IN THE CLAIMS COMMISSION OF THE STATE OF TENNESSEE Respondent Counterclaim Claimant. MIDDLE DRVISION MEASUREMENT INCORPORATED, Claimant Counterclaim Respondent v. Claim N0. K20171215 STATE OF TENNESSEE, Regular Docket 55) ANSWER AND COUNTERCLAIM Respondent State of Tennessee Department of Education (the ?State?) hereby answers the numbered paragraphs of Claimant Measurement Incorporated?s or ?Claimant?) Complaint as follows: 1. Admitted on information and belief. 2. Admit. 3. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 4. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 5. No response is required as the allegations relate to contracts, which are documents in writing that speak for themselves. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 6. No response is required as the allegations relate to a contract, which is a document in writing that speaks for itself. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 7. No response is required as the allegations relate to a contract, which is a document in writing that speaks for itself. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 8. No response is required as the allegations relate to contracts, which are documents in writing that speak for themselves. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 9. No response is required as the allegations relate to contracts, which are documents in writing that speak for themselves. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 10. Admitted in part, denied in part. It is admitted that MI worked with the State and hundreds of Tennessee educators to develop testing materials for TNReady and TCAP. The State denies that MI performed its work in accordance with the terms of the Contracts and that its work can be characterized as diligent. In fact, MI breached the Contracts in a number of respects. 11. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments in this paragraph, which are deemed denied. 12. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments in this paragraph, which are deemed denied. 13. The State denies the ?rst sentence. For the second and third sentences, the State is without knowledge or information suf?cient to form a belief as to the' truth of the averments, which are deemed denied. 14. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of this paragraph, which are deemed denied. 15. Deny. 16. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments in this paragraph, which are deemed denied. 1 7. Deny. 1 8. Admit. 1 9. Admit. 20. Admitted in part, denied in part. For the ?rst sentence, the State admits only that it provided recommendations for improving the MIST platform, and denies all remaining allegations. For the second sentence, the State is without knowledge or information suf?cient to form a belief as to the truth of the averments, which are deemed denied. 21. Admitted in part, denied in part. For the ?rst sentence, the State admits only that load tests were conducted on January 12, 2016, and January 22, 2016, and denies all remaining allegations. For the second sentence, the State is without knowledge or information suf?cient to form a belief as to the truth of the averments, which are deemed denied. 22. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments in this paragraph, which are deemed denied. 23. Deny. 24. Deny. 25. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments in this paragraph, which are deemed denied. 26. Deny. 27. Deny. 28. For the ?rst two sentences, the State is without knowledge or information suf?cient to form a belief as to the truth of the averments of this paragraph, which are therefore deemed denied. The State denies the third sentence. 29. Deny. 30. The State denies the ?rst sentence. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of the second sentence, which are therefore deemed denied. 3 1 . Deny. 32. Deny. 33. The State denies the ?rst sentence. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of the second sentence, which are therefore deemed denied, although the State admits that the contracts expressly granted the State the right to approve work. 34. Deny. 35. The State admits the ?rst sentence. The State denies the second sentence. 36. The State denies the ?rst, second, and foUrth sentences. As for the third sentence, the State is without knowledge or information suf?cient to form a belief as to the truth of the averments, which are therefore deemed denied. 37. The State denies part admits part and denies part 38. Deny. 39. The State denies .the ?rst and third sentences, and admits the second and fourth. 40. Deny. 41. The State denies the ?rst sentence. No response is required to the second sentence as the exhibit is a document in writing that speaks for itself. 42. Deny. 43. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of this paragraph, which are therefore deemed denied. 44. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of this paragraph, which are therefore deemed denied. 45. Deny. 46. The State is without knowledge or information suf?cient to form a belief as to the truth of the averments of this paragraph, which are therefore deemed denied. 47. Deny. Not all TNReady tests administered were capable of being scored. 48. Deny. 49. Denied. To the extent that the allegations of this paragraph refer to the State?s termination letter, no response is required as the. letter is a document in writing that speaks for itself. As for the remaining allegations, TDOE denies that it has broken any promises made to M1. 50. Denied. 51. No response is required as the allegations of this paragraph refer to a document in writing that speaks for itself. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 52. Denied. 53. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 54. Deny. 55. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 56. This paragraph contains no allegations requiring a response. To the extent a response is deemed required, each and every allegation is denied. 