After school crisis alert system failed, CMS will get $475K refund in lawsuit settlement

Charlotte-Mecklenburg Schools settled its lawsuit with the maker of the district’s troubled crisis alert system, which agreed to a partial refund of the more than $1 million the district spent.

The district sued Centegix, the Georgia-based company behind the security system, in April. CMS sought to recoup the $1.15 million it had paid the company, alleging in court filings that Centegix knew its system did not work and misled the district.

Months earlier, the Observer began investigating the failing security alert system, which had been touted as a way to keep schools safer following the fatal shooting in 2018 of a student at Butler High School.

Following questions from the Observer, Superintendent Earnest Winston told the public the system was not working on Jan. 10 and gave the company a 30-day deadline to resolve all problems, which Centegix did not meet. CMS refused to pay the remaining $600,000 of its $1.75 million purchase agreement.

Centegix has agreed to refund CMS $475,000 for the CrisisAlert equipment, according to details in the lawsuit settlement agreement, a copy of which was provided to the Observer Thursday by district officials.

CMS agreed to hire a vendor at its own expense to uninstall and box up all equipment for the company to pick up. The district will hold on to some audio equipment installed at Charlotte East Language Academy to use for hearing assistive purposes.

Both parties agreed to pay their own attorneys’ fees and to dismiss all litigation against each other.

“CMS and Centegix have come to a mutually agreeable resolution to our dispute,” the district and the company said in a joint public statement. “We are pleased to have this matter behind us.”

The settlement concludes a nearly year-long dispute over the functionality of the crisis alert system, which is supposed to allow teachers to call for help during an emergency by pressing a button on a badge. But according to CMS’s documentation of the installation process, the system failed for months before Winston told the public of its shortcomings.

As the Observer has previously reported, the system was adopted under former Superintendent Clayton Wilcox, who pushed for the deal with Centegix and built a relationship with the company’s founder before the district began purchasing its products.

Purchase bypassed school board

According court documents, including declarations and affidavits from CMS employees and the company, the district began working with Centegix to install a crisis alert system months before a request for proposals was published.

In December 2017, chief technology officer Derek Root and other CMS employees visited schools in Georgia and met with company representatives, according to a statement in the lawsuit attributed to Daniel Dooley, the company’s founder and chairman.

Dooley stated that he met with CMS again in Jan. 2018, and that Wilcox told him that he should go through Root, who had been designated as responsible for the project. He stated that Wilcox did not attend the December site visits, but was present at the January 2018 meeting.

In an affidavit, Root said he first met with Centegix representatives in May 2018, where they discussed placement of the company’s security and audio products at the pilot school, Charlotte East Language Academy.

CMS did not issue a request for proposals soliciting bids for a security system until August 2018. Centegix was awarded the bid in November 2018.

Though contracts of this size usually require board approval, the CMS board did not vote to approve one, the Observer has previously reported. Instead, the district used purchase orders to authorize all payments.

Court documents show the company asked Root to sign a scope of work agreement and said he needed to sign the agreement so Centegix could proceed with installation. Root said he signed the agreement after he was contacted multiple times by Dooley but that no one else in CMS reviewed the document, according to Root’s affidavit.

Procurement officers in CMS said in their statements that Root did not have the authority to execute competitive contracts and that they were not aware of the agreement. Root said the company did not tell him that the agreement was intended to replace the bidding process, and that he was not instructed by the board or the superintendent to sign the document.

Emails, records of testing and other district documents previously obtained in the Observer’s investigation show repeated flaws with the crisis alert system. The panic buttons given to teacher were designed to set off a series of color-coded lights and alerts across school buildings.

But the district’s records show that the system often played the wrong emergency message, components fell out of the ceiling and the badges failed to work properly.

Centegix has previously defended its product and accused CMS of having a political agenda.

The two parties came to their final settlement agreement after court-ordered mediation. In their joint statement, both emphasized a desire to move forward.

“We both remain entirely committed to creating safe school environments in which teachers are free to educate, and students can learn and thrive,” they said.