Did state overpay on no bid $13M contracts?

ATLANTA - The OneGeorgia Authority has spent thirteen million dollars over the past three years on broadcasting equipment, training, and video streaming and storage for schools across Georgia.

Teachers love the equipment and training.

But the three contracts were given to one of Governor Nathan Deal’s campaign contributors without any competition. And, industry competitors say the state overpaid for what they got.  

OneGeorgia is an authority set up to give loans and grants to help stimulate the economy in rural Georgia.  

In 2014, OneGeorgia signed the first of three contracts with Wayne Pearson and ESE Networks to provide camera video equipment, training, and video streaming and storage to schools across Georgia.

OneGeorgia paid ESE Networks $25,000 per school. Half went to the equipment, the other half to storage, streaming, training, and technical support.

No other video streaming company was contacted by OneGeorgia, because by law, the authority doesn't have to seek competitive bids or proposals -  even for multi-million dollar contracts like this one. Wayne Pearson of Ray City, Georgia, is the CEO of ESE Networks. But, he is best known as a long time, Outdoor Channel hunting and fishing show host.

Less than three months after the first 2.5 million dollar contract was signed, Wayne Pearson and his company  ESE Holdings, each made the maximum allowable campaign contribution to Governor Nathan Deal. The contributions totaled $12,600.

An ESE spokesperson wrote us to say Wayne Pearson "regularly contributes" to candidates and "preferred Nathan Deal's candidacy to Jason Carter's."

But competitors were stunned when they saw the price the state was paying per school. David Rudolph runs PlayOn! Sports, the nations' leading high school sports media company.  He is a competitor of ESE. We asked him to examine the contract.

“I thought the equipment list was good,” said Rudolph. “It was what a lot of schools need to get started."

But, Rudolph told us he was shocked when he saw ESE Networks was paid more than six million dollars over three years for video streaming, server storage, training, and tech support.

Rudolph told us: “I looked at the math 50 different ways, there is no way I can make the numbers add up.”

He said he could easily do the job for half the price the state paid.   

ESE contends PlayOn! Sports "level of service is significantly lower" than theirs and PlayOn! charges "advertising money" and "subscription fees."

We wanted a second opinion. So, we asked another high school video streaming company in Ohio, Boxcast.

Their price was higher than PlayOn! Sports. But they told us for the 523 schools that got video streaming and storage, along with technical support and training during the first three years, Boxcast could have saved Georgia taxpayers at least 1.15 million dollars.

ESE wrote us to say simply: "It can't be done" for less money.

State Senator Hunter Hill, a member of Governor Deal's leadership team, doesn't like the thought of any contract without competition to help protect the taxpayers.

He wonders if the statute that says OneGeorgia Authority doesn't have to get competitive bids is the best way to go for taxpayers.

“If they are not required to have a bid process, we probably need to look at making them do so,” Senator Hill told us.

A postscript. Right before we put this report together, we learned the Department of Education has also given ESE network 2.5 million dollars for the exact same program. Only there is one difference, they are actually paying more: $30,000 per school. They also didn't seek competitive bids, because the department "did not receive any goods or services from ESE Networks."