Department of Education awards $20.3M contract for student financial aid servicing to Missouri Higher Education Loan Authority

Contract Overview

Contract Amount: $20,308,702 ($20.3M)

Contractor: Missouri Higher Education Loan Authority

Awarding Agency: Department of Education

Start Date: 2013-05-01

End Date: 2013-12-17

Contract Duration: 230 days

Daily Burn Rate: $88.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: IGF::CT::IGF "CRITICAL FUNCTION". TASK ORDER 0002 - 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 STAT.1029)

Place of Performance

Location: CHESTERFIELD, SAINT LOUIS County, MISSOURI, 63005

State: Missouri Government Spending

Plain-Language Summary

Department of Education obligated $20.3 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for work described as: IGF::CT::IGF "CRITICAL FUNCTION". TASK ORDER 0002 - 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 STAT.1029) Key points: 1. The contract focuses on servicing Title IV student financial aid, a critical function for federal student loan programs. 2. The award was made to a specific state authority, raising questions about broader market competition. 3. The fixed-price with economic price adjustment structure introduces potential cost escalation risks. 4. This spending falls under 'Other Activities Related to Credit Intermediation', a broad category.

Value Assessment

Rating: fair

The contract value of $20.3M for 230 days of service appears reasonable for specialized financial aid servicing. However, without specific benchmarks for this niche service, a definitive pricing assessment is difficult.

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 award to a specific state authority might indicate a limited pool of qualified bidders for this specialized service.

Taxpayer Impact: Taxpayer funds are being used to ensure the continued servicing of federal student financial aid, which is essential for program integrity and student support.

Public Impact

Ensures continued access to and servicing of federal student financial aid for millions of students. Supports the operational integrity of the Title IV student aid programs. Potential for cost increases due to economic price adjustment clauses. Highlights the role of state authorities in federal student loan servicing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment may lead to cost overruns.
Limited information on the specific services provided and performance metrics.
Award to a state authority may limit broader market innovation.

Positive Signals

Contract supports a critical government function.
Awarded under full and open competition.
Clear task order for specific servicing needs.

Sector Analysis

This contract falls under the 'Other Activities Related to Credit Intermediation' sector. Spending in this area is often tied to government-backed loan programs and financial services. Benchmarks are difficult to establish due to the specialized nature of student loan servicing.

Small Business Impact

The data does not indicate any specific provisions or considerations for small businesses in this contract award. The awardee is a state higher education loan authority.

Oversight & Accountability

The contract is a task order under a larger agreement, suggesting existing oversight mechanisms. However, the specific oversight for this task order, particularly regarding performance and cost adjustments, requires further review.

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.
Limited transparency on specific performance metrics and oversight.
Awardee is a state authority, potentially limiting broader market competition.
Contract duration is relatively short (230 days), raising questions about continuity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $20.3 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY. IGF::CT::IGF "CRITICAL FUNCTION". TASK ORDER 0002 - 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 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 $20.3 million.

What is the period of performance?

Start: 2013-05-01. End: 2013-12-17.

What is the specific performance standard expected for the servicing of Title IV student financial aid under this contract, and how is it measured?

The contract details the servicing of Title IV student financial aid in accordance with specific legislation. Performance standards would typically be outlined in the task order's statement of work, including metrics for response times, accuracy, and compliance. These are crucial for ensuring effective student support and program integrity, and their specific details would be found in the full contract documentation.

What is the potential financial risk to taxpayers associated with the 'economic price adjustment' clause in this fixed-price contract?

The economic price adjustment (EPA) clause allows for contract price changes based on fluctuations in economic indicators, such as inflation. This introduces a risk of cost escalation for taxpayers if these indicators rise significantly during the contract period. The extent of this risk depends on the specific index used and the cap, if any, on the adjustment.

How effective is the 'full and open competition' process in ensuring the best value for taxpayer dollars when awarding contracts for specialized financial services like student loan servicing?

While 'full and open competition' aims to maximize value, its effectiveness can be limited if the market for specialized services is narrow. In this case, awarding to a state authority suggests a potentially limited pool of qualified bidders. Ensuring best value requires rigorous evaluation of technical capabilities and pricing, even within a specialized field.

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: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 633 SPIRIT DR, CHESTERFIELD, MO, 63005

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,208,702

Exercised Options: $22,208,702

Current Obligation: $20,308,702

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: EDFSA11D0012

IDV Type: IDC

Timeline