How LAUSD's Superintendent Has Used Special Pandemic Emergency Powers To Make Fast-Track Deals

LAUSD Superintendent Austin Beutner speaks to staff in the counseling office at San Fernando Middle School in August. (Kyle Stokes/KPCC/LAist)

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Over the summer, when the Los Angeles Unified School District created its own COVID-19 testing program, the news generated so much national buzz that you might not have noticed: the school board never voted to approve the program.

In normal times, a board vote would be a crucial step; L.A. Unified board members must approve all major district purchases or contracts during a public meeting.

But since March 10, when LAUSD's board declared a formal emergency, Superintendent Austin Beutner has had special powers to make fast-track deals to help LAUSD respond to the emerging coronavirus crisis — including the deal that launched the COVID-19 testing program: a $51.3 million contract with start-up lab company SummerBio.

Under LAUSD's normal process, Beutner said it would've taken four or five months to vet the SummerBio agreement and win the school board's approval. With emergency powers, district officials needed only a few weeks to close the deal — and, Beutner said, they were still weighing their options until roughly 48 hours before they went public.

"We wouldn't have SummerBio if we had to go through the traditional process," Beutner said in an interview this week. "There's no chance ... Start-up companies don't do business with big bureaucracies."

THE NEW ABNORMAL

To Beutner, these emergency powers have been critical to LAUSD's pandemic response, allowing district officials to quickly launch programs that have won widespread praise: a meal distribution program and an initiative to connect every student to the internet on a district-provided device.

LAUSD administrators reported spending more than $210 million under these emergency powers between March 10 and Sept. 5, according to filings the district's county regulators recently released to KPCC/LAist.

Even in the context of a global pandemic, LAUSD's emergency declaration is extraordinary. No other L.A. County school superintendent currently has the same kind of emergency powers to enter no-bid and single-source contracts that Beutner now wields, according to the L.A. County Office of Education.

LAUSD board members have not rolled those emergency powers back — in part because they feel the superintendent still needs the ability to act nimbly.

SummerBio, a Silicon Valley start-up, is providing the bulk of the COVID-19 tests LAUSD plans to use for its screening system for students and employees. (Kyle Stokes/LAist)

"Unfortunately, we remain in a state of crisis on multiple levels," said board member Mónica García in a statement. She added: "Nothing is normal and I am supportive of continuing to empower [the] superintendent with the authority necessary to act on behalf of our students, schools, and communities."

On the other hand, LAUSD has been operating under this emergency for nearly seven months — and some school board members, while lauding programs created under the crisis powers, are beginning to wonder about when and how the district returns to normal.

"We can't continue as we are in perpetuity," said board member Kelly Gonez. "We should have a real conversation about the appropriateness of [the emergency declaration] moving forward, but I want to be thoughtful about that."

"It's not just that it's easier" to make deals under the emergency authorization, Gonez added, "it's that there have been benefits to students and families."

Board member Scott Schmerelson said he doesn't favor ending the emergency powers; instead, he believes the board should "modify" them. Schmerelson said he's urged Beutner to share more information with board members about how he's using the special authority.

"I am not sorry that we granted immunity to him to do whatever he needed to do," said Schmerelson, "because we were in a crisis. Now, little by little we're getting out of this crisis, so little by little, I would hope he would loosen the reins."

THE MOMENT THAT MADE EMERGENCY POWERS

In early March, as it began to dawn on LAUSD officials that a pivot to distance learning was inevitable, Beutner said his staff began calling tech suppliers in search of up to 200,000 laptops and tablet computers.

One phone call with Apple clarified to Beutner and his staff just how fast they needed to act.

"We were at a point with [Apple]," Beutner recalled, "where they said, 'We have this much inventory left in all of the U.S. and it's at our stores. Do you want it or not? New York's on Line A, you're on Line B.'" (For the record: Beutner declined to confirm that New York City's school district was actually the other bidder — only that large districts were, in fact, competing with each other at this time to scoop up available devices.)

On a late night phone call, just hours before an LAUSD board meeting — where Beutner's emergency powers were the sole item on the agenda — the superintendent's staff realized the district would have to give Apple an answer.

