Department of Education awards $40.3M contract for student financial aid servicing to Missouri Higher Education Loan Authority
Contract Overview
Contract Amount: $40,303,955 ($40.3M)
Contractor: Missouri Higher Education Loan Authority
Awarding Agency: Department of Education
Start Date: 2011-09-23
End Date: 2013-04-30
Contract Duration: 585 days
Daily Burn Rate: $68.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: TASK ORDER 0001 - SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029).
Place of Performance
Location: CHESTERFIELD, ST. LOUIS County, MISSOURI, 63005
State: Missouri Government Spending
Plain-Language Summary
Department of Education obligated $40.3 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for work described as: TASK ORDER 0001 - SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029). Key points: 1. The contract focuses on servicing Title IV student financial aid, a critical function for educational institutions. 2. Missouri Higher Education Loan Authority, a state-level entity, is the awardee, suggesting potential regional or specialized expertise. 3. The contract value of $40.3M over approximately 2 years indicates a significant investment in student loan administration. 4. The 'Other Activities Related to Credit Intermediation' NAICS code points to the financial services sector, specifically loan management.
Value Assessment
Rating: fair
The contract is a fixed-price with economic price adjustment type, which can lead to cost overruns if not managed carefully. Benchmarking against similar student loan servicing contracts is difficult without more granular data on the specific services provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific awardee being a state authority might indicate a limited pool of highly specialized bidders.
Taxpayer Impact: Taxpayer funds are used for student financial aid servicing, aiming to ensure efficient program delivery. The fixed-price with economic adjustment clause warrants monitoring to prevent unnecessary cost increases.
Public Impact
Ensures continued access to federal student financial aid for students. Supports the operational efficiency of the Department of Education's student loan programs. Impacts students and educational institutions relying on these financial aid services. Contributes to the broader landscape of student loan servicing and management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could increase costs.
- Limited public information on specific performance metrics.
- Potential for vendor lock-in if specialized knowledge is required.
Positive Signals
- Awarded under full and open competition.
- Contract supports a critical government function (student aid).
- Established awardee with experience in higher education loans.
Sector Analysis
This contract falls within the financial services sector, specifically credit intermediation and loan servicing. Spending benchmarks for student financial aid servicing can vary widely based on program size, complexity, and the specific services required, making direct comparisons challenging without more detail.
Small Business Impact
The data does not indicate any specific set-aside for small businesses. The awardee is a state authority, not a small business. Further analysis would be needed to determine if small businesses were subcontracting opportunities.
Oversight & Accountability
The Department of Education is responsible for oversight of this contract. The fixed-price with economic price adjustment clause necessitates robust monitoring to ensure fair pricing and prevent potential waste, fraud, or abuse.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Lack of detailed service breakdown for value assessment.
- Limited transparency on performance metrics.
- Awardee is a state authority, not a typical commercial entity.
- Contract duration and value warrant close monitoring.
Tags
other-activities-related-to-credit-inter, department-of-education, mo, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $40.3 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY. TASK ORDER 0001 - SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029).
Who is the contractor on this award?
The obligated recipient is MISSOURI HIGHER EDUCATION LOAN AUTHORITY.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $40.3 million.
What is the period of performance?
Start: 2011-09-23. End: 2013-04-30.
What specific services are included under 'servicing of Title IV student financial aid' to justify the $40.3M cost?
The contract likely encompasses a range of services including loan origination support, repayment processing, default management, customer service for borrowers, and compliance reporting related to Title IV federal student aid programs. The exact scope would be detailed in the contract's statement of work, influencing the overall cost and value.
How does the 'economic price adjustment' clause mitigate or exacerbate risk for taxpayers given the contract's duration?
This clause allows for price changes based on economic factors, potentially protecting the contractor from unforeseen cost increases but also exposing taxpayers to higher costs if inflation or other economic indicators rise significantly. Effective oversight is crucial to ensure adjustments are reasonable and tied to legitimate cost drivers.
What is the effectiveness of using a state-level loan authority for federal student aid servicing compared to private sector alternatives?
Using a state authority might offer specialized expertise in higher education finance and potentially lower overhead compared to some private firms. However, effectiveness hinges on their technological capabilities, customer service infrastructure, and ability to scale. A comparison with private sector benchmarks would reveal efficiency and cost-effectiveness.
Industry Classification
NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Other Activities Related to Credit Intermediation
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 633 SPIRIT DR, CHESTERFIELD, MO, 02
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $40,353,955
Exercised Options: $40,353,955
Current Obligation: $40,303,955
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: EDFSA11D0012
IDV Type: IDC
Timeline
Start Date: 2011-09-23
Current End Date: 2013-04-30
Potential End Date: 2013-04-30 00:00:00
Last Modified: 2014-09-24
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