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Administration Poring Over Pearson Contract to Assess PARCC Damages

Just determining what contract says about outages will be a chore; the agreement’s documents are nearly 1,000 pages long

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Last week state Education Commissioner David Hespe said he would hold Pearson accountable for the one-day crash of New Jersey’s PARCC testing. This week the Christie administration is going through the testing vendor’s voluminous contract with the state to see what that accountability will mean.

That contract contains extensive language for “damages” incurred by the vendor if the deliverable (the online PARCC exam) is not provided on time or as agreed upon.

None of that language appears to specifically address a system crash like the one that took place last Wednesday, when schools statewide had to suspend testing after they were unable log students in to the online platform.

But while the testing resumed as normal on Thursday, apparently it is now up to the state’s lawyers to decide what is covered, Hespe said yesterday in an interview.

“The contract does have damages clauses that our legal team are reviewing,” the commissioner said, deferring any further comment on the matter while it is under review.

The four-year agreement, jointly entered into by the states that are part of the Partnership for the Assessment of Readiness for College and Careers consortium, calls for New Jersey to pay roughly $108 million over its full term. That worked out to $22.50 per student in 2014-2015, PARCC’s first year, or about $22.8 million. The amount is to be adjusted annually each year thereafter.

But determining the company’s liability will not be easy; the agreement, acquired by NJ Spotlight through the state’s Open Public Records Act, actually comprises several different documents that span nearly 1,000 pages.

Immediately germane is the contract’s call for what is termed a “root cause analysis” of any incidents involving the testing, whether that is a breach by the state or a school or Pearson or one its subcontractors.

As Hespe explained in a statement last week, “As it is stated in the contract with Pearson, whenever application services are unavailable, Pearson is to conduct a ‘root cause analysis’ to provide a full accounting that identifies the origins of the problem and how Pearson responded.”

“In addition,” the statement continued, “we will take steps to determine the impact on school districts of Pearson’s failures. The Department fully intends to hold Pearson accountable once the review is completed.”

The department did not put a timeframe on the process.

On Wednesday, Pearson initially put the blame on a “technical glitch” that was caused when an employee adjusted the testing’s software on Tuesday night.

“In an effort to optimize performance of the test administration system used in New Jersey, Pearson made some adjustments that were deployed Tuesday night through Wednesday morning,” read the statement.

“In doing this, Pearson introduced an unexpected problem that restricted access to the administrative system. We are correcting the issue and will work to ensure it does not happen again.”

Whatever the cause, the contract does offer some suggestions as to what could happen next.

Most relevant is the “liquidated damages” clause, a common provision for such agreements in which the parties agree that the state can collect damages for contract breaches such as late delivery.

One provision that PARCC applied to all consortium members is that any state could assess payment for damages at any time during the length of the contract, although the agreement capped that amount at no more than 10 percent of the annual sum.

But the sums also don’t appear to be significant in the scope of things. The agreement calls for a daily penalty to be assessed based on three categories that include “consequential deliverables” and “extremely critical deliverables.”

For the former, the penalty is $500 per day; for the latter, it’s $10,000 per day.

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