McKee signs bill spurred by controversial education contract for ILO Group

“Had this protocol been in place, the state would have averted this unneeded controversy,” Senator Louis P. DiPalma said.

Rhode Island Senator Louis P. DiPalma, left, and Governor Daniel McKee.Globe Staff

PROVIDENCE — Governor Daniel J. McKee has signed legislation prompted by controversy over the multimillion-dollar education contract that his administration awarded to the ILO Group and that is the subject of federal and state investigations.

In the fall, the House and Senate oversight committees conducted hearings into whether the ILO Group had an unfair advantage in securing the state contract because of its ties to McKee.

The chair of the Senate oversight committee, Senator Louis P. DiPalma, concluded that ILO “clearly had preferential treatment on this procurement. “And in response to the committee’s findings, he joined Representative Patricia A. Serpa, who chairs the House oversight committee, in sponsoring legislation to revamp state purchasing laws.

McKee’s office this week announced that the governor signed the House and Senate versions of the bill on June 29 along with a batch of other bills.

DiPalma, a Middletown Democrat, thanked McKee for signing “this much needed purchasing reform legislation.”

“As we have seen with this recent controversial state contract and purchase, there is a distinct need for reform of our state purchasing processes and policies,” he said, referring to the ILO contract.

DiPalma said, “The public deserves transparency and assurances that every state contract or purchase agreement is made with the sole best interests of Rhode Island residents in mind. And this bill will provide the administrative framework to ensure that state contracts and purchases are conducted fairly, cost-effectively and without any inference or evidence of impropriety. Had this protocol been in place, the state would have averted this unneeded controversy.”

Serpa, a West Warwick Democrat, said the new law “will further enhance our residents’ confidence in how the government operates, ensuring that fair and transparent purchasing processes are clearly established in law. The residents of our state should know that their tax dollars are being spent wisely and properly, and this legislation will provide safeguards against concerns relating to state purchasing.”

The new law requires that no request for proposal could be changed to a master-price agreement unless the request for proposal is cancelled and reissued as a master price agreement.

A master price agreement sets a price for goods or services that the state may obtain from multiple vendors.

Administration officials have said that after receiving proposals for this education contract, they found they “could not compare apples to apples” because the vendors “didn’t understand what the state was expecting.” The confusion centered on plans for establishing “municipal learning centers” in all 39 cities and towns.

So the state ended up awarding the work to ILO and WestEd through a master-price agreement process. During an oversight hearing, Senator James A. Seveney, a Portsmouth Democrat, said, “That wasn’t moving the goal posts — you moved the stadium.” DiPalma called for terminating the contracts for both ILO and WestEd and rebidding the work.

The new law also prohibits companies from bidding on a request for proposal if that entity had any link to an official that participated in crafting that request for proposals.

During oversight hearings, senators noted that the ILO Group’s managing partner, Julia Rafal-Baer, had been a member of the state’s Learning, Equity & Accelerated Pathways (LEAP) Task Force, which issued a report on issues, such as learning loss, that ILO was later hired to address.

The ILO consulting firm formed two days after McKee took office and one day before McKee took part in a Zoom meeting with then-Chiefs for Change CEO Mike Magee, a McKee ally and donor who mentioned ILO during the call. That meeting led to a contract for ILO, whose managing partner, Rafal-Baer, then worked for Chiefs for Change and had been invited to the Zoom meeting.

On Friday, the ILO Group issued a statement, saying it “believes strongly in fairness and transparency and always properly follows the procurement rules that are in place.”

“We concluded our contract for Rhode Island in December, and we appreciate the legislature’s work to clarify Rhode Island’s processes going forward,” the ILO Group said. “Our top priority, on this project and every project, is to leverage our nationally recognized expertise to achieve better student outcomes for every student.”

In October, McKee defended the ILO contract on the Rhode Island Report podcast.

In response to DiPalma’s conclusion that he can’t conclude that the ILO contract was awarded in “an open, fair, transparent, process,” McKee said he would tell DiPalma “that he was wrong and that you have all the information that you need to know that the procurement process was followed.”

And after listening to a recording of DiPalma’s statement, McKee said, “So when that gets clarified, who apologizes for making rash statements like that? You’re basically indicting the people who are in the procurement process by saying that somehow that they broke the rules. So who puts Humpty-Dumpty back together again?”

At the state Democratic Party convention on June 26, DiPalma, a former McKee ally who served on his transition team, nominated former CVS executive Helena B. Foulkes in the governor’s race, but McKee came away with the party endorsement.