Highball bidder wins schools applicant tracking

The Philadelphia School Reform Commission awarded a $1.1 million contract for a job applicant-tracking system that costs more than twice as much as those of other finalists and will take three times longer to deploy.

The decision stunned unsuccessful vendors and raised questions inside and outside the district about how the contract was handled and why a top administrator got involved.

The SRC awarded the contract Aug. 25 to Kenexa Corp., a publicly traded company with headquarters in Wayne. Kenexa's bid totaled $1.14 million over five years.

The other two finalists bid $385,561 and $436,000, both also over five years.

A district committee that evaluated proposals from 11 vendors initially excluded Kenexa because it was one of three with total costs over $1 million, according to sources familiar with the review.

The company was brought back into consideration by Estelle G. Matthews, who oversees human resources for the district. In an interview, she described Kenexa as offering a superior system.

"It was like a Volkswagen vs. a Cadillac," she said.

But four of the unsuccessful firms have filed right-to-know requests with the district to find out how the contract was handled and why their proposals were rejected. Three agreed to interviews.

"The price gap is too large to make sense," said Damir Davidovic, founder and president of NEOGOV, a firm in El Segundo, Calif., that provides applicant-tracking systems for governments and schools.

"We don't know why we weren't chosen," said Davidovic, whose company bid $361,000. "The price difference is so large there would have to be a big scoring gap somewhere to justify that."

Kenexa, which does business worldwide, declined to comment on the process.

"Kenexa does not have any information to share," said a spokeswoman for the corporation, which provides recruiting and other business services to such clients as Boeing, BP, and McDonald's.

Matthews said that money was in the budget for a new online system, and she wanted to ensure that the district got the best product to bring its antiquated hiring practices into the 21st century.

The former senior vice president for human resources at Wachovia Bank said that upgrading the recruiting and hiring process had been a top priority since she joined the district two years ago.

Matthews said that based on its proposal and presentation, Kenexa received the highest score, which reflected the strength of its system.

"I am astounded that in this economy the district would select a partner that is three times the cost," said Tracy MacGregor, president and chief executive of Teachers Support Network, a Princeton company whose bid totaled $385,561 over five years. "I'm staggered by that and surprised and disappointed."

His company, which handles applicant tracking for New York schools, was one of the two other finalists, district documents show.

Prospective teachers have complained for years that the district's hiring process is outmoded, time-consuming, and disorganized: Documents are often lost.

After meeting with several companies that specialize in applicant tracking, the district released a 44-page request for proposals March 31.

Among other things, the district wanted an easy-to-use system that would automate and streamline hiring. The system would follow job applicants, track required certifications, create customized job-screening questions, assemble supporting material, correspond with candidates, and transfer information about hires to an employee database.

Eleven vendors responded. The committee that reviewed the proposals decided to eliminate those over $1 million.

Based on that, Kenexa was not among six companies that came to the district to make presentations in mid-May.

The committee then narrowed the pool to two vendors it termed "the lowest responsible bidders," because the team thought they could provide the services requested by the district for the best price, sources said.

The firms were Teachers Support Network, which said it could deploy its system in three months, and iCIMS, a company based in Hazlet, N.J., that said its system could be ready in two months. iCIMS did not return phone calls.

Although Matthews was not on the committee, she was dissatisfied with the finalists. She said she had concerns about scheduling and whether the firms would be able to deliver all services for the quoted prices. She directed the team to reexamine all of the proposals.

"So at that point, we had two that were not going to meet our needs," said Dawn Lomden, a special assistant to Matthews, who was involved in the review. "We started from scratch."

John L. Byars, who oversees procurement, said it was not unusual for Matthews, as head of the department that will use the system, to play a key role.

"At the end of the day," he said, "it starts with her and stops with her."

Pennsylvania law, as well as district policy, calls for most contracts to be awarded to the lowest qualified bidder when services are comparable. But Byars said that requests for proposals and professional-service contracts do not require awards to the lowest qualified bidder.

"You look at experience and references and scope of products they have," he said. "That is much more important than price."

Lomden and Matthews said Kenexa emerged as one of three finalists when the committee took a second look at all proposals. The Wayne company then was invited to make its presentation.

The committee gave Kenexa and the other finalists the same score for compatibility with district technology. But Kenexa had a higher overall score - 88.3 out of 100 points. It had more points in areas such as meeting district goals and customer support.

The higher score, Matthews said, "reflects the reality of the product."

Teachers Support Network scored 70.5 and iCIMS 72.2.

"Money was a factor," she said. "But we didn't want the team to settle just because they were the lowest."

Some vendors learned Kenexa had been selected when the SRC posted its August agenda online Aug. 19. The district did not notify them until it sent letters Oct. 12.

The Kenexa contract has not yet been signed, district officials said Friday.

Despite receiving a few district documents in response to a request for information, General ASP, a Chicago company, submitted another request last week to try to understand why its low bid of $141,500 had been rejected.

"We are, of course, disappointed," said Keith Westman, vice president of sales and marketing. "We felt that our experience with school districts - which is all we serve - and our price would have been attractive with the services we provide."

His company was created by former school officials and human resources directors. Cherry Hill and Collingswood are among the area districts using its AppliTrack system.

Dissatisfied with the few documents it received from the district, Teachers Support Network asked for a meeting.

"We are trying to schedule a debriefing . . . to explain the process," MacGregor said. "Much of it is still complicated and surprising to us, to say the least."

While applicant-tracking systems have some differences, at their core, he said, they are mostly the same.

"From my vantage point, is there $700,000 worth of difference?" he asked. "I would be greatly surprised."

Byars said it is not unusual for rejected vendors to file right-to-know requests or ask for debriefings.

And although Matthews says that streamlining the district's hiring remains a top priority, she is not concerned that Kenexa's system will not be fully deployed until July and unable to play a large role in recruitment for 2011-12.

"That's OK with us," she said. "There is no way we could convert in two or three months. We are going to do this in stages and do it right."