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Los Angeles School District Suspends Its IPad Program

As the 2013 school year began in Los Angeles, the nation’s second-largest school district embarked on an ambitious and controversial multiyear plan: to give every student and teacher an iPad, complete with curriculum developed by Pearson to align with the new Common Core standards. The program was expected to cost $1 billion—half of which would go to Apple (AAPL) and Pearson (PSO) and half to upgrading the Wi-Fi and other infrastructure for the schools.

Now the superintendent of the Los Angeles Unified School District, John Deasy, has suspended the contract altogether because of an apparently flawed bidding process. So far the district has spent $61 million; students in 58 schools have iPads.

As the Los Angeles Times and public radio station KPCC first reported, a district inquiry into the bidding found that the initial rules for winning the contract appeared to be tailored to products from Apple and Pearson rather than to district needs. It also found that officials were in regular contact with executives at Apple and Pearson, which created an appearance of conflict even if no ethics rules were violated.

E-mails obtained by KPCC provide some details. Marjorie Scardino, then Pearson’s chief executive, made a pitch to Deasy in May 2012 before the bidding process began. After their lunch, Deasy wrote: “Looking forward to further work together for our youth in Los Angeles!”

“Dear John, It’s I who should thank you,” Scardino replied. “I really can’t wait to work with you.”

Deasy, who apparently also pitched Apple on a partnership with Pearson, has tried to recast the controversy as an opportunity. In a memo to school board members on Aug. 25, he wrote that the decision to suspend the contract will ”enable us to take advantage of an ever-changing marketplace and technology advances. … We will incorporate the lessons learned from the original procurement process.” Deasy has said he did not participate in writing the specifications or constructing the bidding process, nor did he select the winners.

Pearson issued a statement that says in part: “As the district continues its bold, ambitious effort to provide every teacher and student with access to a state of the art device and state of the art curriculum, we look forward to continuing to support this vision.”

Apple didn’t respond to a request for comment, but Deasy has said he expects the company to participate in the new bidding process as well. It should be complete by spring.

Berfield is a writer for Bloomberg Businessweek in New York. Follow her on Twitter @susanberfield.

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