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Oregon Jury Awards $3.5 Million to Online Testing Firm

The Oregon Department of Education is not scoring very well in its 2-year-old dispute with Vantage Learning.

On Friday, an Oregon jury awarded $3.5 million to the online testing company to compensate it for tests that it had administered but that were not paid for by the state.

The jury of the Marion County Circuit Court found that the education department breached its contract with Vantage by failing to negotiate in good faith to settle the payment issue, establish a new pricing structure, and deal fairly with the company.

The jury unanimously rejected the education department’s claim that Vantage Learning breached the contract and dealt in bad faith.

The state in March 2007 sued Vantage, which is registered in Delaware but has its headquarters in Newtown, Pa. Vantage had been the state's partner since 2000 in developing and launching a new Web-based testing system, called Technology Enhanced Student Assessment. For several years, TESA was used to deliver state tests in reading and math in grades 3-8 and grade 10, as well as science in grades 5, 8, and 10.

The dispute arose over issues of system performance and payment. But a significant fact was that, when the state rebid its testing contract, it disqualified Vantage from competition in the fall of 2006. The state later chose the current test provider, the American Institutes of Research, based in Washington.

In the most dramatic incident, Oregon students who logged into the testing system on March 9, 2007 were presented an on-screen message from Vantage, explaining that the test was unavailable because the state had not paid its bills.

You can read my story for Education Week here.

A story this week on the jury verdict in The Oregonian is here.

In 2007, Oregon education officials took an aggressive stance against the company, with Deputy Superintendent Ed Dennis contacting the news media to describe the state's complaints. Vantage, perhaps to minimize negative publicity, kept fairly quiet.

This week, however, it was Vantage that was crowing about its courtroom victory.

President Robert Patrylak said to me, in an interview, that the jury was swayed by "the fact that [the state] never came to sit down with us, even after we gave opportunity after opportunity to have them do that."

Harry N. Barfoot, the company's vice president, said that Oregon's current online testing system is costing the state's taxpayers from three to five times the cost of TESA.

And Barfoot claimed the high ground in the dispute: "The lesson learned here is it does matter to taxpayers, to a company like Vantage, and on both sides, to have a program that works, to have fair contracts that are adhered to, with issues that are worked on, and written on a piece of paper that means something."

Oregon's education officials have not yet decided whether to appeal the verdict.

Dennis issued a short statement, expressing disappointment in the verdict, and reading in part: "... We filed suit because Oregon’s students and teachers suffered as a result of what we still believe to be a breach of contract by Vantage Learning. This breach resulted in districts scrambling to administer paper and pencil assessment tests during the spring of 2007. Fortunately, we have a new contractor delivering our online assessments and have not had any further disruptions for our students. We will meet with our legal counsel from the Department of Justice to explore our options for appealing this decision and continue to press our case.”

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