School & District Management

Pearson Contract for Common-Core Testing Faces Legal Challenge

By Sean Cavanagh — May 13, 2014 6 min read

A decision to give the education vendor Pearson a major, potentially lucrative contract for common-core testing is being challenged by a competitor that claims the award was made through a process that was unfair and biased in favor of the eventual winner.

The American Institutes for Research, a Washington-based organization that has a substantial place in the testing field, has filed a legal action in New Mexico state court that argues the contract was awarded in a process that was illegal, and structured in a way that wrongly benefited one company—Pearson.

The AIR initially filed a protest with New Mexico state officials six months ago, not long after the invitation for bids on behalf of a group of common-core states—those belonging to the Partnership for Assessment of Readiness for College and Careers, or PARCC, testing consortium—was issued. The state rejected that protest, saying it hadn’t been filed within the required time window.

Now, the AIR is asking a judge to overturn the state’s decision on its protest. It wants the court to declare as invalid the process for issuing the award, block the procurement from going forward, and order that the initial bid for testing work be restructured to correct problems with the solicitation.

The dispute over the contract represents a high-profile battle over work that is essential to ensuring that ambitious testing linked to the Common Core State Standards can be carried out. Sixteen states, plus the District of Columbia, are participating in PARCC, while 22 states are members of the other major common-core testing consortium, the Smarter Balanced Assessment Consortium.

The contract awarded to Pearson, a commercial education provider with a worldwide reach, calls for the London- and New York City-based company to provide the development of test items, test delivery, reporting of results, and analysis of student performance for PARCC.

A Mississippi state official, part of the negotiating team on the contract, could not put a dollar value on the contract, but described its size as “unprecedented” by the standards of the U.S. testing industry.

The potentially huge scope of the work is described in the language of the New Mexico contract with Pearson. It says that anywhere between 5.5 million and 10 million students would be tested annually, with a projected per-student cost of testing in the new contract of about $24. That estimate is a decrease of more than $5 per student from the previous price tag.

Favoritism Alleged

New Mexico, a PARCC state, put forward the initial request for proposals for the PARCC testing work on behalf of the member states in the consortium in November.

In December, the AIR filed a protest with the state, citing several objections to the RFP put forward for the testing project. For instance, the AIR argued that the solicitation improperly tied assessment services to be provided in the first year of the tests with work in subsequent years, essentially creating a “bundling of work” that unfairly restricts competition.

The bundling of work favors Pearson, because it would rely on a content-delivery platform already developed by Pearson for the PARCC tests, the AIR said in a Dec. 11, 2013, letter to New Mexico’s education department.

That arrangement meant that vendors other than Pearson would end up having to design an assessment system and estimate the costs of that work with only vague information, the AIR claimed in its protest.

As a result, Pearson would be allowed to “transform the advantage it enjoys as the year-one [content-delivery] platform vendor to an advantage for subsequent years of the program,” the AIR stated in its protest.

In court documents, AIR officials say they would have submitted an official proposal to do the testing work if they thought the bidding process was fair, but they regarded it as flawed and biased, and so they decided not to bid.

In the end, Pearson ended up being the only bidder, a PARCC state official told Education Week.

The protest from the AIR was initially sent to an official at the state’s department of education. But a little more than a week later, AIR officials said they were informed that their protest had not been put forward in a timely fashion, and was thus invalid, because it had not been sent to the state purchasing division. State officials said the correct process was made clear in the RFP.

In response, the AIR filed its appeal in state court, calling the rejection of its protest “arbitrary, capricious, and not in accordance with governing law.”

AIR officials declined to comment in detail on the lawsuit. Jon Cohen, the president of assessment for the organization, said in a statement that the state’s RFP, as it was drafted, was tied to work Pearson was doing in the first year of assessment, and would end up giving the company a “monopoly on completely different work for the next seven years.”

A spokeswoman for Pearson, Stacy Skelly, said the company had no comment on the AIR’s protest over the procurement process. Pearson was unaware of the subsequent legal challenge, she said.

Huge Scale

PARCC officials also had no response to the protest or legal action, said David Connerty-Marin, a spokesman for the organization. He directed questions to New Mexico officials, noting that the contract had originated in that state and was issued on behalf of a group of PARCC states.

Larry Behrens, a spokesman for the New Mexico education department, said his agency could not speak to the dispute directly, citing the pending lawsuit. But in an email to Education Week, he said that because the court has not halted the procurement, the work on the testing project will go forward.

In their complaint to the state, AIR officials also argue that the partnership between PARCC and Pearson creates a potential conflict of interest. Specifically, AIR officials said that if the consortium competes for testing work being procured in other states, PARCC would have an incentive in New Mexico to award work to a contractor it intends to partner with—Pearson—because doing so would improve its ability to compete for similar work in other state markets.

Earlier this month, officials in PARCC states touted the deal as providing a number of benefits. One of the biggest is its price—the assessment cost will be $24 per student, state officials estimate. That’s cheaper than an initial projection of $29.50.

James Mason, who helped negotiate the contract as part of a team of PARCC state leaders, said in an interview that he could not provide a dollar figure for the contract, because the price tag would depend on how many students and states end up participating, and whether they choose computerized or paper-and-pencil tests, among other factors.

But he described the contract with Pearson as one of “unprecedented scale, in terms of states coming together. It’s a pretty significant event in a number of ways.”

Despite Pearson being the only bidder for the contract, PARCC officials are convinced the process was sound and resulted in the best vendor getting hired, Mr. Mason said. The list of experienced subcontractors secured by Pearson, which include the Educational Testing Service, WestEd, Caveon, and Measured Progress, also gave PARCC state officials confidence, added Mr. Mason, who is Mississippi’s state assessment director.

The $24-per-student price was reached after “very aggressive negotiating” between PARCC state officials and Pearson, a back-and-forth that lasted weeks, he said. He attributed the lower cost partly to economies of scale that can be achieved through having large numbers of states and students participating at once.

Gauging the total cost of the contract is not as simple as it is for a state charged with negotiating with a vendor, in which the state and vendor agree “we’ll do it for X million,” said Mr. Mason. By contrast, he said, figuring out the costs for multiple states in PARCC will depend on what they choose from an “a la carte” menu of testing options.

A version of this article appeared in the May 14, 2014 edition of Education Week as Pearson Testing Deal For Common Core Faces Legal Challenge

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