Jun 9
2020
School contract was failure waiting to happen
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To hear senior staff tell it, the Buffalo school district never should have gone through with a contract awarded to HarpData to provide wi-fi service to students in two low-income neighborhoods.
The firm’s finances were suspect, according to the district’s purchasing director, and the district’s unusual decision to waive a performance bond put the school system in a precarious financial position should the project falter.
There were questions about the propriety of meetings between the vendor and district staff, including the chief technology officer, prior to the project being put out to bid.
And there were doubts whether the project was technically feasible. One local company advised the district it probably wasn’t and declined to bid. A second company, which did bid, expressed doubts.
“We have a $1.3M dollar project that I have doubts our vendor can deliver,” Richard Fanton, the district’s purchasing director, wrote in a Dec. 2, 2019, email to Nathaniel Kuzma, the district’s general counsel, and Geoffrey Pritchard, the chief fiscal officer. “[A]nd even if they do we have an indicator that it may not work … and we have no hedge against either the failure of the vendor or the project.”
Fanton’s objections culminated in a Dec. 4, 2019, memo to Pritchard, which outlined the project timeline, the officials’ shared concerns, and possible corrective measures.
Among the actions Fanton suggested in the memo and in emails to his colleagues: cancel the contract with HarpData and issue a new request for proposals.
“I absolutely think we need to step back, have someone from outside evaluate the technical aspects of the plan and re-bid the whole project WITH the performance bond requirement,” Fanton wrote in a Dec. 2, 2019, email. “I would rather delay this and get it right … than move forward and waste $1.3M.”
Fanton Memo HarpData Contract Concerns (Text)
Not included in Fanton’s memo, but discussed in his email exchanges with Pritchard and Kuzma, was the role Sanjay Gilani, the district’s former chief technology officer, may have played in brokering the project.
Gilani and other district staff met with HarpData to discuss the upcoming project’s design in November and December 2018. Gilani retired from the district in January 2019, just before the project went out to bid, and subsequently became a paid consultant for HarpData.
Kuzma, the district’s attorney, acknowledged those meetings took place. He could not say whether the meetings were improper or might have resulted in HarpData getting an inside track on the bidding.
“However, we would take very seriously any circumstance that could be construed to impart an unfair advantage to a company bidding for school district business,” Kuzma told Investigative Post. “And we will investigate this issue.”
As it turns out, red flags had been flying for months. All these concerns were brought to Superintendent Kriner Cash on Dec. 6, 2019. Cash decided to stick with the project and HarpData, pending the arrival of Gilani’s replacement as chief technology officer.
“We waited for our new CTO (chief technology officer) to come on board and evaluate the project,” Cash said in a statement provided to Investigative Post.
The new CTO, Myra Burden, started in January. That’s the month the project was meant to be complete.
HarpData’s CEO, Ivory Robinson Jr., blamed the project’s delays on the school district and the COVID-19 pandemic. School district officials acknowledged some culpability, but insisted “HarpData’s financial and legal difficulties” played a role, too.
Whatever their cause, the delays shortchanged some 5,500 students and their teachers, struggling to make distance learning work since schools closed their doors in mid-March.
Potential technical shortcomings
Two local companies raised doubts whether the project, as conceived in the RFP, could succeed in connecting that many students.
The first was Rooftop Data. In a Feb. 11, 2019, email to district officials, Nathaniel Byrnes, the company’s chief technology officer, explained why his company chose not to bid on the Connected Communities project:
“I feel compelled to urge the avoidance of the technical implementation this RFP is requesting,” Byrnes wrote. “The overall initiative is a great idea, and to be applauded, but the technical solution you have requested to deliver service inside the home, will not work well enough to be usable.”
Rooftop Data Concerns Connected Communities (Text)
The RFP called for construction of a wireless mesh network: Equipment would be distributed throughout the project areas — on utility poles, on roofs — to boost and relay a wireless signal originating from eight school buildings in two “zones,” one on the East Side and one on the West Side. The result would be a “mesh” of wireless signal laid over each neighborhood, reaching the homes of as many as 5,500 students.
