IN THE CLAIMS COMMISSION OF THE STATE OF MIDDLE DIVISION 2m nz-a -1 :3 r: 3 MEASUREMENT INCORPORATED Claimant, v. No: K20171215 STATE OF TENNESSEE DEPARTMENT OF EDUCATION Defendant. COMPLAINT The Claimant, Measurement Incorporated by and through counsel, ?les the following Complaint against the Defendant State of Tennessee Department of Education and states as follows: PARTIES AND JURISDICTION 1. MI is a full-service education company that provides test development and scoring services with its principal of?ces located at 423 Morris Street, Durham, North Carolina, 27701. 2. TDOE is an administrative agency of the State of Tennessee and it is responsible for the administration and enforcement of Tennessee statutes relating to education. 3. The Tennessee Claims Commission (the ?Commission?) has jurisdiction over this matter pursuant to Tenn. Code Ann. 9-8-402 et seq, as MI timely,r filed its Claim for Damages against TDOE with the Division of Claims Administration on February 7, 2017. See Notice of Claim, attached hereto as Exhibit 1. J. rw-r 1 i a . COPY 4. Ml?s Complaint is timely as it was ?led within thirty (30) days of the date that the Division of Claims Administration transferred this matter to the Commission as required by the Commission?s Rules of Procedure. See Tenn. Comp. R. Regs. FACTUAL ALLEGATIONS 5. Over the course of 2014 and 2015, M1 entered into two (2) multi-year, multi- million dollar contracts with TDOE to develop and administerTN Ready as the statewide standardized student assessment for grades 3?8 and High School courses in Math and English Language Arts and to administer Tennessee Comprehensive Assessment Program for grades 3-3 and High School courses in Social Studies and Science, beginning in the 2015-2016 school year. 6. Specifically, on November 15, 2014, M1 entered into a six-year, approximately One Hundred and Seven Million Dollar contract (?2014 Contract?) with TDOE to provide testing services to TDOE in connection with statewide annual assessment for ELA and Math. A copy of the 2014 Contract is attached hereto as Exhibit 2, and is incorporated herein by reference. 7. On June 29, 2015, M1 entered into a ?ve-year, approximately Fifty Eight Million Dollar contract (?2015 Contract?) with TDOE to provide testing services to TDOE in connection with the statewide annual assessment for Science and Social Studies. A copy of the 2015 Contract is attached hereto as Exhibit 3, and is incorporated herein by reference. 8. Under the terms of the 2014 Contract and 2015 Contract (hereinafter collectively referred to as the ?Contracts?), MI was required to work ?in collaboration? with TDOE to deveIOp and administer the following assessments: Achievement Assessments for grades 3?8 for ELA and Math, and (13) End of Course Assessments for English I, II, Algebra I, Geometry, Integrated Math 1, II, and Ill, and to administer the following assessments: Achievement Assessments for grades 3-8 for Science and Social Studies; and EOC Assessments for Biology, Chemistry and US. History. 9. The Contracts required M1 to collaborate with, and obtain approval from, TDOE at every stage of the development process. For instance, MI was required to collaborate with TDOE in the development of all assessment materials, scoring procedures, methodologies, and quality control procedures, and obtain ?nal approval from TDOE for each passage, item,' test form, administration manual and other testing materials. 10. Pursuant to the terms of the Contracts, MI worked diligently and extensively with TDOE, as well as hundreds of Tennessee educators, to develop testing materials for the TNReady and TCAP assessments. 11. The testing materials developed were desi gned to be administered primarily through online testng platform, MIST. 12. The TNReady assessments developed by M1 included twenty-one (21) separate grade levellcontent area tests with multiple versions for ?eld testing purposes. The TCAP assessments prepared by MI included ?fteen (15) separate grade level/?content area tests, with multiple versions of the Social Studies tests for ?eld testing purposes. 13. For the Fall 2015 and Spring 2016 administration, MI created hundreds of test versions, with tens of thousands of digital assets, including, but not limited to, text, pictures, graphs, and audio for hearing-impaired students. In addition, a number of enhancements were made to the MIST program digital calculators, digital highlighting). Many of the items on The term ?item" refers to an individual test question. each test form were designed to be ?technologically enhanced? and were never designed to be administered in a paper-pencil format. 14. In addition to the online test forms, MI, in collaboration with TDOE, developed braille and large print paper test forms for each grade level and content area, as well as one paper-pencil version of each grade levelfcontent area test as an alternative for school districts that requested to opt out of online testing. 