If you tried to apply for federal student aid this 2024–2025 school year, you would have been met with a glitch-filled online form created using 40-year-old code, released three months behind schedule, and that might have arrived too late for a college to offer you the aid you applied for. This failure of the Education Department and its private-sector contractor, General Dynamics IT, affected millions of students and their families—disproportionately the poor and working-class applicants whom FAFSA was meant to help.

Unfortunately, the FAFSA debacle is only one example of the broader problems in government contracting—inefficiency, waste, and a lack of transparency—that I’ve witnessed firsthand. I served as Commissioner of the National Center for Education Statistics (NCES) from 2005 to 2008, and as Director of the Institute of Education Sciences (IES) from 2018 to 2022. During my tenure, I helped oversee contracting for the National Assessment of Educational Progress (NAEP). In a new report from the American Enterprise Institute, I explain how NAEP’s contracting process has been opaque and anti-competitive, resulting in a product that is inefficiently designed and costly for the American taxpayer.

Known as the “Nation’s Report Card,” NAEP is a Congressionally-mandated program that assesses the knowledge and skills of American students over time. It is the largest such assessment and provides essential data on students’ performance in the aggregate as well as by groups like race, gender, and socioeconomic background. Despite its importance, NAEP has become an expensive operation with outdated technology and little-to-no competition among contractors—replicating the same conditions responsible for the FAFSA incident.

Along with my colleagues at the Institute of Education Sciences, I commissioned a report from the National Academies of Sciences, Engineering, and Medicine (NASEM) to find ways to reduce NAEP’s cost inefficiencies without compromising its utility or technical quality. Unfortunately, the NASEM report revealed that NAEP was significantly behind industry standards, particularly in adopting new technologies like artificial intelligence for scoring and item development. For instance, while other assessments have used AI-assisted scoring to improve accuracy and reduce costs, NAEP continues to rely on traditional, labor-intensive methods.

A second report, the Internal Controls (IC) assessment by Guidehouse, also examined NAEP’s contracting practices. Unlike NASEM, whose staff had expertise in assessment development and research, the Guidehouse analysts were experts in audits and government contracting assigned to look into NAEP’s financials. Although conducted by separate staff, the Guidehouse IC report came to much the same conclusion—NAEP’s contracting process was highly inefficient and hindered competition, resulting in an inferior product.The report criticized NAEP’s near-exclusive use of cost-plus contracting, which is highly unusual for long-standing, low-risk contracts like NAEP. It also pointed out how the NAEP Alliance structure, which required bidders to form teams covering all activities, inherently limited competition and favored incumbent contractors. As a result, there were only two bids in the 2019 recompete. One was disqualified, leaving taxpayers with only one option—ETS, the incumbent NAEP contractor of 40 years.

Both the NASEM report and the Guidehouse IC report also noted that they ran into significant barriers to data access when trying to learn more about NAEP contracting procedures. Different dollar amounts were given for the same service, there was minimal process documentation to indicate how contract bids were evaluated, and government staff outright refused to provide data. This was particularly galling for Guidehouse, whose contract with the Education Department explicitly provided for data that Education Department staff then refused to yield to the Guidehouse inspectors.

As a result, both reports called for an independent audit by a government agency that could compel disclosure of documents and data. No such audit occurred—instead, NCES commissioned a third report, the results of which were kept secret from the public. Efforts to disclose the contents of that third report—which even included inquiries from Congress—were stonewalled by the Education Department and remain fruitless.

The recompete for this year’s NAEP contract has seen some changes, likely in response to the growing concern generated by these reports. NCES shifted the contract structure from one alliance to a “Coalition of Teams” with three separate bids, potentially allowing for more competition. The new structure also calls for fixed-price contracting, which should shift more risk back to contractors. However, many core elements of the current NAEP alliance remain. Like the FAFSA rollout, NAEP has been another case of contracting failure and inefficiency, with the taxpayer on the hook. If things are to be different this time around, the new NAEP contract must encourage competition, allow transparency in its selection criteria, and deliver America’s students—and its taxpayers—a product worth NAEP’s billion-dollar price tag.