Businesses in the education market face new and unfamiliar obstacles in delivering product support and professional development that spans remote, hybrid, and in-person learning environments.
The impact of learning loss during the pandemic won’t just be felt in the classroom. It could also saddle the future economy.
That was the core argument put forward recently by a group of eight business leaders from North Carolina, who made a public plea for state policymakers to address students’ academic slippage during COVID.
Among their recommendations, laid out at a recent online event, were for state policymakers to set up a recurring funding stream to train all of the state’s educators, and to move from a “student tutoring model” for literacy education to a model that supports educators based on the “science of reading.”
Reading proficiency among North Carolina 3rd graders slightly worsened during the pandemic.
According to a report last month by the (Raleigh) News & Observer, accounting for 67.7 percent of 3rd-grade students who had taken midyear assessments, 75.4 percent of 3rd graders were not reading at a proficient level, compared to 73.6 percent last school year.
“Let’s be clear: This is not just a North Carolina problem,” said Kelly King, chairman and CEO of Charlotte, N.C.-based Truist Financial Corp., a consumer and commercial bank holding company. “This is a national problem.”
The impact of learning loss does not appear to be hitting all U.S. school communities equally. A report released by McKinsey & Company in December found that there was a 10 percent drop in average K-5 reading levels among majority-white schools during COVID, but a 23 percent drop in average K-5 reading levels among minority-majority schools.
Another participant in the North Carolina event, Honeywell Chairman and CEO Darius Adamczyk, noted that COVID has likely accelerated the need for higher educational attainment, a demand that is unlikely to abate. Honeywell, headquartered in North Carolina, is a conglomerate with a heavy focus in aerospace and building technologies, among other industries.
Investing in early reading proficiency is integral to weathering a changing economy, and for students to gain education and skills to meet the needs of businesses, Adamczyk said.
“The recommendations we’re making today will address inequities in our workforce and help us develop a strong, diverse, and resilient talent pipeline well into the future,” he said.
In addition to recommending recurring state investments in teacher training in reading, the leaders called for North Carolina policymakers to maintain and even expand funding for pre-K access in the state and to eventually accomplish the goal of enrolling 75 percent of the state’s pre-K-eligible children, and to ensure that every county hits that benchmark.
The state currently funds pre-K programs at about $154 million per year.
Fred Whitfield, president and vice chairman of Hornets Sports & Entertainment, noted that about 9,100 fewer children enrolled in North Carolina pre-K for the 2020-2021 school year compared with the previous school year, eliminating all of the enrollment gains made in the state over the last four years.
Before COVID, enrollment in the state’s pre-K had topped 31,000 children — about 50 percent of the children eligible for the program statewide, he said. Now, pre-K programs in the state are serving only 36 percent of eligible children.
A Big Focus on Pre-K
“The drop in enrollment should not be viewed as a decrease in demand or need for North Carolina pre-K,” Whitfield said. “To the contrary, although we have much to overcome, this proven high-quality program, targeted at some of our most at-risk children, is needed now, more than ever.”
In addition to calling for more support for pre-K, the business leaders are asking state officials to inflation-adjust North Carolina’s pre-K funding for the first time in nine years, to require an annual such inflation adjustment, and to modify county-state cost sharing percentages to help economically disadvantaged counties cover program costs, Whitfield said.
During their presentation, the business leaders cited a 2016 CEO action plan to support improved U.S. literacy rates put forward by Business Roundtable, an association of CEOs at leading U.S. companies.
North Carolina business leaders were inspired by the action plan to initiate several pro-education initiatives, including creation of a comprehensive aligned education system for grades pre-K-3, as well as launching a data methodology to ensure that children stay on track to achieve reading proficiency, said Dale Jenkins, CEO of Raleigh, N.C.-based medical malpractice insurance provider Curi.
A “robust data system” is scheduled to roll out later this year, Jenkins said.
In 2017, the North Carolina General Assembly formed the Birth through Third Grade, or B-3, Interagency Council, which is a joint council between the North Carolina Department of Health and Human Services and the North Carolina Department of Public Instruction.
The goal of the effort was to create a vision for a birth through 3rd-grade system of early education, and a system of accountability tied to it, including standards and assessment, data-driven improvement and outcomes, and teacher and administrator preparation and effectiveness.
“We’ve made progress on these goals through the B-3 Interagency Council that was created in 2017 to address these issues among others,” Jenkins said. “We applaud the General Assembly and the governor for moving this forward together.”