15. MI successfully developed and uploaded all agreed-upon TNReady testing materials for all required grades and all required content areas for the 2015-2016 school year to the MIST platform in accordance with time frames that were discussed with, and agreed upon by, TDOE. 16. In addition to the TNReady and TCAP testing materials, MI developed and delivered online practice tools and online practice assessments for every grade and content area in Math and ELA. In fact, during the 2015-2016 school year, over 2.4 milli0n practice test assessments were successfully administered to Tennessee students using the MIST platform. 17. In the fall of 2015, M1 successfully administered Parts I and II of the TNReady assessment in Math and ELA and the TCAP assessment in Social Studies to approximately 172,000 high school students on block schedules using the MIST platform in accordance with the testing schedule established by TDOE. 18. Throughout the fall and winter of 2015 and leading into early 2016, M1 worked cooperatively with TDOE on an ongoing basis in preparation for the administration of Part I of the TNReady assessment in Math and ELA and TCAP assessment in Social Studies for students on traditional schedules, administration of which was scheduled to begin on February 8, 2016. 19. For instance, on October 1, 2015, MI and TDOE performed a stress test designed to overload the anticipated usage in order to identify any weaknesses in the MIST platform. 20. Following the October 1 stress test, TDOE provided MI with suggested recommendations for improvement of the MIST platform, all of which were implemented by M1 as instructed by TDOE. Notably, stress test report did not disclose any TDOE concerns with network infrastructure. 21. Subsequent load tests were conducted on January 12, 2016, and January 22, 2016, after requested changes were implemented. These load tests did not reveal any system stress and none was reported by TDOE. 22. As a result of these efforts, Chief Information Of?cer, Cliff Lloyd, stated that TDOE was ?very confident? that the MIST platform was ?ready? from a technical standpoint for the online administration of the TNReady and TCAP assessments starting on February 8. 23. At approximately 8:00 am CST on February 8, 2016, Tennessee students began logging onto the MIST platform to take the TNReady and TCAP assessments. By 9:15 am, approximately 22,000 students were online and MI began receiving reports that some school districts were experiencing delays during the login process and slow response times; however, students continued to log into the MIST platform and by 10:15 am, the response time returned to nOrmal. 24. Instead of communicating with MI in good faith to analyze the reason for the slow response time, at 11:00 am CST, the Tennessee Commissioner of Education (the ?Commissioner?), Candice McQueen, unilaterally sent an email to all school districts directing them to ?stop testing.? 25. By the time of the Commissioner?s directive, 44,174 students had started testing and 13,300 (3 0.1 had completed and submitted their online assessment. Between 11:15 am and 3:30 pm CST an additional 4,206 students started testing and 6,421 students successfully submitted their tests. At the end of the day 19,720 (40.76%) of the 48,380 online tests had been submitted for scoring. Thousands of other students ?paused? their sessions and could have completed the online assessment later, had they been permitted to do so. 26. However, that same day, again without material consultation with M1, TDOE made a knee-jerk reaction to unreasonably, unilaterally and unjusti?ably cancel all state-wide online assessments and switch to a paper and pencil administration of the TNReady and TCAP assessments. 27. decision was made without any meaningful discussion or input from MI as to whether the issues experienced by some students that day (February 8) could be corrected in time to resume online testing. 28. In fact, MI quickly determined that a portion of the slowdown that some students experienced on February 8 was a self-correcting issue that was caused by a temporary network saturation due to stude logging into the MIST platform at the same time. Ml further determined that the root cause of this issue could have been simply corrected with ample time to adjust the testing window and allow students to successfully complete the TNReady and TCAP assessments online. Despite receipt of this information, TDOE refused to allow M1 to remedy the situation. 29. Instead, TDOE informed Ml that its decision to cancel all electronic testing and to switch to testing by paper was ?non?negotiable,? and TDOE refused to consider any other alternative solutions with M1, such as, for example, administering some grade and content levels in the online format in the same successful manner as the block schedule tests administered through the MIST platform in the fall of 2015. 