Dallas ISD Hit With $40-Million Breach of Contract Claim by Classroom-Tech Vendor

digitalclassroom.jpg
And speaking of the Dallas Independent School District ...

It's just been sued over a $40-million technology contract that the district awarded to Lewisville-based Delcom Group in May and yanked in June, when the board gave the contract to one of the company's competitors. At stake: the district's digital classroom initiative, which involves making classrooms wireless, interactive and portable. That $40 million is funded out of bond money (75 percent) and the general fund.

The reason the contract was canceled, according to the complaint filed yesterday in Dallas County District Court: In early May, before the contract was even awarded, an unknown John Doe "anonymously placed a calculated and subversive telephone call to at least one DISD trustee [that] caused the destruction of eight years of good will developed between Delcom and the DISD."

Per the complaint, the informant told the trustee that Delcom was employing a convicted felon. Delcom doesn't dispute that: It says in the suit that in 1995, the current director of sales who was then "a young outdoorsman" accepted some fishing equipment stolen off a UPS truck by friends who worked for UPS -- "a single, cursory and regretful decision." Since the $1,000 worth of equipment crossed state lines, the guy was popped with a federal felony, for which he had to make full restitution and received three years' since-served probation. Far as Delcom's concerned, the man's not an owner of Delcom, and that was a long time ago, and Delcom's been providing tech equipment and services to DISD for eight years already, so ... end of story.

Not so much.

On June 20, Gary Kerbow, the district's director of purchasing, sent Delcom's director of business operations Joe Mark Phillips a letter saying that Delcom "has not been forthright in reporting a Felony conviction for one of its operators ... [and] for this reason Dallas ISD has elected to end contract negotiations with Delcom."

According to Delcom, the district has opted to go with a Houston-based competitor, Prime Systems, whose proposal ranked second among prospective vendors. The complaint argues that "Prime is incorporating Delcom's propriety design solution," which, of course, Delcom says will destroy its competitive advantage in the marketplace. According to Delcom, it serves most of the major districts in the state.

The lawsuit claims this isn't the first time the employees' past has come back to "haunt" the company. Delcom says that a former Micro Systems employee once sent "a batch of anonymous letters to school districts across North Texas" over a different tech contract. Delcom now wants to find out "whether Defendant John Doe and the previous informant are one and the same." That Micro Systems employee was never named.

Michael Hurst, who's repping Delcom, tells Unfair Park this morning that "all evidence points" to the trustee being informed of the employee's past in mid-May -- before the contract was awarded on May 27. After the contract was awarded, Hurst says, "Delcom was out there working with DISD providing them with trade secrets, which included system designs, vendors, schematics" and so forth.

"Once DISD got everything that comprised the digital classroom design, Delcom never heard from DISD till the termination letter," he says, which came June 20. Two days later, Prime got the contract.

A message has been left for DISD spokesman Jon Dahlander, who probably hasn't even seen the suit since it was filed only yesterday. (Update: Dahlander says the district does not comment on pending litigation.) The complaint is below.08-04-11 Delcom v. DISD File-Stamped
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21 comments
nothingnew
nothingnew

DELCOM is all about sour grapes. They should also investigate their work in the south Texas valley, Laredo etc.Sean Delph of Delcom did a lot of work with Frank Wong (MSE & more) & affiliates of Frank Wong. As well as Sherrard Thomas and Garrett Goeters of HP and Compaq. The FBI & other agencies should investigate in a very detailed manner. Turn everything of Sean's upside down!  PRIME should be taken off, eliminated AND a national LARGE vendor, reseller should be utilized.

Kuei
Kuei

I'm guessing this will cost the school district ALOT more than $40million now.

Montgomery_Sinclair
Montgomery_Sinclair

Believe me, there is nothing proprietary about the descriptions of the a/v systems in these k-12 classrooms. It is just standard a/v technology. A quick look at Delcom's website shows they aren't a REAL a/v company, just boilerplate jargon and no people. They are set up for the sole purpose of overselling a/v equipment to k-12 schools, since these folks aren't sophisticated enough (or prevented by district policy) to know better. Ask Delcom how many Universities they "support". That's right, none (no private ones anyway).

