Education Department Responds to No-Bid Contract Concerns in Newark

When I reached out to the NJ Department of Education’s Office of Fiscal Accountability and Compliance (OFAC) to ask them to investigate Newark Board of Education’s $4.5 million no-bid contract for a museum, I told my readers I would update them on a response. 

Here’s the update: It turns out that the NJ DOE’s investigations unit should add “cutting and pasting” to their list of taxpayer funded activities. 

To recap: Newark Public Schools entered into an agreement with a real estate developer to renovate the State Street school building into a museum for $4.5 million. The plan to rehab the building was part of a settlement agreement between the developer and the school district.  

In New Jersey, anytime a school district wants to spend over $44,000 on any service, it must, by law, go out to bid. Newark public schools did not do so, and so I asked the NJ DOE’s Office of Fiscal Accountability (OFAC) to look into it. 

This month, Thomas Martin of OFAC, responded to my request for an investigation by simply letting me know that the target of the would-be investigation doesn’t think there should be one. 

This is the exact text from the email that was sent to me: 

“Mr. James,

Below is a response from the Newark Public Schools Chief of Staff.  Based upon the response, renovations to the property are not subject to the bidding provisions under N.J.S.A.18A , educational statute.

Regards /tm 

The district has not contracted for a renovation project.  It has entered into a settlement agreement which resolves claims and counterclaims asserted in litigation between the Board of Education and certain affiliates of the Hanini Group.  Among other things, the settlement agreement provides for improvements to be made to a building formerly owned by the Board of Education and currently owned by a Hanini affiliate.  The Board of Education has no control over the work or any aspect of the project.  The agreement also provides for payment to the Hanini Group in an amount which was determined in settlement negotiations and which (from the district’s perspective) took into account factors other than the cost of the building improvements.  If you have any questions, please feel free to call.” 

Well, my first thought is: What kind of government investigative agency simply asks the target of an alleged non-compliant activity if their activity was indeed non-compliant? And then simply cuts and pastes that response in order to send it to a would-be whistleblower, as if the job is done?

Frankly, I have read N.J.S.A.18A, which Martin cites, and though I’m not a lawyer, it very clearly states that ANY goods or services valued at over a certain amount MUST go out to bid. 

I will be reaching out to Martin again and I will ask him to explain which part of the N.J.S.A.18A creates a carve out of the law specifically for services contained within a settlement agreement. 

I will continue to keep you posted.