A decision to give the education provider Pearson a major, potentially lucrative contract for common-core testing is being challenged by a competitor who 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.

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 PARCC testing consortium—was issued. The state rejected that protest, saying it hadn’t been filed within the required time window.

Now, 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.

As Education Week reported last week, Pearson, a commercial education provider with worldwide reach, won the contract to provide the development of test-items, test delivery, reporting of results, and analysis of student performance for a group of states that are part of the Partnership for Assessment of Readiness for College and Careers, or PARCC, one of two main consortia designing tests linked to the common-core standards.

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 to EdWeek as “unprecedented” by the standards of the U.S. testing industry. 

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 ultimately did not believe they had a legitimate chance to win, and so they decided not to turn in a proposal.

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

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 consortia in November.

In December, AIR filed a protest with the state, citing several objections to the RFP put forward for the testing project. For instance, 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.That bundling of work favors Pearson, because it would rely on a content/delivery platform already developed by Pearson for the PARCC tests, 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, 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,” AIR stated in its protest.

AIR officials declined to comment in detail on the lawsuit, saying their objections were spelled out in its protest and legal documents through the courts. Jon Cohen, president of assessment for AIR, said in a statement to EdWeek 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.”

Question of Timing

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

PARCC officials also had no comment, 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 put forward on behalf of a group of PARCC states.

And Larry Behrens, a spokesman for the New Mexico department of education, also said his agency could not speak to the dispute directly, citing the pending lawsuit. In an e-mail to EdWeek, he said simply, “in New Mexico, the RFP process is a public one and open to anyone who wants to participate.”

[UPDATE (May 9): Behrens said that the work on the testing project is going forward, despite the legal challenge. “The court has not stayed the procuement and there is no bar to proceeding,” the New Mexico official said in a statement.]

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 consortia 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.

Last week, in describing details of the contract award to Pearson, 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 the previous estimate of $29.50. Pearson is working with a group of experienced subcontractors on the testing work, including Caveon, ETS, Measured Progress and WestEd, officials in PARCC states said.

AIR officials say they initially filed their protest with a New Mexico department of education official&dmash;who the testing organization said was identified as the only point of contract for questions about the testing proposal.

But a little more than a week later, AIR officials said they were told 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—a step that state officials said was spelled out as being required in the RFP. 

AIR, however, rejects the state’s reasoning, labeling it “arbitrary, capricious, and not in accordance with governing law,” in its legal challenge.

It now appears that it will be up to a court to determine whether the PARCC states’ initial request for testing work was fair—or if it needs to drawn up again.