News: CJ Exclusives

Contract dispute over K-3 reading diagnostic tool far from finished 

The school year may be halfway over — or more — before the contract dispute between competing reading diagnostic companies is resolved, leaving students at public schools in limbo.

On Oct. 1 and Oct. 3, lawyers representing the North Carolina Department of Public Instruction and rivals Amplify and Istation made their cases before a state administrator whether a stay blocking the implementation of Istation should continue. 

DPI initially awarded the K-3 reading diagnostic contract to Istation. Amplify tried but failed to convince DPI to reconsider the award. Then Amplify asked the Department of Information Technology for a stay. On Aug. 19, DIT granted Amplify’s motion to temporarily stay the implementation of Istation while the dispute is heard. 

DPI and Istation promptly appealed the decision. 

DIT General Counsel Jonathan Shaw oversaw the two-day hearing at the Office of Administrative Hearings. In a sense the hearings constituted a reconsideration of the motion, Shaw said, so now he wants proposals from each party before ruling on the stay. 

Three alternatives exist: Uphold the stay, amend the stay, or dissolve it. Istation, Amplify, and DPI have until Oct. 11 to submit proposals on whether the stay should continue. 

Implementation of Istation was well underway when DIT ordered the temporary stay. Lawyers representing DPI and Istation contend the stay sowed chaos and confusion in thousands of public schools. 

Ossa Fisher, the president of Istation, testified that every school district has enrolled in Istation and that thousands of teachers have been trained to use the program. 

Kieran Shanahan, an attorney representing Istation, said sometimes delays are necessary to sort out these disputes, but they shouldn’t be the norm. 

“I think it should be extraordinary circumstances, otherwise every losing party is going to come in based on vague allegations about the process and grind the operations of the state government to a halt,” Shanahan said. 

Johnson awarded Istation the K-3 reading diagnostic contract June 7, prompting backlash from some educators, superintendents, education activists, and Amplify. Amplify argued in its protest that Istation was developmentally inappropriate for young students. The company claims Istation didn’t have a proper dyslexia screening process during the procurement process. 

North Carolina has used Amplify’s Mclass since 2013 to monitor progress with Read to Achieve. But after two cancelled Request for Proposal bid processes and direct negotiations with Amplify and Istation, Johnson gave Istation contract. The state superintendent said Istation was the best choice. 

Critics, including Amplify, contend Johnson went around his own evaluation committee to pick Istation. 

Mitch Armbruster, an attorney representing Amplify, argued DPI inappropriately canceled the RFPs and changed the evaluation criteria to favor Istation without documenting the reasons.

The integrity of the procurement process is at stake, Armbruster said, and vendors no longer will want to bid in North Carolina. 

Amplify’s attorney said the stay prevented irreparable harm. If the stay was causing problems for the state, then DPI and Istation’s were to blame, Armbruster argued. He claimed DPI and Istation rushed implementation.

Tiffany Lucas, a state attorney representing DPI, countered the assertion that the RFPs were unfairly canceled or that Istation had any advantage. 

The first RFP was canceled because an evaluation committee member failed to disclose a prior business relationship with Amplify. Lucas said the second RFP was canceled because an evaluation committee member breached a confidentiality agreement. 

DPI negotiated directly with Amplify and Istation because they were the only vendors meeting the state’s needs for a reading diagnostic tool. Lucas said DPI sought and received DIT’s blessing to proceed with direct negotiations. 

“Amplify had the same opportunity as Istation to make its best offer to DPI following the cancellation of RFP 2,” Lucas said. “[Amplify] did not convince the evaluation committee or the superintendent that they were the vendor who provided the best value to the state.”

Shanahan and Lucas said Armbruster failed to demonstrate how the stay prevents irreparable harm to Amplify. Since Amplify’s contract with the state had expired, the stay wasn’t costing the company any money. Shanahan and Lucas argued there wasn’t any irreparable harm. 

Shanahan and Lucas also said Armbruster hasn’t proven Amplify’s case is likely to succeed on the merits. 

Shaw said hearings on the case will begin Dec. 9 and last four days. A ruling on the motion to stay is expected in several weeks.