Byrnes wrote Rooftop had consulted with “wireless technology distributors and manufacturers” to ask if their equipment would do what the school district wanted it to do, and those companies “strongly advised not to proceed in this direction.”
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Two vendors told Rooftop they would not participate in a response to the district’s RFP, citing other cities — specifically Philadelphia and Bangor, Maine — “that had started down this road, and ended up re-designing much of their deployment.”
The problem, according to Byrnes, was not so much the equipment that boosts the signal and carries it into homes. It’s the devices the students in those homes use. Those devices “lack sufficient transmit power” to communicate the users’ needs to the network, resulting in an “extremely laggy” user experience.
In addition, Byrnes wrote, wireless mesh networks “do not scale particularly well.” While the initial project would focus on two neighborhoods, boosting signals from eight schools to reach up to 5,500 students, the RFP said bidders should propose a “scalable” solution that could be expanded to cover other neighborhoods.
Rooftop Data was not the only company with concerns. The 34 Group — a firm owned by former Buffalo Bills running back Thurman Thomas — submitted a bid for the Connected Communities project, but with a caveat. The company said it could install the wireless mesh network the district envisioned for $4.9 million, but were “not willing to even consider” taking the job unless the district first embarked on a “proof-of concept” pilot project — which 34 Group proposed to do for $375,000.
“[W]e want to make sure that an outdoor wireless solution would in fact meet the district’s needs and provide enough upload and download speeds within the households of each Zone,” the company wrote. “The only way to do this is to conduct a proof of concept.”
Rooftop Data communicated its reservations about the RFP’s technical parameters to district officials in February 2019. The 34 Group’s concerns were contained in its proposal, read by district officials in April 2019.
HarpData and the RFP
“There are indications that HarpData actively solicited District business prior to the issuance of the RFP,” Fanton wrote in his Dec. 4, 2019, memo to Pritchard, the district’s CFO.
Indeed, HarpData appears to have been angling for a contract with the school district since at least 2017.
Robinson told Investigative Post that HarpData sent the district an unsolicited proposal for a community wireless project in 2017. The district didn’t accept that proposal.
In 2018, Robinson said, HarpData responded to a request for information from the school district, asking for input on the design of a similar project. As a result, Robinson said, he and other HarpData staff met with district staff in November and December of 2018.
“My understanding is that the district might have used some of the requirements from the multiple proposals that we wrote to formulate the RFP,” Robinson told Investigative Post, though he insisted those discussions imparted no advantage to his company in the bidding process that followed.
“We had the same information as everybody else did,” he said.
Government agencies use requests for information, or RFIs, “to learn about the options available to address a particular need.” Neither state procurement law nor school district policy bars companies that respond to RFIs from bidding on the projects that result. Like RFPs, RFIs must be published so any qualified company can take part.
Kuzma, the district’s attorney, said he could find no indication the district issued an RFI for the Connected Communities project.
“We have no record of it,” Kuzma told Investigative Post.
A Freedom of Information request for all documents related to the Connected Communities procurement process yielded no RFI, nor any reference to one.
The pre-RFP meetings between HarpData and district officials sometimes included Gilani, the district’s chief technology officer at the time. They also included a project administrator for the school district, Eric Stockmeyer, who would help score the bids on the Connected Communities project six months later. By that time, Gilani had retired from the district and become a consultant for HarpData.
In email exchanges, district officials expressed concerns about those meetings and the role Gilani played.
Pritchard, the district CFO, noted in a Dec. 2, 2019, email that Gilani “was integral to starting the original RFP process, and certainly close with members of the evaluation team … it is a concern at least with respect to appearances.”
“It certainly would be an issue if we had evidence that members of the evaluation team were working with HARP during the procurement process because they employed the former CTO,” Kuzma replied by email the same day. “If we have evidence of that, we should scrap it and rebid.”
Without that evidence, however, and absent an explicit policy barring vendors and former district employees from working together on district business, Kuzma did not consider Gilani’s employment by HarpData “a fatal issue.”
Robinson would not speak to Gilani’s role as a consultant to HarpData, saying that it was company policy to keep such matters confidential. But he said no past or present school district employees worked on the Connected Communities project for HarpData.