Companies like this only exist to make money at the public's expense.

Urbandweller
Urbandweller

Lol. Who in the hell is "John Doe". In Dallas, I can only imagine. If Delcom does not have proof; really hard evidence that John Doe disrupted her contract with DISD, then she can't do much. Lol. If she don't know where John Doe lives to properly serve him/her..probably him, then she is in for a long costly battle. Just follow the money, campaign contributions, etc..and she may come up with something other than being pissed at John Doe for having better political contacts. Maybe her contacts are gone, leaving her vunerable to the change in leadership. This one is obvious, I don't have to say.   Dallas is a trip. The agency/local government intertwine in Dallas is unbelievable! As Foreman stated, the kids loose on this one, again.

Joyce Foreman
Joyce Foreman

The sad thing about this whole situation is that the children in the classrooms without technology continue to suffer from the lack of technology access.  The new schools do not have that problem,but the children  in older buildings are stil arel not getting the same educational opportunity as the children in the new schools.  DISD when are you going to get this technology issues fixed?  No more excuses we need it fixed ASAP.

Michael MacNaughton
Michael MacNaughton

47. The following morning, June 23, Jack Elrod, General Counsel for DISD, responded that DISD would be in contact with counsel for Delcom the week of July II-two weeks later-because the District was closing for summer break. Mr. Elrod gave his assurances that "nothing will happen during the summer break" in regards to other vendors. 

48. Clearly that had not been the case, for on this very same day Prime was contacting manufacturers in order to move forward on the Digital Classrooms project. 

49. On Delcom's end, two silent weeks passed, and July 11 came and went with no word from DISD. After repeated calls and emails to Mr. Elrod, counsel for Delcom was finally informed on the afternoon of July 12 that Mr. Elrod was handing off the matter to DISD's outside counsel, and therefore Mr. Elrod would not be speaking to counsel for Delcom regarding this matter. 

DISD Legal is useless. In 2009-2010 DISD spent more than double, $5.95M, what Houston ISD spent, $2.8M, for legal services.  Why do we even have a legal department if they continually toss the potato to outside counsel?  

http://www.budgetreview.org/po...

Its so sad
Its so sad

This is so discouraging, I don't even know what to say. We have a federal grant to improve technology in the classroom, and the district finds a way to screw that up too!

Still waiting on my new laptop promised last December.

Paul
Paul

I'm shocked ... I'm shocked ... there are ex-cons working for DISD! ... What's next, incompetent double dealing pocket lining DISD employees?  Oh my word what is this world coming to?

If DISD were Catholic and went to confession it would go something like this:

"Bless me Father for I have sinned, it has been 4 months since my last corruption scandal ..."

Stu
Stu

Does Willis Johnson like digital classrooms? 

Montemalone
Montemalone

How long does someone have to pay the price for a mistake? I know, a crime's a crime, unless you're a celebrity or CEO, or both.

plfarmer
plfarmer

I have my guess on trustee also.As DISD falls further behind in tech, do we have a public servent once again getting monetary gain?Let's bring back the Roman sentence for public corruption(tie the felon in a cloth bag with a wildcat and throw them in the Tiber.)I suggest a feral pig, Farmers Branch trashbag and the standing water.

Diane Birdwell
Diane Birdwell

So they are suing for our tax dollars, and we have to defend it with our tax dollars....

And I cannot wait to hear who the trustee is...... I have my bets..... 

Cliffhanger
Cliffhanger

So Delcom hires competent ex-felons, and DISD hires incompetent ones.  Clearly, DISD fired them in snit  of professional jealousy.

DISD Teacher
DISD Teacher

Sigh.We need the FBI to get involved and clean out the rats' nests of corruption that may extend even up to the school board.

contractor guy
contractor guy

You have to look at the competence of Mr. Kerbow and the Construction Management Division of DISD. To give confidential material and trade secrets from one contractor to another is just unbelievable. If that can be proved in court after DISD pays a big settlement to Delcom they should fire the entire Purchasing and Construction Management Division of DISD. If the School Board approved giving the contract to Prime having known that Delcom came forward with the information regarding the employee with the criminal record, they all should be fired as well.  With the budget woes facing DISD they can ill afford to lose one penny, much less 40 million dollars.

gabbahey
gabbahey

Sounds like sour grapes from a vendor who got outbid. It would be safe to guess that this isn't the first time this has happened in DISD.

