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New York, NY - The New York City Department of Education, long criticized for a haphazard approach to special education, has signed a $55 million contract with a Virginia company to overhaul the way it tracks information about 190,000 students with disabilities.

Advocates say that the new system is desperately needed, and that it will replace an antiquated computer system, which is supplemented by roomfuls of paper documents. The combination, they say, too often results in children being denied services they need and are required by law to receive.

"We know that these problems happen all the time in terms of delays in service or deprivation of service, but what we don't know accurately is exactly how widespread they are and where they occur," said Kim Sweet, the executive director of Advocates for Children, which monitors the school system and has sued it on behalf of students with disabilities.

"Whenever advocates or researchers ask for data to assess how the Department of Education is doing in terms of compliance with special education law, the D.O.E. will say, 'Well, we'll give you our data, but we can't rely on it because it's not accurate.' And that's a major problem in terms of accountability."

The contract with the company, Maximus, is for five years. The Education Department estimated that, in addition, it would spend $23 million over the next five years on related costs, including training and equipment.

The contract, expected to be publicly announced today, comes as parents and principals throughout the city are bracing for cuts of up to $1.5 billion in the department's $20 billion budget next year.

Leonie Haimson, executive director of Class Size Matters, an advocacy group that has been critical of the school system's $80 million project for tracking information like test scores, says she believes that "more attention and better record-keeping are absolutely necessary to ensure that special education students get the services that they need."

But, she added, "I would want to make sure that the data is accurate, because in the past the data has been severely flawed that they've entered into these massive systems."

Ms. Haimson said there should also be "really strict oversight and the ability of parents to access the information for their own children, to make sure that it's not arbitrarily changed by people at D.O.E. without their knowledge."

Maximus, a company with more than 6,000 employees that does consulting and provides services to government agencies, ran into some controversy in a previous venture with New York City.

During the Giuliani administration, the city comptroller tried to block the company from receiving welfare-to-work contracts, arguing that the company had improperly used connections with city officials. After City Council hearings and lawsuits, the contracts went forward, but the Bloomberg administration did not renew them.

Education Department officials expressed confidence in the company, which was selected after the city issued a request for proposals a year ago.

"This is something that people have been asking for for a very long time," said Linda Wernikoff, the Education Department official in charge of special education.

Referring to Individualized Education Programs, the federally mandated documents that outline which services special education students need, she said: "If you develop an I.E.P. online and that child is in the system, he can't fall between the cracks, he's right there." When the I.E.P.'s are on paper, and someone has to enter the data in a computer program, she said, "there's a lot of chance for human error."

In addition to 157,305 students who attend city public schools, the Maximus system will be used to track 33,084 others - mostly New York City residents - who attend private or parochial schools but receive services like physical and occupational therapy through the department.

Ms. Wernikoff said she expected that a small group of about 30 schools would be able to use the system by fall, and that the entire system would be up and running by the spring of 2011.