LEWIS. THOMASON. KING. KRIEG 8. WALDROP, P.C. r? 424 Church street. Suite 2500 Post Of?ce Box 198615 Nashville. TN 37219 (615) 259-1366 F: (615) 259-1389 - bolt F. on kl LEWIS THOMASON of: (515) 25512573 mhapski@lewisthomason.com - Febmary 7, 2017 Feb 07 2017 Division of Claims Administration State of Tennessee VIA HAND DELIVERY Division of Claims Administration Andrew Jackson Building, 15?11 Floor 5 02 Deaderick Street Nashville, TN 37243?0202 RE: Measurement Incorporated State Department of Education Our File NIL: MN 182?00002 NOTICE OF CLAIM. Dear Sir or Madam: Pursuant to Tenn. Code Ann. 9-8-4032, et seq, please ailow this letter to serve as Measurement Incorporated?s Claim for Damages (12.9., written notice of claim) against the State of Tennessee Department of Education The Tennessee Claims Commission has jurisdiction over this matter pursuantto Tenn. Code Ann. MI is a full service education company with its principal of?ces located at 404 Hunt Street, Durham, NC 27701. entered into two mold-million dollar contracts (collectively referred to herein as the ?Contracts") with on, respectively, November 15, 2014, and June 29, 2015. True and accurate copies of the Contracts are attached to this letter as Notice of Claim Exhibits 1 and 2 and the Cootracts are incorporated herein by reference. Exhibit 1 is further identi?ed by Agency Tracking 33111-0015 (Edison Record 1D 44210) and Exhibit 2 is further identi?ed by Agency Tracking it 33111-00715 (Edison Record ID 44785). In brief, the Contracts require Ml to provide various test development, administration, scoring and reporting services to TDOE in connection with statewide education assessment testing. The total contract amounts are, respectively, $107,720,55737 and $58,884,367.94. Ml?s work pursuant to the Contracts provided much of the substantive testing and both the computer- based and paper-based platforms for Moody, the State?s assessments in math, English language arts, social studies, and science. Following the execution of the Contracts, MI commenced work to perform its contractual obligations and worked extensively and hand?in?hand with TDOE personnel to provide services lKnoxville lMemphis iNashville State of Tennessee Division of Claims Administration February 2017 Page 2 pursuant to the Contracts until April 27, 2016, when TDOE unilaterally cancelled both contracts. A true and complete copy of notice of termination, dated April 27, 2016, is attached hereto as Exhibit 3 and is incorporated herein by reference While DOE alleged that it cancelled the Contracts primarily as a result of technology issues associated with electronic testing that occurred on February 8, 2616, the evidence demonstrates that Ml diligently worked with TDOE to achieve contractual obligations and attempted to acquiesce to every demand ?'om TDOE personnel, whether reasonable or unreasonable, throughout the entire process, For example, TDOE 1mi1aterally and unjusti?ably ordered the cancellation of all statewide electronic testing on February 8, 2016, following a transitory slowdown of network services that morning and subsequently ordered M1 to undertake a herculean effort to substitute paper test materials with hundreds of test forms for hundreds of thousands of students to every public school across the state. In the weeks that followed, MI incurred expenses well beyond those contemplated by the Contracts while attemptingto satisfy paper testing demands to the point of using all known United States based paper printing vendors available, regardless of price and distance. MI still had dif?culty meeting unnecessary and irresponsible demands, and FedEx?s air operations from North Carolina informed MI that they could not accept some shipments because of the huge volume involved. Despite unending and good faith efforts to meet every demand issued by TDOE and despite provision of services up through and Until April 27, 2016, TDOE, has failed and refused to pay for anything more than a small and arbitrary percentage of the total amount owed to under the Contract for the time period encompassing July 1, 2015 through April 27, 2016. failure to pay for MP5 services and goods is a breech of the terms of the Contracts. Moreover, TDOE has refused to satisfy its monetary obligations to MI despite successfully completing its testing at the high school level in the Fall of 2015 and at the elementary school level during the Spring of 2016 using the goods and services provided by MI. Whatever alleged concerns with Ml?s overall performance, the fact remains that several thousand Tennessee students successfully completed their assessments. Further, work product, upon information and belief, is still being used by TDOE despite unjusti?ed failure to pay MI for its work on behalf of the State of Tennessee. TDOE promised in April 2016 to ?work with M1 to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination but that promise has been, similarly, broken, consistently stonewalled and ignored. (See TDOE notice oftennination letter.) TDOE owes MI in excess of $25,296,981-99 for services and goods provided by MI, not including interest, attorney?s fees and additional sums associated with additional work demanded by TDOE and performed by MI a?cr termination of contractual services on or about April 2-7, 2016. Out of this total amount, has paid only a small portion in the amount of $545,324.46, representing approximately a more 2% of the total amount of services State of Tennessee Division of Claims Administration February 7, 2017 Page 3 provided. A Summary of Mi?s outstanding invoices for the time period encompassing July 1, 2015 through April 27, 2016 is attached hereto as Exhibit 4 to this Notice and it is incorporated herein by reference. MI performed additional, post?tennination, work for TDOE as a measme of good faith and cooperation and because TDOE essentiz?ly held MI hostage by refusing to pay for services already rendered unless MI performed the demanded additional work. A summary of work perfonned ?'orn April 27, 2016 to September 30, 2016, is attached hereto as Exhibit 5 to this Notice and it is incorporate herein by reference. TDOE owes MI $3 99,855.99 for this work. (Note that TDOE requested additional work after September 30, 2016, resulting in additional expenses not yet paid.) Accordingly, MI hereby gives notice of its intent to assert every remedy available to it, at law and equityr including but not limited to damages for breach of con'lract, unjust enrichment, promissory fraud, civil consPiracy, fraud in the inducement of the original Contracts, intentional and negligent n?sreprescntation, and promissory estoppel. If it is necessary for M1 to present additiotml or alternative forms other than this Notice of Claim for damages in order to preserve its claim against TDOE, or if MI is required to follow alternative or additional procedures, please advise the undersigned as soon as possible. In addition, if the State requires any additional information from MI, please contact the undersigned. Please note that MI is proceeding under the provisions of Tenn. Code Ann. 9?8- 402 that provide that any and all causes of action by Ml against TDOE are hereby tolled. MI is represented by the following counsel and we respectfully request that all Notices, Orders, and other documents be sent to counsel at the following addresses: . Lawrence F. Giordano, Esq. Lewis, Thomason, King, Krieg Waldrop, RC. One Centre Square, Filth Floor 620 Market Street Knonille, TN 37902 and Robert F. Chapski, Esq, Lewis, Thomason, King, Krieg Waldrop, PC. 424 Church St, Suite 2500 Nashville, TN 37219 State of Tennessee Division of Claims Adminjsiration February 7, 2017 Page 4 Thank you for your attention to this matter. If yau have any questions, please do not hesitate to contact me. Sincerely, RIEG WALDROP, RC. Enclosm'es: Exhibits 1-5 cc: Hem'y Scherich, President Lawrence . Giordano, Esq.