Alabama has reopened the bidding for a contract to connect the state’s public schools to the internet amid complaints that the original process was unfair.
“There was just too much confusion,” said Ted Hosp, Gov. Don Siegelman’s legal adviser.
The apparent front-runner for the contract, valued at about $30 million over three years, was Trillion Digital Communications of Bessemer.
However, Trillion’s competitors and Republican legislators say the company had an unfair advantage because it had been chosen by the Democratic Siegelman administration to inventory computers in Alabama public schools, according to reports in the Mobile Register and the Birmingham News.
Like Trillion, the Siegelman administration denies any attempt to rig the bids.
“If the fix were in, the governor would not have canceled the bid,” Hosp told the Register in a story May 26. “Once the administration became aware of the confusion surrounding the bid process, that we canceled it is a very strong statement for the good faith of the administration.”
The three-person Public School and College Authority awarded Trillion a $789,998 contract without bidding in May 2000. The assessment was conducted to develop spending plans for internet connections and computer purchases.
Siegelman, state school Superintendent Ed Richardson, and state Finance Director Henry Mabry, a Siegelman appointee, serve on the authority. Richardson said he was not involved in the decision.
The project is designed to use money from the federal eRate program, which gives the biggest discounts on telecommunications services to the poorest school systems.
Hosp and Siegelman’s chief of staff, Paul Hamrick, said the administration wanted to implement the program quickly to upgrade schools.
Hamrick told the News in a story May 27 that Trillion approached the administration about putting the eRate money to use statewide.
Trillion’s web site says the company provides internet equipment and service to 43 percent of Alabama’s public schools, including pending contracts.
The state solicited bids for getting schools online in December. The low bid of $26 million a year came from Contact Network. Trillion’s bid was $31 million.
The committee that reviewed the bids in January said Trillion met more of the bid specifications, but left the final decision to the Siegelman administration.
On Feb. 6, the state canceled the contract because of procedural questions and a shortage of matching state money for the federal program, Hosp said.
Rick Rushing, a Trillion founder, maintained his company didn’t have an unfair advantage.
“Our company isn’t Republican or Democrat,” Rushing told the Register. “Our company is in the business of providing services to schools.”
Rushing said that if any of Trillion’s survey information was used in making bid specifications, it should have been made available to all bidders.
It wasn’t, according to competitors. Contact Network said its request to study the Trillion inventory survey was turned down.
“We’re not aware of any requests,” Hosp said. “I can’t imagine why they would be denied.”
Also, some of the required paperwork for bidders reportedly was missing from the web site they were told to use, causing at least three of the six bidders to be disallowed. They were later restored.
Republican legislators claimed the contract was another example of Siegelman awarding unbid contracts to friends.
“Something of this size should have been bid,” said Rep. Chris Pringle, R-Mobile.
Rick Dent, who helped run Siegelman’s 1998 election campaign, is one of Trillion’s consultants. State Sen. Roger Bedford, D-Russellville, a Siegelman ally, is one of its attorneys.
Dent and Bedford said they did not lobby for Trillion to get the contract. Dent did defend the choice.
“They are a homegrown Alabama company,” he said. “And who better to connect the other 60 percent of schools than the company that’s already servicing the first 40 percent?”
Pringle has an indirect connection to one of the other five bidders, a group led by Southern Light LLC of Mobile. His wife, Gabrielle Reeves, is a lawyer at a Mobile firm where Bill Daniels also practices. Bill Daniels is the brother of Eric Daniels, Southern Light’s vice president for business development.
Pringle told the Register that he discovered the connection long after he became suspicious of Trillion, and it hasn’t influenced him.
Trillion was founded in 1997 as Herring & Associates Consulting Service. Rushing, his father Richard Rushing, Sr., and Harry Slaughter took over, transforming it into Trillion, a name designed to convey the unlimited opportunities of the internet, the Register reported.
Since the eRate program began, Trillion has collected more than $7.1 million in federal funds, according to Funds For Learning, an eRate consulting firm. Last year, Trillion was the second-largest recipient of eRate funds for internet service in the country, behind Nashville-based Education Networks of America.
According to a proposal sent out by two Connecticut investment banks to raise expansion capital for Trillion, the company had $2.8 million in revenues and $490,000 in profits before taxes, interest, and depreciation in 1999.
Gov. Don Siegelman
Trillion Digital Communications
Southern Light LLC