The Federal Update is a weekly publication by our Legislative Office that provides our clients with an analysis of the most up-to-date issues affecting federal education and workforce programs. Below is an example of the articles included in our federal update. We will update this page periodically. If you are interested in receiving a copy of our weekly Federal Update please contact our offices!
Date: February 15, 2013
Legislation & Guidance. 1
House Committee Democrats Release Report on Sequestration. 1
Super Circular Modifies A-110 Procurement Standards. 1
President’s State of the Union Lays Out Challenges, Plans. 3
White House Releases Details of Early Education Plan. 3
ED Partially Removes High-Risk Status for Hawaii RT3 Grant 4
House Hearing Profiles Innovative Education Practices. 4
Study Finds Lack of Accountability in ESEA Waivers. 5
Legislation & Guidance
House Committee Democrats Release Report on Sequestration
The Democrats on the House Appropriations Committee released a report this week detailing the potential impact of sequestration. The report asserts that automatic across-the-board cuts would cut economic growth, cause at least a million jobs to be lost (and many more workers to be furloughed), and affect the day-to-day workings of government. In addition, the report notes that many business owners, especially in the defense industry, have also slowed spending and hiring in anticipation of automatic cuts.
The report details the projected impact of cuts, furloughs, and layoffs on nuclear security, air travel, border security, environmental management, food safety, social security claims and appeals processing, health care research, education, and other activities.
If Congress does not act to delay or repeal sequestration, the automatic cuts will go into effect on March 1. However, Congressional leadership has not made significant progress in negotiations regarding what an alternative spending and deficit reduction plan might look like. Speaker of the House John Boehner (R-OH) has indicated that he is waiting on the Senate to make the first move in passing legislation to modify the scheduled cuts. Senate Democrats indicated Thursday that they are going to move forward next week with a budget bill, but action in the Senate is by no means a guarantee that the legislation will get through a Republican-controlled House. Further complicating the matter is the fact that both the House and Senate will be gone from Washington next week, not returning until February 25th – leaving just a week to pass legislation to avoid cuts.
David Rogers, “Senate Democrats reach sequester deal,” Politico, February 14, 2013.
Super Circular Modifies A-110 Procurement Standards
As discussed in our Federal Update on February 8, 2013, this is the first detailed analysis of specific sections of the new guidance in relation to current cost principles.
The Office of Management and Budget (OMB)’s recently released proposed guidance (known as the “super circular”) combines administrative requirements and cost principles from various OMB circulars. For procurement guidelines, State and local educational agencies (SEAs and LEAs) have previously looked to OMB Circular A-102 while institutions of higher education (IHEs) and non-profit organizations are covered under OMB Circular A-110. The proposed super circular combines these requirements into a single set of rules. Compared to other sections of the super circular, the changes to federal procurement guidelines are minimal. Notably, the proposed super circular now applies A-102 requirements to all recipients and subrecipients, with one exception. The super circular included the A-110 “Codes of Conduct” in its new set of rules, rather than using the language from A-102. The new language is listed side-by-side with A-102 and A-110 in a comparison table provided by OMB.
Under the super circular, States will follow the same policies for procuring goods and services with federal funds as they would when using non-federal funds, unless the State policies come into conflict with federal statute or requirements. Other recipients and subrecipients, such as LEAs, IHEs, and non-profits, will also use their own procurement procedures, but their procedures must conform to the super circular as well as applicable State and local laws and regulations. This means that all recipients and subrecipients must, at a minimum, conform to the super circular requirements, though recipients and subrecipients may go beyond these standards if they so choose.
The OMB guidelines still require full and open competition, including limiting the use of time and material contracts and requiring written procedures for avoiding conflict of interests. IHEs and non-profits should take notice that the methods of procurement to be followed under the new super circular are somewhat more detailed and restrictive than the language of OMB Circular A-110. The principles are largely similar, but the new super circular is more expansive than the current OMB Circular A-110 provisions. Most notably, the super circular goes into details regarding when noncompetitive proposals may be used, in accordance with current OMB Circular A-102 rules. The new Section __.504(d)(4) stipulates that procurement by noncompetitive proposals may be used only when the award of a contract is documented to be infeasible under small purchase procedures, sealed bids, or competitive proposals, and one of the following circumstances applies:
- The item is available only from a single source;
- The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
- The federal awarding agency expressly authorizes noncompetitive proposals in response to a written request from the recipient; or
- After solicitation of a number of sources, competition is determined inadequate as described above.
