Texas Education Agency ends controversial no-bid special education contract

_{Editor's note: This story has been updated with a statement from SPEDx CEO and founder Richard Nyankori.}

The Texas Education Agency is ending a no-bid special education data mining contract after fielding criticism for weeks about its decision to bypass a competitive bidding process, according to an agency release.

Texas Education Commissioner Mike Morath ordered an immediate end to the $4.4 million no-bid contract with Georgia-based company SPEDx to help overhaul its special education practices by analyzing thousands of personal records of students with disabilities. Special education advocates this month asked the agency to temporarily pause the contract to review it more thoroughly, and at least one school district has pulled out of the agreement with the company.

"Significant concerns have been raised regarding our agency's processes and the scope of the project. The efficacy of the project would be undermined without real support from parents and educators alike," Morath said in the statement. "As a result, this project cannot proceed effectively. TEA will continue to work with parents and educators to identify methods to improve outcomes for our special education students."

TEA sent SPEDx a formal notice of contract termination, which takes effect in 15 days and requires the company to destroy all student information it received. TEA has paid SPEDx $2.2 million of the contract, using federal funds for students with disabilities, for services rendered.

Some school districts have received local reports from SPEDx, but TEA is no longer asking SPEDx to produce a state-level report.

In a statement Friday, SPEDx CEO and founder Richard Nyankori said the company was pleased to have had the chance to partner with the TEA on special education services. "SPEDx remains committed to ensuring that educators, parents, and others have the best possible information with which to create plans that allow students with disabilities to flourish and achieve the most ambitious goals possible," he added.

Morath said he is starting to review contracting processes in the agency.

The SPEDx contract came under increased scrutiny after former TEA special education director Laurie Kash filed a federal complaint in late November with the U.S. Department of Education. In the complaint, she argued TEA had violated state procurement processes, in part by failing to submit documentation with the state budget board, Texas Register and governor’s budget office.

The agency fired her the day after, arguing she had not advised them about allegations that she covered up sexual abuse of a 6-year-old in a former job.

Kash’s lawyer, Bill Aleshire, provided records requests to The Texas Tribune showing both the Texas Secretary of State and governor’s budget office had not received documentation of the SPEDx contract from TEA. Those documents are required by state law for a major consulting services contract above $15,000, which Aleshire argues the SPEDx contract falls under. He said he sent those records to the comptroller earlier this week.

The company was contracted to analyze student data and “make recommendations about programmatic changes. That’s a consulting contract,” he argued.

After Kash first raised questions about the contract in the fall, TEA conducted an internal investigation. That investigation ended Nov. 17 and concluded there was no internal wrongdoing on the contract.

Aleshire said he does not think Kash will sue the agency or ask for her job back but that no final decisions have been made. 

“This action today, I think, vindicates Laurie Kash," Aleshire said. "She was right about the SPEDx contract all along. It shows that heads ought to roll at TEA over the SPEDx contract, but it shouldn’t have been Laurie’s.”