It’s a problem that was meant to have been solved months ago, at least for two impoverished Buffalo neighborhoods.
Lack of reliable internet access in low-income households puts thousands of Buffalo public school students at an educational disadvantage. So last summer the school district hired a local IT company with a troubling track record to provide free, fast Wi-Fi to approximately 5,500 students on the city’s East and West Sides.
The “Connected Communities” project was scheduled for completion by January. That’s two months before the COVID-19 shutdown made home internet access a critical issue for students and teachers trying to conduct classwork remotely.
But the project hasn’t been completed. In fact, the work has barely started.
From the beginning, there were warning signs that the company, HarpData, might not deliver on its promises.
To begin with, HarpData’s bid for the project was less than a third of what its competitors thought the project would cost.
And, as the school was soliciting bids for the project, HarpData was embroiled in a legal dispute arising from a multi-million dollar deal with Kaleida Health and the Erie County Medical Center. At the heart of the litigation were allegations that HarpData stiffed a partner on payments and engaged in suspect business practices.
The legal action resulted in a judgment against HarpData and its CEO, Ivory Robinson Jr., for $810,000. That judgment was entered in July 2019, just as the Buffalo School Board was certifying HarpData as the winner of the contract.
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In new litigation arising from that same stalled project, filed in New York State Supreme Court last week, Kaleida Health alleges the HarpData failed to deliver on its end of the contract, and lacked the capacity — the finances, the expertise, the personnel — to do so.
Kaleida Health is demanding HarpData return more than $365,000 and hopes to continue the project without Robinson and his company.
But school officials are sticking with HarpData for now.
Superintendent Kriner Cash told Investigative Post on Thursday that, prompted in large part by our inquiries, he had called Robinson and delivered a stern warning. Cash told Robinson to get the district a plan to start work this week. If that plan is approved, Cash told Investigative Post, the system should be up and running in three months.
That’s in time for summer school, at best. More likely the fall semester. Too late to help teachers and students for the current school year.
A politically connected entrepreneur
Robinson is a Buffalo native, a graduate of Riverside High School and a veteran of the U.S. Air Force, where he gained his expertise in information technology. After leaving the Air Force, he started an IT career in the Washington, D.C., area, he told Buffalo Business First for a profile published last August.
But he wasn’t satisfied with his career trajectory, he told the author of another profile published last year, and a trip home to Buffalo convinced him there was opportunity here. HarpData LLC was registered in New York State in January 2016.
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According to Robinson’s accounts, the business has grown quickly: The title of the latter profile was “From zero to $12 million.”
Robinson has collected powerful political friends in the four years since he launched HarpData. Mayor Byron Brown gave HarpData a shout-out in his 2020 State of the City speech this January, naming the company as a partner in Brown’s vision to build a “smart city” guided by data and connectivity. Robinson’s associates tell Investigative Post that Robinson is quick to mention his friendship with the mayor.
I thank Ivory Robinson, owner of technology company @harpdata, for creating a generous $40K 4-year scholarship for seniors to compete for at Riverside Academy. Ivory Robinson is a 1997 graduate of Riverside, it’s fantastic to see him giving back his school and community. pic.twitter.com/7zg0uRwBSa
— Byron W. Brown (@MayorByronBrown) May 15, 2019
In May 2019, Masten District Council Member Ulysees Wingo lost his chairmanship of the Council’s Education Committee after he brought a handgun into Riverside High School. Wingo was there to hear his friend Robinson speak.
Another political ally is Assemblywoman Crystal Peoples-Stokes. Robinson gave $1,100 to Peoples-Stokes’s campaign committee in 2018. Earlier that year, HarpData gave $1,150 to Grassroots, the political club with which Peoples-Stokes, Brown and Wingo are associated.
HarpData’s chief operating officer, Erica Tyler, donated $1,000 to Wingo’s campaign account in April 2019.
The Connected Communities project’s objective was simple: By boosting the power of the WiFi signal from eight school buildings, the district would provide free at-home internet access to 5,500 students in low-income neighborhoods where the lack of such access is a problem. The district chose two neighborhoods, one each on the city’s west and east sides: an area south of West Ferry and west of Richmond, and a corridor along Genesee Street between Michigan and Bailey.
