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The latitude given to district managers to spend public money on companies they go on to work for has sparked new questions at San Diego Unified about how it awards its contracts.
This story has been updated.
Five years ago, Darryl LaGacé arrived at the San Diego Unified School District with a mission.
The new head of IT at the county’s largest school district wanted to overhaul information technology operations, and immediately began a process of revamping San Diego Unified’s aging computer and web networks.
Part of this effort was bringing in a company called Lightspeed Systems.
According to several high-ranking sources at the district, LaGacé was adamant from his first days in San Diego that Lightspeed should become the provider for core elements of the district’s IT needs, including its web-filtering system, which keeps nasty stuff like viruses off the district’s computers.
Over the next four years, LaGacé campaigned aggressively for expanding the district’s relationship with Lightspeed. The company was awarded hundreds of thousands of dollars’ worth of no-bid contracts for web filtering and a new social network for teachers and students. The relationship led to a no-bid $375,000 contract, awarded to Lightspeed last April.
Five months after that contract was approved, LaGacé left the district.
He took a job at Lightspeed Systems, where he’s now the company’s vice president of global business development.
LaGacé isn’t the only San Diego Unified official to leave an influential post at the district only to go and work for a company that won contracts under his tenure.
During his five-year stretch at the district, former Chief of Staff Bernie Rhinerson, who left the district earlier this year, was a self-professed cheerleader for Schoolwires, a Pennsylvania-based K-12 technology company that redesigned the district’s website. Since his retirement this summer, Rhinerson has worked as a paid consultant for Schoolwires, appearing in promotional videos for the company.
The latitude given to managers like LaGacé to spend public money on companies they go on to work for has sparked new questions at San Diego Unified about how it awards its contracts.
A special task force set up in 2012 to analyze ethical district contracting in the wake of a scandal at Sweetwater School District concluded that employees shouldn’t be allowed to go straight to work for companies they have previously worked with at the district. And two school board members said the district’s policies should be looked at anew in the light of LaGacé’s record.
“A director being able to push through sole-source contracts and then immediately work for a company raises serious policy and procedure questions,” said school board member Scott Barnett. “It should be analyzed and possibly changed.”
Neither LaGacé nor officials at Lightspeed responded to numerous requests to be interviewed for this story. Rhinerson did not comment on LeGacé’s employment with Lightspeed, but said it makes sense that public officials will occasionally go to work for firms they’ve been impressed with during their tenure.
“(Schoolwires) provided an excellent product. It was a major improvement that I was very proud of” Rhinerson said.
On the same evening in 2012 that the school board approved Lightspeed’s $375,000 contract, the board quietly passed another item.
At the urging of trustee Richard Barrera, the board ordered then-Superintendent Bill Kowba to set up a special task force to “ensure ethical safeguards in the district’s contracting process.”
The move was prompted by events in nearby Sweetwater, where close relationships between that school board, staff and contractors was receiving scrutiny from local prosecutors.
The task force should look at “preventing staff from any relationships with contractors or potential contractors that could lead to an actual or perceived conflict of interest,” according to the agenda for the meeting.
In May of this year, months after LaGacé had already left to go and work for Lightspeed, the task force produced a memo for the board.
In order to maintain the public’s trust, the memo states, district officials should “observe cooling periods.”
It also says: “Allowing for some time to pass before a former official works on matters related to their prior agency … helps to mitigate concerns about the appearance of a ‘revolving door’ where public offices are sometimes seen to be used for personal or private gain.”
Current and former district officials expressed discomfort that LaGacé went on to work for a company he had worked so hard to integrate into the district’s IT operations.
And they said they’re especially uncomfortable because LaGacé continues to be paid by taxpayers as a consultant to the district.
Since leaving San Diego Unified, LaGacé has earned almost $100,000 as a consultant, said district spokesman Moises Aguirre. He’s being paid an hourly wage of $125 an hour and earned $70,750 for his services in the 2012-2013 and $24,552 so far in 2013-2014, Aguirre said.
LaGacé has primarily been working as an adviser on the Lightspeed products the district purchased when he was running the IT department, Aguirre said.
The ethics task force ultimately concluded that the district can’t legally bar all employees from going to work for companies with which they have had prior relationships.
But Barrera said he plans to push for cooling-off periods in district contracts with senior managers nonetheless.
“This is all the more reason why we do need to have some sort of cooling-off period,” he said. “The federal government has cooling-off periods, so why can’t we?”
It’s hard to pin down the now-years-long relationship between Lightspeed and San Diego Unified.
Little public record exists to document Lightspeed’s work, and we’re still waiting for answers about how and why the company was awarded contracts without having to compete with other firms for the work.
On Wednesday, Aguirre emailed Voice of San Diego copies of all the invoices the district has paid to Lightspeed. They show the company has been paid a total of $652,831.50 since 2009. All of the invoices except the 2012 contract for $375,000 were paid via “purchase orders,” which don’t require individual board approval.
Aguirre said the state Education Code requires contracts over a certain dollar amount to be competitively bid, meaning several companies compete for the chance to win the contract.
That threshold has hovered around $80,000 since 2009. The bills Aguirre provided show Lightspeed’s product cost just less than that threshold in 2009, 2010 and 2011.
But the $375,000 contract was well over the threshold. District officials have not explained why that contract wasn’t competitively bid.
According to school board meeting records, the main justification for the large 2012 contract is that the district was already using Lightspeed’s products. Aguirre said he and his team are now trying to establish why and how the company was chosen in the first place.
“We’re working right now to determine exactly what happened,” he said.
Joy Muehlenbein, a former systems analyst at San Diego Unified who worked under LaGacé, is one of the former district employees who isn’t happy about the former IT director’s swift move to the private sector.
Muehlenbein said she thinks the Lightspeed web-filtering system LaGacé brought to San Diego was the wrong product for the district at the time.
“He was advised at every turn that those products were not what we were looking for but he didn’t care,” Muehlenbein said. “There were a lot of limitations that had to be dealt with.”
Muehlenbein said the introduction of the Lightspeed web-filtering tool was largely a disaster for the district.
The system consistently broke down, she said. It kept crashing, leaving the district with unprotected internet access and sometimes blocking internet access for thousands of staff and students.
Four other high-level current and former district staffers confirmed Muehlenbein’s assessment of Lightspeed’s early performance for San Diego Unified. They all said the existing web-filtering product was working fine, and that they didn’t see the need for a costly new system.
“When it was first installed, the Lightspeed filtering product basically didn’t work,” one senior source with direct knowledge of the issue said about the product. “It replaced a program we had already just replaced for $30,000 and was working just fine. Basically, Lightspeed got to field-test their product at the district’s expense.”
Another source, who did not wish to be identified because of a continuing relationship with the district, said despite the initial problems, San Diego Unified ultimately ended up with better-protected internet access.
The kinks in the software took a year and a half to iron out, but the Lightspeed product eventually worked very well, the source said.
“In 2008 I personally would not have gone with it,” the source said. “But now, having seen what it was capable of as of late 2009, I’d go with it, without a second thought.”
Update: This story has been updated to reflect new information Voice of San Diego received from the school district just after the story originally published.