Assessment

States Writing Penalty Clauses Into Testing Contracts

By Lynn Olson — November 30, 2004 4 min read

With so much now riding on student test results, states are introducing stiff penalties and other provisions into assessment contracts to provide an incentive for publishers to deliver results on time and error-free.

See Also

“Statewide testing programs are much more visible to the public, and so I would say there is a heightened sensitivity to any glitches,” said Jeff Galt, the president and chief executive officer of the San Antonio-based Harcourt Assessment. “Where there used to be some collegiality, or an understanding that it’s still a process dependent on human beings, subject to mistakes, there’s very little tolerance for that.”

Hawaii, for example, is negotiating a partial reimbursement from Harcourt for errors in the state’s spring 2004 state testing materials. The company reviewed test scores last summer, to ensure that none of the mistakes in the test booklets or administration manuals would harm students or schools. And it has worked out new quality-control processes with the state to ensure that the problem won’t happen again.

“There’s no question: The biggest change we see is the terms and conditions,” said Stuart R. Kahl, the president of the Dover, N.H.-based Measured Progress. “They include penalties and damages and also requests, in some cases, for performance bonds. A performance bond is almost like an insurance policy, where you name the state as the beneficiary.”

It’s a real problem for small companies without deep pockets, he added, that cannot always carry such liability costs.

Providing Incentives

Georgia is a case in point. The state had experienced numerous problems with the timely delivery of test results, scoring errors, and the inadvertent release of secure test items dating back to 2001 and spanning contracts with several test publishers. (“Ga. Suspends Testing Plans in Key Grades,” April 16, 2003.)

Since the spring of 2003, however, the state has taken aggressive steps to address the issue.

Kathy B. Cox

“I had to realize that part of the problem was here,” said Kathy B. Cox, Georgia’s state superintendent of education. “It wasn’t just the contractors. Part of the problem was the maintenance of the contract, and the oversight of the contract with the contractors, and the mixed messages that contractors had gotten.”

Ms. Cox has reorganized the testing division within the state education department, including paying more to attract well-qualified people. Georgia has staggered its requests for proposals, so that the testing and legal divisions are not forced to negotiate several contracts simultaneously, each worth tens of millions of dollars.

Its new contractor for standards-based tests in grades 1-8, Riverside Publishing, faces heavy penalties for potential failures, ranging from the late delivery of test results to the administration of an invalid exam. The penalties, starting at $5,000 a day, top out at 30 percent of the overall value of the contract.

The state department of administrative services also requires companies to post a performance bond for any contract in excess of $100,000. The insurance basically guarantees that, in case of a breach of contract, the state can recoup its costs.

Georgia’s contract with the Itasca, Ill.-based Riverside, a division of the Boston-based Houghton Mifflin Co., also establishes a payment schedule, in which more than half the fees are paid upon the receipt of essential services, such as getting the testing blueprints on time or a smooth administration of the exams.

“If they fail to meet these key delivery dates,” said Ms. Cox, “at any point along the way, we have the option of not paying them, and that was not real clear in the other contracts.

“So we’ve really increased the incentives for these companies to meet their deadlines, and that was a huge problem before,” she added. “They didn’t have an incentive.”

‘Too Risky’

Other states, such as Michigan, have reduced the number of penalty clauses in their contracts but made the ones they have heftier for failure to meet crucial deadlines.

“The states have either gotten burned themselves by delivery problems or errors in the past, or they’ve read about other states that have had those problems,” said John H. Oswald, the senior vice president and general manager for elementary and secondary education at the Princeton, N.J.-based Educational Testing Service. “And they have added some very, very strict penalties.”

“If we see a contract that looks too risky because the penalty clauses are just way out of line with the timelines,” he added, “then we’ll just pass on it, which is why we don’t bid on that many contracts.”

But David M. Taggart, the president of CTB/McGraw-Hill, based in Monterey, Calif., argued that, while some states have incorporated steep penalties into their programs, “I don’t see it as a trend.”

“I think most state departments recognize this is a collaborative effort,” he said, “that there are a lot of things that can happen outside our control.”

And although state requests for proposals have become more sophisticated, Mr. Taggart said, there’s still a wide range.

Eduventures, a Boston-based firm that tracks education-related businesses, also predicts that with the increased stakes attached to state assessment results, states will begin to pay more attention to such issues as provider qualifications and experience, and not just award contracts to the lowest bidder. The freedom to do so varies across states.

A version of this article appeared in the December 01, 2004 edition of Education Week as States Writing Penalty Clauses Into Testing Contracts

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Future of Work Webinar
Digital Literacy Strategies to Promote Equity
Our new world has only increased our students’ dependence on technology. This makes digital literacy no longer a “nice to have” but a “need to have.” How do we ensure that every student can navigate
Content provided by Learning.com
Mathematics Online Summit Teaching Math in a Pandemic
Attend this online summit to ask questions about how COVID-19 has affected achievement, instruction, assessment, and engagement in math.
School & District Management Webinar Examining the Evidence: Catching Kids Up at a Distance
As districts, schools, and families navigate a new normal following the abrupt end of in-person schooling this spring, students’ learning opportunities vary enormously across the nation. Access to devices and broadband internet and a secure

EdWeek Top School Jobs

Speech Therapists
Lancaster, PA, US
Lancaster Lebanon IU 13
Elementary Teacher
Madison, Wisconsin
One City Schools

Read Next

Assessment SAT Scraps Optional Essay and Subject Tests
The College Board said it will eliminate the optional essay from the SAT and do away with subject tests.
1 min read
A student leaves after taking the SAT at Upper Arlington High School in Upper Arlington, Ohio on March 12, 2005. The College Board said Tuesday, Jan. 19, 2021, it will eliminate the optional essay from the SAT and do away with subject tests amid a changing college admissions landscape.
A student leaves after taking the SAT at Upper Arlington High School in Upper Arlington, Ohio on March 12, 2005. The College Board said Tuesday, Jan. 19, 2021, it will eliminate the optional essay from the SAT and do away with subject tests amid a changing college admissions landscape.
Paul Vernon/AP
Assessment Opinion To Keep Primary Students Learning and Growing, Start With Data
A district’s dedication to gathering and analyzing data provides stability in uncertain times.
Janice Pavelonis
5 min read
Image shows a speech bubble divided into 4 overlapping, connecting parts.
DigitalVision Vectors/Getty and Laura Baker/Education Week
Assessment Spotlight Spotlight on Assessment 2021
In this Spotlight, dive into best assessment practices
and more.
Assessment Opinion Testing Students This Spring Would Be a Mistake
High-stakes tests would tell us very little we can't know in other ways, writes a longtime assessment researcher.
Lorrie A. Shepard
5 min read
Illustration of students in virus environment facing wave of test sheets.
Collage by Vanessa Solis/Education Week (Images: iStock/DigitalVision Vectors/Getty)