However, “sanjay.gilani@harpdata.com” is copied on a host of emails between the district and HarpData during the contract negotiations in November.
Gilani did not return phone calls seeking comment.
“No hedge” against failure
In a Dec. 3, 2019, email, Fanton expressed his frustration that the terms of the Connected Communities RFP put the district at unusual financial risk:
“[I]n our INFINITE wisdom we EXPLICITLY rejected a Performance Bond for this RFP,” Fanton wrote in an email to Kuzma and Pritchard.
Typically, the school district requires a vendor to post a performance bond to ensure it will fulfill the terms of its contract. If the vendor fails to perform, or if the project doesn’t work, the district may keep the money the vendor put up as recompense.
Often RFPs also require a bid bond, which insures the bidder will take the job if it wins the contract. If the winning bidder opts out, the company forfeits the bond.
When the Connected Communities project was first put out to bid in January 2019, posting a bid bond was required by the RFP. HarpData’s bid on that first RFP was disqualified — deemed “non-responsive,” in the language of municipal procurement — because the company didn’t post a bid bond.
In fact, four of five proposals elicited by the district’s first RFP were disqualified.
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William Russo, the district’s director of instructional technology — who took part in the pre-RFP meetings with HarpData staff — wrote on Feb. 28, 2019, that he “would prefer not to proceed” with the results of the first RFP, noting that two bids were disqualified for failure to post a bond, two “contained gross technical inadequacies,” and the last “did not rise to the scope” of the district’s ambitions for the project.
As a result, the first Connected Communities RFP was scrapped and a new one quickly reissued. The technical requirements did not change between the two RFPs. The only change related to the bonding requirements: The requirement to post a performance bond was removed.
Fanton could not determine the reasoning for that change, or who made it, because, he wrote, “unfortunately, no one currently working for the District was involved in the decision.”
Subsequently, HarpData’s $1.3 million bid succeeded against two other bidders: 34 Group, which bid $4.9 million but only wanted the project if it could test the concept first; and Scientel, a national company that bid $4 million. Neither company responded to requests for comment.
Performance bonds are sometimes waived for contractors with which the district has worked previously. Connected Communities is HarpData’s first and only contract with Buffalo Public Schools.
“So we have a vendor with NO history with the district … and the RFP they won explicitly removes one of our primary risk management hedges,” Fanton wrote.
HarpData’s finances
“I have concerns about the fiscal stability of the vendor,” Fanton wrote as part of that same December 2019 email exchange, which included Kuzma, the general counsel, and Pritchard, the CFO, as well as Anibal Soler, a deputy superintendent who helped identify existing grant funding that could be steered to the Connected Communities project.
“I’ve got some real concerns about their cash flow; I can’t quantify this, but they are giving me a gut feeling I’m really not liking,” Fanton wrote.
Contract Concerns Thread (Text)
Fanton became the district’s director of purchasing in June 2019, after Connected Communities had been bid out.
The first alarm bell, Fanton wrote, was “the effective ‘pre-payment’ they requested in the rejected contract draft.”
The contract went through several iterations before it was finalized in early November 2019. One sticking point was HarpData’s wish to be paid for some services before they’d been completed. Fanton rejected that request.
Later, Fanton encountered what he took as “a second indication” the company had cash-flow issues: After the contract was signed, HarpData asked to bill the district on a “Net 15” basis — that is, payment due within 15 days of an invoice being issued. More typical for government contracts are periods of 30, 60, or even 90 days. Fanton rejected that change in payment terms.
Cash-flow problems can affect a company’s ability to fulfill a contract, especially when there’s a substantial upfront cost for hardware and equipment that must be borne by the company. In the case of Connected Communities, the upfront hardware costs exceeded $400,000.
Fanton worried HarpData lacked the cash or credit “to float our contract with them.”
Fanton’s misgivings were shared by Kuzma, the district’s general counsel. Kuzma told Investigative Post the district had been instructed that payments due HarpData were to be sent directly to Oxygen Financial, a “factoring” firm that provides what amount to payday loans to businesses with cash-flow problems.
