VII. Continual Reliance on No Bid Contracts Creates A Disadvantage to the Minority Community : Ongoing
SUMMARY
The Emergency Manager does not regularly provide an open bidding process for contracts to the Detroit School
District. A reliance on no bid contracts does not provide the best value for tax payers and students. It is also
not a fair process. It does not provide adequate oversight. The Emergency Manager’s continuous reliance on
no bid contracts places harm on the district, when audits are unclear, lawsuits are filed by contractors against the
district, School Board members cannot get adequate information in a timely fashion, and the previous
Superintendent, now in Chicago, is under investigation for actions in Chicago, which also occurred on her
watch in Detroit. Black and Latinostudents are at a disadvantage when their district relies on no bid contracts
by Emergency Managers. The bidding process as utilized in other districts, and previously in Detroit before
Emergency Management, provides a more level playing field, more information and chance to vet the
contractor and is a better value for students. It also provides the necessary checks and balances to avoid the
appearance of impropriety and abuse.
EXAMPLE
Emergency Manager Jack Martin is on the Board of HAP, a health insurance provider. His wife is an executive
at HAP. HAP was given the an exclusive agreement to provide health insurance to teachers.
NO BENEFIT
There is no benefit to a pattern of no bid contracting.
ETHICS
Lack of open bidding opens the door to conflicts of interest, nepotism, and the general appearance of
impropriety. A contract with the City for $11.7 million dollars was retroactively altered to a value of $5 million
dollars. This gives no confidence to the community.
ADVERSE IMPACT
No bid contracting is not transparent. It does not maximize financial resources. It is not transparent. Lack of
open bidding circumvents the necessary checks and balances and allows for the appearance of impropriety
and potential conflict of interest. The community will never know if there was a lower bid.
DISPARATE TREATMENT
The Governor seized control of the Detroit Public Schools with the pretext of fiscal solvency, but state
management has benefited no one in the minority community. A community with limited funds deserves to be
able to trust that decision makers are acting to maximize the benefit of every financial investment. The
minority community should also have opportunities to compete to provide services. White school districts do
not rely upon standard RFB processes.
ALTERNATIVE
It is always recommended in any setting that one solicits bids from more than one contractor.
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