30. At the time TDOE made its unilateral decision, MI had created one paper-based form for each grade and content area for all Part I exams, and was in the process of completing one paper-based form for each grade and content area for all Part II exams. Administration of this form would have allowed each student in TN in each grade and content area to receive a valid test score for the 2015-2016 testing year. 31. However, TDOE unreasonably insisted that it was necessary for M1 to create hundreds of new versions of paper tests in order to ?eld test enough new items to be used during the following year?s assessment (2016?2017). Ml representatives immediately informed TDOE that switching from an online format to creating multiple versions of a paper-based format after a testing window has opened was unprecedented and created a host of foreseeable and unforeseeable risks that could jeopardize the successful administration of the assessment. Despite being fully informed of these risks, TDOE refused to consider any alternatives and unilaterally insisted on a paper administration. 32. arbitrary, capricious and unreasonable decisioo to switch from a planned and proven online administration to a paper administration of the TNReady and TCAP assessments required M1 to undertake an unprecedented and herculean effort to create and deliver millions of pages of paper test materials to hundreds of thousands of students in school districts across the state of Tennessee in less than six weeks. 33. Despite the wholly unreasonable undertaking required of MI by TDOE, MI made every effort, reasonable or otherwise, to attempt to assist TDOE in its new decision to complete the testing by paper. M1 hired additional staff in an effort to meet demand that Ml create hundreds of different versions of paper test forms and answer documents, and multiple distribution plans, all of which were subject to pre-approval by TDOE before they could be sent to the printer and then shipped to the school districts. 34. Ml?s efforts to meet these unprecedented goals and deadlines were cemplicated by multiplying and unrealistic unilateral commands, which changed frequently and resulted in additional and avoidable delays, an which ultimate] caused or, at minimum, contributed to unilateral cancellation of the Contracts. 35. For instance, each version of each assessment contained a certain number of ?eld test items, which did not and were never designed to count towards an individual student?s score, but which were, instead, intended to be used to gather statistical data needed for the items to be used as operational (is, scored) items for assessments in future years. In order for M1 to create, review, approve, print and ship the testing materials as demanded by TDOE, it was necessary to reduce the planned number of total ?eld test versions of the assessment. 36. While MI was able to successfully develop, print, and ship the agreed?upon number of versions of Part I of the assessment, TDOE refused to accept Ml?s February 26 proposal to develop 400 total versions of Part II of the assessment. Instead, four days later, on March 1, TDOE unreasonably delayed the development of these test forms by unreasonably and unnecessarily demanding that MI develop 565 different versions. One day later, TDOE increased that demand to 585 versions. Between March 3 and March 14, TDOE then again unilaterally and arbitrarily changed its initial demand multiple times before ?nally agreeing to 192 versions approximately six weeks prior to the start of the revised Part 1] testing window. Each time TDOE changed its demand over this critical period, MI was required to: a) re-create all of the test forms to ensure that the designated number of versions contained the ?eld test items required to adequately sample from the educational standards being assessed; b) obtain pre-approval for each test form from and c) then re-develop a shipping and sampling plan based on the number of versions to ensure that a particular ?eld test version was administered to a demographically representative sample of students, ensuring that the results of the statistical data obtained was appropriate. 38. Since the number of ?eld test versions did not impact the scores of individual students taking the 2015-2016 TNReady and TCAP assessment, refusal to accept initial proposal on February 26 to create 400 versions?which would have yielded suf?cient statistical data to develop the following year?s assessment?was completely unreasonable. The fact that TDOE did not approve a ?nal plan until March 14 unnecessarily impeded ability to prepare Part II of the assessment for TDOE approval, which in turn, resulted in even further delays in printing and shipping that portion of the assessment. 