the minutia; that's why they depend on the administration's employees, trusting them to take the fine-tooth-comb approach especially to financial matters.

But in this latest round, it appears a detailed approach was not implemented. At a December board meeting, a number of contractors came before the board and the public to complain that proper procedures had not been followed in awarding the contracts.

Sour grapes was the immediate response, but no, there was more to it than that, Stipeche says. And so, an audit was undertaken and found that raising the qualitative (can we say "subjective") criteria to 70 percent of the evaluations "resulted in firms being recommended with pricing adjustment factors which were significantly higher than other firms which were not recommended. ... They did not document the rational for the scoring.

"Because the qualitative evaluation was not documented, the only way to validate the qualitative scores would be to re-perform the evaluations," the audit said.

In an audit committee meeting last week, Gilberto Carles, the district's general manager of procurement said procurement committee work documents had been shredded. Stipeche, an attorney who had previously served on the audit committee but was pulled away from it last year while she was president of the school board, says "You just can't say these are personal notes and throw them away."

Then the story from HISD became that the notes were just missing and couldn't be found.

References were another sore point, Stipeche says. At the audit committee meeting she asked Carles for the references and after a sheet of names was finally produced, she asked that one question too far: "Did you call them?"

"No," she was told with a follow-up explanation that the district has worked with several of the firms already and knew them. "Didn't that give those companies an unfair advantage?" Stipeche wants to know.

The district has acknowledged that they need to do a re-do. Stipeche says this latest incident shows the need for further staff training. "We've been talking about these things for five years."

Whether we're talking about appearances or actualities, HISD, despite all its pledges to be transparent and aboveboard in its procurement procedures, looks pretty murky these days. And this latest boondoggle makes it even more difficult than ever to "trust us."

Perhaps the better approach would be to adopt the old adage: "Trust but verify."


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