57. No response is required as the allegations relate to documents in writing that speak for themselves. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 58. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. TDOE speci?cally denies that MI complied with its obligations under the parties? Contracts. 59. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 60. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 61. This paragraph contains no allegations requiring a response. To the extent a response is deemed required, each and every allegation is denied. 62. The allegations of this paragraph relate to a claim dismissed by the Court and thus do not require a response. To the extent a response is deemed required, each and every allegation is denied. 63. The allegations of this paragraph relate to a claim dismissed by the Court and thus do not require a response. To the extent a response is deemed required, each and every allegation is denied. 64. The allegations of this paragraph relate to a claim dismissed by the Court and thus do not require a response. To the extent a response is deemed required, each and every allegation is denied. 65. This paragraph contains no allegations requiring a response. To the extent a response is deemed required, each and every allegation is denied. 66. No response is required as the allegations of this paragraph refer to a document in writing that speaks for itself. To the extent a response is deemed required, the allegations in this paragraph are denied as stated. 67. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 68. The allegations of this paragraph constitute legal conclusions to which no response is required. To the extent a response is deemed required, each and every allegation is denied. 69. The State denies that Claimant is entitled to any of the relief it seeks. 70. All allegations not speci?cally admitted are denied. AFFIRMATIVE DEFENSES Without assuming any burden that it would not otherwise have, the State hereby asserts the following defenses. 1. The Complaint fails to state a claim upon which relief may be granted. 2. Some of Claimant?s claims are barred by the doctrine of sovereign immunity. 3. The relief requested by Claimant is barred by the doctrine of setoff. 4. Claimant?s claims are barred by doctrines of estoppel, waiver, laches, and/or unclean hands. 5. Claimant has not incurred damages or its damages are speculative. 6. Claimant?s claims are barred under the terms of the parties? Contracts. WHEREFORE, the State respectfully requests that the Complaint be dismissed in its entirety and with prejudice, that judgment be entered in the State?s favor and against Claimant, and that the State be awarded costs, attorney?s fees, and such other relief as the Court deems to be just and equitable. COUNTERCLAIM Counterclaim-claimant State of Tennessee Department of Education (the ?State?) hereby asserts the following Counterclaim against counterclaim-respondent Measurement Incorporated 1. On November 15, 2014, the State and MI entered into a contract (the ?2014 Contract?) for the provision of a state summative assessment system for English language arts and math. 2. A copy of the 2014 Contract is attached as Exhibit A. 3. The ELA and math summative assessment system is now called ?TNReady.? 4. Under the 2014 Contract, MI agreed to ?provide an assessment program that will allow all students access to assessments in ways that produce meaningful results.? 5. As the primary means of delivery and implementation of the assessment, Ml agreed to provide a computer-based testing platform and enSure its functionality. 6. MI also agreed to provide a backup paper-and-pencil testing option in the event that the computer-based system experienced errors. 7. The move to online testing represented an important step forward for Tennessee?s investment in education technology, with the aim of preparing students for the real world. 8. The State Spent months working with school districts in advance of the rollout of this development in education. 9. As school districts prepared for TNReady and the transition to online testing, they trusted and relied on representations that it would deliver a functioning computer-based .testing platform. 10. Because the State did not want to burden school districts with having to use one testing platform for ELA and math assessments and a different platform for science and social studies, a non?competitive contract was entered into with M1, effective June 29, 2015, for the administration, scoring, and reporting of state summative assessments in science and social studies (the ?2015 Contract,? and with the 2014 Contract, the ?Contracts?). 11. A copy of the 2015 Contract is attached as Exhibit B. 12. The 2015 Contract contains essentially the same deliverables for a computer- based testing platform as the 2014 Contract. 13. In the period preceding the spring 2016 testing period, school districts throughout Tennessee reported that the online platform developed by M1 was unreliable and that they were experiencing functionality issues. 14. - The reliability and functionality issues were particularly egregious on iPads, despite the fact that the Contracts required assessment delivery platform to support the iPad 2 device and later iPad versions. 15. Just two weeks before the beginning of the spring 2016 testing window, the State had to communicate to school districts that they could not use iPads for testing and that they should use a different electronic device or choose the'option of administering paper tests. 16. Many school districts had already purchased iPads speci?cally for testing. 17. After school districts were instructed that iPads could not be used for testing, at least twenty more school districts continued to experience serious technical issues with platform and thus were given the option to choose to administer a paper test. 18. Despite assurances that the online testing platform was ready to launch, on February 8, 2016, the ?rst day of the spring 2016 testing window, online platform crashed. 