The pandemic has fueled demand for academic lessons outside of core curriculum, as districts seek flexibility and digital materials that engage students.
The number of published solicitations in K-12 declined sharply in 2020 — dropping to the lowest in almost a decade — but the education sector is poised to return to pre-pandemic levels for RFPs faster than many other government markets that buy products and services, according to GovWin from Deltek.
Last year’s dip in solicitations was due primarily to a tectonic shift in school district spending and purchasing priorities as a result of COVID-19 and the mass move to remote learning.
Districts typically rely on RFPs and bids as part of the procurement process, but in many cases last year did not want to wait through the long process involved with those traditional purchasing vehicles. School systems also relied on sole-source (non-competitive) procurements or turned to cooperatives last year to purchase goods and services quickly, according to GovWin from Deltek, which tracks published solicitations.
The company estimates that K-12 RFPs and bids fell off by 18.5 percent during 2020 compared to the same period a year earlier, according to its recent “State and Local Procurement Snapshot – Q4 2020” report.
The report, which analyzed RFPs and bids from all public school districts with an enrollment of more than 500 students, says that K-12 solicitation volume is expected to grow by 13 percent this year and then almost another 5 percent in 2022 as spending and purchasing conditions normalize further.
“Education overall is one of the markets that’s going to rebound most effectively through the next two years,” said Morgan Parkin, a research analyst for GovWin at Deltek.
That rebound, said Parkin, has already started, fueled in part by several rounds of federal emergency dollars.
She is forecasting that soft demand in a broad swath of K-12 spending categories should begin to reverse, and vendors could “start to notice those changes as early as now.” At the same time, solicitations for some “high priority purchases” have remained strong in recent months, according to the report.
Two big areas Parkin said she’s noticing an uptick for published solicitations is STEM curriculum and career-technical education programs.
She also expects to see an increase in school districts issuing bids for assessment programs. Moving forward, districts could be issuing solicitations for a broader mix of assessment tools “coming from all types of vendors, large and small,” to better understand achievement gaps caused by the pandemic,” according to the report.
“A major contract might get split up into smaller ones so more vendors can get in on it,” Parkin said, noting that districts might be less willing to sign with a big assessment provider for multiple years. “There’s going to be more work in assessments, but it will look a little different going in 2021 and 2022.”
Demand should also stay steady for digital textbooks, small-scale remote learning tools, and computer equipment — all tools needed in case of another move back to distance learning.
Rising Interest in PD, and Consulting
The report notes that vendors should “continue to watch for opportunities across all aspects of education, as this market involves a vast amount of services, supplies, systems, software, construction and maintenance. “ Districts not only have more money at their disposal now than at some points in 2020, as a result of a new federal stimulus, but more time and increased flexibility in how they use those funds.
“Spending has returned already at the start of 2021,” Parkin said.
Bids and RFPs issued by independent school districts rose from about 45,000 in 2014 up to 53,864 in 2019, for a compounded annual growth rate of 3.6 percent.
In 2020, the total was 43,903, which was the lowest since 2012, according to data from GovWin from Deltek.
GovWin from Deltek provides business customers with market intelligence and leads on federal, state, local, and education government contracting. A recent analysis by the organization of contracting in the K-12 and higher education markets can be found here. (EdWeek Market Brief partners with GovWin from Deltek’s searches as a source for Purchasing Alerts, our twice-weekly breakdowns of education-focused RFPs from around the country.)
Through 2020, schools showed a strong interest in procuring supplies and safety products. But as the year progressed, so did district needs, as more schools issued bids for COVID testing services and there was a stronger focus on consulting and professional development, according to GovWin from Deltek.
Parkin said she expects the trend from 2020 of districts using cooperative purchasing to continue, but that school systems will likely rely on sole-source procurements with less frequency since they have more money and are no longer facing do-or-die timelines for purchases.
Also, Parkin anticipates that a trend in districts making more contract opportunities available to minority and women-owned businesses will continue.
And she has a message for vendors: Virtual sales pitches and demonstrations are still in demand, based on RFPs in 2021 that Parkin has analyzed, even as the pandemic subsides.
“Schools will be more willing to entertain the option of a virtual presentation,” she said. “I’ve seen more bids and RFPs that list it as an option, so that won’t be gone completely even as the world returns to normal in terms of spending.”
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