Capitol Alert

Low bidder says California will overpay testing contractor

Superintendent of Public Instruction Tom Torlakson last month recommended that the state Board of Education choose Educational Testing Service for a contract to overhaul the state’s testing system. ETS is set to win the contract despite submitting a bid $34 million higher than a competitor’s.
Superintendent of Public Instruction Tom Torlakson last month recommended that the state Board of Education choose Educational Testing Service for a contract to overhaul the state’s testing system. ETS is set to win the contract despite submitting a bid $34 million higher than a competitor’s.

California education officials relied on three paper slips and a box to help determine who would win a nearly quarter-billion-dollar contract to overhaul the state’s system of testing students.

At a state Board of Education meeting last month, board President Michael Kirst drew each of the three firms’ names to decide the order in which they would present their case.

“It will be a random choice,” Kirst said, illustrating the lengths taken to help ensure a thorough and evenhanded bidding process.

The apparent loser, however, says it was anything but fair. Pearson School questions whether it was put through an elaborate charade designed to pick the state’s current testing vendor, Educational Testing Service. Pearson representatives want the job rebid and are threatening a lawsuit.

In the world of lucrative government contracts, the effort to design and build a system for more than 3 million students a year could have far-reaching implications. The new assessments are considered a cornerstone of the state’s education system, helping improve classroom instruction and marking progress in English and mathematics for kindergarten through 12th grade. Given the innovative approaches being considered, experts said the winning bidder would be in position to parlay the agreement to provide tests to other states.

At the urging of Superintendent of Public Instruction Tom Torlakson, Kirst and his colleagues unanimously agreed to pursue a pact with ETS, which is proposing a three-year deal worth $240 million, $34 million more than the plan submitted by Pearson. ETS has provided testing in California for more than a dozen years.

“ETS’ flexibility and corporate agility will allow negotiations and scope(s) of work to benefit not only the (department), but also our students, educators, and the people of California,” Torlakson said.

In the days that followed, Pearson attorney Donald G. Featherstun wrote that the company had serious concerns about the propriety of the department’s evaluation. He pointed to the decision to shred original notes used to score the bids and demanded officials “cease destroying any additional documents,” according to a letter obtained by The Sacramento Bee.

The company also complained that ETS was required to essentially adopt a portion of Pearson’s plan calling for the recruitment, training and paying of teachers to help score parts of the standardized tests.

Doug Kubach, the president and chief executive of Pearson School, the assessment division of London-based Pearson, urged in a letter of his own that the job be rebid “to remove any taint to the procurement process.”

“We have a lot of questions about the process because it does not seem to have been transparent and necessarily is a process that leads to the best result for the teachers and taxpayers in California,” he said in an interview.

Keric Ashley, deputy state superintendent, said in a written statement that although costs are crucial, the most important consideration is the technical ability of a company to test millions of students every year, including providing and reporting reliable scores in a timely fashion.

Ashley said it is “standard operating practice” to discard individual notes when using a consensus-scoring process. Such notes can be misleading, he said, adding that group scores are publicly available.

Kirst declined comment, noting through a spokeswoman that the process is ongoing. A draft contract with ETS will be presented at the board’s meeting in May. After agreeing on the scope of the work, the contract would be executed with the approval of Kirst and Torlakson, the spokeswoman said.

Torlakson, in his comments to the board, described the vetting as “extremely thorough” and “very deliberative.” Evaluation and scoring involved several phases. The department put together two panels to provide further clarity to the recommendation, with one focusing on technology and the other on assessment.

Members were chosen from local education agencies and from the state department, based on their expertise, and were made to sign confidentiality agreements. The goal was to gather consensus, so any notes produced by the panel were shredded, Ashley said.

He said panelists were selected based on their professional expertise and were told to “leave their personal experiences at home.”

Pearson has requested all writings relating to the panels, as well as to how members were selected and their qualifications.

The scoring process also has come under fire from Pearson, which ranked third overall, receiving 769 points out of a possible 1,200. ETS received 932 and CTB/McGraw-Hill got 794 points. Of particular concern, Pearson said, is the company scored just nine points higher than ETS on cost despite its considerably lower charge at $206 million. Meanwhile, the higher bid by CTB/McGraw-Hill, at $223.8 million, scored better on cost than Pearson.

Kubach said he’s seen no evidence that the actual costs were considered in the evaluation, “to the detriment of California’s taxpayers.”

The department employed a seldom-used process to solicit proposals that does not require it to select the lowest bidder. The board was to consider wide-ranging criteria, beginning with a company’s ability to produce valid and reliable scores. Other considerations were cost, along with the capacity to report timely results and demonstrate technical adequacy of the tests.

Education Department officials said Pearson’s overall submission lacked depth, breadth and clarity “in response to multiple sections.” ETS scored better on comprehensiveness and schedule, program support and technology services, test security and reporting results.

Thomas Ewing, a spokesman for ETS, said the nonprofit organization could not comment on specifics because the contractual process is ongoing.

“However, we are proud of the work we have done for the state of California, and are proud of having submitted a proposal rated the highest by a careful and independent process,” Ewing said in a statement. “Across the board, reviewers found our approach of the highest quality. We look forward to negotiating the final scope of services and approach, and continuing to service the state.”

Despite the scores, it was Pearson’s approach to exclusively use public school teachers for manual scoring that dominated the discussion among board members. Pearson’s proposal calls for paying the teachers $17 to $19 per hour, garnering praise from board members Trish Boyd Williams and Patricia Ann Rucker.

Still, they opted to vote with their colleagues after hearing from Torlakson, who said involving teachers in the winning contract “could be addressed further more thoroughly, more completely, in the negotiation process.” Any contract with ETS would include California teachers to the greatest extent possible, officials said.

But Kubach said allowing ETS to essentially adopt a large piece of the Pearson plan gives the organization an unfair advantage over the other bidders and “contravenes California law on public contracts.”

Call Christopher Cadelago, Bee Capitol Bureau, (916) 326-5538. Follow him on Twitter @ccadelago.