(The Center Square) – Washington State University earlier this year signed a $5 million contract with Carahsoft, an IT contractor which is currently under investigation by the FBI for price fixing and overbilling government contracts, according to public documents.
One critic is arguing that the contract violates state law, a claim bolstered by internal communication within the State Attorney General’s Office.
The contract is related to a public police use of force database project overseen by the AGO under authorization of a 2021 state law. Signed in June, the contract has Carahsoft work as a subcontractor after IBM, which was originally intended to be part of the project, withdrew during contract negotiations over stipulations regarding intellectual property.
In September, Carahsoft was subject to an FBI raid of its Virginia-based headquarters that saw computers seized. According to Defense One, Carahsoft issued a statement saying it was fully cooperating with the investigation.
While the reason for that raid is not known, Carahsoft faces a separate investigation for violating the False Claims Act for overbilling several federal agencies, including the Defense Department; in 2015, Carahsoft agreed to pay $75.5 million for violating that same law.
According to documents obtained by The Center Square, the $5 million contract between WSU and Carahsoft called for an advanced payment of $2.6 million, which Police Strategies CEO Bob Scales argued in a recent report is illegal under state law.
Scales has been a vocal critic of the project and was a potential subcontractor during the request for proposal process for the $15 million contract; he has since filed numerous ethical complaints against both AGO and WSU employees, as well as a $42 million tort claim against the AGO and the university. He has also accused the university of illegally using proprietary data from his company.
The contract containing the advanced payment provision was sent to AGO Budget Director Edward Giger and told the contract “locks in the 2024 fiscal year rate for the utility access fees for user access to the cloud-based data environment for the entirety of the project period.”
However, Giger wrote in a June 10 email “I want to confirm that this is what I think it is, the user fee/license free for a system that is not built and that we don’t have access to. If it is, this would be considered a prepayment. We can pay a user/license fee upfront, if we have access to the system. I hope I am misreading the agreement.”
Scales wrote in an unofficial report for the police database project that “Mr. Giger was not misreading the agreement. The WADEPS [Washington State Data Exchange for Public Safety] data collection system has not been built yet and it is likely years away from completion.”
A separate public document obtained by The Center Square states that “payment in advance for goods or services is generally prohibited by RCW 43.88.160. However, there are certain exceptions for which state law explicitly permits payment in advance and in certain instances, payment may be structured to accommodate a supplier’s need for advance payment without violating state law.”
Among those exceptions are:
Payment for postagePayment for booksPayment for subscriptions up to three years in advance:Payment for software/software updatesPayment for equipment maintenancePayment for travel expenses
Scales wrote in his report that “it is unclear whether the Carahsoft invoice was ever paid. However, it does appear that the project is moving forward with Carahsoft and AWS so the invoice must have eventually been paid.”
The Carahsoft contract or role as a subcontractor was not mentioned in WSU’s June project update report.
WSU did not respond to The Center Square’s request for comment on the Carahsoft contract, the FBI investigation into the IT company, or whether the advance payment violated state law and university policy.
In an email to The Center Square, AGO Communications Director Brionna Aho did not comment on the FBI’s investigation of Carahsoft, but stated that the “underlying agreement” was a grant and that “looking only at state contracting statutes will provide, at best, an incomplete and more likely misleading picture. The Attorney General’s Office has designed the grant and oversight process to ensure grant funds are spent appropriately.”
When asked if the AGO agreed with Giger’s interpretation of the contract as providing a prepayment, Aho wrote that “the email you reference doesn’t contain an ‘interpretation.’ It is a question asked before the contract was reviewed. It would be inaccurate to represent it as anything else.”
Although The Center Square’s email did not mention him, in her reply Aho criticized Scales’ continued scrutiny of the state’s implementation of the database.
Scales told The Center Square he has filed a complaint with the State Auditor’s Office regarding the advance payment to Carahsoft.
“We’ll see if they do anything about it,” he wrote in an email.
The police use of force database project has faced other challenges recently, including legal concerns over a data user agreement to be signed between WSU and 9-11 dispatch centers.
The Center Square’s coverage of the AGO/WSU police use of force database project was named as a finalist for the 2024 DAO Prize for local investigative journalism.