I'd sue the shit out of DISD, and force them to roll over on their informant who is apparently in bed with a trustee.

Notfromhouston
Notfromhouston

Interesting comments.  I searched the names you provided out of curiousity...primarily had the most success locating Sean Delph of Delcom, aka Michael Sean Delph of Wichata Falls, TX.  Most likely this is the unnamed felon listed as Director of Sales for Delcom in the above article, but what is most interesting is the comment that as far as Delcom is concerned the man is not an owner of Delcom.  If the employee/operator with a federal felony in question truly is Sean Delph, then how can Delcom not claim that he is an owner or at well invested benefactor of the company.  I wonder if that is why the company's first three letters match the first three letters of Sean's last name. I looked at their HUB certification as posted on the company website and pulled up the record as filed with the State of Texas and found Sean Delph's name and number used as the company contact. http://www.window.state.tx.us/... This caused me to dig further and find out who is running the ship of the HUB certified company.  Christine Delph came up as president and director, yet she appears to be divorced of Sean and mearly collects a pay check(payoff?) to be a figure head with no real power of decision making for the company.  While this may not be completely illegal to name a spouse as owner/operator of your company to gain HUB status, don't go claim innocence in a lawsuit against a public school district suing for public tax dollars at ultimately the tax payers expense.  I suppose that all Sean/Delcom really cares about is adding onto the $1million lakehouse, I mean East Texas Company Office(in dad's Michael Delph name-employee/groundskeeper), located in Lake Worth, Texas.  Ultimately, this company is not as squeaky clean and innocent as they claim and i would venture to say that all parties involved (Delcom, DISD, Prime, informant(Ron Price - just announced. http://blogs.dallasobserver.co... ) will wind up being caught with their hands in the $40million cookie jar.

Isn't it amazing what kind of information a Dallas School Teacher can discover with the internet and few names.  Makes me wonder why it is so difficult for the DISD legal dept and the Fed to do the same.  Guess I need that digital classroom to figure it out...ohh that's right will be waiting a little longer now.

Jdesola
Jdesola

I work for a company that bid this project.  If Prime was "second" in the rankings with "their" design, but is now using "Delcom's" design, then how does the district know that Prime would still be second in the rankings had they used the "Delcom" design to begin with?  This is not "standard" technology.  There were numerous companies that submitted designs and proposals.  Of those, 11 companies were classified as finalists and were asked to install a sample classroom.  I saw Delcom's room while I was at the demo site. They saw our room.  There is nothing proprietary about their design, but it was different than that of all the other 10 companies presenting.  This deal must go back out to re-bid.  If it does not, Dallas ISD is going to have 9 other companies (all finalists but Delcom and Prime) suing them. 

scottindallas
scottindallas

I'm highly skeptical about the benefit of "technology in the classroom."  The most effective teaching tool is to let teachers teach.  Technology is typically very crude as to teaching.  After all few lessons, facts, truths comport themselves to multiple choice, or the rigid, overly simple answers that programming offers. 

The world and it's lessons can't be written down, proven nor standardized--this is an old philosopher's game.  As an undergrad we shredded the epistemological arguments of Ph D's.  Either we were exceptional, or, as Truman said, any jackass can kick down an outhouse, but not one can build one.  Teaching doesn't require technology, look at Aristotle's peripatetic (literally walking around) school.  Education requires engaging the world and the facts observation provides, asking questions and wrestling with ideas.  A single formula won't ever be as effective as decent teacher, who can alight upon the interests and observations of the students, and use the Socratic method to get them to think for themselves.  How does a one size fits all computer program do that?  Give me tailored learning rather than pret-a-porter programming.

GetLearned
GetLearned

Ex-felon is false. The convictions were never reversed, therefore the delcom offender retains his status of felon.

eapeaux
eapeaux

@Notfromhouston My wife use to work there. I've heard current employees there say that Sean's ex-wife was asked by him to "take over" the company instead of him so they can claim it is a minority owned company and receive extra grants. 

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