WCC’s administration outsourced the College’s IT Department over the summer. By itself, the loss of 31 full-time jobs is bad. The administration gave the $26M contract for managed IT services to an out-of-state firm, and that is also bad. The administration never solicited bids for the contract that eliminated 31 jobs and sent $26M out of state. That displays a lack of integrity.
But what is absolutely unforgivable is the Board of Trustees’ willingness to violate its own policy on purchasing. Board Policy 6050 clearly states the process for purchasing for the College.
Policy 6050: The Rule
The Purchasing Agent acting in the best interests of the College shall be required to:
- use his/her best judgment to acquire goods and services costing less than $3,000;
- request at least three bona fide quotations for purchases costing more than $3,000 but not greater than $10,000; and
- request at least three bona fide written sealed bids for purchases costing $10,000 or more.
The Purchasing Agent will award the purchase of goods and services to the lowest responsible bidder meeting specifications of quality, delivery, and service. Purchases shall be made from vendors within Washtenaw County where the price is equal to or lower than vendors outside the County, if quality is equal in the judgment of the Purchasing Agent.
The Board requires the College Purchasing Agent to solicit a minimum of three sealed bids for purchases of goods and services that exceed $10,000.
So, every policy has exceptions, and this policy is no exception.
Policy 6050: The Exception
The President or Vice President of Administration and Finance may make exceptions for contractual commitment dependent upon the circumstance involved (such as utilities and emergency repairs). Under very unusual circumstances or if a unique product or service may be obtained from only one source, the Vice President of Administration and Finance after consultation with the President, may waive certain sections of this policy.
This was not an emergency, so the administration relied on the justification that managed IT services are somehow a unique product or service. In fact, an Ellucian executive wrote a ridiculously self-serving, 17-point memo that purported to come from WCC CFO Bill Johnson justifying the “sole-source” nature of Ellucian’s services. It is clearly fake because WCC never had an active bid process to suspend.
Capitalism means always having less costly alternatives
There is nothing unique about managed IT services. In fact, managed services are expected to grow from $180B in 2018 to $282B by 2023. Ellucian clearly isn’t the only managed service provider out there.
(Before going farther, I would be remiss if I didn’t mention that the College spent less on maintaining an in-house IT staff than it is now paying Ellucian.)
The administration justified going with a no-bid contract because the College uses the Banner student information system (owned by Ellucian) – so no one else could possibly provide managed services for Banner, right?
Well… about that…
The truly sad part about the last provider – Dynamic Campus – is that a Dynamic Campus rep showed up in person at the public comment session and asked the Board of Trustees for the opportunity to bid on the work. The Dynamic Campus CEO also submitted a letter, which the Trustees ignored. Outsourcing the IT department was never about getting the best possible deal for WCC. It was always about giving a good deal to Ellucian.
Which brings me back to Policy 6050 – the policy that requires sealed bids for purchases for goods and services in excess of $10,000. Five of seven members of the WCC Board of Trustees willfully and deliberately ignored Policy 6050. The result of this was the loss of 31 local jobs, $26.2M in lost local tax spending, and a $2.65M bill to pay off the wrongfully terminated employees.
The $26M figure hangs heavy, considering that the College borrowed half of that sum over 20 years to build the Health and Fitness Center.
The hardest questions have the fewest answers
The WCC Trustees are asking Washtenaw County taxpayers to reauthorize a millage on March 10, 2020 to generate $175M -$200M in tax revenues for the College over its 10-year lifetime. On one hand, few people in Washtenaw County have not been positively impacted by WCC. Why shouldn’t we invest in our own future?
On the other hand, the public does not benefit from no-bid contracts. Ever. It just looks bad when elected officials sign off on multi-million dollar no-bid contracts. It looks bad when college administrators work closely with vendors to game a multi-million dollar public purchase. That raises the question of integrity. The College bids out literally all other purchases. Why was this $26M contract the exception to the rule?
The March 10, 2020 millage is now a question of integrity.
Photo Credit: UCFFool, via Flickr.com