For SEAs and LEAs, the only additional change in the new procurement guidelines is that the new super circular raises the threshold for small purchase procedures from $100,000 to $150,000. This change is intended to be consistent with the simplified acquisition threshold in the Federal Acquisition Regulation (FAR). “Small purchase procedures” refers to relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the simplified acquisition threshold. Generally, under small purchase procedures, the super circular simply requires that price and rate quotations be obtained from, “an adequate number of qualified sources.” The number of sources of the goods or services may be determined by the number of qualified sources available, the time frame involved, the nature of the goods or services, and the dollar value. Though the number of sources that are considered adequate will depend on several factors, this generally means that at least two qualified sources are required.
Although recipients and subrecipients will be required to adhere to the super circular’s procurement standards, proposed changes to the Single Audit requirements eliminate the current “Procurement and Suspension and Debarment” compliance requirement. This means that once these rules go into effect, auditors conducting Single Audits will no longer be required to look into a recipient’s procurement system. However, the proposed language allows for federal agencies to include this eliminated compliance requirement as a “special test” in certain circumstances, pending OMB’s approval. This “special test” process will be discussed in greater detail in a later analysis of the super circular’s changes to the Single Audit process.
Currently, the administrative requirements of A-110 and A-102 are codified in the Education Department General Administrative Regulations (EDGAR) Part 74s and Part 80, respectively. As with A-110 and A-102, EDGAR contains different procurement standards for IHEs and non-profits (Part 74) and for SEAs and LEAs (Part 80). The U.S. Department of Education (ED) will have one year from the date of the final super circular to modify EDGAR’s rules based on the new super circular language. Because the super circular contains just one set of rules now for SEAs, LEAs, IHEs, and non-profits, it is likely a revised EDGAR would follow suit.
OMB is encouraging IHEs and non-profits to comment on the procurement section, especially if they feel the new requirements will increase administrative burden. Interested parties can submit comments on the super circular here. OMB is accepting comments on the proposed guidance through May 2, 2013.
Brustein & Manasevit, PLLC will provide additional analysis of super circular sections in the coming weeks. In the meantime, if anyone has questions or concerns regarding the OMB’s proposed guidance, please do not hesitate to contact us at 202-965-3652.
Author: SAS, TRW
President’s State of the Union Lays Out Challenges, Plans
The President addressed the nation on Tuesday night in his fifth State of the Union address. During the speech, he urged Congress to find a sensible plan to curtail federal spending and eliminated scheduled automatic budget cuts, stating that Americans “don’t expect those of us in this chamber to agree on every issue… [b]ut they do expect us to put the nation’s interests before party [and] forge reasonable compromise where we can.”
The President proposed a new early childhood education initiative and a Race to the Top-like program for high schools to help them prepare graduates with the skills that employers and colleges are looking for – including a focus on science, technology, engineering, and math (STEM). He called on colleges to address rising costs and noted that the Department of Education would be releasing a new college scorecard on Wednesday. In addition, the President suggested raising minimum wage to $9 an hour – an increase that Congressional Republicans criticized as potentially devastating for small businesses.
In perhaps the most emotional portion of his speech, the President called for Congress to address gun violence. He recalled the December school shooting in Newtown, Connecticut as well as the more recent death of a Chicago teen who performed at his inauguration in late January, and urged Congress to bring gun safety proposals to a vote.
Many of the President’s proposals in this State of the Union – including keeping college costs low and investing in STEM education – were themes that had appeared in a number of his previous addresses. The more ambitious proposals – like gun control and universal prekindergarten – are unlikely to see any debate in Congress before legislators have addressed federal spending and automatic sequestration cuts.
The full text of the President’s address is available here.
