UPDATE: School chief Ritz’s office backed app deal without bidding

Indiana Superintendent of Public Instruction Glenda Ritz's office approved a lucrative technology contract that state government officials said should have been subject to competitive bid, awarding it to a company that later gave one of her key aides a senior job.

Documents and emails provided to The Associated Press show state officials who review contracts were alarmed it was not put out to public bid, and tried to stop it. They also show that the proposal to develop a mobile app for Indiana schools to communicate data such as standardized test scores to the state could be a multimillion-dollar boon for AT&T and its Georgia-based software developer N2N Services.

"We told (the Indiana office of technology) to sit on this and not do anything," one contract review supervisor wrote in an email on Aug. 26, 2015. The contract should have been "bid out through an open market solicitation," wrote the supervisor, who works for the Indiana Department of Administration managed by Republican Gov. Mike Pence's administration.

But the contract went ahead anyway. The point person was Ritz's then-spokesman and one-time political adviser David Galvin, who worked with N2N Services to develop the app and steer it through the bureaucracy. Shortly after it was finalized, Galvin went to work for N2N Services as its executive director of marketing and communications. AP reported in June on Galvin taking the job with N2N Services but since then AP obtained additional documents that show opposition to the way the contract was structured.

Critics said the technology contract highlights Indiana's lax ethics laws. It also feeds a perception that Ritz—the only Democrat elected to statewide office and who is seeking a second term in November—has been a poor manager of the Department of Education since she ousted incumbent Tony Bennett in 2012.

"There were (school) superintendents that complained about disorganization, about receiving mixed messages from the department," former Democratic state board of education member Tony Walker said of Ritz's management. "People being told one thing then having that reversed at a later date."

Jennifer McCormick, a Republican running against Ritz in this year's election, issued a statement that said she "was still reviewing the story and its details, but if true, it is apparent the pattern of mismanagement and lack of leadership in the Indiana Department of Education is even worse than anyone realized."
 
"All state contracts should go through a transparent process that involves all stakeholders to ensure that taxpayer money is efficiently and appropriately spent," McCormick said. "This was apparently not the case here. I call upon the Attorney General and Inspector General to conduct a thorough investigation of this case and all contracts negotiated by Superintendent Ritz and the Department of Education to ensure that all taxpayer dollars are utilized properly.” 

Indiana has seen several ethics scandals in recent years. Former schools superintendent Bennett was involved in a school accountability scandal, former Indiana Department of Transportation chief of staff Troy Woodruff sold land to the agency, and state Rep. Eric Turner helped kill a nursing home construction ban that could have cost his family business millions.

Ritz's chief of staff, Craig Hartzer, certified the contract for the app on Sept. 1, 2015, the day payment was approved, signing the document in a space reserved for a contract reviewer in the Department of Administration, the main agency responsible for state contracts.

Current Ritz spokesman Daniel Altman said her office was never told about opposition to the arrangement and said that appropriate procedures were followed.

"We have not received any record of anyone from these agencies objecting to this project. If we had, we would have obviously worked out any issues before moving forward," Altman said.

N2N Services said in an email that Galvin is no longer employed there. Galvin could not be reached, though his profile on the professional networking site LinkedIn listed him as an N2N Services employee Wednesday and he has a company voicemail. An older website for the company lists him as an employee, but not a newer site.

The contract was structured as two amendments to the state's existing cellphone plan with AT&T—a move that appeared to circumvent the competitive bidding process generally required for purchases above $75,000. It also allowed the deal to move forward without formal review by the Indiana Department of Administration.

"We've never seen these before," an employee in the Indiana office of technology wrote in an email that alerted contract reviewers. "Do you know what it is and is it okay to process?"

The supervisor who manages the state's cellphone plan with AT&T later objected to piggybacking the deal on the cellphone plan, writing that it was "beyond the scope" of the AT&T deal.

Ritz had hailed the mobile app as a novel new way to communicate with school districts. If adopted by even a fraction of Indiana's roughly 300 school districts it could yield a large pay day for AT&T and N2N Services because each district would pay over $100,000 in startup costs, according to an estimate from AT&T.

Before he stepped down from Ritz's office, Galvin issued a July 2015 release touting the app, later updated to remove his name after the AP report in June that he took a job with N2N Services.

Galvin was a key figure in instigating an ethics investigation of Bennett as Florida's schools chief. Bennett took the Florida job after losing to Ritz. But he quickly stepped down after Galvin helped make public emails showing Bennett overhauled Indiana's "A-F" school grading system in 2012 to benefit a charter school run by a Republican donor.

An ethics expert said it was hypocritical of Galvin to push the contract and take a job with the company when he had championed ethics in attacking Republican Bennett.

"You want to be careful about throwing stones if you live in a glass house," said Stuart Yoak, executive director for the Association for Practical and Professional Ethics at Indiana University. "You should avoid even the appearance of a conflict of interest."

Indiana law generally requires a one-year cooling off period for state government employees before working for a company they had financial dealings with. Those suspected of violations can be investigated by the state's inspector general, who can forward findings to a prosecutor for further action.

Galvin sought informal ethics guidance before he took the job, but never requested a formal opinion even though it was recommended by an ethics officer "because of his extensive interaction with N2N," according to an email released by Ritz's office.