The “East Zone” would boost the signal from five schools: Marva J. Daniel Futures Preparatory School, Dr. Charles R. Drew Science, New BUILD Community School, Harvey Austin School and East Community High School.
The “West Zone” would boost the signal from three schools: D’Youville Porter Campus School, Frank A. Sedita Academy and Herman Badillo Bilingual Academy.
Robinson told Investigative Post the hardware for the project is now on site at those schools. But none of it has been installed or activated.
Robinson said that blame for the delay lies entirely with the school district. Sanjay Gilani, the district’s chief technology officer, retired at the beginning of 2019, months before the contract was awarded to HarpData. Gilani’s successor, Myra Burden, didn’t start until January 2020.
In a contract of this scope, Robinson said, his company needed to work closely with and win approvals from the district’s information technology leadership every step of the way. Until Burden came on board, he said, the design phase of the project was effectively stalled. Then the COVID-19 crisis hit, and the district prohibited on-site work.
“Of course I wish the project was online now,” Robinson told Investigative Post in a phone call, with his attorney, Joseph Makowski, participating. “But we are at the mercy of the school district.”
Still, last August, Robinson told the Buffalo News he expected the project to be completed by January of this year. When he made that prediction, the district was between chief technology officers and the COVID-19 crisis was six months away.
School district officials acknowledged the change in IT leadership contributed to the delay, but they said other factors figured in as well.
“The hiring of a new [chief technology officer], coupled with HarpData’s financial and legal difficulties, have contributed to the delay,” Nathaniel Kuzma, the district’s general counsel, told Investigative Post.
In the meantime, the HarpData project’s failure to proceed is felt all the more keenly because of the COVID-19 crisis. The suspension of in-school activities, now extended to at least May 15, has compelled the school district to turn to distance learning. To do that, the district is scrambling to connect all its students by deploying thousands of mobile hotspots to individual families. And it is working with other local companies to provide Wi-Fi connections similar to those HarpData was hired to create.
The warning signs
HarpData substantially underbid its competitors for the Connected Communities project: just $1.3 million, while the other two bids came in at $4 million and $4.9 million.
Price was the bidding criterion HarpData scored highest on. On four of five other criteria — technical solution, timeline, understanding the project, and qualifications and experience — HarpData scored lower than the other bidders. On “Proposer Qualifications, Experience, Demonstrated Ability and References,” they scored dead last.
But the school district gives price the greatest weight in scoring bids — 40 out of a possible 100 points — so HarpData’s bid won the day.
Then there were HarpData’s legal problems.
In June 2018, HarpData partnered with an Indianapolis-based company called Core BTS to pursue a contract to upgrade digital record-keeping and service delivery for Kaleida Health and ECMC. The project, awarded jointly by the two health-care providers in August 2018, entailed the purchase and installation of $4.4 million in new equipment.
The equipment was to come from Cisco, the IT hardware giant. Cisco only sells its equipment through authorized dealers. HarpData couldn’t place the $4.4 million order with Cisco itself, so it arranged to place the Kaleida/ECMC order through Core BTS, which is licensed by Cisco.
By April 2019 — before Buffalo’s school board awarded the Connected Communities project — the arrangement between HarpData and Core BTS had gone so sour that the two parties were seeking relief in the courts.
Core BTS claimed in court filings that, after delivering the goods for HarpData, they were stiffed: HarpData allegedly didn’t pay for the equipment. Even after ECMC paid HarpData its portion of the bill, Core BTS alleged, HarpData didn’t pass payment on to Core BTS.
Further, Core BTS claimed that HarpData intended to violate the terms of their contract by selling some or all of the Kaleida equipment on a “black market” to another end user. Switching end users is forbidden by Cisco, and Core BTS feared HarpData’s action might cost Core BTS its lucrative designation as an authorized Cisco dealer. Core BTS won a court injunction preventing HarpData from reselling the equipment.
Core BTS Inc v HarpData LLC (Text)
Core BTS’s complaint resulted in a judgment against HarpData and Robinson personally for $810,000. That judgment was handed down in July 2019, just as the school district was approving HarpData’s bid for the Wi-Fi contract.
