Analysis: Idaho picks fledgling company to ship $50 million in scholarships to parents

Originally published on on September 29, 2022

In just three weeks, more than 18,000 Idahoans applied for part of the state’s Empowering Parents education grant program.

Parents have requested more than $37.5 million, which would eat up more than three-quarters of the $50 million earmarked for grants.

The job of processing this wave of applications — and sending money to cover education costs for families — falls to a relatively new provider with no experience in Idaho and limited experience nationally.

New York-based Primary Class Inc. is set to receive nearly $1.5 million to run the Empowering Parents program. Primary Class wasn’t the lowest bidder in the draft, and it wasn’t even that close.

Why did state officials hire a relatively inexperienced contractor for a high-profile education initiative — one that will directly connect with thousands of parents and businesses across Idaho?

Here’s the story — pieced together from interviews and contractor bids, which Idaho Education News obtained through a public records request.

State officials were late and rushed

Even before soliciting bids, state officials were late.

The bill that created the Empowering Parents grant program — which Gov. Brad Little signed into law on March 1 — ordered the State Board of Education to launch the program within 45 days. “We’re a long way from achieving that goal,” State Board Executive Director Matt Freeman said.

Earlier this summer, State Board staff and the Idaho Department of Administration’s procurement division were talking about options. A full RFP would likely have taken 90-120 days, further delaying deployment. A streamlined process, known as a request for qualifications, would have required the state to take the lowest bidder, and the State Council was not comfortable with that option, Freeman said.

State officials agreed on something in between: a request for qualifications process that allowed the State Council to ask certain questions of its bidders.

The state opened the auction on July 26 and accepted bids through August 2, a seven-day window. On August 8, Primary Class signed a contract with the state.

The State Board had two priorities, Freeman said. The board was looking for a vendor that could get an Empowering Parents website up and running in 30 days. And he wanted a supplier who had completed projects in other states.

New contractor woos Idaho, lands first statewide contract

The primary class met one of those goals: the 30-day deadline. Its website went live on September 7 – and in a test launch that day, nearly 50 parents signed up.

However, the out-of-state experience of the primary classroom is limited. In its application, the company listed contracts in Arizona and Colorado, where it operates privately funded micro-grant programs on behalf of nonprofit organizations. However, Empowering Parents is the company’s first full statewide launch, CEO Joseph Connor said in an interview Tuesday.

A lawyer with a background in education regulation and a former teacher, Connor founded Primary Class about 18 months ago. He said he saw a growing market: grant programs designed to help families with education costs.

The elementary class also saw an opportunity in Idaho. As the Empowering Parents bill made its way through the Statehouse, society began networking in Idaho.

The company heard a common message from parents and companies. While Idaho’s $50 million Strong Families, Strong Students grant program in 2020 was intended to cover pandemic-related education expenses, parents in 2022 said they needed help to tutoring, music instruction, therapy or other in-person services. And after 2020 grants largely went to the tech sector, local education providers were hoping to position themselves for a share of the 2022 market.

In its application, Primary Class touted its work to create its Empowering Parents Marketplace, the online portal where parents will spend their grants. The company said it has identified 538 Idaho vendors interested in joining the marketplace. “That’s really become a big deal for us,” said Connor, who predicts most of these companies will hit the market at some point.

On Wednesday, the State Board said only 50 sellers had applied for the market. But according to Blake Youde, a Boise lobbyist representing the primary class, those providers will service more than 100 locations statewide.

Meanwhile, the primary class also sought to build a coalition in the state. Along with his candidacy, he submitted several letters of support with his candidacy — from the Lee Pesky Learning Center, the Idaho Association of School Administrators, and the Idaho Commission on Hispanic Affairs, among other groups. The letters may not have had much influence, however.

“Letters of support and other information not specifically requested by the Procurement Division were not considered,” the State Administration Department said in a written response to questions from Idaho EdNews.

Cost was a secondary consideration

While letters of recommendation were not a factor, cost was a relatively minor factor.

Primary Class’ offer was $1,485,000. It wasn’t the best offer; Bloomington, Indiana-based Sid3car Co. offered $2 million. But the lowest bidder, Merit International of Milbrae, Calif., came in at $1,065,000.

