Rupert Murdoch’s growing education business is facing regulatory scrutiny in the US, after a subsidiary company won a controversial ‘no-bid’ contract to supply schools with IT systems.
The New York Daily News reports that the state’s education department is ready to award the $27 million (£17 million) contract to Wireless Generation, a subsidiary of Murdoch’s News Corp conglomerate, without considering bids from other companies.
Under US law, no-bid contracts are permissible in exceptionable circumstances, such as where only one company is able to provide the required product or service or where there is an urgent need to agree the contract quickly.
New York state officials said the decision to bypass a competitive tender process and deal exclusively with Wireless Generation was down to the “extremely challenging timeline” of the project, which must make headway by autumn 2012 in order to qualify for a multi-million-dollar federal grant.
However, the newspaper outlines evidene that shows the education department has been considering the project for at least two years – suggesting there was plenty of time to consider other bids for the work.
It says that in mid-2009, the department was in contact with 16 other companies to discuss the feasibility of the project, which involves creating a new management information system for New York schools.
But the report claims that in September 2010, Wireless Generation paid up to $5,000 a month to a lobbying firm to gain the education department’s support for a no-bid contract. Work on preparing the no-bid contract began in December, but final approval is currently pending from the state controller’s office.
Responding to the Daily News report, Wireless Generation said the decision to offer a no-bid contract was down to the state education department alone. "They chose a vendor known for its quality in the education marketplace nationwide," added the firm.
Concerns of favouritism towards News Corp have been heightened by the position of Joel Klein, who announced in November that he was stepping down as New York City’s schools chancellor to join News Corp’s education division.
Meanwhile, here in the UK, a document disclosing Michael Gove’s meetings with senior members of the media, showed that in his first year as schools secretary he met with Rupert Murdoch seven times and Joel Klein twice.