Department of Education awards $158M for student financial aid servicing, with fixed-price adjustments
Contract Overview
Contract Amount: $158,431,913 ($158.4M)
Contractor: Great Lakes Educational Loan Services, Inc
Awarding Agency: Department of Education
Start Date: 2014-09-01
End Date: 2015-08-31
Contract Duration: 364 days
Daily Burn Rate: $435.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: IGF::CT::IGF / CRITICAL FUNCTION IDIQ: SERVICING OF TITLE IV STUDENT FINANCIAL AID. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2014 THROUGH 8/31/2015. PROVIDES FUNDING FOR TITLE IV AID SERVICING AND DEVELOPMENT AND MAINTENANCE, THROUGH APPROXIMATELY 12/31/2014. PROVIDES FUNDING FOR THE DELINQUENCY REDUCTION COMPENSATION PROGRAM, IN A NOT-TO-EXCEED AMOUNT OF $500,000 PER QUARTER AND $2,000,000 ANNUALLY.
Place of Performance
Location: MADISON, DANE County, WISCONSIN, 53704
Plain-Language Summary
Department of Education obligated $158.4 million to GREAT LAKES EDUCATIONAL LOAN SERVICES, INC for work described as: IGF::CT::IGF / CRITICAL FUNCTION IDIQ: SERVICING OF TITLE IV STUDENT FINANCIAL AID. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2014 THROUGH 8/31/2015. PROVIDES FUNDING FOR TITLE IV AID SERVICING AND DEVELOPMENT AND MAINTENANCE, THROUGH APPROXIMATELY 12/31/2… Key points: 1. The contract focuses on servicing Title IV student financial aid, including development and maintenance. 2. A significant portion is allocated to a delinquency reduction compensation program. 3. The contract was awarded under full and open competition. 4. The fixed-price with economic price adjustment structure may expose taxpayers to cost increases.
Value Assessment
Rating: good
The contract value of $158M for a one-year period appears reasonable for comprehensive student financial aid servicing. Benchmarking against similar large-scale federal contracts for financial services would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The award was made under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing by allowing multiple qualified vendors to bid.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers, likely resulting in a fair market price for the services rendered.
Public Impact
Ensures continued access to and servicing of federal student financial aid programs. Supports efforts to reduce student loan delinquency through a dedicated compensation program. Impacts millions of students and educational institutions relying on Title IV aid. Potential for cost fluctuations due to economic price adjustment clauses.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment may increase costs beyond initial projections.
- Contract duration is relatively short, potentially leading to frequent re-competition costs.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- Includes a specific program to address student loan delinquency, a key performance indicator.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation,' a broad category. Federal spending in this sector is crucial for supporting government lending and financial assistance programs, with benchmarks varying widely based on program scope and complexity.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as the vendor is a large established entity. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The contract is managed by the Department of Education, which has established oversight mechanisms for financial aid programs. The specific task order and its performance metrics would be subject to departmental review and auditing.
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 transparency on specific performance metrics for delinquency program.
- No indication of small business participation.
- Short contract duration may lead to recurring procurement costs.
Tags
other-activities-related-to-credit-inter, department-of-education, wi, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $158.4 million to GREAT LAKES EDUCATIONAL LOAN SERVICES, INC. IGF::CT::IGF / CRITICAL FUNCTION IDIQ: SERVICING OF TITLE IV STUDENT FINANCIAL AID. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2014 THROUGH 8/31/2015. PROVIDES FUNDING FOR TITLE IV AID SERVICING AND DEVELOPMENT AND MAINTENANCE, THROUGH APPROXIMATELY 12/31/2014. PROVIDES FUNDING FOR THE DELINQUENCY REDUCTION COMPENSATION PROGRAM, IN A NOT-TO-EXCEED AMOUNT OF $500,000 PER QUARTER AND $2,000,000 ANNUALLY.
Who is the contractor on this award?
The obligated recipient is GREAT LAKES EDUCATIONAL LOAN SERVICES, INC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $158.4 million.
What is the period of performance?
Start: 2014-09-01. End: 2015-08-31.
What is the historical cost performance of similar student financial aid servicing contracts awarded by the Department of Education?
Historical cost performance data for similar contracts is essential for a comprehensive value assessment. Analyzing past awards, including their final costs versus initial estimates and any adjustments made due to economic factors, can reveal trends in cost efficiency and the impact of pricing structures like economic price adjustments. This information helps determine if the current $158M award is competitive and fiscally responsible over its lifecycle.
What are the specific performance metrics and penalties associated with the delinquency reduction compensation program?
The effectiveness of the delinquency reduction compensation program hinges on clearly defined performance metrics and associated penalties or incentives. Understanding these specifics allows for an assessment of whether the program is adequately incentivized to achieve its goals and if the allocated $2M annually is an appropriate investment. Without these details, it's difficult to gauge the program's potential impact on taxpayer-supported student loan portfolios.
How are economic price adjustments calculated, and what is the potential range of cost increases for this contract?
The mechanism for calculating economic price adjustments is critical for understanding potential cost overruns. If these adjustments are tied to broad inflation indices, the risk to taxpayers is moderate. However, if they are linked to specific cost drivers within the servicing industry, the potential for significant increases exists. A clear understanding of the calculation methodology and historical data on such adjustments is needed to quantify the fiscal risk.
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: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Great Lakes Higher Education Corporation (UEI: 121598791)
Address: 2401 INTERNATIONAL LN, MADISON, WI, 53704
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $158,431,913
Exercised Options: $158,431,913
Current Obligation: $158,431,913
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: EDFSA09D0012
IDV Type: IDC
Timeline
Start Date: 2014-09-01
Current End Date: 2015-08-31
Potential End Date: 2015-08-31 00:00:00
Last Modified: 2016-11-25
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