But cost was a relatively minor part of the Administration Department’s equation.

Bidders were scored on a scale of 1,000 points, with cost scoring no more than 200 points. As the lowest bidder, Merit International received the full 200 points.

The remaining 800 points were distributed on the basis of six technical aspects of the offer. Because he accumulated the highest overall technical score, the primary class received the full 800 points.

Here is the breakdown of the scores:

Tenderer Technical note Cost memo Overall score
Primary class 800 143.43 943.43
Sid3car 758.21 106.50 864.71
international merit 417.91 200 617.91

Still, the technical ratings were mixed.

According to a score breakdown — obtained through Idaho’s EdNews public records request — the elementary class received high marks in several areas. Its technical support plan received the highest score in the state, and the bidder also received points for entering into agreements with Idaho education providers.

But unlike Sid3car and Merit International — which have experience running online grant marketplaces in other states — Primary Class received no points in this category. In other words, the elementary class received Idaho’s highest overall technical score despite its lack of out-of-state experience — the very experience the State Board said it was looking for in the first place.

Familiar Salesman Gets Roughed Up

Before the Administration Department chose between three bidders, it eliminated a fourth competitor from the race.

ClassWallet — the Pembroke Pines, Fla.-based provider that ran the 2020 Strong Families, Strong Students grant program — also applied for the Empowering Parents contract.

But the seller and the state argued over cost estimates.

In a letter sent Aug. 5, three days after the submission deadline, ClassWallet CEO Jamie Rosenberg said his company could run the Empowering Parents project for $754,200, about half the price of the class. primary.

Later that day, the state said ClassWallet failed to submit a detailed cost estimate on time and said it would not consider the company’s offer. “The (Procurement) Division cannot accept this late submission,” Michael Piccono, Department of Administration buyer, wrote in a letter to Rosenberg obtained by Idaho EdNews.

ClassWallet challenged the decision. But in an Aug. 16 letter, Department of Administration Director Keith Reynolds again said ClassWallet’s offer did not meet the state’s requirements.

Represented by former state superintendent and state GOP chairman Tom Luna, who lobbied on behalf of the company, ClassWallet was awarded a no-tender contract to run the Strong Families program, Strong Students. In the end, ClassWallet received more than $2.6 million, according to a recent survey by the Idaho Capital Sun.

When asked if the performance of the 2020 contract played a role in the state’s decision in 2022, the Administration Department only replied that ClassWallet’s bid was “non-compliant.”

“Therefore, his quote was not considered,” the department said in a written response to Idaho EdNews.

Company spokesman Henry Feintuch said little about the state’s decision.

“ClassWallet is proud of the work it has done on behalf of the State of Idaho. That said, we respect the state’s procurement process and fully accept its decision to award the Empowering Program contract. Parents to another provider.

Rollout – and the next big deadline

The primary school market software, known as Odyssey, was tested as soon as it went live. In 24 hours, 7,000 parents logged on to apply. “There was a pretty big pent-up demand,” Connor said.

The site remained standing.

While the State Board said it wanted a vendor with out-of-state experience, board spokesman Mike Keckler said Wednesday that the primary class rollout was going smoothly until ‘now :

  • The State Board has confirmed that the Odyssey site has been online since launch with no crashes.
  • The board also said the provider is delivering on its commitment to resolve customer service issues within an hour. The primary class has closed 1,482 customer service tickets so far, in a median time of 12 minutes.
  • Based on anecdotal accounts, parents who have also applied for Strong Families, Strong Students grants say the new platform is easier to use. The Odyssey site uses registration data to confirm applicants have children in the K-12 system, and State Tax Commission data to confirm income eligibility.

Another test is looming.

Under the Empowering Parents Act, the state is supposed to begin awarding grants within 30 days of opening the application process. This means that the money must start flowing out by October 7.

For the 18,000 parents who have applied for scholarships, this is the big deadline. The whole premise of Empowering Parents is to cover household education expenses, whether it’s a computer or a tutor.

Ultimately, the state’s relatively inexperienced contractor has an uphill task: getting the money out and getting it into the hands of eligible families who need it.

Kevin Richert writes a weekly analysis on education politics and education policy. Look for his stories every Thursday.

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