In 2001, Detroit Public Schools and Compuware signed a $90 million contract to manage the district’s information technology services. The deal is expected to save the school district approximately $10 million over the five–year term of the new contract.
Detroit Public Schools CEO Kenneth Burnley anticipates that the Compuware deal also will put a significant dent in problems with outdated hardware and software, payroll, the telephone system, cost overruns, and other technology–related issues that have plagued the district for years. The benefits will then spill over into a number of areas, just through one contract.
Compuware beat offers by Ameritech; Celt Corporation, an educational technology and services firm; and EDS, a business solutions company. The Compuware offer was not the lowest, but according to DPS administrators, it was the best value for the district. The deal was criticized, however, because some suspected the deal was compensation to Compuware for moving its corporate office to the city of Detroit.
The savings from the various competitive contracts will help Detroit reprioritize its spending and direct more money into classrooms. In 2000, the district spent 68 percent of its budget at the school level; the rest provided for administration. In 2001, the district’s budget slated 76 percent to be spent in schools. In short, competitive bidding has proved it can put more dollars back into the classroom in one of the most problem–ridden school districts in the nation.
These privatization contracts are not a new phenomenon in Michigan. Some districts have been outsourcing non–instructional services for years and even decades. For example, the Morrice and Millington school districts have contracted for food services for more than 15 years. The Lincoln Park school district has contracted for transportation services and Coloma has contracted for janitorial services for even longer.