After Violation, S.C.’s $58M Testing Contract Must Be Re-Bid After First Year

Managing Editor

South Carolina must re-bid a recent statewide testing contract after year one of the deal because the $58 millon contract awarded to ACT Inc. violated state law, a top state procurement panel has ruled.

In a decision formalized in writing this week, the seven-member South Carolina Procurement Review Panel supported the earlier findings of the state’s top procurement officer, who found that the award of the deal to provide statewide testing ran afoul of the law on numerous fronts.

Disputes over high-dollar state testing contracts are not uncommon. But the South Carolina decision offers one of the clearest recent examples of a lucrative state assessment deal that will potentially have to be reworked because its officials were found to have strayed from the accepted bidding process.

The awarding of the multi-year contract to ACT had been challenged by a rival testing vendor, the Data Recognition Corp. The losing bidder had argued that ACT ignored a number of requirements of the state’s original request for proposals—including spelling out plans to help the state set different achievement levels for the test, and creating an adequate system to provide online student reports—but that the Iowa City, Iowa-based organization was awarded the deal, anyway.

The state’s chief procurement officer, Michael Spicer, in December ruled that he agreed with the Data Recognition Corp.’s allegations on a number of points. But he said throwing out the entire deal would have disrupted the state’s assessment of students, which is scheduled to begin this spring. (A number of state education officials had voiced the same concern.) So Spicer allowed the first year of ACT’s work to go forward, but said the remaining two years would have to be opened up again to other testing vendors.

ACT appealed Spicer’s decision before the procurement review panel, arguing that he did not have the authority to order that the contract be broken up after year one. But the panel, which is independent of Spicer’s office, ultimately said he was acting within his rights. Five members of the panel voted on the case, with four members choosing to uphold Spicer’s decision, and one dissenting.

Spicer’s decision “reflects the gravity with which he fulfills his role as guardian of the procurement code,” the panel ruled. “His remedy strikes a fair balance between competing interests that ensures open competition and fair treatment by enforcing the rules, and thus protecting the intergrity of the state procurement system.”

While the panel considers its decision final, companies that have their cases heard can file motions to reconsider, or they can appeal to the state circuit court, an official for the panel told Education Week.

ACT is still evaluating the decision, said Paul Weeks, ACT’s senior vice president for client relations, in an emailed statement. He said the vendor’s immediate focus is deliver the test this spring.

“Of course, we’re concerned with users having to change course in mid-stream,” Weeks said, “but we’ll hope to continue serving South Carolina in the future, as dictated by yet unknown proceedings.”

Wade Mullins, a South Carolina lawyer representing the Data Recognition Corp., said the testing vendor was pleased with the outcome.
The Maple Grove, Minn.-based company “believes that the remedy ordered by [Spicer] was appropriate,” Mullins said in an email.
The Data Recognition Corp. was the only other company to bid on the testing contract in South Carolina. And it plans to bid again when the state re-opens the procurement, Mullins said.

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