The company in charge of Idaho’s troubled Empowering Parents program has national aspirations.

Primary Class — a New York-based education vendor, also known as Odyssey — was a newcomer in August, when it landed the contract to run Idaho’s $50 million Empowering Parents microgrant program. The deal, worth close to $1.5 million, was Odyssey’s first statewide contract anywhere in the nation.

But in February, Odyssey landed a contract to launch Iowa’s fledgling education savings account program. Odyssey is also bidding for a contract to run Arizona’s expanding ESA program; a decision could come in early July.

Odyssey made Idaho a centerpiece of its successful bid in Iowa. At least publicly, Odyssey gave no inkling of the problems plaguing Empowering Parents — recurring reports of improper taxpayer-funded purchases, involving non-educational items such as TV sets, smart watches and clothing. Two of the unsuccessful Iowa bidders flatly accuse Odyssey of exaggerating the success of Empowering Parents.

Odyssey’s Iowa bid offers a window into the company’s expansion goals, and its uneven Idaho rollout.

Odyssey’s Idaho launch

The story begins in Idaho. So do the questions.

In 2022, legislators and Gov. Brad Little agreed to fold $50 million of federal coronavirus aid into Empowering Parents — a program to allow parents to seek grants to cover their at-home educational costs, for computers, curricular materials, tutoring or therapy. As a result, Idaho needed a contractor to set up a digital marketplace, where eligible parents could spend their share of grant dollars through qualified vendors.

Enter Odyssey.

The company was not the low bidder for the job. Nor was it the most experienced bidder. One of its competitors was Hollywood, Fla.-based ClassWallet, which received a no-bid contract in 2020 to run Idaho’s predecessor to Empowering Parents, known as Strong Families, Strong Students. (The state rejected ClassWallet’s Empowering Parents bid, saying the vendor had failed to submit a timely cost estimate.)

Odyssey — founded in June 2021 — got the Empowering Parents contract from a State Board placing a premium on speed. At the time, executive director Matt Freeman said the State Board wanted a contractor that could get a website up and running in 30 days, and push taxpayer-funded grants into households as quickly as possible.

The Odyssey website began taking parents’ applications within 30 days, meeting the State Board deadline. But when parents began making purchases through the digital marketplace, problems developed quickly.

An inventory of dubious purchases included big-ticket items and sundries alike — everything from sporting goods and gaming accessories to TV sets and sewing machines. According to State Board documents, obtained by Idaho Education News through a public records request, it took four months for Odyssey to send vendors a list of items that were eligible, or ineligible, for state microgrants.

As the questionable purchases piled up, the State Board launched an in-house Empowering Parents review. The board released its findings Friday. Fewer than 1% of purchases were found to be ineligible, the board said, and Odyssey agreed to  reimburse the state to the tune of $180,000. However, about 14% of the purchases remain under review, and a third-party audit will continue, at Little’s request.

Also on Friday, the state Department of Administration said Odyssey had collected nearly $479,000 in interest from Empowering Parents’ federal funding, and said the company had until the end of this week to send the money back. Odyssey has indicated it will refund the money.

Odyssey did not respond to repeated and detailed interview requests for this story. But in a State Board statement, issued in conjunction with the Friday’s release of the board review, company founder and CEO Joseph Connor pledged to work with state officials. “We will always work hard to quickly resolve any questions and issues, and we appreciate the state of Idaho for working so closely with us to ensure the program is even more successful for Idaho families.”

Odyssey’s Iowa application — and growing tensions in Idaho

By February, as State Board officials were beginning to flag improper or questionable Empowering Parents purchases, Odyssey was making its pitch in Iowa and touting its success in Idaho.

The sales pitch jumped the gun.

In a Feb. 14 letter to Iowa purchasing officials, Connor painted the Empowering Parents rollout as a done deal. “Today, Odyssey is the only experienced platform in the country that has managed to distribute the entirety of the funds earmarked for a program, while eliminating fraud.” But even now, much of the Empowering Parents money remains somewhere in the pipeline; the state has distributed $49.4 million, but as of mid-June, parents have completed less than $31.1 million in online marketplace purchases, the State Board says.

In an attempt to land the Iowa contract — and help launch a program that will allow parents to siphon up to $7,600 of public money into a child’s private education — Odyssey presented Idaho as its case study, one built on speed.

Odyssey’s Iowa application included reference letters from Idaho.

One letter, tepid and boilerplate, hinted at some of the concerns that were quietly building within the State Board’s offices. “The purpose of this letter is to confirm Odyssey as a vendor currently under contract,” Freeman, the board’s executive director, wrote on Feb. 13. Providing a rote recap of the bid process and the contract, Freeman offered no critique of Odyssey’s performance, positive or negative.

