Department of Education awards $44.6M for student financial aid servicing, raising questions on value and competition
Contract Overview
Contract Amount: $44,578,834 ($44.6M)
Contractor: Missouri Higher Education Loan Authority
Awarding Agency: Department of Education
Start Date: 2017-10-01
End Date: 2018-08-31
Contract Duration: 334 days
Daily Burn Rate: $133.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: 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) FOR THE PERIOD OF 9/27/2011 TO 9/30/2019. TASK ORDER: 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) FOR THE PERIOD OF 10/01/2017 TO 8/31/2018.
Place of Performance
Location: CHESTERFIELD, SAINT LOUIS County, MISSOURI, 63005
State: Missouri Government Spending
Plain-Language Summary
Department of Education obligated $44.6 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for work described as: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: 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) FOR THE PERIOD OF 9/27/2011 TO 9/30/2019. TASK ORDER: SERVICING … Key points: 1. The contract awarded to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for $44.6M covers student financial aid servicing. 2. Competition was full and open, but the specific pricing strategy and its impact on value are unclear. 3. The contract's duration and firm fixed-price nature suggest potential risks if scope changes. 4. This spending falls under 'Other Activities Related to Credit Intermediation' within the Department of Education.
Value Assessment
Rating: questionable
The total award of $44.6M for a 334-day period needs further analysis to determine if it represents good value compared to similar contracts for student loan servicing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the bidding process and how the firm fixed price was determined are not provided, making it difficult to assess the effectiveness of competition in securing the best possible price.
Taxpayer Impact: The impact on taxpayers is uncertain without a clear understanding of the value received for the $44.6M expenditure.
Public Impact
Impacts millions of students relying on federal financial aid programs. Ensures the continued operation of critical student loan servicing functions. Potential for cost savings or overspending depending on the efficiency of the awarded authority.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown for the $44.6M award.
- Unclear performance metrics and potential for cost overruns if not managed tightly.
- Limited insight into the specific services provided beyond general 'servicing'.
Positive Signals
- Awarded under full and open competition.
- Contract supports essential student financial aid functions.
- Firm fixed-price contract provides cost certainty if scope is well-defined.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation' and supports the Department of Education's mission. Benchmarking spending in this specific sub-sector can be challenging due to the unique nature of federal student loan servicing.
Small Business Impact
There is no indication that small businesses were involved in this contract award, as it was awarded to a state-level higher education loan authority.
Oversight & Accountability
Oversight by the Department of Education is crucial to ensure the effective and efficient servicing of student financial aid. The firm fixed-price nature of the contract should provide some level of cost accountability, but performance monitoring is key.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Lack of detailed cost breakdown.
- Unclear performance metrics.
- Potential for scope creep impacting fixed price.
- Limited transparency on price discovery during competition.
Tags
other-activities-related-to-credit-inter, department-of-education, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $44.6 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY. IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: 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) FOR THE PERIOD OF 9/27/2011 TO 9/30/2019. TASK ORDER: 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) FOR THE PERIOD OF 10/01/2017 TO 8/31/2018.
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 $44.6 million.
What is the period of performance?
Start: 2017-10-01. End: 2018-08-31.
What specific services are included in the 'servicing of Title IV student financial aid' and how do they align with the $44.6M cost?
The 'servicing of Title IV student financial aid' typically includes tasks such as processing loan applications, disbursing funds, managing repayment schedules, handling deferments and forbearances, and providing customer support to borrowers. The $44.6M cost for the period needs to be broken down to understand the allocation across these specific functions and assess if it is reasonable for the scope of work.
How was the firm fixed price determined, and what mechanisms are in place to ensure this price represents fair market value given the full and open competition?
The determination of the firm fixed price likely involved evaluating proposals based on technical merit and cost. While full and open competition is a positive indicator, the specific methodology used to arrive at the $44.6M figure and the evaluation criteria for cost-competitiveness are not detailed. Further analysis would be needed to confirm if the price truly reflects fair market value and efficient use of taxpayer funds.
What are the key performance indicators (KPIs) for this contract, and how is the effectiveness of the student financial aid servicing being measured?
The effectiveness of student financial aid servicing is typically measured by KPIs such as borrower satisfaction rates, timely disbursement of funds, accuracy of loan servicing, and efficiency in managing repayment processes. Without specific details on the KPIs established for this contract and the monitoring mechanisms employed by the Department of Education, it is difficult to assess the overall effectiveness of the awarded services.
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: FIRM FIXED PRICE (J)
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: $48,806,163
Exercised Options: $48,806,163
Current Obligation: $44,578,834
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
Start Date: 2017-10-01
Current End Date: 2018-08-31
Potential End Date: 2018-08-31 00:00:00
Last Modified: 2019-09-24
More Contracts from Missouri Higher Education Loan Authority
- THE Purpose of This Modification IS to Create a NEW Task Order for Contract Ed-Fsa-11-D-0012 With the Period of Performance:01/01/2020 - 12/31/2020 — $652.7M (Department of Education)
- Operations and Maintenance (O&M) Task Order for Student Loan Servicing in Accordance With the Requirements of the Usds Contract. ALL Work and Deliverables Provided Must BE in Accordance With the Requirements of the Contract for the Task Order — $221.7M (Department of Education)
- Operations and Maintenance (O&M) Task Order for Student Loan Servicing in Accordance With the Requirements of the Usds Contract. ALL Work and Deliverables Provided by the Usds Servicer Must BE in Accordance With the Requirements of the Contract F — $128.2M (Department of Education)
- Operations and Maintenance (O&M) Task Order for Student Loan Servicing in Accordance With the Requirements of the Usds Contract. ALL Work and Deliverables Provided by the Usds Servicer Must BE in Accordance With the Requirements of the Contract F — $93.7M (Department of Education)
- Base Award: 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) for the Period of 6/17/2014 to 6/16/2019. Task Order: 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) for the Period of 09/01/2018 to 08/31/2019. Modification: the Purpose of This Modification IS to Create a NEW Task Order for Contract Ed-Fsa-11-D-0012 With the Period of Performance: 9/01/2018 - 8/31/2019, and Provide Funding for Title IV AID Servicing Through Approximately 12/31/2018 — $66.4M (Department of Education)
View all Missouri Higher Education Loan Authority federal contracts →
Other Department of Education Contracts
- Administrative Action — $2.2B (Conduent Education Solutions, LLC)
- - Tivod Supports the Origination, Disbursement, and Reporting of Title IV Federal Student AID Programs, Including - BUT NOT Limited to - Direct Loans, Pell Grants, and the Teacher Education Assistance for College and Higher Education Grants. the Title IV Solution Shall Also Provide Ongoing Support for the Discontinued Title IV Federal Student AID Programs, Including - BUT NOT Limited to - Academic Competitiveness Grants and National Science and Mathematics Access to Retain Talent Grants — $1.5B (Accenture Federal Services LLC)
- Federal Student AID Common Origination and Disbursement Services — $1.1B (Accenture LLP)
- Provide Direct Loan Services Such AS Call Center and Financial Reporting - Nelnet From 12/15/2019 Through 12/14/2020 — $983.7M (Nelnet Servicing LLC)
- Debt Management and Collections System (dmcs) Igf::ct::igf — $906.9M (Maximus Federal Services, Inc.)