The state of Oregon last week sued Vantage Learning, an online-testing company, for allegedly failing to deliver to thousands of Oregon students the tests needed to meet the state’s obligations under the federal No Child Left Behind Act.
The lawsuit, filed March 13, alleges that the company broke its contract by switching off the state’s testing system on March 9—weeks before its contract expired on April 27—and leaving the state in the lurch as its public schools try to complete their mandated testing this spring.
Vantage, which is registered in Delaware but has headquarters in Newtown, Pa., vigorously denies that it has not lived up to its obligations. Robert Patrylak, a lawyer for Vantage, said last week that the state owes the company several million dollars for providing thousands of assessments.
The state charges that, besides breaching its contract, the company has failed to provide data from tests that students have taken online. And it contends that the online-testing system, which allows students to log in and take the standardized tests under the eyes of school proctors, has suffered data losses, outages, and other performance glitches in recent months.
“We had a tremendous amount of trouble over the last several weeks with the system,” said Ed Dennis, Oregon’s deputy superintendent for education.
During the 2005-06 school year, 21 states and the District of Columbia offered computer-based assessments, according to a survey of the states.
SOURCE: EPE Research Center, 2006
The lawsuit also asks a state court to order the company to ensure the security of the thousands of validated test items, which are owned by the state.
The state is being forced to provide paper-and-pencil versions of its assessments to about 300,000 students in Oregon’s 1,200 public schools to comply with the federal education law, the lawsuit alleges.
Mr. Patrylak acknowledged that Vantage recently shut down its online-testing systems for one day because of an electrical problem. But he disputed the state’s claims in its legal complaint, including that the company’s quality of service dropped after the state announced in October that it would not renew its contract with Vantage for online testing for the 2007-08 school year.
Mr. Patrylak disputed the state’s claim that it was caught by surprise by the system’s turn-off last week. Even though the company hadn’t specifically warned the state of a cutoff, the state was given fair notice, he said, when the company terminated the contract for nonpayment on Jan. 23.
Vantage plans to sue Oregon claiming damages, “including damages for the reputation of our company,” Mr. Patrylak said.
Market Shifts
The breach ends a high-profile partnership that began in 2000, when Vantage began developing the state’s online Technology Enhanced Student Assessment system, or TESA, which was piloted in 28 schools in 2001.
The system is used for state tests in reading and mathematics in grades 3-8 and grade 10, as well as in grades 5, 8, and 10 in science. The state owns the test questions and Vantage provides the testing software and central hardware.
In some of the test areas, schools can use paper-and-pencil tests, but state officials say the online format offers cost savings and advantages for student learning. The online format lets teachers get results back in a few days and allows students to take the tests repeatedly with slightly different test items.
In recent years, many other companies have entered the online-testing market, Mr. Dennis said, and the state decided to open the contract to competition.
“Five or seven years ago, they were the only game in town,” Mr. Dennis said of Vantage. “We just wouldn’t be doing right with taxpayers’ money if we didn’t bid competitively.”
The state announced the competition in June. Vantage bid but failed to qualify, as it was informed on Oct. 3, Mr. Dennis said.
The state has chosen the American Institutes of Research, based in Washington, to be the new provider, he added.
Soon after the company was told that its contract would not be renewed, the state complaint says, Vantage sent the Oregon Department of Education “past due invoices” totaling $4.7 million—amounts that the state disputes.
On Jan. 23, the company told the state it was ending the contract “for cause,” both sides agree.
The state argues that the company was not entitled to do so, however, unless the state had failed to tender “undisputed payment” to Vantage. It says the company was obligated to keep the system operating until April 27.
The state also contends that since last October, service from the company declined sharply, with frequent computer “freezes” that often interrupted test-taking.
On March 9, students in Oregon schools who logged on to their computers to take state tests were presented with the on-screen message: “Important Notice for TESA Service Users.”
The notice explained that the company terminated its contract with the state on Jan. 23, and said in part, “[The Oregon Department of Education’s] bills for the TESA Service remain unpaid. Consequently, the TESA system will be unavailable for continued testing until further notice.”
Mr. Dennis said the company gave the state no advance notice that it was turning off the system.
“It was a complete surprise,” he said. “We learned about it by dozens of calls from schools telling us about it.”
The state argues in its lawsuit that the notice “wrongfully informed” the Oregon students by misrepresenting the facts of the dispute.
