Key Points
- The National Assessment of Educational Progress (NAEP) has a congressional mandate to assess American students’ academic performance over time. Unfortunately, the bureaucratic processes to select NAEP’s contractors have been rife with inefficiencies and anticompetitive behavior.
- NAEP has fallen behind in assessment technology developments like automated scoring, and its anticompetitive contracting process—in which firms can’t bid on individual, specialized tasks but rather must find partners for a collective proposal—hinders its ability to catch up.
- Government staff responsible for NAEP refused to provide contracting data for outside studies, showed extreme preference for incumbent vendors, and did not respond to inquiries from the House Education and the Workforce Committee, NAEP’s designated congressional authorizing body.
- The new NAEP contracting process is improved, but policymakers must do more to encourage competition and ensure transparency for the new likely $1 billion NAEP contract.
The American government runs on contracts between government agencies and private companies (both for- and not-for-profit).1 When things go awry, it is often because a long-term incumbent contractor lacked the incentive to provide more cost-effective services or accountability for a poor product, both of which have been made clear by the Free Application for Federal Student Aid (FAFSA) debacle.2
Contractor failure is coupled with (and abetted by) government agencies lacking the talent, time, and incentive to supervise the contracts under their control. In the case of FAFSA, these ingredients combined to create a massive failure, affecting millions of students and their families. This toxic mix of contractor failure and weak oversight only occasionally makes a splash like the FAFSA implosion did, but poor contracting procedures are found throughout government.
Here, I explore the contracting processes surrounding the National Assessment of Educational Progress (NAEP) to illustrate some of the dynamics of suboptimal contracting processes. While it lacks the visibility of the FAFSA failure, the NAEP case is likely more typical of the relationship between government agencies and contractors—and what can go wrong in that relationship.