Test Vendor’s Legal Fight, Growth Attract Attention

By Sean Cavanagh — September 30, 2014 7 min read
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Of all the testing organizations that are prospering in the common-core era, few have fought as doggedly in public for a competitive edge as the American Institutes for Research.

The Washington-based nonprofit has landed several big contracts over the past few years to conduct testing work tied to the Common Core State Standards, not only for the multistate Smarter Balanced Assessment Consortium, but also for individual states preparing to give the exams for the first time this school year.

But as its profile has risen, the organization has also drawn scorn from some quarters of the testing world for its hard-nosed tactics in trying to expand its reach.

In particular, critics have objected to the AIR’s protracted legal fight over the awarding of a potentially huge common-core contract to Pearson, one of the most recognizable corporate names in education. The AIR recently filed a new, scaled-down legal appeal of that award, which had been issued by the Partnership for Assessment of Readiness for College and Careers. But the court battle, which has played out in New Mexico, has nonetheless frustrated many in the testing industry, who say it has sown uncertainty among states facing enormous pressure to deliver the new, online tests for the first time later this school year.

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Common-Core Testing Contracts Favor Big Vendors

If the legal protest were to significantly disrupt the PARCC tests, it would be a “disaster,” said Scott Marion, the associate director for the National Center for the Improvement of Educational Assessment, a Dover, N.H.-based organization that consults states and districts on testing.

“It’s not unusual for awards to get challenged, but I think people were pretty unhappy” with the dispute, Mr. Marion said. He added: “If you’re an assessment vendor in this country, you have 50 clients in this country. You can’t make them angry.”

Era of Expansion

Founded in 1946, the AIR describes itself as one of the world’s largest behavioral and social science research and evaluation organizations. Its work spans many areas of education, from early childhood to teaching to higher education.

The organization has a long history in assessment. But many observers of the testing industry say the organization has greatly expanded its reach and name recognition over the past few years. During that time, it has secured contracts not only from Smarter Balanced Assessment Consortium, a group of 22 states but also from individual states, most notably Florida, where it won a six-year award to oversee testing for an estimated $220 million.

State Awards to Vendors

Independent of the contracts awarded through the consortia using federal funds, individual states that adopted the common core have made large and small awards to vendors for a variety of services, including test design and adminstration.

One of many Smarter Balanced states to hire an administrator to help with its tests. Has awarded AIR, its existing vendor, a one-year contract for common-core test administration and other work, including exams in other, non-common-core subjects.

Adopted common-core standards but dropped out of PARCC; hired AIR to design and manage overall state testing for $220 million.

Has hired AIR for Smarter Balanced test administration through the end of 2015 for a contract with option to renew.

KANSAS → Center for Educational Testing and Evaluation $6M
Adopted common core but dropped out of Smarter Balanced. Has a contract with the Center for Educational Testing and Evaluation, affiliated with University of Kansas, to develop tests.

Smarter Balanced state, but not giving consortium test this academic year. Has hired ETS for test administration, with much smaller contracts to AIR and ACT.

NEW YORK → Pearson $32M
PARCC state, still determining whether to use consortia’s test. Pearson has a contract over five years to develop grade 3-8 common-core tests; high school exams developed in-house.

Pearson won a potentially enormous PARCC contract, awarded through the state of New Mexico for a wide range of work in test development and administration. The contract award is being challenged in court by AIR.

“If you’re talking about a company that has dramatically increased its place in the last few years, AIR is that company,” said Derek C. Briggs, a professor of education at the University of Colorado at Boulder, who has extensively studied assessment. “They’ve been very aggressive.”

Many test-industry officials attribute the AIR’s success and ambition in the assessment market to Jon Cohen, the president of the organization’s assessment division, described by peers in the industry as both talented and outspoken.

Mr. Cohen, 51, oversees an assessment group whose size, during the decade or so he has led it, has jumped from about 100 to 380 employees, with expertise in software, test-item development, statistics, and psychometrics.

While he declined to provide a dollar value for the AIR’s testing contracts, Mr. Cohen said his division’s growth has been slow and deliberate, not sudden.

“We know how much we can bite off,” Mr. Cohen said. “We bite off that much.”

In cases where the AIR has won contracts, Mr. Cohen attributes that success partly to states’ high regard for the organization’s work so far, including its role in administering field tests—using an AIR-developed test-delivery system for Smarter Balanced—given to millions of students across the country earlier this year.