39. Notwithstanding the unreasonable and unnecessary delays caused by TDOE, MI continued to work relentlessly to produce and deliver all testing materials to each school district in an extremely short period of time. Shipping the testing materials was a complex logistical process as the material shipments received from the printers had to subsequently be redistributed over numerous and diverse districts/schools within the state in accordance with the agreed-upon sampling plan for most test versions. Additionally, TDOE requested numerous changes to the sampling plan in order to prioritize certain schools over others, further adding to the delays. In addition, at each step of the shipping and packaging process MI was tasked with ensuring the security of all of the testing materials. 40. Nevertheless, MI placed all test material production and distribution on an expedited schedule in an effort to accommodate the school testing schedules. As testing materials were returned from the printers, they were packaged and shipped to the school districts based on priority as quickly as feasible in accordance with often changing directives. 41. Despite Ml?s unending good faith efforts to meet every unrealistic, arbitrary, and changing demand issued by TDOE, a small percentage of Tennessee school districts still had not received all of their required testing materials by April 27, 2016, the date when TDOE chose to unilaterally cancel both Contracts and to abandon the administration of the TNReady and TCAP assessments for grades 3 - 8. A copy of the Notice of Cancellation is attached hereto as Exhibit 4, and is incorporated herein by reference. 42. At the time of the cancellation, Part I and ll of the TNReady and TCAP assessments had been successfully administered to 172,000 high school students during the fall administration and those assessments had been submitted, scored, and delivered to data management vendor pursuant to the terms of the Contracts. 43. In addition, Part I of the TNReady assessment had been delivered and administered to approximately 653,516 students across all grade levels and content areas and Part II of the TNReady testing materials had been delivered to all high schools. 44. Nearly sixty (60) percent of the testing materials for Part II of the assessment for grades 3-3 had been delivered and were ready to be administered. 45. Following unilateral cancellation of the Contracts, as a measure of Ml?s continued good faith and cooperation, MI, in fact, performed additional work for TDOE based on promise to pay for Ml?s services provided post-contract, and based on Ml?s concern that withholding the testing materials would jeopardize testing for Tennessee students for the following year. 10 46. Speci?cally, MI cooperated with TDOE in arranging for the shipment and delivery of several tons of hard copy testing materials developed by M1 pursuant to the Contracts, as instructed by TDOE, as well as all electronic testing materials, student responses, and score data in possession. 47'. Upon information and belief, the TNReady assessments that were administered to students and delivered to the TDOE by M1 have been scored and TDOE, as well as Tennessee students, parents, and educators, have bene?ted from the results of those assessments. 48. Upon information and belief, TDOE is still utilizing and bene?tting from the testing materials created by M1, including hundreds of different ?eld test items that were developed by M1 and accepted by the TDOE for use on future assessments. 49. Although TDOE promised MI in April, 2016, that it would ?work with M1 to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date,? TDOE has broken this promise by refusing to negotiate in good faith with M1 and by refusing to pay Ml?s outstanding invoices. 50. As of May 22, 2017, TDOE has failed and refused to pay anything more than $545,324.46, which represents approximately 2% of the total amount owed to M1 under the Contracts for the time period encompassing July 1, 2015 through April 27, 2016. 51. A summary of Ml?s outstanding invoices for work performed under the Contracts is attached hereto as Exhibit 5. 52. TDOE owes MI in excess of $25,296,921 .99 for services and goods provided by M1 pursuant to the Contracts, not including interest, attorney?s fees, or any additional amounts associated with the post?termination work demanded by TDOE and performed by MI. 11 53. refusal to pay for goods and services rendered from July 1, 2015 through April 27, 2016, constitutes a breach of the Contracts. 54. TDOE has further failed and refused to pay M1 for the additional, post- termination work that was performed by M1, as demanded by TDOE, totaling $410,250.29. A summary of Ml?s outstanding invoices for post-termination work performed is attached hereto as Exhibit 6. 