Yesterday’s NY Daily News reported that last month, the Panel for
Educational Policy approved a contract for New Classrooms to teach math
in city middle schools via an
online program called the School of One. The contract charges the city nearly
$200 per student for the licensing fee: “An estimated 2,220 students will be
enrolled in the School of One program at a cost of $420,750 for license fees
($191.25 per student)." This is the second contract granted New Classrooms; the original one was granted in January 2012.
Joel Rose, a former chief of staff to
Deputy Chancellor Chris Cerf, created School of One while at DOE, starting in
February 2009. He developed the algorithm and the program along with
Chris Rush, a consultant then working for Wireless Generation, now headed by
former Chancellor Joel Klein for Rupert Murdoch’s NewsCorp.
In March 2011, Rose spun off the
program into a separate company, renamed it New
Classrooms, and became co-CEO along with Chris Rush. The company, ostensibly a non-profit, boasts an impressive list of funders, including NewSchools Venture Fund, the
Gates Foundation, the Broad Foundation, New Profit Inc., and Carnegie
Corporations, and its 2013 tax returns (the latest available on Guidestar) show
a surplus of $4.5 million dollars. Board members include Miguel Bezos, father
of Jeff Bezos, billionaire CEO of Amazon.com, and Gideon Stein, omnipresent
corporate reformer and board member of Chalkbeat, Teach Plus, Stand for
Children and a former board member of Success Charters.
According to Rick Hess, who plugged the much-hyped program in his column, “One
of my favorite things about School of One is that it's a solution that doesn't
imply new costs. It's a way to optimize whatever dollars a school is spending
on math instruction--to squeeze more juice from the orange--and doesn't entail
new outlays. “The question becomes if it doesn’t entail new outlays, why
the city has to spend more money to implement it.
Here is an excerpt from the January 9, 2012 Conflict of Interest decision, justifying the first DOE contract with New Classrooms in 2012:
Of course the algorithm and
methodology inherent in the School of One program was developed by Rose while
he worked for the DOE – and would remain fully confidential. The city’s Conflict of interest rules also say a former
employee “may never work on a particular matter or project that you were
directly involved in while employed by the City.”
Yet somehow, despite the
fact that Rose is head of the company and his company would clearly benefit from
the contract, the conflict of interest rules were waived.
In any event, when Rose was
granted his initial contract by the Panel for Education Policy, only nine days later on January 18, 2012, it was at no cost to the
city, and the back-up documentation promised that the DOE would be granted “joint
ownership or a royalty-free perpetual non-exclusive license to the platform …
for use in NYC schools." (See p. 37 for this language in the 2012 PEP document.)
Presumably, the joint ownership or
royalty-free perpetual contract was pledged in recognition of the fact that the
program was created by Rose while employed at the DOE. Indeed, if
anything, it might be argued that the city should also royalties each time the
program is re-used in other districts, considering it was developed using city
students as guinea pigs and took up much teacher and staff time.
Even so, the awarding of the contract
in 2012 was quite controversial, as noted in the Daily News:
City officials defend the deal, noting
Rose got the blessing of the city’s Conflicts of Interest Board because he’s
promised to play no role in any of the city-related work.
Under the agreement, the city will
share with Rose’s groups the licenses for the School of One program, which
uses computer-based learning to individually tailor math classes for students
at three middle schools. [emphasis added]
“This is exactly the type of thing that
raises eyebrows and causes people to question” the Education Department, said Michael Loughran,
a spokesman for city Controller John Liu, whose
office will review the contract.
Education Department officials note
four other companies showed initial interest but did not bid because the city
isn’t paying out any money during the three-year term of the contract.
“We believe this zero-cost contract is
a smart move for the city, potentially saving millions of dollars,” said
spokesman Matt Mittenthal,
defending the deal that aims to expand School of One to 50 schools.”
The no-cost contract voted on in
January 2012 that was to “commence on or about March 1, 2012” and was to last
for three years, which means that it would only lapse in March 2015. To add insult to injury, the new
contract was just granted retroactively from August 2014 --six months before
the old cost-free cntract was supposed to lapse.
So what does the company say in its
defense about the fact that it is now charging a per student license fee instead
of allowing the city to use it for free in perpetuity? In the Daily news, a
New Classroom spokesperson claimed that “the fees in the new contract cover
services other than the free software license Rose promised back to the city in
2012.” But the PEP documents say otherwise:
The DOE also claimed in the Daily News article that “no
city taxpayer money was used in paying for the services” though the document
says the opposite; that while the initial funding came from a federal grant, “Now
that the program is fully implemented in participating schools, the DOE is
responsible for the cost of supporting these schools.”
So essentially, the company is charging
the city nearly $200 per
student for a program developed by Rose while a city employee, instead of for
free as promised, six months before the previous contract lapsed --exactly what conflict of interest rules were designed to
prevent.
To make things worse, this
is a no-bid contract. In 2012, the DOE claimed to have bid out the
contract to New Classrooms competitively, although it was apparent that the
contract was designed only for Joel Rose, as at that point the DOE wasn’t
willing to pay any fees:
Now, however, when the city is paying real money, the DOE hasn’t even pretended to bid it out, supposedly to
prevent “a lengthy competitive bidding process” (even as the previous
contract wasn't near completion):
Even
so, if and when a new RFP is announced, it will likely be designed for Rose’s
company to win --which despite huge hype, lacks convincing evidence of positive
results. The online data-mining program was originally designed to spread
across 50 schools throughout the city, and yet it is only used in five schools
at this time, compared to six schools last year. Two of the three original schools dropped out
because of poor results.
When I visited one of the pilot programs at a school in lower Manhattan a few years back, I saw
utter confusion, with up to 60 students in a room, switching places every 15
minutes, and many of them disengaged while answering multiple choice questions
on their computers, clicking on answer A, B, C in turn until the machine told
them they had the right one.
When
the PEP was granted approval power over contracts in 2009 with the renewal of
mayoral control, there was hope that some of this cronyism, corruption and
waste that had been rampant would be stemmed. The number of no-bid contracts had exploded under
Bloomberg, with no-bid contracts
totaling $15 million in 2001 ballooning to $300 million by June 2008, with more
than one fourth of those contracts going over the agreed upon cost.
Yet after the PEP was given the ability to
vote on these contracts, every contract but one was rubberstamped by
the mayoral majority on the PEP, even when there was strong evidence of corruption --- as pointed out by independent-minded
watchdogs, like Manhattan appointee Patrick Sullivan.
The
new PEP members appointed by Mayor de Blasio were supposed to be more independent;
but the Panel has yet to reject any proposed contract, to my knowledge.
In some ways, the process now is LESS transparent than before, as the back-up
contract documentation is not posted until the night before the PEP vote – instead of
about about a week before, as happened previously. Previously, PEP members
complained that they were not allowed to see the full contracts; now no written
description of what the contracts are meant for, or explanation if they have been
competitively bid is available to the public until the night
before the vote. It is truly disappointing to see waste and favoritism continue
under a new administration which had promised otherwise.
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