Texas Education Agency officials are keeping quiet about why exactly a controversial no-bid data mining contract took a nosedive last week, losing the state $2.2 million in federal funds for kids with disabilities.

After spending weeks defending the contract and the unusual way it was rolled out, TEA last Friday terminated its agreement with Georgia-based SPEDx, the company hired to both analyze how schools serve students with disabilities and help create a long-term special education plan for the state.

The now-terminated contract was a large part of TEA's plan to overhaul special education services statewide, after a series of extensive reports last year alleged that school districts were denying necessary services to thousands of students at the agency's behest. (TEA has repeatedly denied it capped special education services.)

But critics have questioned why a contract so central to addressing a priority issue for TEA officials was awarded to a relatively unknown company without allowing other firms to bid for the job. 

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When The Texas Tribune asked for more specifics on whether TEA had followed state procurement laws and whether it is considering other options for improving special education, spokesperson Lauren Callahan said: "Commissioner of Education Mike Morath has ordered a review of contracting processes within the agency. At this time, we are allowing that review to take place."

Though TEA sent SPEDx a formal notice of contract termination last week, it had already paid SPEDx $2.2 million in federal funds for services rendered.

"It feels like a very, very disturbing waste of money," said Cheryl Fries, founder of parent advocacy group Texans for Special Education Reform, which was first to raise questions about the contract.

"It is not usual"

Federal regulations allow no-bid contracts under a few circumstances, including when a product is only available from one source and competition is determined inadequate. TEA officials had argued that no other company except for SPEDx had the software necessary to do what it needed: analyzing individualized plans for serving students with disabilities and providing state and district-level trends on student outcomes. 

An individualized education program or IEP is a document that details the specific educational needs and goals for a child eligible for special education services, developed by that child's parents and teachers. Since thousands of students in Texas each have tailor-made plans, any comprehensive data analysis of these documents would require higher-level data processing software, according to TEA officials.

Yet critics argue that SPEDx's portfolio did not necessarily demonstrate that it was uniquely equipped to handle the full range of tasks in the contract. A relatively new company – it registered as a business in Georgia in 2016 – SPEDx had previously completed a simple state-level analysis of special education in Louisiana's public schools, providing broad recommendations for how to improve state support for local districts — but nothing close to its contract with TEA.

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SPEDx had also never worked with individual districts to analyze local trends, according to founder and CEO Richard Nyankori, former deputy chancellor of special education for Washington D.C. Public Schools. But before the contract with Texas was terminated, he argued that the company's software has the technical capability to compile and analyze data at state and local levels. "I don't see a difference," he said. "If Louisiana had asked us to deliver [the data] in a more granular way, we could have definitely done that."

TEA started laying the groundwork for this contract last spring, after the U.S. Department of Education had spent months investigating whether Texas had violated federal law in the way it evaluated students for special education.

That pressure was part of the reason agency officials opted to bypass a competitive process, in addition to believing that only SPEDx could provide the analysis the agency needed, said Penny Schwinn, TEA's deputy commissioner of academics, in an interview with reporters before the contract was terminated.

"Being able to go through the sole-source provision, understanding that we deeply believed it was a sole source, allows for a much faster contract, meaning we can execute things for this school year," she said. "Otherwise we are waiting one more year, and it's one more year of kids where we don't have data and they're not getting served in the way that we know they can be served."

In order to determine whether SPEDx's offerings were indeed worthy of a no-bid contract, TEA said officials checked with at least 26 consulting and education technology companies, a few state-level education experts, and the agency's own regional service centers. They also performed web searches for terms including "special education data analytics," "special education iep analysis," "companies analyzing success of special education plans," and "analyzing strong outcomes for students in special education."

Schwinn said most of her research entailed looking at projects companies had done previously, including submissions for other competitive bids.

Fries and other parent advocates acquired an internal email from the agency's contracts director Norma Barrera acknowledging the aberrant process on the SPEDx contract.

"It is not usual. We try to encourage competition for all procurements," Barrera wrote in late April to the agency's deputy commissioner of finance. Barrera added that Schwinn "does pose a good argument to contract with SPEDx."

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The SPEDx contract drew more attention in September, when TEA amended and significantly expanded it to pay SPEDx to help develop a "strategic plan for advancing the Agency's vision, mission, and priorities related to special education in Texas through" the 2020-2021 school year. Soon after that, the issue prompted Laurie Kash, TEA's newly hired special education director, to file a federal complaint alleging agency misconduct on the awarding of the contract. 

A day later, Kash was fired. She has claimed it was due to her complaint but TEA officials say the termination came because Kash had hidden allegations that she covered up sexual abuse of a 6-year-old at a former job in Oregon.

Void in Texas special education

The termination of the TEA contract and Kash's firing has left a gaping hole in the state's infrastructure for supporting students with disabilities. Frustrated advocates and parents are wondering how the agency plans to move forward.

"There is the current issue of the void of leadership at the agency that needs to be addressed...we need to have that position filled," said Steven Aleman, policy specialist at Disability Rights Texas. 

An internal TEA investigation dated Nov. 17 concluded there was no misconduct on the SPEDx contract.

Yet questions about the bungled contract linger.

"They lost a lot of trust, and they didn't gain it with this project," said Chris Masey, public policy specialist at the Coalition of Texans with Disabilities.

Advocates argue TEA should focus on equipping teachers and school districts with the resources to properly serve students with disabilities. Though state lawmakers filed many bills earlier this year aimed at improving special education services and teacher training, most failed during this year's regular legislative session.

"They need to go back to the drawing board, in terms of, 'OK, how can we work toward a really solid research-based approach to improving special education in our state," Fries said. 

She added that SPEDx's data analysis would not even have addressed the main issue at hand in the federal investigation: that thousands of students with disabilities were denied needed services and would not show up in districts' data.

"They still have not addressed that cap," she said. "I totally agree it's urgent. Unfortunately, they didn't address it."

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