Iowa Lawmakers Wade Into Disputed Award of $31 Million State Testing Contract

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The American Institutes for Research appeared to have notched a major victory last year when it won an estimated $31 million contract to give statewide assessments across Iowa.

But a rival company—and state lawmakers—have a different idea about who should do the work.

One of AIR’s main competitors in the testing market, Pearson, appealed the contract award by Iowa’s department of education, an award that was competitively bid. An administrative law judge, in a decision earlier this month, rejected Pearson’s argument and sided with AIR.

The case will now be heard by the director of Iowa’s department of administrative services, state officials say. If Pearson loses, it could appeal to a district court.

Meanwhile, in the Iowa statehouse, legislators are weighing in.

The state’s House of Representatives voted overwhelmingly this week to mandate that the state stick with its current testing provider, the Iowa testing program (commonly known as the Iowa assessment) which is run out of the University of Iowa, rather than going with a test developed by the winner of the RFP, the American Institutes for Research.

Pearson, it turns out, administers the current version of the Iowa testing program’s assessment. The company has a lobbyist assigned to work on the Iowa legislation, according to the state’s online disclosure forms.

A spokesman for Pearson said the company’s position on the measure is officially neutral.

The current legislative proposal, however, disappoints AIR, which says it won the contract through a fair and transparent process—a position seconded by the state’s administrative law judge.

“We think schools and students are best served by competition,” which occurred in the state’s RFP process, said Barry Levine, an AIR vice president, in an interview.

The legislation still would have to win approval in the Iowa state Senate, and be signed by the governor, to take effect. AIR does not believe that will happen, Levine said.

“We think the elected officials will do the right thing,” he said.

Legislative Bypass

In voting by a 95-3 margin to approve the legislation on Feb. 20, some Iowa lawmakers said they were motivated in part by worries about Pearson filing a lawsuit over the contract, according to a story in the Des Moines Register.

“It is not unlikely that this will be a protracted court battle as Pearson felt wronged by the process used by the Department of Ed.,” said Rep. Sandy Salmon, a Republican supporter of the measure. “So with this bill, we are bypassing the department of education.”

Another state lawmaker, Democrat Mary Mascher, said she backed the bill because she believes it will cost the state less money, and because the Iowa test was developed within the state. (The AIR says its test will better meet state’s requirements for a new state assessment, as spelled out in the state’s RFP.)

“Iowa assessments have served our state very well,” said Mascher, who added that those tests were “an Iowa product.”

Pearson is a global education company, but in its appeal of the contract award to AIR, it has emphasized its status a big employer in Iowa. Pearson’s main assessment business is based in the state and employs about 1,000 people in Iowa City and Cedar Rapids, said Scott Overland, a spokesman for the company, in an interview this week.

Pearson’s testing operation “is definitely an Iowa business,” Overland said.

The legislation approved by Iowa’s House would essentially go around the Iowa department of education’s decision to select AIR. The language of the bill mandates that the state use an “assessment developed by the Iowa testing program within the University of Iowa college of education” and “administered by the Iowa testing program’s designee.”

Currently, Iowa students use an older version of the Iowa testing program, known as the Iowa assessment, explains a fiscal note on the proposed legislation.

Pearson is a subcontractor that currently administers the Iowa testing program assessment, and it partnered with the program in submitting an unsuccessful bid last year, Overland said.

But Overland said that if the state legislation is approved, there is no guarantee that the “designee” named to administer the tests going forward would be Pearson.

While he said that Pearson has worked with the Iowa testing program “for a number of years,” Overland said the company believes if the state legislation was approved, and the Iowa testing program secured the work, there would be “a new contract and potentially a new RFP” put forward by the university.

“There are definitely a number of steps before we know what this would look like for Pearson,” Overland said.

Tangled History

Jeneane Beck, the University of Iowa’s assistant vice-president for external relations, said in an email that if the legislation is approved, and the Iowa testing program is tasked with providing a new test, the university “will follow state and university guidelines for determining the delivery vendor.”

Those guidelines require a public bidding process, added Beck, who directed Marketplace K-12 to an online description of the university’s procurement policy.

Iowa’s effort to create a new statewide assessment dates back several years.

In 2013, then-Gov. Terry Branstad appointed a task force to recommend a new assessment that was aligned with state standards, amid concerns that the exam was not. The task force recommended that Iowa use tests developed by a consortium of states, Smarter Balanced. The state department of education released an RFP for vendors to give the test.

But before the bids were considered, state lawmakers approved a measure halted the process, citing the amount of instructional time that would be devoted to preparing for the new tests. That measure, signed into law by Branstad in 2017, also required that the department of education issue a new RFP for a new statewide exam. It required the state to consider a series of factors, including the cost of the new test and their standards.

Last year, the American Institutes for Research won that work, winning out over five other vendors, including Pearson.

Pearson appealed the award to Iowa’s department of administrative services, arguing that the state had engaged in “preferential treatment and bias” in making the award.

Specifically, Pearson argued that state officials had erred in their scoring of a piece of the RFP related to translation of the tests into other languages. That decision boosted AIR’s score in a way that allowed them to win out, Pearson contents.

The company also said state reviewers strayed from the factors that the 2017 state law mandated that they consider, in evaluating the various testing companies.

‘No Evidence’ of Subterfuge

But in a Feb. 14 order, Iowa administrative law judge David Lindgren rejected Pearson’s rationale on numerous points.

In denying Pearson’s claims of scoring and cost errors, the judge at one point said the company’s assertion “seems to misstate and over-dramatize what actually happened,” in the RFP process.

“[T]here is no evidence” that the state’s approach to scoring the translation section of the RFP, Lindgren added, “was underhanded or subterfuge to elevate a lower-scoring but more desirable bidder to the top.”

Lindgren’s decision is not final until it is reviewed by the director of Iowa’s department of administrative services, according to the department of education. And Pearson could still pursue its claim in court.

The state’s department of education praised the Lindgren’s finding. “We appreciate that the judge’s decision reinforces that the state ran a fair, open, and objective competitive bidding process,” a spokeswoman for the agency, Staci Hupp, said in an email.

Even so, the department of education will delay efforts to immediately have AIR implement the state test, until legislature “again revisits the assessment issue this session,” she said. The agency still intends for a new test to be given next academic year in 2018-19.

Despite the delays so far—and the legislative drama—AIR officials say they have every ability to meet that deadline.

“A short delay for this to work itself out won’t impact AIR’s ability to deliver a quality test,” Levine said.

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