The AIR has gained recognition for developing computer-adaptive assessments—in which the difficulty of questions is adjusted for each student based on performance—in a number of states, including Hawaii and Oregon.

The organization is now building on that work, with potentially much greater impact, for Smarter Balanced, on a $16 million contract, in creating the assessment’s “test engine,” basically software that delivers the test in an adaptive format to students, collects responses, and manages scoring, among other functions.

But in recent months, it has been the AIR’s pursuit of a much more lucrative contract with PARCC that has fueled controversy.

In April, PARCC officials announced they had awarded a contract for a broad range of work, including development of test items, test delivery, and reporting and analysis, to Pearson, the giant London- and New York City-based publisher and education services provider.

The stakes are potentially enormous. The proposal floated by PARCC says the testing work would cover between 6 and 10 million students. In court documents, the AIR argues that the contract could be worth more than $1 billion.

Last December, after the proposal was initially released, the AIR protested the process, arguing that the procurement essentially had required bidders for the test-administration services to use a delivery platform already developed for PARCC by Pearson. That amounted to an improper “bundling” of work for Pearson, argued the air, which wanted the contract invalidated.

Bidding Battles

AIR officials ultimately did not bid on the contract, saying they did not have a legitimate chance to win. But they did not retreat quietly.

When New Mexico’s state procurement office rejected the AIR’s protest, ruling that it had been filed too late, the AIR sued in court, and won the right to have the case heard on its merits.

In July, the state procurement office again rejected the AIR’s case, only to have the testing provider challenge the decision again in state court, where the case is still pending.

In its appeal, the AIR is no longer seeking to halt the overall contract. Instead, it would allow the deal to commence the first year, but then have it rebid for the remainder of the award—potentially up to eight years, according to AIR.

New Mexico officials, and some testing-industry insiders, have cast the AIR’s challenge as largely profit-driven and hypocritical.

While the AIR sees an unfair bundling of assessment delivery and administration in the Pearson deal, critics believe the organization itself benefits from a similar arrangement with Smarter Balanced. In having secured the contract to develop Smarter Balanced’s test-delivery platform, the AIR will have an inside track in winning individual state contract awards to administer those tests, some observers say.

“It gives AIR a leg up,” said Barry Topol, the managing director for the Assessment Solutions Group, a Danville, Calif.-based group that consults states on testing. A rival company, using the AIR’s logic in the New Mexico’s protest, “could protest every award AIR wins” under Smarter Balanced, added Mr. Topol.

But Mr. Cohen says those arguments don’t hold up. He noted that, unlike PARCC, Smarter Balanced states are independently procuring services for test administration, which fosters competition among vendors. Those procurements are also drawing multiple bidders, he said, providing further evidence of their competitive nature. In addition, the test-delivery system being developed for Smarter Balanced by the AIR is “open source,” meaning other vendors have access to information necessary to use it.

Mr. Cohen also dismissed the argument, made by Pearson and others, that the legal fight is hurting states’ ability to provide high-quality tests to students.

“Who thinks the best thing to do for kids is to give a sole-source contract to a multinational corporation?” Mr. Cohen said. “Let’s face it: Wrong is wrong.”

The New Mexico case is not the only instance in which the AIR has responded to what it viewed as unfair treatment. Last year, after Minnesota education department officials complained about the AIR’s performance as its test administrator, the organization responded with an at-times strongly worded memo from Mr. Cohen arguing that “most of the significant problems arose as a result of [the state agency’s] actions.”

Minnesota education officials declined to comment, as did Mr. Cohen, though he noted that the AIR’s letter was not meant to be made public.

Despite that disagreement, some other state testing officials who have worked with the AIR vouch for the organization’s expertise.

In Hawaii, the AIR helped the state make an ambitious transition from paper-based exams to online, adaptive tests, said Cara Tanimura, the state education department’s former assessment director. Today, the state tests are more engaging for students and useful for teachers, said Ms. Tanimura, who is now the department’s administrator for classification and compensation.

The AIR has been “very accommodating and very responsive,” she said. “We’ve had good project managers, and they have good people.”

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A version of this article appeared in the October 01, 2014 edition of Education Week as Nonprofit’s Legal Fight, Growth Attract Attention


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