School District Wants Refund After Crisis Alert Tech Fiascos

Charlotte-Mecklenburg Schools has spent $1 million on a system for crisis alerts, and owes $600,000 more. But after some failures, including unneeded lockdowns and lights falling from ceilings, it wants its money back.

by Annie Ma and Fred Clasen-Kelly, The Charlotte Observer / February 28, 2020
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(TNS) — Hours before North Carolina's Charlotte-Mecklenburg school board met on Feb. 11, when it was expected to address the district’s troubled crisis-alert system, the company behind the product declared success.

“CMS high schools successfully complete quality assurance testing, met all of the agreed-upon success criteria, and are ready for teacher training and deployment,” its news release read.

That starkly contrasted what Superintendent Earnest Winston said shortly after the board meeting began. Winston said that after testing, parts of the system often failed, and other times it simply did not work at all. The company’s employees, Winston said, were often slow to respond. CMS would not pay the company the outstanding $600,000, and it would try to get back the more than $1 million it had already paid, Winston said.

Centegix has refuted those claims, but newly released documents, obtained by The Observer via a public records request, detail a frustrating 30 days for CMS as the Feb. 10 deadline for the company to fix its product approached. The apparent disagreement over whether the crisis-alert system met its promises to the district, combined with the absence of a written contract with CMS, raises questions over how and whether CMS will get its money back.

The crisis-alert system, installed in more than two dozen schools, was intended to allow employees to trigger an alarm by pressing a button on a card they carry with their ID badges in case of a school shooting or another emergency.

In the 30 days CMS gave Centegix to resolve the issues, the color-coded beacon lights that flashed during alerts failed repeatedly, and sometimes fell out of the ceiling. Centegix employees showed up to scheduled appointments “notoriously late,” according to a CMS staff member’s notes, creating problems with facilities access. During one incident where two staff members used the panic cards that trigger alerts to call for individual assistance, the system accidentally triggered a lockdown that no one in CMS could turn off.

Since Winston announced that the district would sever its relationship with Centegix and try to get its money back, the company has publicized its successes and criticized CMS. Whether CMS can successfully argue that it is owed a refund will center around the question of if the company met its obligations to deliver a working product.

Centegix has said that CMS has a political agenda, though it did not specify what that meant, and asserts that its crisis-alert system has met all the requirements the district laid out in its solicitation for bids.

Former Superintendent Clayton Wilcox pushed the system and appeared to build a relationship with the founder of Centegix before CMS reached the deal with the company, according to email and interviews with current and former CMS officials.

After two years on the job, Wilcox resigned in August without offering any public explanation. Since then, current and former employees have alleged that Wilcox helped a company that employed his son secure a deal with the district and that he sought to become CEO of another tech company after he successfully lobbied CMS to pay to use its software.

In a written statement to The Observer Wednesday, Centegix defended its crisis-alert system.

“We stand by the results of the testing conducted by CMS district personnel and live operational results,” the company said. “Our system works as promised, including 2 alerts that were initiated and successfully delivered the day after the district announced their decision to no longer use the solution.”

CMS spokesman Brian Hacker refused comment, saying the district cannot discuss a legal matter.

Legal Recourse

Government and school finance experts say the way CMS executed its financial dealings with the company could lead to complicated legal proceedings to recoup the money. The school board did not approve or sign a formal written contract with Centegix, and the district instead used purchase orders to authorize all payments.

State law does not require local education agencies to execute contracts in writing or in a single document, said Norma Houston, a professor with the UNC-Chapel Hill School of Government, except for construction, goods and purchases. Because Centegix was providing maintenance work on its alerts, Houston said the deal could be considered a contract for services and thus would not need to be written down in order to be enforceable.

“What constitutes the form of the contract is very broad,” Houston said. “If the school system can argue this constitutes a legally binding oral contract, then it can sue the company for breach of contract.”

Unless Centegix voluntarily refunds the money, CMS will have to take the issue to court, Houston said, as there is no state agency or process that oversees local education agency contracts.

