91制片厂视频

The No Child Left Behind Act has spawned new opportunities鈥攁nd challenges鈥攆or an increasingly diverse testing industry.

With all of the federal law鈥檚 testing requirements, the Government Accountability Office estimates that states will have to spend between $1.9 billion and $5.3 billion in the next six years, depending on the types of tests used.

That prospect has led to new openings both for traditional test publishers鈥攍ike CTB/McGraw-Hill and Harcourt Assessment鈥攁nd for a host of middle-market or niche players who are scrambling to keep pace with growing demand.

鈥淥bviously, there are more players than there used to be,鈥� said John H. Oswald, the senior vice president and general manager of elementary and secondary education for the 91制片厂视频al Testing Service, based in Princeton, N.J. 鈥淭here are many more choices that states have than they used to have.鈥�

Based on an 91制片厂视频 Week Research Center survey of state education departments this summer and fall, CTB/McGraw-Hill, in Monterey, Calif., now is the primary contractor for the largest number of state tests, followed by the San Antonio-based Harcourt Assessment and Pearson 91制片厂视频al Measurement of Iowa City, Iowa.

Together, those companies account for about 75 percent of the market, according to Mr. Oswald. The Itasca, Ill.-based Riverside Publishing, a division of the Boston-based Houghton Mifflin Cos., also continues to hold a number of state contracts.

But other players, such as the Dover, N.H.-based Measured Progress, the Minneapolis-based Data Recognition Corp., and the ETS, a relative newcomer to the precollegiate testing field, have also grown rapidly in the past several years. States can also choose from a handful of smaller players.

鈥楥ompetitive Landscape鈥�

鈥淚t鈥檚 a very competitive landscape right now, and I鈥檇 say it鈥檚 undergoing a fair amount of change,鈥� said Jeff Galt, the president and chief executive officer of Harcourt.

鈥淲e鈥檙e really talking 10 or 12 companies that are vying for a lot of these contracts,鈥� agreed Stuart R. Kahl, the president and CEO of the nonprofit Measured Progress. 鈥淭he competition is truly much stiffer.鈥�

Eduventures, a Boston-based independent research firm, estimates that the pre-K-12 assessment market鈥攊ncluding revenues from state tests, formative assessments used to inform teaching and learning on an ongoing basis, college-entrance exams and preparation for those exams, and catalog or off-the-shelf tests鈥� totaled $1.81 billion in 2003. But that figure could jump as high as $2.29 billion by 2006, with the highest growth in state assessment programs.

Of that $1.81 billion, Eduventures figures about $334 million was outsourced by the contract recipients to subcontractors for functions ranging from content development to psychometric analysis and scoring.

That submarket is also expected to grow rapidly, to some $473 million in 2006, in part as vendors that win and lose state contracts continually scale their capacity up and down. In addition to holding the primary contract in a number of states, many vendors hold subcontracts.

States also have multiple contracts with different testing companies. For example, Measured Progress generated the test items for Louisiana鈥檚 standards-based tests in grades 4, 8, 10, and 11, but Data Recognition Corp. administers them. Utah鈥檚 math and science tests are under contract to Measured Progress, while Pearson handles its English tests.

Some industry shifts predate the NCLB law, which requires that states annually test students in reading and mathematics in grades 3-8 and once in high school, beginning in 2005-06. States must add science tests at least once in grades 3-5, 6-9, and 10-12 by 2007-08.

In the 1990s, CTB/McGraw-Hill, Harcourt, and Riverside began to diversify and set up their own scoring centers, rather than subcontracting that work to other, more specialized companies, such as Pearson.

At the same time, niche players, like Pearson, Data Recognition, and Measurement Inc., which had started out focused on data processing and scoring, began to expand into full-service players, doing everything from test development and administration to the scoring and reporting of results. Nonprofit groups, like the ETS and the Washington-based American Institutes for Research, which had not traditionally gone after large-scale state testing contracts, also entered the game.

鈥淲e had decided that assessment, and state assessment, was someplace where we could actually have an impact,鈥� said Jon Cohen, the vice president and director of assessment at the AIR. 鈥淚t鈥檚 not that NCLB caused us to want to do the work,鈥� he said, 鈥渂ut it certainly did put a lot of work out there for us to be able to do.鈥�

New Demands

Along with a more welcoming business environment for testing vendors are sharper demands.

鈥淧robably the number-one issue that we鈥檙e seeing, and people are asking of us, is how do they test later in the school year but get the results back faster?鈥� said Douglas Kubach, the president and CEO of Pearson. In Texas, Pearson is now turning around score reports in some high-stakes grades in five to seven days.

鈥淭he timelines are just incredible,鈥� said Mr. Kahl of Measured Progress. 鈥淲e used to figure, years ago, a couple of months was a fast schedule between testing and putting results out, and that just isn鈥檛 allowable today. Statewide assessment programs鈥攂asically, you鈥檙e talking weeks.鈥�

In response, companies have been putting money into technology that enables them to build more quality checks into the testing process; to automate the shipping, receiving, tracking, and handling of materials; to scan open-ended responses and score them using computers; and to generate printed reports faster.

鈥淲e鈥檙e investing a lot in technology鈥攂oth the technology the customer would use to administer a test, as well as systems that support our internal business practices,鈥� said Mr. Galt of Harcourt.

Those innovations, combined with the prospect of getting results back faster and more efficiently, also are generating renewed interest in online assessments. In November, Illinois awarded a four-year contract to Harcourt that will lay the foundation for moving its entire testing system to online delivery.

