Update 12/1/22: Daily News has a good article today on how the McGraw Hill contract was pulled from the PEP agenda last night, because of the controversy over huge cost and lack of any discount; the article quotes from comments made at the meeting by teacher Gavin Healy, PEP member Tom Sheppard and me.
Yet the question still remains whether the contract will be submitted unchanged at a later meeting. The only comments by DOE officials about the contract were confusing: Liz Vladeck, General Counsel, said there would be no loss of "services" during this time, meaning (I suppose) that schools could still order McGraw textbooks at inflated prices. As the DN quotes her, "We just want to ensure folks understand this means they will be working at risk of financial loss until the contract is resolved,” Vladeck said of the vendor.
The only other DOE official to speak to the issue was Elisheba Lewi, head of DOE procurement, who on Monday had said at the PEP contract committee meeting that the contract "didn't make any sense" to her. Last night she said they "pulled that item from agenda so that we could just ...address concerns that have been raised & we're working very closely with the vendor to get to gain clearer understanding of what the current status is.” Huh?
The Great Minds Foundation textbook contract that also lacked any discount and charged an even higher shipping fee, but at a far lower total amount, was approved.
On Sunday night, I perused this month's contract list [ proposals here] and noticed a contract to be voted on during tonight's PEP meeting that was even more ridiculous than usual: It was a non-competitive contract with McGraw Hill that would authorize DOE to spend $31 million for textbooks at their full list price, plus 7% shipping.
I tweeted in protest against this ridiculous bid, as surely the DOE, the largest school district in the country could have negotiated a better deal. See, for example, how McGraw Hill textbooks are sold online at this website, with a 30% off for any orders of 25 or more, increasing to a 40% discount for any orders of 1000 or more, with free shipping. With a discount like this, they could have saved our schools nearly $15 million.
I also noted a similar, if smaller non-competitive proposal to purchase books by Great Books Foundation, for $454,000, with no discount and an even higher cost for shipping: 11
My tweets were quickly retweeted, with many parents and teachers expressing their outrage, and others surprised, given the fact that their schools had never provided textbooks to their students. Possibly this is because they are too expensive, even as schools are only provided $58 per student to purchase textbooks.
On Tuesday morning, the issue was discussed during the PEP contract committee meeting. See the transcript of the meeting here.
PEP members Sheree Gibson and Tom Sheppard both spoke out against the contract.
PEP parent member Tom Sheppard said: "$31.6 million over seven years is a lot of money. Right? And I'm wondering, is this mostly online materials is a print material as well. And I guess the reason why I'm asking that question because, you know, my kids are seventh, eighth, ninth and 10th grade, and I think I've never seen them carry a textbook home. So if they've never had a textbook, and we're spending $31.6 million over seven years for a contract with McGraw Hill, I want to know what we're getting for that."
Sheree Gibson, Queens borough appointee asked, "Is there a discount in there because we did some looking, online advocates reached out to us...what negotiation what percentages are we getting for booking and dealing with McGraw Hill? I am taking into consideration that McGraw Hill is the big behemoth and has taken over a lot of other companies but still if we're doing this type of amount of business with them. I want a deal, I want a break, a discount."
Tom also raised the larger point, that these huge contracts month after month are proposed with little justification or even explanation from administrators, and for this school year already amount to more than $3.5 billion:
I look at our schools, for example, that have had their budgets cut. And I look at environments where, you know, schools have to make choices about programming right, and what we can keep and what we can get rid of, but, you know, here we are kind of business as usual, over the course of a year voting to approve almost $4 billion in contracts, right? Like there's nowhere in all of this where we can figure out how to save some money so that we don't have to let go over 1000 teachers and get rid of like arts programs and after school programs like I think about that every month. And you know, I would love to know how or what the DOE is doing on an ongoing basis. To evaluate these contracts, the necessity of them, and how we can use cost savings from these contracts to actually keep teachers in classrooms and pay for librarians and those kinds of things.
Even Elisheba Lewi, chief procurement officer, admitted that the lack of any discount “doesn’t make sense.You guys have a very, very strong point.”
Yesterday, the Daily News ran a story about the no-discount, no-good McGraw Hill contract. Reporter Cayla Bamberger quoted math teacher Bobson Wong: ""Someone needs to look into the terrible deals that NYC DOE makes for schools." Deborah Kross of the CCHS said, "So much money is getting wasted because there are no competitive processes,” and “yet cuts in the classroom hurt our kids and teachers.”
According to yesterday's article, the DOE said that they planned to ahead anyway with the vote tonight. Then this afternoon, they emailed PEP members that the vote will be postponed, though the other no-discount $453, 966.11 no-discount contract with Great Minds Foundation is still on there. Here they both are on the latest RA list:
In 2012, McGraw-Hill was acquired by private equity firm Apollo Global Management, for $2.5 billion in cash and debt. In 2021, it was purchased from Apollo by Platinum Equity for $4.5 billion. Clearly there are gold in them thar hills.
I urge people to provide comments anyway, urging the DOE to do a far better job in negotiating these contracts, now and in the future. The meeting begins at 6:00 p.m. via zoom. You can log-on and sign up to speak from 5:30 PM to 6:15 PM at: https://www.learndoe.org/pep/nov30/.