CMS has previously said that it would use a provision in the invitation for bids as grounds to recoup the money spent. When it solicited bids, the district included its standard terms and conditions.

Those terms state that “goods and services that are defective in workmanship or material or otherwise not in conformity with the requirements of the contract documents may be rejected and returned at the seller’s expense.”

While those provisions could offer CMS some legal protection, the best practices for contracts of this size are to spell out the terms clearly in one document, said Mike Griffith, a school-finance consultant in Colorado. Griffith said that it is not unprecedented for school districts to sue vendors for failing to deliver on promises, but that without a written contract, those arguments are more complicated.

“I know even when it seems pretty clear that the vendor failed, where the school district has a lot of leg to stand on, those can still be difficult cases,” Griffith said. “You could be spending a tremendous amount on legal fees and time in court just to get the money back.”

Promises Met?

On Jan. 10, following questions from The Observer, Winston called the CEO of Centegix and gave the company 30 days to resolve the problems.

According to a timeline of Centegix’s relationship with CMS, compiled by Pam Fandel, a senior project manager in the district’s technology department, problems persisted throughout the month leading up to Winston’s decision to end the relationship.

Centegix insisted on being present for CMS’s tests of the system, and tried to dictate how quality assurance walk-throughs should be done.

In email exchanges with staff, the company said CMS signed off on testing at six schools, which Fandel refuted.

CMS asked Centegix to refrain from fixing problems found during the walk-throughs until all testing was completed, a directive that was ignored several times, according to Fandel’s notes.

When Fandel asked why the company had not previously identified that the audio messages for weather and evacuation were being cut off, a Centegix vice president responded, “Oh, you know men. They aren’t very detailed,” according to Fandel’s notes.

Independence High Lockdowns

Centegix has said that its alerts have helped during dozens of emergencies in CMS, including during physical altercations. But emails and other records from CMS show that the system often failed during incidents.

One of the first schools to go through a quality assurance walk-through after Winston’s announcement of the 30-day deadline was Independence High School. During a Jan. 13 test of the beacons, 43 of them did not work, and an additional 17 were recorded as having “low light/battery failing,” according to Fandel’s notes.

Two days later, police responded to a report of a student with a gun on campus, sending Independence into a lockdown for an hour.

According to Fandel’s notes, many of the beacons did not work during the incident, and the ones that were reported as “low light” two days earlier were now non-functional. Other lights did not shut down properly after the incident was cleared, and the company had to remotely turn the beacons off from Georgia.

In its news release on Feb. 11, Centegix used the incident as an example of how its crisis-alert system was operational in “More than 5,000 classrooms, gyms, outdoor facilities, cafeterias and media centers in area high schools.”

On Jan. 27, two staff members at Independence used the panic cards to call for help with an altercation. Instead, the crisis-alert system triggered a school-wide lockdown that no one in CMS could turn off, according to emails and Fandel’s notes.

Neither the principal nor CMS police officers were alerted to the lockdown on their computers or mobile devices, and Centegix staff members in Georgia had to close the incident remotely, according to emails between Brent Cobb, the company’s president, and CMS staff.

“Although this was a 60 second outage, there is concern that if this was in fact a school lockdown — the principal nor CMSPD would have received the Alert in order to respond to the situation,” Kay Hall, CMS executive director of technology services, wrote. “Just wanted to make sure that you have the facts.”

Days later, Cobb showed up “unannounced and uninvited” to Independence, where he offered a technical explanation for the failure and requested to speak with the teacher who pressed their card, Fandel wrote.

“I ended the conversation stating he is interrupting instructional time and I had a real problem with this tactic,” she wrote.

After overseeing a test of the system at Butler High School the same day, Fandel had to explain to a Centegix executive the district’s expectations for the product, according to her notes.

“He also said that ‘even Google and Amazon had to go through testing phases,’” she wrote. “I told him we were not adopting an academic program but a lifesaving program that needed to work 100% of the time.”

©2020 The Charlotte Observer (Charlotte, N.C.) Distributed by Tribune Content Agency, LLC.

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