NYC Schools Postpone Vote on $31.7M, 7-Year McGraw Hill Contract
McGraw Hill is continuing to work with the New York City Department of Education and field school board members’ questions in the wake of the agency’s decision to postpone a vote on a proposed $31.7 million contract with the textbook giant, a spokesperson for the company said.
The city’s panel for educational policy — the governing body of the country’s largest school district — was set to vote last week on a new contract with McGraw Hill to purchase a range of textbooks before parents, advocates, and board members raised concerns about the contract’s cost and lack of discount off list price.
A McGraw Hill spokesperson said the company is currently “in contact with the NYC DOE to answer follow-up questions from them ahead of future board meetings” and is also working to clarify its pricing structure.
The proposed textbook contract with McGraw Hill includes a purchase authorization of up to $4.5 million per year and is renewable for seven years.
According to a DOE document explaining the resolution to approve the contract, McGraw Hill proposed a 0 percent discount off list price, with a 7 percent charge for shipping and handling.
The contract is non-competitive, with the DOE document stating that a competitive procurement is impractical because the company “is the sole producer and exclusive distributor of its materials, which cannot be purchased by open competitive means.”
During the panel’s contract committee meeting last week — the day before the contract was scheduled for a vote before the full panel — members of the group questioned why the DOE was not receiving a discount for purchasing in bulk.
“What negotiation, what percentages, are we getting for booking and dealing with McGraw Hill?” Sheree Gibson, a panel appointee from Queens, asked at the contract meeting.
McGraw Hill is a “big behemoth and has taken over a lot of other companies,” she added, but if the DOE continues to purchase a large number of products from them, she said she would like to see a discount.
Pricing at Issue
In response, Chief Procurement Officer Elisheba Lewi told members at the contract meeting that the DOE did not realize the resolution to approve the contract did not include a discount on list price. The DOE is investigating the issue since “it doesn’t make sense,” she said. “You guys have a very, very strong point.”
A DOE spokesperson said the department “decided to pull our proposed contract, answer the questions raised by panel members, and revisit it at a later date.”
Leonie Haimson, executive director of Class Size Matters, an advocacy organization that has raised concerns about the contract, said at the full panel meeting she was glad the contract vote was postponed but said she wanted to learn more about how the contract came together.
“I think we need some answers,” Haimson said at the panel meeting last week. “Surely the DOE, the largest school district in the country, could have negotiated a better deal.”
In a statement to EdWeek Market Brief, McGraw Hill’s spokesperson said the company “offers fair and equitable pricing to all school districts that we believe reflects the value of our instructional materials.”
The organization also said was important to note that “the existing terms of the contract between McGraw Hill and NYC ensure that the prices the company is charging NYC are at least as favorable to NYC as the prices McGraw Hill charges other customers.”
The questions over the pricing may also be tied to a lack of clarity over the company’s list prices and the prices it charges school districts.
“In the past, our list prices have not been reflected on our website, only our school prices,” the statement said. “We are working to change that to make it clear that our school prices are lower than list.”
The next panel for educational policy meeting is set for Dec. 21. A resolution to approve the contract is not currently listed on the agenda for the meeting.
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