Rupert Murdoch given $27M no-bid contract from state Department of Education

BY Rachel Monahan
DAILY NEWS STAFF WRITER

Sunday, July 31st 2011, 4:00 AM

Louis Lanzano/AP

News Corporation head Rupert Murdoch nabbed a $27 million DOE contract without a public bidding process, the News has learned.

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More than a dozen private firms wanted to work on a project like the one the state Education Department is set to award to a Rupert Murdoch-owned company in a $27 million no-bid contract.

Agency officials have cited "an extremely challenging time line" in their decision to partner with News Corp. subsidiary Wireless Generation to build a data system of student test scores and other information.

The Daily News has learned that the agency has explored the project for at least two years - proof, critics say, state officials had ample time to competitively bid out the contract and still meet a fall 2012 deadline for a federal Race to the Top grant.

"It raises all kinds of questions," said Susan Lerner, executive director of good government group Common Cause New York. "There appears to be time in this process to go through a much more open-bidding process to ensure that the public is getting the best vendor at the best price."

The News has also learned that Wireless Generation paid as much as $5,000 a month to lobbying firms to advocate for the contract and Race to the Top funds with state officials.

A time line resulting in the no-bid contract shows that:

In June 2009, the state put out a formal request for information about the feasibility of the project. Three weeks later, it received responses from 17 vendors, including Wireless Generation.

State Education Department officials described the project at the time as more complex than the work ultimately awarded to Wireless Generation.

Agency spokesman Tom Dunn said the state put out a request "focused on a different project." The Wireless Generation "project fulfills only a portion of the scope of" what the state originally asked contractors for, he added.

Still, he acknowledged the results of the formal request process "provided a useful groundwork for developing our Race to the Top proposal."

By June 2010, the project was revised in time for the state's second Race to the Top bid, agency officials said, but the Education Department did not solicit another round of bids or new information from the 16 other potential contractors.

In August 2010, the state was named a winner in Race to the Top, netting nearly $700 million.

Starting in September 2010, Wireless Generation paid as much as $5,000 a month to lobbying firm Public Strategies to gain "agency support" for a no-bid contract, records show.

Dunn said the Education Department was not aware of any "lobbying."

In December 2010, the state Education Department began work with Wireless Generation on preparing the no-bid contract, Dunn said.

A month earlier, Joel Klein had announced he was stepping down as the city schools chancellor to join News Corp., overseeing its budding education division.

Since December, no work has been done as Wireless Generation waits for a final signoff from the state.

The state controller's office is weighing whether to approve the contract.

Wireless Generation directed questions about the contracting process to the state.

"It was a state decision to give Wireless Generation a sole-source contract," said Joan Lebow, a vice president for the firm.

"They chose a vendor known for its quality in the education marketplace nationwide."

rmonahan@nydailynews.com