State-level bidder splits federal money to drop lawsuit

Historic City News has learned that the Florida Department of Education has resolved a contract dispute between the two competing bidders for a scholastic testing system, after the chosen company agreed to share $4.6 million of the $36.8 million federal grant proceeds with the losing bidder.

In April, the department awarded the contract for a computer-based testing system, with a budget of $36.8 million, to NCS Pearson.

Another company in the running for the contract, CTB/McGraw-Hill, challenged the decision with the Division of Administrative Hearings and asked an administrative law judge to give the department a chance to resolve the dispute “by mutual agreement.”

The case, which had been set for a hearing next week, was officially dismissed on Monday, and the department reported yesterday that it would award the contract to Pearson.

The companies agreed to a settlement in which CTB will supply some of the test questions to Pearson in exchange for $4.6 million.

Federal funds for the effort to improve standardized testing are coming from the “Race to the Top” program, in which states compete for grants tied to policy changes. Florida’s program, won a $700 million grant in 2010.

The losing bidder argued that the department scored its proposal only a “fraction of a point” lower than the bid winner, and that it was penalized for a “misunderstanding”. It also argued that the bid winner had not responded to all the requirements of the request for proposal from the Florida Department of Education.

Under the original proposal, the testing system is supposed to be accessible during the upcoming school year, and fully up and running in 2013-14. The contract runs for about two years, through June 30, 2014. The state can renew the contract for up to three more years.