by David M. Reutter

On September 10, 2021, a California court set aside an award by the state Department of Corrections and Rehabilitation (CDCR) of a contract to Global Tel Link Corporation (GTL) for telecommunications services for California prisoners.

The ruling disrupted GTL’s rollout of new tablets to state prisoners under the contract, which in turn had stuck a dagger in the heart of a tablet rollout underway by competitor Securus Technologies’ JPay, expanding on a pilot program launched at five state prisons in 2017.

At stake is the lucrative market for prisoner gaming, reading and listening material delivered via the tablets, which are also used to make audio and video calls. Those once made up the lion’s share of profits for prison communications firms, until the Federal Communications Commission began to reign in their outrageous rates. [See: PLN, Sep. 2021, p.12.]

As that saga was unfolding, in August 2020, CDCR and the state Department of Technology solicited bids by way of a request for proposals (RFP) followed by negotiations pursuant to the Public Contract Code Section 6611. The bids were to be evaluated under a system assigning each a maximum of 2000 points, 30% of which were allocated to costs.

Under the “Costs” section appeared this warning: “The State has established a not-to-exceed (NTE) for this procurement. Bidder’s rates for calls must not exceed $.05 per minute. Bidders may propose rates lower than the NTE identified.” Bids were to be for all calls, including video and voice calls.

The Bidder was also to be responsible for all costs associated with implementation and installation of equipment. Additionally, it had to pay the state an annual Contract Administrative Fee of $200,000. Otherwise, no commissions were to be paid to the State, whose goal was having prisoner and video services that were “lower than any other State DOCs and shall not exceed the current rates/pricing for these services.”

Three companies submitted bids: Securus Technologies, IC Solutions, Inc. and GTL (now ViaPath), which formerly held the contract to provide prisoner phone services. After examining the bids, the State invited GTL and Securus to negotiations. Securus submitted a bid of $0.99 per transaction for a 30-minute video, explaining that this represented a per-minute rate of $0.039, below the $.05 NTE.  GTL proposed charging $.25 per minute for video calls and $.07 per minute for international calls.

After the State got GTL to lower its video rate to $.20 per minute, it awarded the firm a six-year contract with four one-year extensions.

Securus sought documents on the bidding process from the State via a public records request. Then it went to state Superior Court for Sacramento County, seeking a writ of mandate to invalidate the contract for violating the Public Contract Code. It alleged the failure to disqualify GTL for surpassing the NTE rates not only violated the law but also gave GTL an unfair advantage. By choosing GTL over Securus, prisoners and their families “now pay over $12,000,000 more per year for video calling than they would under Securus,” the complaint noted. It further alleged that the State failed to investigate GTL’s misrepresentations as to its experience in providing the services sought by the RFP.

The parties briefed the Superior Court, which then entered its ruling. The State and GTL argued that the NTE applied only to domestic calls, but the Court disagreed, finding the RFP used the term “calls” and “plainly indicates the NTE is not limited to domestic calls.” It found the State “ultimately held Securus alone to the NTE while allowing GTL to exceed it for video calls and international telephone calls. In this way, Respondents granted GTL an unfair advantage the California law proscribes.”

As the Court determined that a writ of mandate was warranted for failure to impose the NTE provision on GTL, “the court need not decide whether relief is also warranted on the ground that Respondents failed adequately to evaluate GTL’s references.”

The Court, therefore, set the contract aside. It allowed the State to continue with GTL providing the contracted services on one or more interim arrangements reached independently of the contract.

In the end, CDCR got its way and awarded the deal to GTL/ViaPath. Securus/JPay’s pilot programs all ended on June 30, 2022, when CDCR promised on its website that the victorious vendor would be on hand “to distribute tablets free of charge to all incarcerated people.” See: Securus Techs., Inc., v. Cal. Dep’t of Technolog., Cal. Super. (Sacramento Cty.), Case No. 34-2021-80003594. 

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