Broadband contractors file tort claims against state

The Idaho Education Network’s contractors have filed tort claims with the state, demanding back payments on the voided broadband contract.

Education Networks of America, the lead contractor on the beleaguered project, is seeking roughly $6 million, “including ancillary damages, plus statutory interest, costs, expenses and reasonable attorneys’ fees.”

CenturyLink, a subcontractor to ENA, does not outline specific damages in its tort claim. But CenturyLink attorney Steven Perfrement said the company is owed “full payment for all services rendered,” plus 12 percent in annual interest. In the past, CenturyLink has said it is owed more than $1 million by ENA for service to schools, and the state has said it owes CenturyLink $540,000 for providing broadband to state agencies, an offshoot of the network project.

Idaho Education News obtained both tort claims Thursday.

The tort claims — filed March 5 by CenturyLink and March 6 by ENA — do not constitute lawsuits. They are a precursor to a potential civil suits, and the state has 90 days to respond.

The filings mark the latest salvo in an ongoing battle over the Idaho Education Network — and a disputed contract to provide high-speed Internet to Idaho’s high schools and state agencies. In November, District Judge Patrick Owen ruled the 2009 network contract void, and reaffirmed his ruling last month. As a result, Idaho has not made payments to contractors for months, citing a state law that forbids agencies from paying out on a voided contract.

In their tort claims, both companies say this decision amounts to a breach of contract — since they have not been paid for Internet service they provided to the state. The companies say this non-payment also is tantamount to an illegal taking of private property, forbidden under the U.S. and Idaho constitutions.

“The state of Idaho and the children served by the (network) have received the full benefit of ENA’s services; yet, ENA has not been paid,” wrote Phillip Oberrecht, a Boise attorney representing ENA.

ENA’s tort claim specifically challenges the state’s attempts to keep school broadband online, while bypassing the Idaho Education Network framework.

In February, the Legislature and Gov. Butch Otter agreed on a plan to compensate school districts for procuring their own short-term broadband contracts for the rest of the school year. The districts have done so, at a projected price of $1.9 million — well below the $3.6 million set aside in the broadband bailout bill. Based on the success of that short-term stopgap, the Legislature’s Joint Finance-Appropriation Committee is recommending a similar plan for the 2015-16 school year, at a cost of $6.3 million; on Thursday, JFAC recommended zeroing out the network budget for 2015-16.

“As of Feb. 28, 2015, the state has defunded the (network), effectively terminating the contract before the expiration of its anticipated term,” Oberrecht wrote.

In 2013, the state Department of Administration quietly extended the Idaho Education Network contract through 2019, to the surprise of legislators.

Spokesmen for ENA and CenturyLink declined to comment on the tort claims.

Otter’s office declined comment, and the Department of Administration said little about the claims. “The Risk Management Program has received the tort claim from the Office of the Secretary of State and is reviewing the claim according to its procedures.”

Todd Dvorak, a spokesman for Attorney General Lawrence Wasden, declined to say how Wasden is advising legislators or the governor on the matter.

The state’s formal action on the tort claims falls, coincidentally, to a branch of the Administration Department — the same agency that engineered the defunct Idaho Education Network contract in the first place.

The department’s risk management division has 90 days to review the claims. If the division rejects the claims, the companies can file suit. In addition, the companies can sue if the division does not respond within 90 days.