Report Clears District of Bidding Violation : Law: A Department of Education review finds that Orange Unified Schools followed proper procedure in purchasing a computer system.

Allegations that the Orange Unified School District violated the state Education Code in its purchase of a $2-million computer system last year were based on misinterpretation of state law, according to a report by the Orange County Department of Education.

In a review prepared at the district’s request and released at its board meeting Thursday night, county Department of Education attorneys determined that the accounting firm of Ernst & Young cited a defunct section of the state Education Code when it questioned the bidding process used by the district in purchasing an IBM AS400 computer in January, 1989.

The attorneys’ report concluded that Ernst & Young should not have cited the Education Code at all in its assessment of the district’s computer program since rules governing computer purchases by school districts were removed from that code in 1987. Guidelines for school computer purchases are now set down in the Public Contract Code.

“Our review of the Ernst & Young report . . . (indicates) that the district followed the proper legal procedures in awarding this contract,” county Department of Education attorney Geraldine Jaffe said in a report to the district.

In a March 12 report, Ernst & Young, which was retained by Orange Unified officials to assess the computer system, noted that the state Education Code “permits selection of a vendor where a district receives at least three qualified bids.” The report added that district officials issued an invitation for bids on Dec. 18, 1988, and set the deadline for proposals only three weeks later.

Four bidders responded, two of which, the report noted, were “non-responsive,” or without formal bids. “We believe the four received responses did not constitute qualified bids,” the report said.

But the review by the county Department of Education’s legal staff found that state law does not set a minimum requirement for bids received by school boards. The only restriction, the report said, is set forth in Public Contract Code section 20118.1, which says that if a district receives more than three bids on a computer system, it need only select one of the three lowest bidders.

Ron Wenkart, senior attorney in the county Department of Education’s Legal Services department, said most public agencies are required to abide by a minimum number of bids and must award contracts to the lowest bidder. However, the state Legislature in 1987 amended the Public Contract Code to give school districts greater flexibility in the bid process, he said.

“There is nothing in the Education Code or in the Public Contract Code which requires a minimum number of bids prior to a school district or community college being able to legally award a contract,” Jaffe said in her report.

Officials of Ernst & Young could not be reached for comment.

The Ernst & Young findings prompted officials of the Orange Unified Education Assn., the union representing the district’s teachers, to ask Dist. Atty. Michael R. Capizzi to investigate the bidding process. Steve McDonald, executive director of the union, said the county Department of Education’s opinions were those of “in-house attorneys” and added that the allegations are still under review by the district attorney’s office.