10 19. At the commencement of testing, the State immediately began receiving communications from school districts aeross the state that students were ready to test but unable to access system due to the functionality failure. 20. According to M1, the rollout of the online platform was a ?failure? in that the system could not accommodate the testing needs for the Tennessee students required to take the assessments. 21. The operational failure combined with the additional issues the State had been facing with regards to MI ?3 poor performance under the Contracts led the State to conclude that MI was unable to provide students with an online platform that could perform reliably and consistently during testing. 22. Due to the inconsistency of the online platform, on February 8, 2016, the State concluded that it had no choice but to utilize the paper-and-pencil test administration option under both Contracts for 2015?2016 test administration. 23. The State extended the spring 2016 testing window because of the need to shift to paper-and-pencil test administration. 24. Even with this extension, MI was unable to meet its own revised shipping deadlines for providing test materials to thirteen school districts, including the largest metropolitan districts in Tennessee serving over a half-million students. 25. In fact, MI revised shipping times for TNReady test materials for grades 3-8 three times in April 2016. 26. MI initially told the State that all materials would arrive in school districts one week prior to testing by April 15, 2016. 27. MI then told the State that the ?worst case scenario? was April 22, 2016. ll 28. Nevertheless, MI again pushed the deadline to April 27, 2016, calling it a new ?worst case scenario.? 29. Upon learning of the ?nal delay, the State immediately and repeatedly requested speci?c delivery dates for school districts, and M1 said it was unable to provide that information. 30. MI missed the April 27, 2016, deadline for delivery of test materials. 31. Accordingly, because MI repeatedly failed to deliver testing materials by its self- imposed deadlines, the State was forced to cancel remaining spring 2016 testing for grades 3-8. 32. Cancellation was a dif?cult, yet necessary decision, as the State could not expect districts to continue waiting and revising school calendars at the end of the year for a vendor that had repeatedly failed. 33. While the law requires annual state testing, the State, due to failures, was unable to deliver testing. 34. The State therefore was forced to work with the United States Department of Education to provide assurances that Tennessee is complying with federal law to the best of its ability and has made a good faith effort to administer tests to all Tennessee students. 35. Due to continued failure to perform under the Contracts, the State, on April 27, 2016, terminated the Contracts for cause. 36. A copy of the State?s April 27, 2016, termination letter is attached as Exhibit C. COUNT ONE BREACH OF CONTRACT 37. The State incorporates by reference the allegations contained in the preceding paragraphs of the Counterclaim as if set forth entirely herein. 38. The State and M1 were parties to the Contracts. See Exhibits A, B. 39. The State has complied with its obligations under the Contracts. 12 40. Throughout the life of the Contracts, MI breached the Contracts in a number of ways, including by failing to perform the work and to meet the project schedule and deadlines set forth in the Contracts. 41. 42. cause. 43. 44. The provisions of the Contracts that MI breached include, without limitation: Sections Al and Section A.4 Schedule; Section A.6 Administrative Activities; Section A.7 Operations Management; Section A.8 Development Activities; Section A. 10 Assessment Materials; Section All Assessment Materials Packaging and Distribution; and Section A. 14 Scoring Activities. Ml?s breaches of the Contracts caused the State to terminate the Contracts for breaches of the Contracts also caused the State to suffer damages. The State?s damages include, without limitation, amounts that the State paid under an emergency contract with another testing vendor who was responsible for remedying Ml?s de?cient performance and administering tests that MI proved incapable of administering. l3 WHEREFORE, the State respectfully requests that the Court enter judgment in the State?s favor and against counterclaim-defendant Measurement Incorporated, as follows: A. Award the State damages that it suffered as a result of breaches of the parties? Contracts, in an amount to be determined at trial; Award the State its reasonable attomey?s fees; Tax the cost of this action against Award the State pre- and post-judgment interest; and Grant the State such other and further relief as the Court deems just and appropriate. Res ectfully submitted, $121101? 95/- $155,? HERBERT H. SLATERY No. 9077 Attorney Ger?andiporter Matthew Manssen, BPR No. 035451 Assistant Attorney General Civil Litigation and State Services P.0. Box 20207 Nashville, TN 37202-0207 615.741.7087 Matthew.Janssen@ag.tn.gov 14 CERTIFICATE OF SERVICE I hereby certify that a true and exact copy of the foregoing document has been served by US. Mail delivery to: Commissioner Robert Hibbett Claims Commissioner,'Middle Division Tennessee Claims Commission Cloverbottom Center, Fir Building 309A Stewart?s Ferry Pike Nashville, TN 37214 Robert Chapski, ESquire Lawrence F. Giordano, Esquire Brad W. Craig, Esquire Lewis, Thomason, King, Krieg Waldrop, RC. 424 Church Street, Suite 2500 Nashville, TN 37219 Attorneys for Claimant Matth??w D. anbsen Assistant Attorney General Civil Litigation and State Services PO. Box 20207 Nashville, TN 37202-0207 615.741.7087 Matthew.Janssen@ag.tn.g0v on this the 24th day of January, 2018.