Desire2Learn Sues UEN Over Instructure Contract

This was reported in The Salt Lake Tribune and, more recently, in The Chronicle of Higher Education. As I have mentioned here previously, startup LMS developer Instructure recently won an LMS bid for the 140,000-student Utah Education Network (UEN).  Now, UEN, as a consortium of public schools, is bound by state laws regarding contract bidding. In their complaint, Desire2Learn alleges that (a) an employee of Instructure had been an employee of UEN or one of its membership schools at the time that the selection criteria were created and was involved with their creation (which would presumably be a violation of state conflict of interest laws) and (b) that UEN didn’t follow the selection criteria published in its RFP (which would presumably be a violation of the state’s procurement laws).

These suits are a lot more common than most people realize. They usually happen either (a) because there genuinely was an unfair selection process (which definitely happens) or (b) because the litigating company is just using the lawsuit as a competitive bludgeon (which also definitely happens). It’s not immediately clear from the publicly available data which might be the case here. Certainly, nothing I have seen or heard yet comes remotely close to being a smoking gun regarding misconduct in the selection process. But there’s not much that’s publicly available yet.

Here’s what we do know that should put some context around this:

  • According to Utah state law, if a company thinks there was something amiss with an award process, that company has five days to file a protest with the organization that granted the award.
  • Desire2Learn did file a protest within five days.
  • If the protest is rejected, then the challenging company has fourteen days to file an appeal.
  • UEN did reject D2L’s protest, and D2L did file for an appeal within fourteen days.
  • In order to get access to the kind of information that would, in fact, show whether there had been any hanky panky in the selection process, you’d need to request the process documentation from UEN via Utah’s Government Records Access and Management Act (GRAMA), which is the state’s equivalent to the Federal Freedom of Information Act.
  • Given the way these bureaucratic information request processes go, it is very likely that any company that thinks there might have been misconduct would have to file suit before it was able to gain access to the information that they’d need to prove it. This encourages a practice of filing a placeholder lawsuit before the facts are in.

Based on the above, it might not make sense to read too much into this lawsuit at this point. At the moment, all we can be sure of is that Desire2Learn is preserving their right to challenge the decision. We won’t really get a sense of the true nature of the suit or the motives of the company until we get a few more moves into the chess game. I will report on the developments as I learn more.

As a side note, I think it is important for these sorts of challenges to be more widely known in the education community whenever they happen, for transparency’s sake. If anybody is aware of such challenges taking place, please let me know.

I have published both Desire2Learn’s protest and UEN’s response below the fold.

Here is D2L’s protest letter:

Download (PDF, 108KB)

And here is UEN’s response:

Download (PDF, 65KB)

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About Michael Feldstein

Michael Feldstein is co-Publisher of e-Literate, co-Producer of e-Literate TV, and Partner in MindWires Consulting. For more information, see his profile page.
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10 Responses to Desire2Learn Sues UEN Over Instructure Contract

  1. Kyle Mackie says:

    Thanks for shedding some light here, Michael. I’m a bit confused why this clarity isn’t coming from D2L.

  2. One thing I’ve learned in my coverage of litigation over the years is that the companies involved in these actions are cautious in crafting their statements because of the legal ramifications of what they say. As a result, their P.R. responses often lag the news cycle, especially in a new breaking story like this one.

    We’ll see whether D2L releases a statement soon.

  3. Barry Dahl says:

    Hi Michael. I had a conversation today with someone who’s in the know (but I’m sworn to secrecy, sort of) – and I would say that you’ve nailed it with this post. This is all about getting access to the information to see if anything was done that shouldn’t have been done (as per “grounds for protest” #2 of the D2L letter above). Having said that, the concern that D2L expressed in “grounds for protest” #1 sounds pretty lame.

