The U.S. Department of Education recently held a competition for grants to support states in their efforts to build longitudinal data systems to track and analyze student and school performance. The Value-Added Research Center (VARC) at the Wisconsin Center for Education Research, University of Wisconsin-Madison, proposed a Tri-State Partnership in collaboration with the states of Michigan, Minnesota, and Wisconsin. Fourteen states were funded, with the Tri-State Partnership proposal the only multi-state effort to win approval. This paper outlines the initial design and work plan of the partnership. It also presents several of the design concerns related to complex system development for educational improvement. (Contains 2 figures.)