A top education official in the Department of Health, Education and Welfare overruled objections from her staff and awarded an $800,000 training contract renewal to an Atlanta college last year after the White House intervened on the school's behalf.
The official, assistant HEW Secretary Mary F. Berry, gave the contract to Atlanta University, a small predominantly black graduate school, despite a flurry of written staff complaints that the college badly mishandled the first year of the two-year teacher training program.
The $800,000 award was made without any competitive bidding, even though the terms of the contract provided no option for a noncompetitive renewal after Atlanta University won a $2 million portion of the project in competitive bidding the first year.
According to documents made available to The Washington Post and interviews with HEW officials, the renewal was made by Berry after a call from a member of presidential assistant Jack Watson's staff. One memo noted that the staff member asked that all education office contracting be halted until the Atlanta University contract was renewed.
Jane Hansen, a staff assistant in Watson's office, said she called both Berry and deputy education commissioner Alfred L. Moye about the Atlanta University contract last July. She said she made the calls after the matter was raised during a conversation between President Carter and Rev. Martin Luther King Sr. and was referred to Watson's office. King is a member of the Atlanta University board of trustees.
"The whole purpose of the calls was to give [university president] Cleveland Dennard his day in court," said Hansen. She said she was not aware of the problems the school had with the training program.
The Atlanta University contract is the first one to come to light in which the White House exerted pressure on the office of education. HEW officials said, however, that such outside pressure is not unique.
The office of education has been criticized recently for its handling of grant programs to developing colleges. Last month HEW officials testified before a Senate Judiciary subcommittee chaired by Sen. Max Baucux (D.-Mont.) that they made or raised grants to more 100 than schools under pressure from Berry or members of Congress.
After the call from Hansen, office of education officials scrambled to yank a notice out of the Commerce Business Daily calling for competitive bids for renewal of the training contract.
Berry then split the controversial contract three ways. Two schools, the University of Colorado and Marquette University, received their portions of the $2.4 million second-year training contract through competitive bidding while Atlanta University got its $800,000 without competition, according to HEW officials.
At the time Berry was opening a vigorous campaign for the post of secretary of education. President Carter subsequently picked California jurist Shirley Hufstedler for the new Cabinet position and Berry has since announced she plans to leave HEW at the end of this month.
Berry was not available to comment on the Atlanta University contract. A spokesman for the assistant secretary said the procedure used in the contract splitting was not unusual for the office of education.
The spokesman said staff members in the office of education who originally expressed concern about the renewal of the training contract with Atlanta University changed their minds after the call from Watson's office and a subsequent meeting with Berry.
According to memos written by senior office of education staff members last year Atlanta University officials had trouble accounting for money the school received under the first year of the contract.
"The overall fiscal control of the contract is grossly inadequate" wrote David A. Johnson, the director of the division of student services and veterans' programs.
Johnson also noted wasteful spending by the school and "the state of almost complete pandemonium" during training programs it conducted at eight sites around the United States.
In addition, Johnson complained that the school had had shown "political insensitivity" in its hiring almost all blacks for key positions in the program. The project was designed to train about 2,000 instructors to help underprivileged young people get into college.
Other memos repeated the problems and advised against granting Atlanta University a noncompetitive renewal. Berry herself, in a memo to Watson noted that she had told the school's president Dennard that "Atlanta seemed no more qualified for this contract than many other institutions which have distinguished records of service to the disadvantaged." i
Nevertheless, she said she had made arrangements to split the contract, leaving the Georgia school with the choice of bidding with other colleges for the renewal or taking a portion "for which Atlanta University is uniquely qualified."