The original contract should have provision in place that the system be maintained, that the school be notified in any change in parent company ownership, etc.
It would then be much easier to compel the company to do the replacement and if necessary sue them to recover the $1.2m cost.
The issue isn't just one of a technological solution inferior to old fashioned manual lights, it's that public bodies get hoodwinked into contracts that are unfavourable.
There were similar stories from the era of mass-PFI in the UK, with stories about how teachers weren't allowed to change lightbulbs but had to pay a maintenance company £50 to do so every time a bulb went.
Public bodies rushing to accept contracts thinking that suppliers have their best interests in mind is horribly naive.