Philly district ending deal with subs contractor

The Philadelphia School District will sever its ties with a New Jersey company that failed to deliver on its promise to provide substitute teachers to staff classrooms across the city.

"I am committed to resolving the substitute teacher staffing challenges long facing our schools," Superintendent William R. Hite Jr. said Thursday evening. "Our effort to improve substitute coverage this year fell woefully short."

District officials said that they and Source4Teachers of Cherry Hill had mutually agreed to end the contract June 30 after one year.

On May 19, the School Reform Commission is expected to vote on hiring another company - Kelly Services - to take over placement of substitutes in the fall.

A draft of the SRC resolution was expected to be posted on the district's website Friday.

"I am confident that Kelly Services will be successful, given its track record with large urban school districts," Hite said.

Owen Murphy, a spokesman for Source4Teachers, said the company notified the district at the end of March that it was not willing to pursue a second year under the current contract and wanted to negotiate different terms.

"We're disappointed that the district did not engage us in those conversations, instead choosing to grant a different organization the opportunity to perform our service," Murphy wrote in an email Thursday evening.

"We knew that working in the School District of Philadelphia would be difficult, but it was a challenge we openly accepted. We remain confident that, if we were to be a partner a second year, we'd leverage our momentum and nine-plus months of learning to reach the fill rates the district had hoped for."

Source4Teachers, which had experience working with smaller districts, never came close to meeting its pledge to fill 75 percent of the positions that were vacant on the first day of school last fall and 90 percent by Jan. 1.

The company provided substitutes to fill 53 percent of the classrooms that needed teachers on April 29, and had averaged a 49 percent to 50 percent fill rate in recent months, district spokesman Fernando Gallard said.

Murphy, however, said that the Cherry Hill firm had demonstrated momentum and that its fill rate had reached "57 percent each day this week."

But last October, when Source4Teachers had a 20 percent fill rate and there were reports of 77 students being jammed into a single gym class, many education advocates called on Hite and the SRC to end the contract immediately.

The substitute shortage - combined with a large number of teacher vacancies - caused problems in classrooms across the city this academic year. The district said it will offer a variety of classes this summer for students who did not have a regular teacher for more than one-third of the school year.

Last summer, the SRC moved to outsource its substitute staffing. The move was roundly criticized by the Philadelphia Federation of Teachers and others.

Hite said then that the change was needed because the district could only provide 60 percent of the substitutes needed to cover classrooms.

The SRC had agreed to pay Source4Teachers up to $34 million over the life of the two-year contract to provide substitutes through June 30, 2017.

Gallard said that the district had paid the firm slightly less than $6 million through April because the payments were tied to the number of positions filled.

The proposed Kelly contract calls for paying up to $17 million a year for a total of up to $42 million over the next two years.

Gallard said the amount is more than Source4Teachers could have collected because it reflects higher payments to substitutes. He also said Kelly would provide more services and had a track record of much higher fill rates.

Among other things, Kelly will have 17 to 19 staffers in Philadelphia who will be involved in placement. He said Source4Teachers had four people.

In addition, Gallard said, district officials will have access to Kelly's call center, which has 90 trained schedulers on hand to provide support from 5 a.m. to 8 p.m. every day.

The actual amount the district will pay will be based on how many positions the company fills.

Kelly has been working with the Duval County Public Schools in Florida - including Jacksonville - since 2001. Before Kelly started, that district had a substitute fill rate of 76 percent. Gallard said it now tops 98 percent.

He said no competitive bids were sought prior to drafting the proposed contract with Kelly.

"This was not done under a competitive bidding process," he said. "This is a professional services contract, where it's not required."

Gallard also said that seeking competitive bids or requesting proposals from vendors this late in the school year would make it virtually impossible to have substitutes on hand in the fall.

He said that the district used the knowledge gained from the first year of the Source4Teachers contract, and reviewed the competitive bids in other districts to determine rates and craft the proposed agreement with Kelly.

The plan calls for paying $160 per day for certified teachers and $126 per day for substitutes who are not certified. Those rates mirror the amounts the district paid when it handled substitutes itself.

Source4Teachers had a more complicated system, but it initially paid substitutes much less. As the Cherry Hill firm struggled to find more substitutes for district classrooms, it bumped up its rates last October.

Gallard said that the existing pool of 800 substitutes who had signed to work in the district under Source4Teachers would be available for placement in the fall if Kelly is awarded the contract.

Based in Troy, Mich., Kelly has been specializing in providing temporary staffing services since its founding in 1946.

martha.woodall@phillynews.com215-854-2789@marwooda