55. refusal to pay M1 for the additional, post-termination, work that was performed by M1, as demanded by TDOE, constitutes a further breach of the Contracts. COUNT - BREACH OF CONTRACT 56. MI realleges and incorporates by reference the allegations contained in Paragraphs 1 through 55 of the Complaint as if set forth fully herein. TDOE and MI entered into valid Contracts for testing services. See 2014 Contract, Exhibit 2; 2015 Contract, Exhibit 3. MI also performed additional, post-termination, work demanded by TDOE. Sea Post-termination Invoices, Exhibit 6. 58. Pursuant to the Contracts, TDOE agreed to pay M1 for goods and services provided under the Contracts and MI timely requested payment from TDOE. MI complied with its obligations under the Contracts and provided valuable goods and services to TDOE. S9. TDOE has materially breached the Contracts by refusing to pay MI any portion of the 332529632199 invoiced by MI for work performed under the Contracts for the time period encompassing July 1, 2015 through April 27, 2016. TDOE has, additionally, materially breached its contract to pay for additiOnal, post-termination, work demanded by TDOE totaling $410,750.29. 12 60. As a result of failures to pay M1 the amounts due and owing under the Contracts and for demanded post?termination work, MI has suffered damages. COUNT II QUANTUM ENRICHMENT 61. MI realleges and incorporates by reference the allegations contained in Paragraphs 1 through 60 of the Complaint as if set forth fully herein. 62. Up until unilateral cancellation of the Contracts on April 27, 2016, MI provided goods and services to TDOE in the amount of $5,296,921.99. Ml continued to provide additional goods and services to TDOE following the cancellation, the value of which amounts to $410,750.29. 63. TDOE ultimately received and appreciated the bene?t conferred by the goods and services provided by M1, the value of which substantially exceeds the value of the goods and services originally contracted for and the amount which MI has been paid to date. 64. acceptance and retention of these bene?ts without payment therefore, is inequitable and is entitled to the reasonable value of the goods and services provided to TDOE in an amount to be proven at trial. COUNT Ill PROMISSORY ESTOPPEL 65. MI realleges and incorporates by reference the allegations contained in Paragraphs 1 through 64 of the Complaint as if set ferth fully herein. 66. Following unilateral cancellation of the Contracts, TDOE promised MI that if MI performed the additional, post-termination work requested by TDOE, then TDOE would ?work with M1 to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date.? 13 67'. At the time the promise was made, TDOE did not intend to pay M1 for any}r services either as performed under the Contracts or for any of the post-contract work demanded of MI following unilateral cancellation of the Contracts. intent to refuse to pay MI is clearly evidenced by the fact that TDOE has not paid MI any portion of the past due amount, as promised. 63. promise was made with the intent to induce M1 to rely upon it and to cause MI to perform the additional post-termination work demanded by TDOE. MI was unaware that TDOE did not intend to perform its promise to pay MI, and MI justi?ably performed additional work in reliance on promise as set forth above. As a result of Ml?s reliance upon promise, MI has sustained damages. WHEREFORE, Claimant Measurement Incorporated demands judgment against the Defendant State of Tennessee Department of Education, as follows: A. An award in the amount of 552530167220 for breaches of contract andfor unjust enrichment; B. An award of Ml?s reasonable attorney?s fees; C. That the cost of this cause be taxed to the TDOE, including the discretionary costs; D. For prej udgment and post judgment interest; and, E. For such other and further relief as the Court deems just and appropriate. 14 ReSpectfully submitted, LEWIS, THOMASON, KING, KRIEG WALDROP, P.C. WM 7 Robert heroism, BPR 022043 Lawrence F. Giordano, BPR #006104 Emily H. Mack, BPR #31217 424 Church Street, Suite 2500 PD. Box 198615 Nashville, TN 37219 (615) 259-1366 Attorneys for Measurement Incorporated CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing document has been served on the following counsel of record in the manner of service indicated below: IXI by placing postage prepaid envelope in United States Mail Service, addressed to: Commissioner Robert N. Hibbett Clover Bottom Center, Fir Building 309 A Stewarts Ferry Pike Nashville, TN 37214 by causing the foregoing to be hand delivered to counsel of record at the following address: Herbert H. Slatery, Attorney General State of Tennessee Of?ce of Attorney General 500 Charlotte Avenue Nashville, TN 37243 This the 7th day of June, 2017. Lv 15