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Contracts and transparency in Minneapolis Public Schools
While this investigation began with the Don Allen contract, the bigger issue is how the Minneapolis Public Schools contract system works. How does MPS decide where public money should be spent? How does it choose the best contractor for the job? How do individuals and organizations in the community find out about contract opportunities? Who makes the contract decisions for MPS? How much information and oversight does the Board of Education have?
For first story in this two-part series, see Strange bedfellows: Minneapolis Public Schools pays critic to do PR
While the TC Daily Planet has been seeking answers to these questions for months, MPS has made only late and incomplete responses to requests for information under the Minnesota Government Data Practices Act. In interviews and phone calls, district officials have given confusing and sometimes contradictory accounts of how the contract system worked in the past, and have said, in effect, that the past doesn't matter and that a new system is now in place. According to Steve Liss, Chief of Policy and Operations, MPS has been rolling out a new system for approving contracts, which will take full effect in the fall of 2011.
How should contracts be handled?
Former school board member Chris Stewart and two sources from within the district who spoke on the condition of anonymity, suggested that there has not been a clear contract policy.
“If you apply for a job at Hennepin County,” Stewart said. “There’s a scoring system. You get points for meeting criteria. There’s a formula. The top ten candidates are brought in, the top five are interviewed. If you get that job, everybody knows why you got that job. The school district doesn’t have that. I saw more people than I would have liked get paid for other than the work itself.”
MPS gives out contracts where there is “absolutely no bidding,” Stewart said. “Those are the ones that caught my eye. The school district is a public institution. Should be held to a standard that things be fair.”
Minnesota laws seem to agree. State statutes provide that school districts making contracts "for work or labor" must go through a formal bidding process for any contracts in excess of $100,000. For contracts for lesser amounts, "The board may authorize its superintendent or business manager to lease, purchase, and contract for goods and services within the budget as approved by the board."
Minneapolis school board member Alberto Monserrate doesn't feel that the school board should be a decision-maker in terms of contracts, but rather more of an oversight board. "You don't want micromanaging from a part-time board," he said. "We rely heavily on staff to give us recommendations."
School Board member Jill Davis said that the expectation is that by the time contracts are presented to the board for approval, they have already gone "through a vetting process."
The "new" MPS contract system
Under the new system, as described by Liss, the school board is only responsible for approving contracts over $100,000, or building contracts for over $500,000. Previously, they needed to approve contracts over $5,000. These were typically included in each month's consent agenda, which the district staff presents to the board for approval without discussion.
Under the new system, the managers of the various departments will be responsible for seeking RFPs for any contract over $50,000. Previously, the $50,000 RFP rule was a “loosely enforced policy,” Liss said. “Now the departments have been trained.”
According to Liss, each department may choose to seek multiple quotes or do a full RFP for contracts under $50,000, but there is no written policy requiring them to do so. The new training manual requires an RFP and advertising process for contracts for services in excess of $50,000.
In a June 28 email, MPS said that its contract and bidding procedures could be viewed on the site where all policies are publicly available. That site has policies for bidding procedures and for evaluating bids. The most recent published revision of the bidding procedures was in August 2009. The most recent published revision to the policy for evaluating bids was in September 2010.
The policies set out on the website have one gigantic loophole: They apply to any "contract for work or labor except as to professional services ..." [emphasis added]. That could leave out public relations contracts and consulting contracts, meaning that they would be ungoverned by MPS policies. Of course, the state law still requires a formal bidding process for contracts over $100,000.
Over the last few months, board member Jill Davis said, the administration has "gotten tighter on the contract process, documenting more about what the process is to be approved." Davis said the administration is looking at 3-5 categories in its vetting process, including meeting diversity goals and fitting into the budget constraints.
In the past, there had been some complaints, Davis said. When asked what complaints she was referring to, she said "we hear it here and there - it's mostly hearsay...there haven't been major complaints."
When asked about Stewart's complaints about Don Allen's contract, Davis responded:
"I don’t even want to go there. We’ve made the changes we had to."
Transparency: Definitely not working
School board members who have talked to us all agree that they want to increase transparency within the district.
That's good, because there are real problems with transparency now.
The Minnesota Government Data Practices Act makes most government communications public information and requires government officials to produce them on request. Our first request for information went to MPS on February 22. Three weeks later, we got a response, which interpreted our request in strangely broad and overreaching terms, then said that MPS couldn't respond because our request was too broad, and warned that "Your request, on its face, could yield costs of up to thousands of dollars," which we would be required to pay.
We responded within five days, making the scope of our request narrower and much more specific. And then we waited. And waited.
Eventually, slowly, and only after numerous written requests, several in-person interviews with high-level MPS staff, and scores of emails back and forth, we received some information.
We still did not receive all of the documents we requested under the Minnesota Government Data Practices Act. For example, we still do not have copies of the contracts with the Urban League or with Don Allen. Many of the emails forwarded to us in "compliance" with the Data Practices Act request were one-liners referring to attachments, but we didn't get the attachments.
Is the MPS contract system working or is it broken?
That's hard to tell.
The Don Allen contract was pretty clearly a bad idea, from start to finish. Is that the fault of the contracting system, or is that the fault of bad judgment on the part of MPS staff? What staff member's responsibility was it to review this contract before it was signed? That remains unclear.
The consultant contracts that came in under $50,000 and then were renewed multiple times with total amounts eventually exceeding $100,000 seem to skate around the edges of compliance. And a $100,000-plus contract that never went through a request for proposal process just looks wrong.
The new rules are not really very new. They would not affect the $15,000 Don Allen contract or the single-source contracts that came in under $50,000 and then got renewed several times for amounts under $50,000. The main change, under the new policy, is that these contracts would not need board approval, so the board would not hear about them at all. In effect, the new rules mean less transparency, not more.
There are two kinds of contract processes involved - public and non-public. In the public, transparent contract process, MPS issues requests for proposals and receives proposals, bids, or quotes. Then they decide among the various proposals.
The non-public process involves ... well, that's hard to say, just because it's not public. Apparently, it sometimes involves someone on MPS staff offering someone a contract do do needed work. At other times, it involves someone outside MPS deciding that MPS needs their services and offering to perform those services for a price. Is there any formal MPS process for vetting these non-public contracts or for multiple layers of review? That's a question without an answer at this point.
There are also two kinds of oversight involved - internal staff review and board review. There's a good argument that board review of lots of small contracts is not needed, and that, in fact, having lots of small contracts on the consent agenda at every meeting means less oversight. While Chris Stewart objected to the Don Allen contract, it's rare that a board member would question these contracts - usually, and understandably, they rely on staff recommendations.
Many questions remain. Among the most important:
- What is an appropriate process for internal review of "non-public" contracting, and what kind of process is in place now?
- How can the contracting process be made more transparent, and opened to people who may not have connections with MPS?
- Is $50,000 the right level for requiring public notice and requests for proposals for contracts?
© 2011 Sheila Regan