Contract approval suspended amid concerns around DOE contract

| Jul 3, 2014 | Contract Disputes, Firm News

Louisiana residents may have already heard, and may find it interesting to learn that according to reports, recently the Office of Contractual Review (OCR) briefly suspended approval of a contract between the Department of Education (DOE) and a company called Data Recognition Corporations, which was expected to provide the DOE with consulting support services in the execution of the state’s education assessment tools.

Although, OCR had already reviewed the contract previously, it is expected to scrutinize and closely review the contract again. The contract issues surfaced after a closer review of the contract indicated that additional review of the contract was necessary to fully understand the actual scope of the services Data Recognition Corporation was expected to provide. Furthermore, further review of the purchases of services and goods related to the consulting services was also necessary.

The OCR interim director informed the DOE of their decision to temporarily suspend their prior approval of the contract via letter. In the letter it noted that OCR would conduct a thorough review of the contract, and that DOE had the right to dispute any of its findings. The contract dispute arose when allegedly the DOE indicated it had the authority to use state contracts for reasons other than their intended purpose. However, under Louisiana law DOE is strictly prohibited from having contracts that dodge regulations and law that govern procurement. Thus, OCR decided to re-review the contract to get additional information and determine how exactly DOE was using its authority under the contract.

In essence, despite the original regulatory approval of the contact between DOE and Data Recognition Corporation, the review board decided to revisit the contract to ensure that DOE was in compliance with existing Louisiana regulations and law, which govern such contracts. During the review, Data Recognition Corporations will likely not get paid. Clearly, contract issues can cause disruptions to a business and public sector agencies. Contract disputes can arise at any stage and regulatory approval may be withdrawn. Such matters are complex, and may require the consultation of an experienced business law firm that understands contract approval.

Source: Nexstar Broadcasting, “DOA Temporarily Suspends Approval Of DOE Contract in Common Core Dispute,” June 18, 2014