鈥淥ne of the solutions that many people are beginning to look at is online testing,鈥� said David M. Taggart, the president of CTB/McGraw-Hill. 鈥淭here are some issues, especially for statewide summative tests, where you want to test all children in the same window,鈥� he added, 鈥渂ut I think everybody is working to try to resolve those.鈥�

With Pearson鈥檚 help, Virginia administered more than half its high school tests online this year. The company is working with other states鈥攕uch as Florida, Georgia, Mississippi, South Carolina, and Texas鈥攖o conduct smaller pilot programs or comparability studies, 鈥渟o they can really understand what it means, and how they can move forward,鈥� Mr. Kubach said.

Although most vendors administer only a small share鈥攖ypically fewer than 10 percent of their state exams鈥攐nline, according to 鈥淭esting in Flux,鈥� a report by Eduventures, the company predicts that by 2014, more than 90 percent of states will administer their statewide tests electronically.

States also are looking for companies that can help them design tests for special populations of students, such as those with disabilities or limited English, who must be included in state testing programs under the federal law. And states increasingly are interested in tying their high school exit tests to college-admissions exams.

鈥楪rowing Like Crazy鈥�

But probably the biggest demands are for better data-analysis and reporting tools, and for formative, or interim, assessments that can keep track of students鈥� progress toward state standards over the course of a school year.

The No Child Left Behind Act requires that state tests produce 鈥渋ndividual student interpretive, descriptive, and diagnostic reports . . . that allow parents, teachers, and principals to understand and address the specific academic needs of students.鈥�

Most testing vendors say it鈥檚 not realistic to expect state tests, given once a year, to provide substantial diagnostic information about individual youngsters.

鈥淲hat a lot of states are interpreting that to mean, and a lot of testing companies too, is doing something that allows you to have some prescription for action,鈥� said Mr. Oswald of the ETS. 鈥淵ou can still have a prescription for action at the group level.鈥�

But the demand for diagnostic results also has produced a huge 鈥渁ftermarket鈥� of formative and interim assessments for classroom use to help teachers teach better and students learn better, he said. 鈥淭he formative-assessment market is a big one, and it鈥檚 growing like crazy, and it鈥檚 accompanied by a lot of professional development to help teachers use those.鈥�

As a result, a number of the bigger companies have acquired smaller firms that specialize in interim assessments or data-driven decisionmaking and reporting. CTB/McGraw-Hill acquired the GrowNetwork, for example; the ETS bought the Pulliam Group; and Houghton Mifflin bought EduSoft. They鈥檙e also inventing new products and services on their own.

In addition, vendors say, they鈥檙e seeing growing state interest in 鈥渧alue added鈥� measures, or in tracking students longitudinally over time. (鈥溾�榁alue Added鈥� Models Gain in Popularity,鈥� Nov. 17, 2004.)

鈥淟ots of folks, when they鈥檙e putting it in their requests for proposals, aren鈥檛 really specifying an approach,鈥� Mr. Kahl of Measured Progress said. 鈥淭hey鈥檙e saying they want something to look at the progress of individual students from year to year, but they鈥檙e kind of vague sometimes.鈥�

Edge for Big Players

Despite such a dynamic market, the large traditional players in the testing industry still hold advantages, said Eric W. Bassett, the director of research practice for Eduventures. For one, much of the content they鈥檝e developed over the past decades for off-the-shelf or catalog exams can be recycled for customized state tests.

鈥淭hey have deep pockets; they have well-established relationships; they鈥檙e great brand names in the industry,鈥� Mr. Bassett said. 鈥淲hat small players can provide is innovation and flexibility and a new way of looking at the way things run.鈥�

The stiff legal risks associated with high-stakes assessments also make it harder for new entrants to compete.

Since January, CTB/McGraw-Hill has received new contracts totaling about $180 million. The company now has about 1,000 full-time employees and five scoring centers, up from three centers five years ago. It has also added a research facility in Centennial, Colo. Harcourt, which now has about 1,400 workers in the United States, says its head count has grown almost 30 percent in the past 14 months.

But some of the newcomers have also grown significantly. The nonprofit ETS estimates revenues of about $90 million from state test contracts this year, with the bulk of that, about $55 million annually, coming from California. It hopes to add one or two state contracts a year.

Measured Progress had 22 contracts, totaling just over $26 million, in fiscal 2000. This fiscal year, it anticipates about 38 contracts, totaling some $62 million. 鈥淪o, needless to say, the biggest jump by far is this current year,鈥� Mr. Kahl said.

Data Recognition, a privately held company with about $100 million a year in revenues, not all of it from K-12 testing, also has seen its primary growth in the past few years, said Susan S. Engeleiter, the president and chief operating officer. 鈥淲e re-secured business that we had been performing, and then we added some business,鈥� she said.

Picking and Choosing

Other vendors say they鈥檙e picking their targets carefully. 鈥淲e鈥檙e not interested in becoming a CTB or a Harcourt or one of the really big test companies,鈥� said Mr. Cohen of the AIR.

His division now bills about $40 million a year, including item development for the federal government鈥檚 National Assessment of 91制片厂视频al Progress, along with state contracts in Ohio and South Carolina. 鈥淲e want to work very intensely with a few places where we鈥檙e going to wind up helping them make significant and, hopefully, good changes in their educational systems,鈥� Mr. Cohen said.

Eduventures predicts that small and midsize providers will continue to experience a 鈥渞apidly expanding market鈥� as states move to customize their tests and add grades and subjects.

But they鈥檒l also face the prospect of mergers, if they want to compete.

Several vendors also observed that while large states often find many companies vying for their business, that鈥檚 not true in smaller states, which may have few.

鈥淭here is still that tiering of players,鈥� said Mr. Taggart of CTB. But, he added: 鈥淚 think more players have entered the market as it鈥檚 become more attractive. And I think that keeps all of us moving ahead and being competitive鈥攚hich is great.鈥