Andrea Ball
American-Statesman Staff
December 28, 2017

At 5 p.m. on a Friday, the Texas Education Agency abruptly announced that it had pulled the plug on a special education data-mining project it had defended for months.

Parents and advocacy groups had too many concerns over the $4.4 million, no-bid contract, TEA Commissioner Mike Morath said. He promised to review the agency’s contracting processes.

But documents, contracts and emails obtained by the American-Statesman show that the deal with Atlanta-based SPEDx was vetted at the highest levels. Morath was regularly updated on the project, approved the no-bid designation and signed the contract. Penny Schwinn, deputy commissioner of academics, helped write it. Justin Porter, executive director of special populations, worked closely with the company.

On Dec. 15 — after weeks of intense scrutiny by parents and advocacy groups — the TEA walked away, saying it did not have the necessary buy-in.

“As a result, this project can not proceed effectively,” Morath wrote in a statement emailed to the media.

RELATED: Texas cancels no-bid contract for special education analysis

The now-scrapped project is another black eye for an agency that has been accused in recent years of failing to serve special education students properly. While no investigative body has said any laws or rules were broken, the effort has prompted an internal review of the agency’s procurement policies and a federal investigation. And it has spurred the ire of advocacy groups who say they yet again have reason to distrust the TEA.

Parents say they weren’t informed about the project and that the agency wasn’t honest with them.

In numerous instances, documentation of how the deal came about conflicts with what TEA officials told the public and media in interviews and public statements.

Schwinn and Porter told several reporters in an early December meeting that SPEDx would not be telling the TEA what to do with the data it collected. But $3.2 million, three-quarters of the contract, was for SPEDx to shape special education policies.

The pair told reporters that the SPEDx work was not a research project. But the contract specifically allows for “research methodology” and uses the word “study.”

The TEA told reporters it did a thorough review of possible companies. But then Schwinn said to the media the agency never talked to other potential vendors because they often make empty promises.

“You’re essentially talking to salesmen,” she said.

TEA officials declined to comment while Morath’s review of the procurement process is underway.

“At this point, we cannot answer questions about the project,” TEA spokeswoman Lauren Callahan said.

Special education advocates say the incongruous statements heighten their suspicions of the TEA.

“They have their talking points about how much they care, but actions speak louder than words,” said Cheryl Fries, co-founder of Texans for Special Education Reform, which first raised concerns about the project.

No bids, and few answers

In an interview with reporters before the deal was killed, Schwinn detailed the way the contract evolved.

In late 2016, she said, the TEA was dealing with fallout from a Houston Chronicle investigation that said the agency had capped special education services to 8.5 percent of the total student population and, based on that arbitrary number, children were being denied services.

Schwinn started looking around the country for bright spots, she said, programs or initiatives that were doing well. During that search, a colleague pointed her toward Richard Nyankori, former deputy chancellor of special education for the District of Columbia public school system, who had started a special education data company.

Nyankori — whose company was chartered in September 2016 — was working on a data project with Louisiana to analyze individualized education plans, records detailing the services provided to children in special education. Those records contain highly confidential information, such as medical conditions, educational performance, psychiatric conditions and family history.

Texas officials hoped a similar review of special education files here would produce data that could be used to shape the agency’s approach to special education.

“We provide a valuable and critical set of services that benefit those who work with students with disabilities,” Nyankori told the Statesman.

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The Louisiana effort was the only such project SPEDx had ever done and, at the time the TEA showed interest in the company, it was still in progress. Advocates, who later obtained a copy of the company’s work in that state, felt the report showed a fundamental lack of understanding of special education. But when Texas officials looked at the SPEDx’s work, they felt the company could provide the state valuable information.

Meanwhile, Schwinn said, Texas was still researching other options. Schwinn said she and her staff talked to colleagues around the country, looked at projects in other states, reviewed work by 26 other companies, and did searches online for keywords such as “special education data analytics,” to find possible vendors.

Based on that, Schwinn said, TEA officials decided that SPEDx was the only company that could do the work they wanted.

