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A major educational technology firm is suing the Utah Education Network (UEN), alleging the organization that provides Internet connections to Utah colleges shouldn't have awarded a contract for the state's online learning-management system to a small Utah startup.

D2L Ltd. claims the successful bidder, Salt Lake City-based Instructure, is too small and untested to deserve the contract, worth more than $500,000 a year. It also alleges an Instructure employee may have helped craft the contract's specifications in a previous job with UEN, thereby leaving the company ineligible to win the contract.

"Considering the scope and scale of the work identified in the RFP [request for proposals], D2L is puzzled that the selection committee selected a vendor with very little experience and a small work force for the project," wrote D2L general counsel Diane Lank in protesting the bid award. "D2L believes the committee must have either misapplied the evaluation factors set forth in the RFP or erroneously considered factors or criteria not set forth."

The University of Utah, which acted as the purchasing agent on the contract, investigated D2L's administrative protest last month and found no evidence to support it, according to documents provided by the university, which is also named as a defendant in the D2L suit. The Instructure employee in question worked for Utah State University (not UEN) before being laid off last year and took no part in drafting the selection criteria, U. officials wrote in response to the D2L protest.

But D2L filed suit last week in Salt Lake City's 3rd District Court. U. officials declined to comment on the allegations, citing ongoing litigation.

Instructure, which isn't a party to the suit, suggested D2L was following the lead of industry powerhouse Blackboard, which, according to Instructure President Joshua Coates, is known for suing its competitors for patent infringement.

"There is absolutely no substance to [the D2L] allegation, and best I can tell, it's simply a frivolous lawsuit intended to disrupt the progress of an emerging competitor," Coates wrote in an e-mail to The Salt Lake Tribune.

D2L's Utah lawyers didn't return phone messages left last week. A call to Lank at the company's headquarters in Baltimore wasn't immediately returned on Tuesday.

The suit asks the court to void the Instructure contract, award D2L's costs in preparing its bid, and either award the contract to D2L or put it back out to bid.

D2L is a Maryland-based subsidiary of Desire2Learn, a Canadian firm that is one of the two largest players in the burgeoning field of learning-management systems (LMS). Its clients include Ohio State University, the University of Arizona and other major research institutions.

Instructure was founded in 2008, and just last year it released a platform called Canvas that company leaders say is superior to those of large established competitors.

"Their software is old, not meant to be used with the Internet as it's used today," Coates said.

The two companies were among eight that bid on the Utah contract, which affects 160,000 students and 8,000 instructors at the state's eight public colleges and universities. It is Instructure's first major contract. For the past eight years, UEN has used the Vista LMS platform from Blackboard. That contract, which costs the state $650,000 a year, expires in July 2012, and Vista is slated to be retired as an LMS platform soon after, according to UEN director Michael Petersen.

Instructure's licensing fee will be a little less than what Utah now pays for Vista, Petersen said.

"Learning management systems are transforming the way that students take classes and the way instructors deliver those classes," he said. "Students obtain content, participate in interactive discussions with classmates and instructors, submit assignments, and instructors grade and return them online. Instead of taking tests in the classroom, they'll take it online."

Already, up to a quarter of Utah's higher-education population logs on to Vista every day. That translates into about 50,000 unique visitors in 120,000 daily log-ins. Vista serves 22,000 course sections this year.

To find Vista's replacement, UEN organized a selection committee, made up of representatives from all Utah's public schools, to craft a 42-page request for proposals last fall and pick a vendor. The UEN committee chose Instructure by a near-unanimous vote on Dec. 13.

College coursesgo online

Utah awarded a major contract for a statewide "learning management system" to a small Utah startup called Instructure, whose platform, Canvas, only hit the market last year. Canvas will allow students and instructors to interact online, affecting virtually everyone at the state's eight public colleges and universities. In a suit filed last week, competitor D2L Ltd. alleged that the bid, worth more than $500,000 a year, was awarded improperly.

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