Charter School Company to Pay $4.5 Million Over Alleged Unfair Bidding in E-Rate Program

Staff Writer

An Illinois-based charter school management company will pay $4.5 million after reaching a civil settlement with the U.S. government to resolve allegations that it engaged in noncompetitive contract practices related to the federal E-Rate program, the Justice Department has announced.

The government alleged that Schaumberg, Ill.-based Concept Schools hand-picked vendors in an unfair bidding process for contracts awarded between 2009 and 2012. Those agreements were connected to work on the E-Rate program, overseen by the Federal Communications Commission.

Concept Schools’ chosen vendors provided equipment at higher prices than those approved by the FCC for equipment with the same functionality, and Concept Schools didn’t maintain sufficient control over reimbursed equipment, some of which was discovered missing, the government alleged.

E-rate is a $4 billion federal program overseen by the FCC that provides discounts for internet connectivity devices and services for schools and libraries.

Concept Schools entered into a compliance agreement with the FCC, and redesigned relevant internal quality controls and programs, according to a statement from Concept Schools.

“We will continue to focus our attention on achieving our mission of providing a high-quality, STEM-focused and college-preparatory education for our students, as we move past this investigation and set new precedents for excellence during the current COVID-19 pandemic and beyond,” Concept Schools spokesperson Christopher Murphy said in a statement.

“We express our gratitude to our school communities and educational partners for their continued support.”

The investigation was a coordinated effort between the DOJ’s Commercial Litigation Branch, the FCC Office of Inspector General, the FBI, and the U.S. Department of Education Office of Inspector General.

“E-Rate contractors and schools receiving E-Rate funds must understand and know that actions that undermine the contracting process, such as conspiring to rig competitive bidding, will not be tolerated and will be investigated aggressively,” FCC Inspector General David Hunt said in a statement.

DOJ noted that the settled claims are only allegations, and there has been no determination of liability on the part of the company.

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