The U.S. Education Department had begun investigating the TEA over the 8.5 percent cap and Texas officials wanted to overhaul the state’s approach to special education. The TEA hoped the SPEDx project would provide a sense of how to do that. For example, Schwinn said, new data might show the TEA more about what was working or not working for children with dyslexia or autism.

Based on their belief that only SPEDx could do that work, TEA officials skipped the traditional bid process and gave the contract to the company, Schwinn said.

State law allows agencies to enter into no-bid contracts if they can prove no other company can do the work. The TEA said that only SPEDx could do the job through proprietary methods for siphoning critical data from the individualized education plans.

On May 24, 2017, Morath signed a $2.1 million contract with SPEDx. Of it, $1.2 million was earmarked for data analysis. The rest involved consultant work on how to improve special education in Texas, including developing two pilot programs that would improve outcomes for students with disabilities.

SPEDx was paid all of that money. How much of the work was completed is unclear, because the TEA has declined to answer questions about the project. The agency also declined to explain how SPEDx’s consulting work was proprietary and qualified for a no-bid contract.

Morath doubled down on no-bid contract

By summer, the TEA was forging ahead and selling the project to school districts across the state. Morath was receiving regular updates on the effort.

In a letter to districts, Morath said those that participated were eligible for $10,000 to $100,000 in federal money to reimburse them for whatever costs they incurred by having the data companies that keep those records send them along to SPEDx. According to a document obtained by the Statesman, if all the districts decided to participate, the TEA would have paid out $14.8 million.

Realistically, however, the state estimated about 150 districts would sign on and that the TEA would pay them a total of $3.5 million, the document states. The TEA was now looking at an $8 million project.

Ultimately about 170 districts signed up. TEA officials say they don’t know how much they’ve paid out to districts because the numbers aren’t final yet.

In September, Morath signed a $2.3 million amendment to the SPEDx contract. This one was entirely for consulting and strategic planning purposes. Among the payments would be $1.1 million for eight pilot projects based on the project’s findings, $715,000 for strategic planning and $158,000 for a communication plan that would “appeal to both hearts and minds of stakeholders.”

In September, Texans for Special Education Reform raised red flags after learning about the project from a school district. The group questioned the TEA but wasn’t getting detailed answers, Fries said. Meanwhile, the group started researching SPEDx, discovering it was a new company and pressing the state to explain how the project would directly affect children with disabilities.

By November, the project had begun to blow up.

That month, the state’s then-special education director, Laurie Kash — who was hired after the contract was signed — began asking questions about project. Kash later filed a complaint with the U.S. Education Department’s Office of Inspector General, since federal money had been used to fund the contract. Kash alleged the project violated state and federal procurement laws and that Schwinn had funneled the contract to a friend who later became a subcontractor on the project.

Kash also claimed the state should not have signed a no-bid contract with SPEDx because the agency had not taken the necessary steps to justify it.

That federal investigation is ongoing.

The TEA’s internal auditor also investigated Kash’s complaints and cleared the agency of wrongdoing. The auditor concluded that Schwinn had not illegally given the contract to her friend.

Kash was fired the night before Thanksgiving. TEA officials said it was because she is facing a lawsuit in Oregon, where she had worked before taking the job in Texas, that claims she tried to cover up sexual abuse allegations of a little girl. Kash and her attorney said she had been retaliated against for raising her concerns about the contract, a claim the TEA denies.

Kash’s dismissal resulted in a slew of media stories scrutinizing the contract. Disability Rights Texas and the Texas Council of Administrators of Special Education later called for a halt to the project because of the concerns and lack of transparency. The TEA said at that time that it would not cancel the contract.

Nine days later, Morath changed his mind.

In the statement sent to reporters on Dec. 15, Morath continued to defend the effort, saying the TEA believed that the data-mining effort could have had a major impact on special education services across the state.

“With information from the project, Texas school districts could have significantly improved the academic resources available to teachers who support special education students,” Morath wrote.

Ending the contract doesn’t put the matter to rest, Fries said. The group will continue to scrutinize everything the TEA does with special education.

“This is not Monopoly money,” Fries said. “These are precious dollars that kids and teachers need to do work every day.”

Article available at Austin American Statesman online HERE.