Testimony of Leonie Haimson, Executive Director

Class Size Matters before the City Council Education Committee

on the granting of no-bid contracts by the NYC Department of Education

Yesterday, I received the results of the first set of my son’s Princeton Review interim assessments.  They were not stellar. I was quite worried until I received the following email from the Parent Coordinator at my school, sent to all 3rd grade parents:

"Take one shadowy, leafy Ivy League "review service" service which then produces assessments that ask students in a large urban area (let's call it "Gotham City") many questions specifically NOT aligned to the curriculum followed by those students.....have those usually superlative students score, in a phrase, "not so well" on those assessments......and then give results to parents of students. What is produced?"

I'll tell you--a lot of confusion and angst, that's what.  This is my way of letting you know that you should NOT get stressed out if your child (who just received a good report card--what gives, right?) has a score on the Princeton Review that isn't very good, or in some cases, downright lousy.

These assessments are often not connected to the ELA or Math state standardized testing at all. We have seen this happen before....and before....and before.....”

My parent coordinator is not alone in her views. 

Other experts, such as Robert Tobias, former head of assessment for the Board of Education, have said that it is pretty much impossible to get useful results from standardized interim testing, which is why he resisted pressure to give these tests when he was in charge.  Yet now, we’re spending millions of dollars of precious funds to expand interim assessments to all grades, with the main effect apparently of worrying more parents and kids, and convince them that they’re going to fail, while providing them with no useful information to help them do better.

Princeton Review received a no-bid contract to the tune of $ 5.4 million, to produce more of these assessments.  Just a few weeks ago, during the latest round of testing, a total of five of the questions as written incorrectly phrased or had no right answer listed, as reported in the New York Post.

Even the sample question was given with the wrong answer indicated as correct – which no doubt confused a lot of kids even before the exam began.  “It's a bummer when we get something wrong," John Katzman, CEO of the Princeton Review, was quoted as saying.

Many other profit-making testing companies will be receiving millions of dollars in no-bid contracts from the city for years to come.

For example, during the next meeting of the Contract committee, the DOE is requesting $1.4 million for a no-bid contract to extend its agreement with Harcourt Assessment for two years, to provide ELA summer assessment, a relative bargain considering CTB/McGraw will receive $3.4 million for two more years of their summer assessments in math.   Let’s hope that Harcourt doesn’t hear about how much more CTB/McGraw is getting.

Another no-bid contract to be requested at the next November meeting involves the company CyberShift – to extend its timekeeping system to 2012, for five years beyond its expiration next January.  Why these automated services should not be competitively bid is beyond me, and is not answerable by looking at the written explanation on the contract committee agenda, since there are no reasons offered.

There many other questionable no-bid contracts that DOE has issued over the last few years, amounting to hundreds of millions of dollars.

Take the no-bid contract for City Year at $11 million, to pay for young people, most of them only high school graduates,  to “work in high-need public schools to help children learn to read, encourage children to stay in school and to care about their communities.”  

I’m sure that these young people want to help others and have the best intentions at heart, but what will be their training, and what does it exactly mean to encourage children “to care about their communities”?  You will not find the information anywhere on the DoE website nor anywhere else.

I suppose that we should be encouraged that this contract, submitted  by Joel Klein’s special  assistant, was originally requested at $16.23 million for six years, but was pared down to only five, contingent on “follow-up questions to be asked of City Year.” 

Interesting that they can receive a five year contract with no follow-up questions, but that sixth year; perhaps they need a few answers first? 

I also noted that City Year appears to have a close relationship with Deputy Mayor Doctoroff, and partnered with the organization he founded to promote the Olympics, NYC 2012.  City Year also participated in many OIympics-related over the last few years, before the city lost its Olympics bid last year.  In fact, Doctoroff received a special honorary award from City Year for his “lifetime commitment to social justice, education, and underserved communities” in April, just following this awarding of this contract.  All this is coincidental, I’m sure.

Another questionable contract involves the University of California at Santa Cruz; DoE officials submitted a request for a $2.2 million no-bid contract to extend their existing contract with the New Teacher Center (NTC), University of California, Santa Cruz for another two years. “ONTI (the Office of New Teacher Induction) needs two more years to fully develop the capacity of the DOE leadership team. The total cost of the additional two years is $2.2 or $1.1 million annually.” 

In April, this request was rejected by other DOE employees who make up the contract committee, with the reasons given that there was “Insufficient justification for request” and that the contract should be “competitively bid.”  

One would be reassured that perhaps there is some integrity to the system, if it weren’t for the fact that the next month, the contract was resubmitted to the committee and then approved – for an even higher amount.  In one month, the total cost of the additional two years of these services had somehow risen to $2.8 million, and the need for competitive bidding had magically vanished.

Perhaps there could be a reason that the contract was first rejected and then approved; perhaps there were more convincing rationales given, including an evaluation of the work already done by the Center, why no teaching college or institute in NYC or anywhere else in the world might be able to do this job more effectively or at a lower cost, or why it would take two more years to “fully develop…the DOE leadership team.” 