    Thanks for jumping in and putting this in language that we IANAL-types can understand. With any luck at all, this will go away as quickly as it popped up, but I doubt it. This is a P.R. coup for Instructure as far as I can tell. Should be interesting. BD

  4. josh coates says:

    michael,

    josh coates here, CEO of Instructure. i appreciate you taking the time to write about this. i agree with you that transparency is important in the community, and as such, i felt like it was important to directly address this.

    as far as the first issue goes, as best i can tell, UEN simply picked the product they thought was the best for them. it was a unanimous decision by a large committee of evaluators. D2L simply says that they are “puzzled” by this decision. UEN gave them an explanation. D2L didn’t like it, so they filed a lawsuit.

    speaking of the second issue, it’s actually a very dull story:

    kevin works in our support department. he used to be a system administrator at utah state. utah state eliminated his position and he left in may of 2010.

    some number of months later UEN began the process of defining the RFP.

    kevin found temporary employment at two companies before he finally landed at Instructure in august.

    in october we received the RFP from UEN, and our RFP response team submitted our response in december.

    so basically, kevin had nothing to do with the creation of the RFP, or the response to the RFP.

    UEN and UofU conducted an independent investigation and has verified these facts. there is nothing more to it.

    so, that’s it. i suppose D2L in their “puzzled” state concluded that there is no possible way they could have lost without someone cheating, so they fished around on linkedin, found an Instructure employee that used to work for a Utah school, and this conspiracy theory was born.

    while i’m at it, let me add my $.02 on this industry. yes, i know we’re the new guys – and maybe we don’t understand that litigation is “common” in this industry, but to us, suing your would-be customers doesn’t seem like the right way to do business. ;-)

  5. John McLeod (Desire2Learn) says:

    All vendors enter every RFP process with the view that the process will be fair and equitable. We all invest resources to respond to RFPs, make presentations, and demonstrate our capabilities. In virtually every case, we accept the decision.

    Michael is correct, Utah law requires that a protest be made within 5 days of a decision, and an appeal – which must be filed in court – be made within 14 days of a denial. We have requested materials under Utah’s freedom of information laws. We will carefully review the materials when we receive them to better understand this process.

    Out of respect for institutions in Utah and our desire to concentrate on serving our customers, we are immediately dropping this appeal. We want to reassure everyone that our focus continues to be on improving education.

  6. Jared Stein says:

    I hope the comment from Desire2Learn on this blog is correct and representative. I was, frankly, shocked by the news of this lawsuit, and it promptly marred my previously positive impression of D2L. As one who served on our campus’s LMS selection committee which voted in the Statewide consortium, I can attest to the validity and fairness of the process. Instructure was indeed the dark horse, but in their feature set and especially in their demos, they left the competition behind. Our Canvas demos actually had faculty laughing and applauding–not an easy feat when you’ve been beaten down by Bb Vista for the past 4 years…

  7. Camille Fairbourn says:

    As one of the Utah faculty who evaluated both products, I echo Jared’s comment above. Canvas is an amazing LMS, and it hasn’t finished growing yet. I dragged two colleagues into my office just yesterday to show them a VERY cool feature in the Assignment tool and I have a colleague at another institution who is trying to switch to Moodle and she’s positively green with envy. The real winners here are Utah students and faculty.

  8. Mickey Slimp says:

    Along with Jared, I also hope that John’s statement is correct. I’ve always had a positive view of Desire2Learn, much of which as much developed over their victimization by lawsuits from elsewhere in addition to the quality of the product. To see their use of lawsuits against potential clients as a tool for marketing was really disquieting. I hope this is behind us and everyone can get on with our role of educating students.

  9. Steve Terry says:

    As an IT person at a public institution, (who deals with many large system procurements) it actually seems reasonable that D2L would “challenge” Utah’s procurement process, especially when the award goes to a local (Salt Lake) company that has very few (if any?) large LMS implementations. If I were an LMS vendor, I would also want to see the details of the process, if nothing else, to better understand the procurement process in the state of Utah.

    The downside for D2L is that this is a bad PR move, especially in light of the Bb suits against them over the past 4-5 years.

    Please understand my comments, I do not question the merit of Canvas as an LMS, Instructure as a company, or the U of Utah – in fact, I am more than certain that Utah followed their procurement processes as required – however, I do know that vendors put great effort into their bids and when they are surprised by the award process (for whatever reason) they want to know how they lost the bid.

  10. OK. But did D2L acknowledge that their product is massively inferior to Canvas, so who cares? Seriously. As a community college teacher saddled with D2L for the first 5 years of my college teaching, my first semester with Canvas has been a breath of fresh air.

    Of course the only recourse D2L has in this sort of situation is the legal route. They can’t market their product as better, so they have to defend their market share through the legal system. Total bummer.