Another letter, from an Idaho vendor that sold $1.7 million in products on the Empowering Parents marketplace, offered a wholehearted endorsement of Odyssey and Connor.

“As a small business here in Idaho, we’ve found the teamwork and responsiveness from Odyssey to be exceptional and in proportion to the great task of serving the educational needs of my fellow Idahoans,” wrote Brendon and Julie Hill and Samantha Larson of Laptops & More of Idaho.

They sent that reference on Feb. 9. A month later, their family business, expressly founded to serve Empowering Parents households, was off the state’s online marketplace. State Board staff flagged improper purchases involving TVs and cameras — perhaps exceeding $110,000, according to a board spreadsheet provided to EdNews. Brendon Hill says the TV and camera purchases totaled less than $30,000, and says Odyssey, the Legislature and the State Board failed to provide direction. For instance, he said, vendors were left to sort out whether a big-screen TV fell under the heading of an appliance, an ineligible purchase, or electronics, an eligible purchase.

“(Odyssey) had no idea what they were approving,” he said in an interview last week. “All they were approving was the amount.”

On March 28, Hill had given up on getting back on the marketplace, saying Odyssey was trying to shift the blame for purchasing problems that could have been avoided. “Any attempt to hold Laptops & More liable will be met with a vigorous defense,” Hill wrote in an email to an Odyssey employee, obtained through EdNews’ records request. “Odyssey and Odyssey alone were/are the gatekeepers for the implementation of this program.”

What happened between Feb. 9 and March 28?

Hill still thinks Odyssey deserves credit for pivoting and creating an Idaho platform from scratch. But he says the company had “a CYA moment” as the State Board began its review. And it came after Odyssey left it to vendors to figure things out themselves.

“(Odyssey) could have done a lot more sooner to avoid all of this, just by doing their job,” he said.

The Iowa contract comes in — but not without controversy

Not unlike Idaho, which sought to ramp up Empowering Parents quickly in 2022, Iowa Gov. Kim Reynolds was moving in a hurry earlier this year. On Jan. 24, Reynolds signed Iowa’s first ESA bill into law. On Feb. 28, Reynolds put Odyssey in charge, citing the company’s work in Idaho and Arizona. “Odyssey was chosen based on its ability to manage all aspects of program administration, including applications, financial transactions, compliance, fraud prevention, and customer service.”

Two bidders weren’t convinced: Students First Technologies of Bloomington, Ind.; and Inspired Life, an Aplington, Iowa, nonprofit that would have partnered with ClassWallet, the vendor that had headed up Idaho’s Strong Families, Strong Students program.

Both bidders appealed the Iowa contract.  Ultimately, the state rejected the appeals — and proceeded with a contract that will net Odyssey about $4.3 million over six years.

The two spurned bidders made essentially the same argument, according to Breccan F. Thies, a Washington Examiner reporter who wrote extensively about the appeals.

First, they accused Odyssey of low-balling their price (a departure from Idaho, where Odyssey was not the state’s low bidder). Second, they accused Odyssey of overstating its track record — microgrant and scholarship programs in Arizona, and the Empowering Parents program in Idaho.

In a March 3 email to a state purchasing official, included in the Washington Examiner’s coverage, Walt Rogers and Tim Boettger of Inspired Life challenged Odyssey’s claim that it had successfully pushed out Idaho’s Empowering Parents money by the time it  applied for the Iowa contract.

“Odyssey’s language is misleading because it suggests that families have been able to access $50 million,” they wrote. “Given that Odyssey has represented that it can quickly and effectively implement a customized solution for Iowa, its record in Idaho is relevant.”

Iowa’s purchasing agents saw relevance in Odyssey’s Idaho experience. Evaluators told Rogers they looked closely at the Idaho platform, and saw parallels with Iowa’s plans, which will allow parents to receive tuition aid and purchase educational supplies through a digital marketplace. “It was pretty high in their consideration,” Rogers, Inspired Life’s policy and outreach director, said in an interview last week.

Now, Rogers is torn. A former Iowa legislator, he has supported the ongoing push for ESAs in his state. He’s ready to work with anyone who can advance this policy — including an adversary. “We really want Odyssey to be successful.”

Rogers’ concerns linger. A contract bid is like a resume, he said; when the top work experience items are inflated or misleading, that should raise red flags for an employer.

And in Odyssey’s case, the resume is inextricably tied to Idaho.

Kevin Richert writes a weekly analysis on education policy and education politics. Look for his stories each Thursday.