The Permanent School Fund and Texas HUBs

The Texas Permanent School Fund (PSF) is the largest public endowment in the nation. Zero minority-owned or HUB-certified law firms provide counsel to the PSF Bond Guarantee Program. Historically Underutilized Businesses (HUBs: women-owned, veteran-owned, minority-owned) have not been awarded contracts to lobby for, perform any oversight, or manage the taxpayer's fund.

During the July 2nd meeting of the Texas State Board of Education's meeting, I asked for this agenda item to be pulled from the Permanent School Fund's consent agenda:

Approval of the Selection of a Legal Counsel for the Bond Guarantee Program as outlined in RFQ 701-20-006 for the Texas Permanent School Fund and Authorization for Contract Execution by the Commissioner of Education

My request was due to the inadequate response to the Board's Request for Qualifications (RFQ). As custodians of the Bond Guarantee Program, the Texas SBOE is charged with the safeguarding of the public’s money. When we are likely facing a deep recession, moving forward with only one applicant is irresponsible. I also noted that this one applicant is not HUB Certified. The lack of minority participation does not speak well of this organization that represents 5.4 million students, of which more than 50% are minorities.

The RFQ process is designed to give us choices to ensure we’re selecting quality firms. Neither ISD Boards of Trustees nor classroom teachers are allowed to purchase paper or pencils without comparing a minimum of three vendors. A panel of a few firms strengthens the breadth of services we receive. Just as important, should a conflict of interest arise, a group of firms provides alternatives.

During the consideration of the one respondent, DLA Piper, for a contract to represent the Permanent School Fund’s Bond Guarantee Program, the TXSBOE discussed a wide range of topics including the TXSBOE’s fiduciary responsibility and social justice requirements. After considerable debate and an amendment that received support from 12 of the 15 board members, the TXSBOE voted to encourage the law firm of DLA Piper to honor its commitment to racial equality.

TXSBOE Discussion (2:15:00): http://www.adminmonitor.com/tx/tea/general_meeting/202007021/

DLA Piper was ultimately awarded a contract valued at $100,000 to $150,000 per year to support the Public School Fund. Several TXSBOE members agreed with my concerns about the procurement process and DLA Piper’s response to the Request For Qualifications. As stewards of taxpayer dollars, TXSBOE members should always consider more than one possible vendor for any contract, a universally recognized best practice. I requested that the TXSBOE re-open the process so that more firms, including HUBs, could be considered. This amendment request was denied.

DLA Piper’s original response to HUB contracting that allowed the firm to ‘Self-Perform’ the contract and give no consideration to capacity building among HUBs by exploring subcontracting opportunities was alarming to me. DLA Piper’s Self Performance Justification, which would have the firm do the work required under the contract without consideration of any HUB partnerships or goals, is not consistent with its public statements that underscore its commitment to racial equality.

DLA Piper Newsroom | “Underscoring our commitment to racial equality”
In the wake of the senseless deaths of Breonna Taylor, Ahmaud Arbery, George Floyd, and unfortunately many others, DLA Piper stands shoulder to shoulder with the Black/African American community as well as other vulnerable communities. We see you, we hear you and we support you. DLA Piper categorically and unequivocally condemns systemic racism. We have seen time and again over the course of our lives the marginalization and institutional biases that burden our communities and the nation. As Dr. Martin Luther King said, “Our lives begin to end the day we become silent about things that matter.”
Read more: https://www.dlapiper.com/en/us/news/2020/06/underscoring-our-commitment-to-racial-equality/

The accepted amendment creates space for the law firm to engage in capacity building by exploring subcontracting opportunities with HUBs.  As repeatedly emphasized, the amendment does not require the firm to subcontract with HUBs - despite several amendment requests -  but to simply make a good-faith effort to do so.