Besides providing education to some 57,000 Boston children, Boston Public Schools is also a provider of meals: the District spends roughly $20 million annually on its food and nutrition programs.
That money is paid largely to outside companies, and competition for those contracts can be fierce.
But in 2016, one vendor would be awarded a half-million-dollar contract with no competition at all.
That year, Boston Public Schools awarded a contract worth $500,000 annually, to Sal’s Pizza, to provide thousands of oven-ready pizzas to BPS schools for a years-old tradition known as “Pizza Fridays.”
WGBH News has learned that this contract was not advertised and was awarded without any competitive bidding process — contrary to state laws explicitly requiring transparent competitive bidding for such services.
BPS officials stress that this was due to an honest mistake, which was later corrected. And the contract is a small part of the district’s overall budget for meals and food services.
But WGBH News’ findings come amid other reported financial accountability issues within the district. Last year, Boston officials acknowledged that an IRS audit found mismanagement of BPS finances including failures to fill out proper tax forms for vendors. A 2014 review of the district’s Food and Nutrition Department found various problems, including that the department had “no formal system for the evaluation of vendors.”
Several members of Boston’s City Council, meanwhile, have been pushing for more transparency and accountability in city contracts across the board.
Sal’s Pizza operates some two dozen pizzerias in Massachusetts and New Hampshire and does a separate business in the wholesale production of pre-baked pizzas that meet special federal guidelines for healthier school meals.
The company, which is incorporated in Salem, New Hampshire and has offices in Lawrence, Mass., was founded in 1990 by Salvatore Lupoli, now a major developer in the Merrimack Valley. His Lupoli Companies, of which Sal’s Pizza is a subsidiary, has received at least $6 million in state development grants.
Lupoli is well-known in political circles as well: He was appointed to a special economic development council by Gov. Charlie Baker and is a member of the Chelmsford School Board.
Employees of “Double N, Inc.” — the New Hampshire-based corporate entity that does business as Sal’s Pizza — have made more than $15,000 in political donations since 2014 (including $1,500 in donations to Boston Mayor Marty Walsh).
There’s no evidence that Sal’s Pizza has provided the Boston Public Schools with anything other than a useful service at a competitive price. (Indeed, Sal’s Pizza provides several other school districts in Massachusetts and New Hampshire with pizzas.)
But the convoluted story of how Sal’s Pizza came to have been improperly awarded a no-bid, $500,000 contract with BPS echoes long-standing complaints that the world of public contracts in Boston can be opaque.
BPS officials acknowledged only after several inquiries by WGBH News that the contract was awarded based on information that was “incorrect,” though they stress that this was the result of an honest error which has since been corrected: The contract was advertised and competitively bid the following year.
For all the reams of data the City of Boston makes available to the public — everything from property valuations to code enforcement tickets to individual 311 calls — the details of public contracts are largely hidden from public view.
Initially Boston Public Schools officials said that the contract had been advertised and competitively bid. When asked for documentation of that process, BPS officials then said an error had been made and that the contract had not been bid but that the contract had been exempt from competitive bidding because it fell under an existing state contract.
That also proved to be inaccurate even though the same assertion had been made, in writing, in a 2016 letter to Boston Mayor Marty Walsh, signed by BPS Superintendent Tommy Chang, stating that the contract was exempt from bidding rules.
BPS officials acknowledged after more inquiries that no such pre-existing contract existed and that the contract should, in fact, have been competitively bid.
The discrepancy was ascribed to an internal misunderstanding. An emailed statement from BPS said that BPS officials confused a state list of qualified vendors (of which several produce pizza) for a list of active contracts.
“Upon further review,” the statement says, “this information was incorrect.”
That means the contract was issued in apparent violation of state law as well as a city regulation requiring any unadvertised contract worth more than $40,000 be sent for review to the Boston Finance Commission.
“We did not receive it,” Finance Commission Executive Director Matt Cahill told WGBH News. “We knew nothing about it until [WGBH News] brought it to us.”
Had the contract been sent to his office for review, Cahill added, “It wouldn’t have passed muster with us” as being exempt from competitive bidding rules.
According to the statement, “BPS did not knowingly violate the law.”
BPS officials have emphasized that the contract was advertised for competitive bidding the following year — the 2017-2018 school year — after the District was notified, in a December 2016 memo from state education officials, that such contracts must be bid.
But even then, WGBH News found, the contract wasn’t advertised until June 5, 2017 — less than one month before the prior contract expired, and with a submission deadline for new bids of June 28, just three weeks from the initial ad.
Only one vendor responded: Sal’s Pizza.
A new contract for pizza, now worth $571,000, was again awarded to Sal’s.
The revelation that the contract had initially been awarded without any public bidding process to a company incorporated in New Hampshire was of particular concern to some members of Boston City Council.
“We as a city should be actively seeking local businesses, and especially women and minority-owned businesses” said Boston City Councilor Anissa Essaibi George, who chairs the Council’s Committee on Education. “We’ve got plenty that would I’m sure be thrilled to participate in our food service contracts in the City of Boston.”
Essaibi George added that she doesn’t have a problem with the idea of having smaller vendors supplementing larger contracts for things like “Pizza Friday.”
“I think it’s fine, and I’m excited about it,” Essaibi George said, “if we’re sharing that wealth locally — if we’re looking to engage locally-owned pizza shops across our city.”
Essaibi George said that she plans to write Boston Public Schools Superintendent Tommy Chang a letter inquiring about the pizza contract.
Boston City Councilor Michelle Wu, who has been pushing for better outreach by the city to a wider diversity of vendors for city contracts, was also less than pleased to learn of the contract and how it was initially awarded.
“When we’re doing procurement, when we’re going out and doing these contracts, we’re not only spending taxpayer dollars … we’re using that to create a business opportunity for someone else,” said Wu.
“Let’s spend taxpayer dollars, when we need to, on creating business opportunities for a local, Boston-owned business," she added. "Five hundred thousand dollars is a whole lot that could be used to start up and support Boston-owned entrepreneurs.”
