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By selecting just two states as first-round Race to the Top winners, U.S. Secretary of Education Arne Duncan is leaving $3.4 billion on the table for the remaining states to vie for in round two.

Delaware and Tennessee beat out 14 other finalists last week to awarded in the $4 billion Race to the Top Fund competition.

Mr. Duncan praised the two states, which edged out front-runners Florida and Louisiana, for mustering strong district and teachers鈥�-union support for their plans, for having superior data systems, and for submitting comprehensive proposals that touched 鈥渆very single child鈥� statewide.

And he challenged states to compete as vigorously for round-two grants, saying there could be 10 to 15 winners. Applications are due June 1, and the awards will be made in September.

鈥淲e now have two states that will blaze the path for the future of education reform,鈥� Mr. Duncan said in a . In looking ahead to round two, he said, 鈥淚 challenge states to put their best foot forward. We want to fund as many strong proposals as possible.鈥�

Delaware, which was ranked No. 1 on the competition鈥檚 500-point grading scale, will win about $100 million, while Tennessee, which came in second, will garner about $500 million, based on student population. Those states should have access to their funds within 90 days, according to the U.S. Department of Education.

Georgia missed the cut by just over 10 points, coming in third, while Florida, Illinois, and South Carolina, in descending order, rounded out the top six. Forty states and the District of Columbia applied in round one of the federal competition, which is supported by economic-stimulus aid.

Putting so much money up for grabs in round two 鈥渟ets up the best possible dynamics for states,鈥� said Charles Barone, the director of federal legislation for the New York City-based political action committee Democrats for Education Reform. He noted that states now have the benefit of seeing peer reviewers鈥� comments on the first-round proposals, which could provide a road map for winning in round two.

Beyond bragging rights for their first-round awards, announced last week, Delaware and Tennessee got a financial bonus, too: Their grants will amount to more per student than states will win in round two. Both states won grants that were larger than estimates the Education Department had provided for states of their size.

But the department is changing the rules for the second round, capping the awards at its top-of-the-line estimates, which vary by student enrollment. Florida, for example, submitted an application that asked for $1.1 billion, but if it applies in the next round, its application must be built on programs that can be funded with no more than $700 million.

And limiting the amount of aid available could be a game changer for some states.

In South Carolina, state schools chief Jim Rex said that given the tough budget conditions there, officials will have to make sure they can craft a successful application and have the capacity to deliver on the promises. The state constructed its original application around $300 million in anticipated federal funding, but South Carolina will be capped at almost half that amount in round two.

鈥淲e may not do quite as much,鈥� Mr. Rex said of round two. He said no decision had been made yet on whether the state would even reapply.

In addition to submitting written plans, the round-one finalists鈥�15 states and the District of Columbia鈥攈ad made in-person presentations in Washington.

Collaboration Highlighted

The $4 billion in Race to the Top grants, which seek to reward states for their commitment to improving teacher effectiveness, data systems, low-performing schools, and academic standards and assessments, are paid for through the American Recovery and Reinvestment Act passed last year by Congress. The Obama administration is seeking an additional $1.35 billion in the fiscal 2011 federal budget to continue the contest next year.

With the announcement of the winners came . They show, for example, that South Dakota ranked last in the race, at 135.8 points, falling more than 100 points behind the next-closest laggard鈥擜rizona, which scored 240.2 points.

By selecting two states that have near-universal support from school districts and state and local teachers鈥� unions, and in touting that achievement in press briefings, the Education Department is telegraphing the importance of stakeholder buy-in. That clear message could help shape states鈥� strategies for round two.

鈥淚 think it gives unions and districts veto power鈥� over states鈥� applications, said Andrew Smarick, an adjunct fellow at the American Enterprise Institute, a Washington think tank. 鈥淭he real question is,鈥� added Mr. Smarick, who has been a prolific writer on the Race to the Top program, 鈥渃an any other state pull off what Tennessee and Delaware did?鈥�

Florida and Louisiana, which had been seen as top contenders in the competition, did not have such strong local support.

Florida had an aggressive plan to improve teacher effectiveness, and was another of the four finalist states that opted to make student-performance data worth 50 percent on teacher evaluations. The state went even further than the other finalists by requiring that all districts use the data to inform new performance-pay programs as well.

But insistence on those policies may have been the state鈥檚 downfall in the end. Of all the 16 finalists, Florida鈥攚hich ended the competition with 431.4 points鈥攈ad the least amount of buy-in from its teachers鈥� unions. Of the Florida school districts participating in the state鈥檚 Race to the Top plan, only 8 percent had buy-in from their local unions.

Florida鈥檚 education commissioner, Eric J. Smith, issued a brief statement saying that he was 鈥渃onfident that with ... continued support, the feedback from our first application, and the possibilities contained in ongoing legislative efforts, we will be in a very strong position to win this next phase.鈥�

鈥楰ey Lever鈥�

Louisiana had been singled out for praise, time and again, by Secretary Duncan for its student- and teacher-data systems and the way it tracks how well teacher-preparation programs are doing. The state鈥檚 plan on teacher effectiveness was built principally around its pledge to design new teacher evaluations with a heavy emphasis on student performance. Louisiana is also one of six states (Delaware is another) that are part of a new, $75 million initiative to turn around low-performing schools using strategies created by the Boston-based Mass Insight Education and Research Institute.

With its state-run Recovery School District in place since 2005 to intervene in low-performing schools, Louisiana also has more experience than most other states at intervening in large numbers of schools.

But unlike in Delaware and Tennessee, state officials in Louisiana did not muster broad-based support from local school districts, school boards, and teachers鈥� unions. The state came in 11th, with 418.2 points.

State Superintendent Paul G. Pastorek acknowledged that lack of local support was a likely factor in the state鈥檚 final score, but he said he does not want to water down any of the proposals in order to garner more buy-in for a round-two Race to the Top bid.

鈥淚 hate to adjust what we think is right just so that we can get a bigger score on collaboration,鈥� he said. 鈥淲e want to remain as ambitious as we鈥檝e been in the past.鈥�

Randi Weingarten, the president of the 1.4 million-member American Federation of Teachers, emphasized the importance of collaboration, not union leverage, in putting together Race to the Top applications.

鈥淭he key lever to changing schools is changing systems, which means you have to change the labor-management dynamic to be one that is very disciplined and very collaborative,鈥� she said, citing the combative environment in New York state, a finalist that didn鈥檛 have an overwhelming amount of local district and union buy-in.

鈥淭he screaming you heard from the [newspaper] tabloids in New York compared to the working together quietly in Tennessee and Delaware teaches us a thing or two,鈥� she said.

Mr. Duncan maintains that no one factor is the key to winning the grants. 鈥淭his is a 500-point competition,鈥� he said. 鈥淭here are no make-or-break categories.鈥