White House Releases Details of Early Education Plan
President Obama has unveiled the details of the universal early education initiative he announced in his State of the Union address Tuesday. Early education has been praised by advocates for providing children with the intellectual skills and emotional readiness to succeed in school. Though critics say that the benefits of programs like Head Start tend to fade after only a few years, others – including the President – assert that the benefits can last for decades, and that investments made in early education provide significant returns in the long run, not only for children participating in such programs but also for their families.
Under the new proposal, the administration wants to partner with States through a cost-sharing agreement to provide near-universal pre-kindergarten. Subsidized services would extend to all low- and moderate-income families (up to 200% of the poverty level) with 4 year olds, and funding would be allocated to States by the U.S. Department of Education (ED) according to the number of eligible children in each State. States would receive additional incentives for allowing additional middle-class students to join existing pre-school programs through a sliding-scale fee or other arrangement, and for offering full-day kindergarten to all students.
In order to receive federal dollars for the program, States would have to agree to certain conditions, including providing matching funds, hiring well-trained teachers paid comparably to K-12 staff, small class sizes, wraparound health care services, and rigorous curricula for young children.
In addition, the President has suggested creating an Early Head Start Child Care Partnership to expand high-quality offerings for infants and toddlers, funded through a competitive grant process. The White House has said that they want to maintain the current Head Start system to support more infants and toddlers as older children move to new pre-kindergarten programs. Though the President has not yet provided a cost estimate for such programs, he said in his speech Tuesday that his proposals would be fully paid for and would not add to the national debt.
Still, any significant proposal – and certainly any proposal requiring Congressional appropriations – would have to make its way through a Congress that has proven resistant to new spending, and where many have questioned whether early education programs are a worthwhile investment.
An outline of the President’s early education proposal is available here.
Alyson Klein, “White House Gives Outline of Early-Childhood Ed. Expansion Plan,” Politics K-12, February 14, 2013.
Stephanie Banchero, “Plans to Expand Preschool Unveiled,” The Wall Street Journal, February 14, 2013.
ED Partially Removes High-Risk Status for Hawaii RT3 Grant
The U.S. Department of Education (ED) has partially removed the “high-risk status” designation given to Hawaii after the State reportedly failed to make sufficient progress in implementing two of the requirements for the Race to the Top (RT3) grant. In a letter to Hawaii’s governor last week, officials from ED said that Hawaii has provided “clear and compelling evidence of substantial progress” in implementing new standards and assessments and data systems.
Hawaii remains under a “high-risk” designation for four other parts of the RT3 grant, and ED officials are reportedly planning an April monitoring visit. While ED is praising the progress the State has made, the reality is that Hawaii is still struggling – like a number of other states – to meet the significant requirements of the grant. With so many of the grant requirements similar to those required under waivers of the Elementary and Secondary Education Act (ESEA) offered by ED, the agency is expected to engage in extensive, intense monitoring in the coming months.
Michele McNeil, “Hawaii Gets Partway Out of Race to Top Doghouse,” Politics K-12, February 11, 2013.
House Hearing Profiles Innovative Education Practices
The House Committee on Education and the Workforce’s Subcommittee on Early Childhood, Elementary, and Secondary Education hosted a hearing this week entitled “Raising the Bar: How Education Innovation Can Improve Student Achievement,” which examined several federal and State innovations in education.
In his opening remarks, new subcommittee Chairman Todd Rokita (R-IN) stated his support for State and local efforts to improve education through measures such as digital learning, blended learning, virtual schools, and other “educational choice” options. Rokita pointed to a 16% increase in virtual school enrollment from 2010 to 2011 to demonstrate the popularity of virtual schools and parent concerns about the quality of local public schools. Ranking Member Carolyn McCarthy (D-NY) agreed that schools need to adapt to 21st century technologies, but noted that the technology gap between wealthy and less affluent schools could curb innovative practices nationwide. McCarthy recommended that Congress support State and local efforts in providing professional development for teachers and school leaders to train them on digital devices and learning.
