State allegedly broke rules for Web service

[hippiechick]

http://www.indystar.com/articles/1/230411-4361-092.html

Indiana violated U.S. regulations by not seeking competitive bids and by fixing prices, report says.


By Michele McNeil
[e-mail]
March 19, 2005


Indiana broke federal regulations by failing to seek competitive bids on school and library Internet service and then fixing prices at "considerably" high rates, a report obtained by The Indianapolis Star reveals.

The Intelenet Commission, a public-private agency in Indiana that administered the program, has already set aside $5 million in anticipation of federal penalties. It's unclear how much the federal government might demand back.

Criminal investigators are scrutinizing Indiana's compliance with the "E-rate" program, which has provided about $23 million in federal grants to the state since 1998 for computer technology in schools and libraries.

In addition, Indiana could be at risk of losing future technology money from the federal government. If that happens, the state would have to kick in more technology money, or schools and libraries would have to pay more of the tab.

"The government appears to have some pretty legitimate claims," said new chief information officer Karl Browning, who started overseeing state technology in January. "I haven't found anything good about it yet."

The U.S. attorney's office, which is overseeing the criminal investigation, won't talk about its investigation.

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