Credits, not cash, to cover damages for ISTEP glitches

Nearly a year ago, the Indiana Department of Education said it could seek millions of dollars in damages from testing vendor CTB/McGraw-Hill for the widespread disruptions in the online ISTEP system.

The president of the company even apologized for the technical breakdown at a Statehouse hearing and told lawmakers she took responsibility for the problems.

But no agreement has been reached on the amount of damages, and when it is, there will be no cash payout to the state.

The department said last June it would seek at least $613,600 in preliminary reparation, but the final tally could go into the millions. That amount included $400,000 in damages provided for in the contract between the department and CTB/McGraw-Hill and $53,600 to pay an outside evaluator to determine whether some ISTEP test scores were negatively affected because of disruptions.

An analysis later found scores improved despite the glitches that affected about 80,000 students in Grades 3-8 during the testing period.

DOE spokesman Daniel Altman said the final amount that CTB/McGraw-Hill would compensate for last year’s problems had not been determined.

“We are still working toward a settlement,” Altman said. “We are confident that the matter will be settled in a way that is beneficial for Hoosier taxpayers.”

Brian Belardi, McGraw-Hill Education spokesman, said Monday the damages will be covered by credits for ongoing, past and future services — not a cash payout.

In addition to the $613,600 in contractual fines, state officials had said significant damages could be sought for costs that individual schools and the DOE amassed to administer ISTEP because of the disruptions.

CTB/McGraw-Hill administers ISTEP, also known as Indiana Statewide Testing for Educational Progress, under a four-year, $95 million contract with the DOE. This is the final year of the contract.

The company is required to provide uninterrupted computer availability every school day from 7 a.m. to 6 p.m. for the two weeks before each testing window, as well as for the entire testing window.

If the company fails to perform, DOE is entitled to collect $50,000 per day for each of the first five days, $150,000 for each of the next five days and $250,000 a day thereafter “until such time that the contractor cures the failure to deliver,” according to the contract.

CTB/McGraw-Hill President Ellen Haley told lawmakers last year the glitches were caused by inadequate planning and lack of computer server memory.

“I know this is not acceptable to you,” Haley said. “It is not acceptable to me.”

This year’s electronic portion of the test continues through May 13. Belardi, the McGraw-Hill Education spokesman, said a few isolated problem have been reported this spring, but overall ISTEP testing has been relatively smooth. A few districts have opted for paper tests after problems last week with the online system.

So far, about 175,000 students have completed the exam, which is about 35 percent of the expected state total, Belardi said.

Call Star reporter Eric Weddle at (317) 444-6222. Follow him on Twitter: @ericweddle.