The district subsequently received an order from a New York State Supreme Court judge, saying that payments due HarpData were to be sent to a law firm to hold in escrow. A former business partner, Core BTS, won an $810,000 judgment against HarpData and Robinson personally in July 2019 — the same week the Board of Education awarded the Connected Communities contract — and secured a lien against the company’s accounts receivable. That lien has since been released, in part.
Then, Kaleida Health filed a lawsuit against HarpData in April of this year seeking the return of $365,000 the health-care company paid for work it alleges was never done.
Asked about his cash-flow situation in early April, Robinson told Investigative Post, “It’s good. We’re profitable.”
However, in the first week of March, HarpData failed to make payroll on time.
On March 10, Robinson called an all-hands meeting of HarpData staff to apologize and explain the delayed paychecks. Investigative Post acquired a recording of that meeting.
Robinson told his staff he was waiting on “a half million dollars” from the school district. Upon receipt of that payment, he said, everyone — including himself — would be paid.
He told staff the payment had been “lost in the mail.” Then, before it could be reissued, he said, a “rival company that’s been trying to destroy us from the beginning” put a lien on the payment to satisfy a judgment the rival company won in an ongoing dispute.
Almost canceled
Robinson started HarpData in 2016 and, like many CEOs, has cultivated political connections that are potentially beneficial to his company.
Robinson gave $1,100 to Assemblywoman Crystal Peoples-Stokes’s campaign committee in 2018. HarpData’s chief operating officer, Erica Tyler, donated $1,000 to Masten District Council Member Ulysees Wingo’s campaign account in 2019. That same year, HarpData gave $1,150 to Grassroots, the political club with which Wingo, Peoples-Stokes and Buffalo Mayor Byron Brown are associated.
Brown gave HarpData a shout-out in his 2020 State of the City speech in January, naming the company as a partner in Brown’s vision to build a “smart city” guided by data and connectivity.
Last November, when the district and HarpData were hammering out a final contract, Buffalo Board of Education President Sharon Belton-Cottman interceded at least twice on behalf of HarpData.
Belton-Cottman asked district officials to expedite contract negotiations and the approval of a purchase order, writing that Robinson, new to working with the school district, was “in a haze regarding the next steps in the process.”
Robinson Belton Cottman Email (Text)
There is no evidence HarpData or any of its employees donated to Belton-Cottman’s political campaigns. Belton-Cottman did not respond to request for comment.
Despite such assistance, district officials came close to canceling the contract with HarpData after Fanton’s Dec. 4 memo to Pritchard.
The same day Fanton’s memo went out, Anibal Soler, the associate superintendent who helped identify funding for the project, recommended putting the project on hold until the district’s new chief technology officer came on board in January.
If HarpData objected to the hold, Soler wrote, “we tell them we will cancel [the] contract and put [it] back out to bid but that we need to protect the district’s investment.”
“We can hold off or cancel the contract. I support either decision from a legal perspective,” Kuzma replied to Soler the next day.
However, Kuzma added, the situation must first be discussed with Cash, the superintendent.
“Since this is likely to come back to him, he needs to be aware and on board,” Kuzma wrote.
Soler volunteered to add the subject to the agenda of a Dec. 6 one-on-one meeting with Cash. On Dec. 8, Darren Brown-Hall, the superintendent’s chief of staff, wrote that Cash decided in that meeting “we can continue with Harp Data.”
Canceling Contract Thread (Text)
In response to Investigative Post’s inquiries in April, Cash pushed HarpData for an action plan that would get site work moving.
“After discussing the project with HarpData, the project has begun and we expect them to perform,” Cash told Investigative Post.
Kuzma, the district’s attorney, sought assurances the company’s legal and financial entanglements wouldn’t further delay the project’s completion.
“We expect the company will inform us if their circumstances change such that they are unable to perform,” he said.
According to an email exchange between Stockmeyer, the district’s project administrator, and a grant coordinator, much of the state grant funding directed to the Connected Communities project must be spent by August 31 — not just committed, but spent — or it will be gone.