Unfortunately, we have no way to know.  There’s no public record, no hearings held on the subject, and nothing written on the subject.

The $17 million no-bid contract with Alvarez & Marsal, involving six consultants receiving at least $1 million each to give advice to DOE about how to pare down school budgets, is perhaps the most controversial.

Recently, I read “A Recipe for Failure; A year of Reform and Chaos in the St. Louis Public Schools” by Marilyn Ayres-Salamon, about her tragic experiences as a middle school teacher the year Alvarez & Marsal took control of the St. Louis schools. 

On Sept. 5, on NY1, Dominic Carter asked Chancellor Klein about the “claim the company in St. Louis shut down a lot of systems.”

Joel Klein replied: “I don't know about other cities, “a rather astonishing admission considering all the tax dollars we are paying these consultants. Perhaps he should have done his homework and read a copy of this book.

It tells the story not only what happened in her school, but in the system as a whole.  Without any education experience, Alvarez & Marsal was hired on June 1, 2003 in St. Louis, to run the schools and “cut the bureaucracy.” 

They soon outsourced, privatized, cut budget and sold off schools.  They closed all the alternative schools, textbooks and other supplies went undelivered for months, the number of serious disciplinary incidents among students grew by 58%, and violent acts increased by 148%. 

Class sizes expanded; special education services were in chaos; teacher morale plummeted, and parents felt even more disenfranchised than before.  Meanwhile, the money spent on consultants tripled, and the no. of administrators paid in excess of $100,000 quadrupled.

At Salamon’s school, instead of 22 students in her classes, as planned, there were 31.  The building was seriously overcrowded, continual fights broke out among students, and she and the principal both ended up resigning before the end of the year because of all the stress.  The next fall, fewer than half of its teachers returned to the school, and most of the replacements hired were substitutes without full accreditation.

Here is a description from Bill Purdy, currently a St. Louis school board member, about what happened under A&M’s regime:

“…. the schools [were put] in the hands of a New York management consulting firm with no prior educational experience under a $10 million contract. The consultants built a high-salary centralized bureaucracy and fired hundreds of dedicated employees through outsourcing of custodial, maintenance, food services, insurance benefits, and warehouse operations to out-of-town companies. They also hired multiple expensive public relations and law firms….”

In June of 2004, the state auditor issued a report, detailing many problems with A&M’s management, cost controls, and financial improprieties.   (Incidentally, the state auditor was Claire Claire McCaskill, now the newly-elected Senator from Missouri.)

Not surprisingly, under A&M, test scores further declined and in June 2005 the schools became only “provisionally accredited” by the state. Last July, the state created a committee to investigate its substandard performance.

But by then, A& M had left town, without having found the district a permanent superintendent.  In an editorial from the St. Louis Post-Dispatch: “The turnaround firm was going to put the district on a solid financial and organizational footing…Instead, there is vague talk of a plan…The financial mess the turnaround firm was going to fix? It’s still with us.”

In the conclusion of its editorial, the St. Post-Dispatch noted that “several other school systems have expressed interest in the turnaround firm,” then added, “For [the firm’s] sake, let’s hope they don’t ask for references.” 

Yet somehow, based on this record of achievement, A&M was hired by the state of Louisiana to manage the 107 low-performing schools in New Orleans..

According to the NY Times, this city’s public school system has now  been “replaced by a small but labyrinthine system of state, city and charter-operated schools, each with its own rules, applications and starting dates” – and sometimes, no place to send your kids to school, especially if they have received low grades or need special help.. 

Sajan George of A&M was St. Louis’ school district acting chief financial officer and then became the chief operating officer under the NOLA restructuring plan; he chose as his chief financial officer a man named Stan Smith, who had no experience in the field of education, but was instead a former “Department of Defense contractor” who also assisted with the liquidation of “an oil and gas exploration and drilling company” 

This fall, less than half of these schools have reopened, and many of the better performing schools have been converted into charter schools. Here’s one description from last fall of what has occurred:

“Under cover of the disaster, Alvarez and Marsal, with full support from local and state officials, are systematically dismantling the school system. First to go were teachers and support staff, who were all laid-off indefinitely, and their union contracts ripped up. Next, local and state school officials announced that schools opened on the non-flooded west bank of New Orleans would re-emerge as semi-privatized charter schools.  The federal department of education helped the effort by providing $20 million to open 13 west bank New Orleans schools, but only if they were opened as charters. To speed up the charter conversion, State officials intervened and "waived" democratic procedures, such as the requirement that parents and staff must approve a school becoming a charter.”

Now, Sajan George seems to have jumped ship to even more lucrative climes – heading the “cost-savings” efforts at Tweed -- acting as its chief financial officer, according to many reports. 

I hope this committee looks closely at the recommendations for cost-savings made by A&M here in New York City, and that for the sake of our children, our schools do not follow the course laid down in St. Louis and New Orleans.

Thanks for the opportunity to testify today.