Syringa Sues Over Idaho Education Network Contract

By Sharon Fisher, 12-16-09

Syringa Networks, which almost a year ago was awarded a portion of the contract for developing the statewide broadband Idaho Education Network, has filed suit against the state of Idaho and Director of Administration Mike Gwartney, among others, claiming not only that its superior bid was rejected but that it is being shut out even of the portion of the contract it was awarded—including other contracts it had separately with other parts of Idaho state government.

The 2008 Legislature passed a bill to create the Idaho Education Network (IEN), a statewide broadband Internet purportedly for education but which actually would also be used for economic development and, eventually, for state agencies. The purpose of the bill was to provide high-speed access throughout the state, starting with schools.

Without high-speed access, it is difficult or impossible to use web-based browsers, let alone have access to downloadable video or music. In addition to consumer use, this not only affects the ability of companies in those areas to do business, but also the ability of students to use the Internet for research – which is where the Education committee came in.

In January, the Department of Administration announced it had awarded the contracts for IEN, partly to Qwest and partly to a consortium consisting of Syringa Networks and Education Networks of America (ENA). The contracts would be worth $10 million in the first year and up to $50 million over five years, partially funded by the federal government.

This week, in a story initially reported by Rebecca Boone of the Associated Press, Syringa filed a lawsuit claiming that its bid—judged superior by an independent panel—had illegally been rejected in favor of Qwest’s, and that the Department of Administration had not followed its own procedures by splitting the contract in the first place. Moreover, the lawsuit contends, “To date, Syringa has received no direct purchase orders from DOA for the IEN implementation despite having the lowest cost for the IEN technical network services, local access connections, routing equipment, network and backbone services,” according to the complaint. “The State has rejected requests to use Syringa for the IEN technical work,” reported Syringa partner ENA—which itself is named as a defendant in the lawsuit.

In addition, “Gwartney has also informed Syringa representatives that other State contracts with Syringa such as agreements between State agencies and Syringa under IdaNet would be placed in jeopardy if Syringa continued to discuss IEN procurement irregularities with others and/or pursue its remedies,” the complaint said. Gwartney and state chief technology officer Greg Zickau went on to tell agencies such as Fish & Game, Health and Welfare, Labor, and school districts not to work with Syringa any more, the complaint continued.

What the complaint did not say is why the Department of Administration might be acting in this way. Why award a contract and refuse to follow it? Why shut Syringa out of contracts it already had? Greg Lowe, Syringa CEO, said he could not comment.

(Lowe, incidentally, is not related to Pamela Lowe, the former head of the Idaho Transportation Department who is suing the state amidst similar claims of cronyism.)

The Qwest bid also uses “unnecessary, costly, installation of older copper technology, duplicating state-of-the-art fiber optic broadband lines that already exist,” according to a statement by Lowe. The map “Broadband Infrastructure Owned or Leased by State of Idaho,” prepared in January, 2008, by the office of the CIO, does indeed indicate that a great swath of Idaho is already covered by fiber optic network, which could provide speeds of up to 100 gigabits per second, compared to the 20 to 40 megabits per second provided by the Qwest proposal. Such fiber optic networks are provided by entities like the Idaho Research Optical Network, which started up in October, 2008.

Qwest also doesn’t have a good history with such state networks. When Idaho last awarded a chunk of money to help improve broadband access in Idaho, in 2006, Qwest received $5 million—and, according to a 2007 report, spent the money inefficiently by increasing service in places where it already existed, and charging a high price for it. The result is that not many people got better access, and the cost per new user was much higher for Qwest than for other companies awarded money ($120.83 per customer, compared to as little as $29.76 from another vendor).

Syringa said it expected $15 million in damages over the five-year run of the contract due to the state’s actions.

Neither the Department of Administration nor the Governor’s office responded to requests for information by press time.