Was a $6 million Buffalo schools technology contract improper?

Questions of favoritism arise from bidder
Posted at 9:36 AM, May 18, 2017
and last updated 2017-05-18 18:39:41-04

The Buffalo School Board scuttled a controversial $6 million technology contract Wednesday after questions arose about the fairness of the bidding process.

Board members were expected to approve the deal with Alternative Information Systems of Buffalo to upgrade technology in all 70 district buildings but voted against it after a losing bidder -- Advance 2000 of Amherst -- questioned whether favoritism played a role.

Advance 2000 was originally the low-bidder for the contract at $6.5 million, but instead of awarding the job to that company, the district used a complicated bidding procedure called “best and final offer” to ask for a second round of bids.

Alternative Information Systems then lowered its bid by $800,000 -- making it the lowest bidder of the second round -- and Advance 2000 refused to lower its bid because it charged that the process was rigged.

“I think that the way it's done has been highly irregular,” said school board member Larry Quinn. “It's a very strange way to do things.”

Advance 2000 claims the district favored AIS because of a cozy relationship. A 7 Eyewitness News review of district data shows AIS received 30 contracts worth millions of dollars in the last five years. The company at one point hired the husband of now-former school board member Mary Ruth Kapsiak, though company officials say that did not play a role in securing any contracts.

“It's beyond cozy,” Jad Maouad of Advance 2000 said of his competitor’s relationship with the district.

7 Eyewitness News legal analyst Florina Altshiler said that while the district may not have broken the law, there are some legitimate questions to be asked about how it does business.

“It's supposed to be done in a way that protects the integrity of the process, where no one bidder has any advantage over the other bidders,” Altshiler said. “If they did as alleged share the bidding prices, that would be surprising and not the normal process. They should not be sharing the bids that have come in.”

Daniel Conley of AIS, whose company was set to receive the $6 million job, said he sees nothing wrong with that.

“I call that good government,” Conley said. “I call that the Buffalo board getting the bang for their buck.”

Maouad responded, “Every single IT company would love to bid on this but once they read it, they know it's written for a certain manufacturer and a certain company.”

Conley said Advance 2000 is just being a sore loser.

“It's always a matter of sour grapes. Somebody did something that wasn't fair. Well unfortunately, everyone has been fair and again, they lost,” he said.

The school district in a statement said "all legal requirements were followed" and "any contention that this process is in any way improper is completely unfounded.”

Board Member Barbara Seals Nevergold said she was confident that district staff “followed a fair, open, transparent, honest procedure...that their behavior was above reproach.”

Maouad said the ruckus he has caused probably won't gain him any friends in City Hall or any future contracts with the district, but he’s OK with that.

“I don't like to be on TV and we have business to lose from Buffalo schools,” Maouad said. “And I'm putting all that in jeopardy to do what's right.”

Roughly 85 percent of the technology costs would have been funded by the federal government and Nevergold said the district can re-apply for that funding next year. Quinn said he wants the process ironed out by then, and Maouad said he plans to file a complaint with the FBI.