The hearing featured testimony from John Bailey of Digital Learning Now, Preston Smith of Rocketship Education, Holly Sagues of Florida Virtual School and Assistant Deputy Secretary for Innovation and Improvement Jim Shelton of the U.S. Department of Education. The witnesses’ testimony and the full video of the hearing are available here.
Bailey discussed several promising trends in digital learning, including the significant reduction in cost of online learning courses, and pointed to three barriers to expanding digital learning: funding, regulatory limitation on schools, and limitations on choice for parents and students. Smith spoke about Rocketship Education’s ability to adapt curriculum on a daily basis through use of online assessments, but noted that many students at home struggled with connectivity and access to broadband. Sagues praised the efforts of Florida to promote the use of virtual schools, and noted the important role Florida had in developing a partnership between LEAs to facilitate the creation of the Florida Virtual School. Several members of the Subcommittee spoke at length about the need to invest in digital learning research and development. Shelton noted that only 0.2% of federal K-12 spending is devoted to research and development of new technologies, and said that Congress should invest in the proposed Advanced Research Projects Agency for Education (ARPA-ED) program and continue support for the Investing in Innovation (i3) program. A number of Subcommittee members identified digital learning and technology access as a topic to be addressed during the reauthorization of the Elementary and Secondary Education Act.
Study Finds Lack of Accountability in ESEA Waivers
This week, the Alliance for Excellent Education released a study on the “Effect of ESEA Waiver Plans on High School Graduation Rate Accountability.” Thirty-five States and the District of Columbia have been offered flexibility from some of the most burdensome requirements of the Elementary and Secondary Education Act (ESEA) by the U.S. Department of Education (ED). The study concluded that a majority of State waivers have weakened or ignored the federal regulations intended to ensure accountability through high school graduation rates.
In 2008, ED released regulations that required States to calculate and measure high school graduation rates as an accountability measure starting in the 2011-2012 school year. The regulations created a standard measurement tool to measure high school graduation rate, a four-year cohort rate, which includes a percentage of students who graduate from high school with a regular diploma. The modifications were intended to provide accuracy and clarity of high school graduation rates nationwide and promote accountability for the graduation of all students. Despite these new regulations, the study found that 23 States were permitted to implement an accountability system that is inconsistent with the 2008 regulations by including GED certificates and dropout rates. Eleven State waivers were found to include weak subgroup accountability measures, including some that did not require intervention if a particular student population’s graduation rate is below 60%. Twelve State waivers also decreased the weight of graduation rates in their accountability system, averaging less than 25%. The report noted that the minimal weight of graduation rates in State’s waiver accountability systems indicated the lack of its importance in assessing the quality of their education system.
The study’s authors conclude that action must be taken in order to remedy the lack of accountability under the ESEA waivers. Their preferred route is for Congress to reauthorize ESEA, but admits that it is more likely that ED will modify State’s waiver packages. The study provides four recommendations for Congress to improve ESEA accountability:
- States should be required to use the four-year adjusted cohort rate for reporting and accountability;
- States should be permitted to use an extended year graduation rate;
- Interventions and support should be triggered by a graduation rate below 60%; and
- Graduation rates should have significant weight in accountability systems.
High school graduation rate accountability is an issue that has been raised by a number of members of Congress. It was recently emphasized by Representative George Miller (D-CA) in a September 2012 letter to Secretary of Education Arne Duncan. In the letter, Miller criticizes State waiver efforts surrounding accountability for “eroding the recent progress States have made on improving graduation rates.” Senate Health, Education, Labor, and Pensions Committee Chairman Tom Harkin (D-IA) also mentioned accountability for graduation rates in the Committee’s recent hearing on ESEA waivers.
Christine Armario, “NCLB Waivers Weaken Grad Rate Accountability, Study Finds,” Associated Press, February 12, 2013.
The Federal Update has been prepared to inform Brustein & Manasevit, PLLC’s legislative clients of recent events in federal education legislation and/or administrative law. It is not intended as legal advice, should not serve as the basis for decision-making in specific situations, and does not create an attorney-client relationship between Brustein & Manasevit, PLLC and the reader.
Contributors: Tiffany Winters, Julia Martin, Steven Spillan, and Aaron Goldstein