"The conversation," Beutner recalled, "was pretty much, 'Okay, tell [Apple] yes. Don't sign it. There's a board meeting tomorrow ... We'll have a vote. And we'll sign right after the vote.'"

By the first Monday students were sent home for distance learning, LAUSD had spent more than $54 million on iPads, Chromebooks and Wi-Fi hotspots from T-Mobile. By the end of March, the district had spent another $13.4 million on a deal with Verizon wireless for even more devices, according to the district's reports to the county Office of Education.

Rafael Balderas, principal of L.A. Unified's Bell High School, stands between stacks of laptop computers for distribution to students in April. (Frederic J. Brown/AFP via Getty Images)

L.A. UNIFIED'S REPORTS TO THE COUNTY

When a school board declares an emergency, California law requires the district to get the approval of its county superintendent of schools on any purchases or contracts signed under this arrangement. The district needs the signature of L.A. County Schools Superintendent Debra Duardo "to move forward," according to a statement from her office.

County officials released copies of the reports for 24 of the 25 weeks between March 10 and Sept. 5. (They did not provide a copy of the report filed for Sept. 17-21 because, according to spokeswoman Margo Minceki's statement, "There are times when we need the district to provide clarification.")

A majority of the spending LAUSD reported covered purchases Beutner has confirmed were made using emergency powers.

But district officials also said their reports to the county included some purchases made with existing vendors under contracts approved before the emergency authorization. They say the total reported — $210.3 million — is best understood as the amount LAUSD has spent on pandemic response, not necessarily as a measure of the emergency powers.

Of that total, at least $53 million was spent on "single-source" contracts — a reference to a deal made with limited competitive public bidding because the district believes the vendor offers a unique service.

'OUR FLEXIBILITY MADE US ATTRACTIVE'

Among the "single-source" deals LAUSD inked under these emergency powers: the SummerBio contract — the $51.3 million agreement to provide LAUSD with the kits and results for up to 100,000 coronavirus tests per week.

But while the SummerBio deal was listed as a single-source contract, Beutner said a working group of district officials and outside experts — some of them hired themselves under the emergency authorization — thoroughly vetted the deal.

According to an LAUSD memo describing the deal, the district took bids from 22 potential providers of COVID-19 tests — and SummerBio was the cheapest by far. While LAUSD's memo doesn't specify what each company would've charged, it does say the next-lowest competitor would've charged $192.3 million — nearly four times as much as SummerBio.


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At the time, SummerBio was in talks with other potential exclusive customers. But Beutner said his broad emergency powers made LAUSD an attractive suitor.

With that authority, Beutner could bypass the cumbersome process of putting out an RFP — a "request for proposals" — that requires a lengthy paper trail that would normally scare off a start-up like SummerBio.

"Our flexibility," Beutner said, "our ability to act quickly, our ability to be unlike a big bureaucracy, if you will, made us attractive ... We could focus on the things that mattered to them and us — the timeliness of the tests, the quality of the tests, their ability to deliver — and not all the trappings of bureaucracy."

Though last spring's pervasive sense of total panic about the virus has faded, Beutner contended the broader crisis has not: three-quarters of the district's families face job loss and food insecurity. It's not clear when and how district campuses can fully reopen.

He argues it's necessary for the board to maintain his emergency powers to allow LAUSD to respond rapidly to future developments. In an interview, Beutner hinted at the possibility the emergency powers could be critical to allowing LAUSD to offer quick access to a future COVID-19 vaccine.

Even as board member Kelly Gonez said it's worth discussing when the district will resume its typical procurement process, she noted that the board would have to be thoughtful about how it pulls back emergency powers — whenever that happens. For example, how could the district ensure continuation of the COVID-19 screening effort if the emergency authorization underpinning it goes away?

But for the moment, Gonez is more interested in discussing "what factors should be in place" before the board pulls back the emergency powers. She indicated it was too early to talk about a timeline for doing so.

"We are still in an emergency situation," she said, "even if the crisis isn't emerging right at this very moment."