In response, HarpData filed a complaint of its own, arguing the company’s debt to Core BTS was substantially less than the judgment levied against it.
Last Wednesday, HarpData was served another lawsuit stemming from the same deal.
According to Kaleida Health’s complaint, filed in New York State Supreme Court, “Harp has failed and continues to refuse to refund Kaleida the prepayments advanced to Harp for the services that Harp has failed—and in fact, does not have the ability to—to perform.”
Kaleida Health v HarpData LLC (Text)
Kaleida demands the refund of more than $365,000 in advance payments made to HarpData for installation and other services.
Kaleida claims Harp Data has failed to provide the services outlined in the contract, failed to provide evidence that it had the certified staff required to do the work, and had generally been unresponsive to Kaleida’s efforts to move the project forward.
Makowski, Robinson’s attorney, said the dispute between HarpData and Core BTSs is “on a path toward resolution” through arbitration. Makowski said it would be premature to comment on Kaleida’s claim, except to say that his client intended to “vigorously contest” all Kaleida’s allegations.
“Financial and legal difficulties”
School district officials told Investigative Post they were unaware of the claims against HarpData at the time the Connected Communities contract was being bid and awarded.
But complications revealed themselves soon enough.
In his statement to Investigative Post, Kuzma, the school district’s general counsel, alluded to “HarpData’s financial and legal difficulties” as contributors to the delay in the project. So did Cash, the superintendent, in his conversation with Investigative Post.
Billing and payment complications arose first.
Not long after the contract was signed last summer, the school district was alerted by Oxygen Funding, a California-based lender, that any payments due HarpData should be directed to Oxygen.
Lenders like Oxygen provide the equivalent of payday loans to companies with cash-flow issues. Through Oxygen and firms of its ilk, companies can convert accounts receivable into ready cash — sometimes at a high cost, and usually by signing over ownership of accounts receivable to the lender.
Robinson confirmed an arrangement with Oxygen. He told Investigative Post that the use of a lender like Oxygen Funding was not unusual and “not particularly” expensive for a company of HarpData’s size.
The first bill the school district received for the Connected Communities project came in March — about $430,000 for equipment. Under the terms of the request for proposals, that hardware should have been ordered last summer.
Before the school district could dispatch that payment to Oxygen Funding, per HarpData’s instructions, the district received a notice from the state Supreme Court regarding the $810,000 judgment against HarpData and Robinson.
Any payments due to HarpData, the court instructed, were to be directed to the law firm of Hodgson Russ, which would hold the funds in escrow to assure money was available to pay the judgment and associated court costs.
Makowski, Robinson’s attorney, told Investigative Post that it was not unusual for a company’s assets — in this case, accounts receivable — to be subject to a lien, in the event of a financial judgment against the company.
Asked why the court would issue a lien against money owed the company instead of freezing existing cash in the company’s accounts, Makowski replied, “Wherever there are pots of money, lawyers will move.”
Asked about his current cash-flow situation, Robinson answered, “It’s good. We’re profitable.”
A bad time to fail
Central to Kaleida’s claim is that, in the teeth of the COVID-19 crisis, the equipment upgrades it was supposed to have received under its contract with HarpData would improve its ability to serve patients.
In a March 27 letter to HarpData, Kaleida’s attorney, James Milbrand of the firm Barclay Damon, wrote:
“As I am sure you can understand, the current pandemic situation makes the reliability of information technology systems in medical facilities paramount. Consequently, your continued failure to address this situation will result in Kaleida seeking emergency relief via formal litigation.”
Beginning in March, Kaleida laid out a series of deadlines for HarpData, hoping to get the project back on track. HarpData was unresponsive, according to Milbrand’s letter.
So Kaleida sued to get its money back and intends to find another way — and another company — to proceed with the project, according to Milbrand’s March 27 letter.
Similarly, Buffalo schools would be better positioned to deliver online instruction to students with limited internet access if the Connected Communities project had been completed on time, district officials told Investigative Post.
But they’re sticking with HarpData and Robinson.
“I want him to succeed,” Cash said of the Riverside High alumnus.
However, Cash told Investigative Post, he’ll be watching HarpData’s performance closely. If the company fails to perform, Cash said, he would not hesitate to cut the cord.