"...pretty soon you're talking real money"

Every now and then, it is useful to step back and remind ourselves just how much money is changing hands due to the education reform movement.

For the first time in three decades, a new company is poised to develop and administer the state-required exams Texas students begin taking in the third grade.

The state is in negotiations with Educational Testing Service, or ETS, to take over the bulk of the four-year, $340 million student assessment contract, the Texas Education Agency announced Monday. Company Vice President John Oswald said ETS is "privileged and honored" to land the work. Final contracts are still being negotiated.

The London-based Pearson Education has held the state's largest education-related contract — most recently, a five-year, $468 million deal to provide state exams through 2015 — since Texas began requiring state student assessments in the 1980s. Under the new agreement, the company would still develop the state's assessments designed for special needs and foreign students. That portion of the contract is worth about $60 million.  

Of course, as Diane Ravitch points out, Texas doesn't seem to have cut itself the best deal.

Here is the puzzling question: Why did it cost $468 million for a five-year contract with Pearson when New York State pays Pearson “only” $32 million for a five-year contract? Does New York have smarter negotiators? Does Pearson have better lobbyists in Texas than in New York? Does New York get Texas’s used questions? True, Texas has more children than New York, but not 15 times more. Can anyone explain?