Pittsburgh Public Schools may lose a $40 million grant from the Bill & Melinda Gates Foundation if the school district and the teachers’ union cannot reach an agreement on teacher evaluations, CBS Pittsburgh reports.

Under the grant, which was awarded through the Gates Foundation’s Intensive Partnership for Effective Teaching initiative, the union and the district were to develop criteria to evaluate teacher performance, with the goal of rewarding superior educators and retraining those who fell short. The district and the union, however, have been at odds for months over the criteria, and according to sources close to the talks, the foundation has said it will no longer fund the grant without a formal agreement between the two parties.

"The Gates Foundation made a significant investment in Pittsburgh because their leaders were committed to ensuring every student has an effective teacher in every class," the foundation said in an e-mailed statement to CBS Pittsburgh. "This is complicated work that requires collaboration, the commitment of the board, the superintendent and the union....We are disappointed by the current turn of events."

Pittsburgh Federation of Teachers president Nina Esposito-Vigitis told CBS Pittsburgh that the union agreed to a system of evaluation but that the minimum score that triggered retraining was set too high. “When teachers are weighed on a much more severe level than teachers across the state or the country, of course, you're going to lose teachers who are good teachers," said Esposito-Vigitis. Pittsburgh Public Schools superintendent Linda Lane said she twice lowered the minimum score. But that is not enough for the American Federation of Teachers, which is providing resources to help its local affiliate prevail in what it calls a "crucial fight."

Carey Harris, executive director of local watchdog group A-Plus Schools, told CBS Pittsburgh that the issue should be settled locally. “They need to get back to the table and work for kids and focus on the kids...put national interests and politics aside and work for kids.” Losing the grant would be “devastating to the school district,” she added. “It would be devastating to the city, but most importantly, it would be devastating to the kids.”