Chicago has fired a leading tutoring firm from seven schools, saying it was not serving the struggling pupils it was hired to help under President Bush's market-driven education reforms.
The firm, Platform Learning, won a $15 million (pound;7.8m) contract to provide remedial tutoring at 76 Chicago schools in October. But officials said it failed to supply enough tutors, left schools scrambling to cover for frequent absences and failed to deliver promised learning material.
"They have simply failed to perform," said Chicago schools chief Arne Duncan.
Another two schools ditched Platform themselves. Three more lodged complaints, but are giving the firm more time, said a Chicago schools spokesman.
Platform president Eugene Wade professed "surprise" at the sackings, pointing to 90 per cent attendance at the firm's classes citywide and low tutor-pupil ratios.
In an earlier statement, he said he welcomed accountability, pledging to "iron out any and all kinks in our system".
Just two years since being founded, New York-based Platform has benefited from the White House's No Child Left Behind Act, achieving meteoric growth.
It has become a leading player in the lucrative market spawned by the legislation, which says that schools missing academic milestones must bring in private tutors.
Last year, it made more than $10m profit from No Child Left Behind contracts.
Deals with 105 New York schools could net the firm up to $35m this year.
But it has also acquired a reputation for aggressive tactics.
Last year, officials in Newark, New Jersey, rebuked Platform for canvassing students outside schools and sending a mass promotion to everyone in the city.
The authority was deluged with enquiries, plunging efforts to co-ordinate tutoring for 5,000 eligible students into chaos, assistant schools chief Gayle Griffin said.
It was reprimanded in Atlanta for allegedly "paying parents to get other parents to sign children up for tutoring," said a city spokesman.
New York's education authority, which does a lot of business with Platform, will announce the findings of a probe into marketing practices among tutoring firms next month. Mr Wade denied using recruitment incentives. "We hire parents to market services in communities, but they're not paid a success fee per student," he said. He accused authorities of inadequately publicising tutoring to parents.
"Until we talk to them, most haven't heard about it," he said. But the principal of Chicago's Spry community school, one of the seven which ousted Platform, accused the firm of chasing the money while failing to deliver on its promises.
Tutors were not up to the demands of working in the heavily Hispanic, inner-city school, said Carlos Azcoitias.
"They had no experience of serving English language learners and weren't able to control the kids."
"Some parents complained it was a waste of time," added Mr Azcoitias, who said attendance dwindled from 135 starters to fewer than 70 recently.