Interior awards $111.7M contract for financial counseling services to Magellan Federal, Inc

Contract Overview

Contract Amount: $111,744,103 ($111.7M)

Contractor: Magellan Federal, Inc.

Awarding Agency: Department of the Interior

Start Date: 2023-05-16

End Date: 2026-05-14

Contract Duration: 1,094 days

Daily Burn Rate: $102.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: PERSONAL FINANCIAL COUNSELORS

Place of Performance

Location: ARLINGTON, ALEXANDRIA CITY County, VIRGINIA, 22206

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $111.7 million to MAGELLAN FEDERAL, INC. for work described as: PERSONAL FINANCIAL COUNSELORS Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Time and Materials, which can pose cost control risks if not managed closely. 3. Magellan Federal, Inc. is the sole awardee for this delivery order. 4. The contract duration is approximately 3 years, ending in May 2026. 5. The North American Industry Classification System (NAICS) code 541611 indicates services related to administrative management and general management consulting. 6. The contract is categorized under 'Administrative Management and General Management Consulting Services'.

Value Assessment

Rating: fair

The total award amount of $111.7 million for personal financial counseling services over approximately three years requires careful benchmarking. Without specific per-unit cost data or comparison to similar contracts for these exact services, a precise value-for-money assessment is challenging. However, the duration and scope suggest a significant investment in supporting personnel. The Time and Materials pricing structure necessitates vigilant oversight to ensure costs remain aligned with the value delivered and do not escalate beyond reasonable expectations for management consulting services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit a bid. The data does not specify the number of bids received, which is crucial for fully assessing the level of competition. A robust competition typically leads to better pricing and service offerings for the government. The absence of this detail means we cannot definitively state if the competition was intense enough to drive optimal price discovery.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services. This approach ensures that the government explores a wide range of potential providers, maximizing the chances of securing the best value for public funds.

Public Impact

The primary beneficiaries are likely federal employees who will receive personal financial counseling services. These services aim to improve the financial well-being and readiness of the federal workforce. The geographic impact is likely nationwide, supporting employees across various Department of the Interior locations. The contract supports the administrative and management consulting sector, potentially creating or sustaining jobs within that industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored.
Lack of specific competition metrics (number of bidders) limits the assessment of price discovery effectiveness.
The broad nature of 'Administrative Management and General Management Consulting Services' requires clear performance metrics to ensure focused delivery.

Positive Signals

Awarded through full and open competition, indicating a commitment to broad market engagement.
The contract addresses a critical need for employee financial well-being, which can improve morale and retention.
The duration of the contract provides stability for service delivery and planning.

Sector Analysis

The Administrative Management and General Management Consulting Services sector (NAICS 541611) is a broad category encompassing a wide range of advisory and assistance services. This contract falls within the professional services segment of government contracting. Spending in this sector is often driven by the need for specialized expertise that government agencies may not possess internally. Benchmarking this contract's value would require comparing it to other similar consulting service contracts awarded by federal agencies, considering factors like scope, duration, and specific deliverables.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside. However, the prime contractor, Magellan Federal, Inc., may still engage small businesses as subcontractors as part of its overall business strategy or to fulfill specific project needs, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Interior's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing payments. Transparency is facilitated through contract databases like FPDS. Accountability measures are embedded in the contract's performance standards and deliverables. The Inspector General for the Department of the Interior would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Employee Financial Wellness Programs
Management and Consulting Services
Employee Assistance Programs
Government Administrative Support Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Need for clear performance metrics to ensure service effectiveness.
Limited transparency on the number of bidders in the competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $111.7 million to MAGELLAN FEDERAL, INC.. PERSONAL FINANCIAL COUNSELORS

Who is the contractor on this award?

The obligated recipient is MAGELLAN FEDERAL, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $111.7 million.

What is the period of performance?

Start: 2023-05-16. End: 2026-05-14.

What is the track record of Magellan Federal, Inc. in delivering similar financial counseling services to federal agencies?

Assessing Magellan Federal, Inc.'s track record requires a review of their past performance on contracts with similar scopes and objectives. This would involve examining contract databases for previous awards, performance evaluations, and any reported issues or successes. Without specific historical data on their performance in delivering personal financial counseling, it is difficult to definitively assess their capability and reliability for this particular contract. A thorough review would look for evidence of successful service delivery, client satisfaction, and adherence to contract requirements in previous engagements.

How does the awarded amount compare to similar personal financial counseling contracts awarded by other federal agencies?

Direct comparison of the $111.7 million award for personal financial counseling services is challenging without access to detailed cost breakdowns and specific service level agreements for comparable contracts. However, the total value over approximately three years suggests a substantial program. To benchmark effectively, one would need to identify contracts with similar scopes (e.g., number of employees served, types of counseling provided, geographic reach) awarded by agencies like the Department of Defense or GSA. Factors such as the pricing model (Time and Materials vs. Firm-Fixed-Price) and the specific expertise required would also influence cost comparisons.

What are the primary risks associated with a Time and Materials contract for these services?

The primary risk with a Time and Materials (T&M) contract for personal financial counseling services is the potential for cost overruns. Unlike a Firm-Fixed-Price contract, T&M contracts do not have a ceiling on the total cost, as payment is based on the actual labor hours and material costs incurred. If not managed diligently, this can lead to the government paying more than anticipated. Risks include inefficient labor utilization, scope creep without corresponding adjustments to the ceiling, and difficulty in predicting the total expenditure. Robust oversight, detailed tracking of hours, and clear definition of 'materials' are crucial to mitigate these risks.

What are the expected performance metrics and program effectiveness indicators for this contract?

The expected performance metrics and program effectiveness indicators for this contract would typically focus on the reach and impact of the financial counseling services. Key indicators might include the number of employees counseled, satisfaction rates among participants, improvements in financial literacy scores, and potentially a reduction in financial stress-related issues among the workforce. The Department of the Interior would establish specific, measurable, achievable, relevant, and time-bound (SMART) goals within the contract's Statement of Work (SOW) to evaluate Magellan Federal, Inc.'s performance and the overall effectiveness of the program in achieving its objectives.

How has federal spending on administrative management and general management consulting services evolved over the past five years?

Federal spending on administrative management and general management consulting services (NAICS 541611) has generally seen a steady demand, often fluctuating based on agency needs for specialized expertise, project management support, and strategic planning. While specific aggregate data for this NAICS code requires detailed analysis of federal procurement databases, trends often show increased spending during periods of government-wide initiatives, policy changes, or when agencies face complex challenges requiring external advisory support. Conversely, budget constraints or shifts in priorities can lead to temporary reductions. The overall trend indicates a consistent reliance on these services to augment internal capabilities.

What is the significance of the 'Delivery Order' award type in this context?

The 'Delivery Order' award type signifies that this contract is a task order issued against an existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. This means that Magellan Federal, Inc. likely holds a broader contract with the Department of the Interior or another agency, and this specific delivery order represents a defined scope of work with a set amount of funding and a defined period of performance. This approach allows agencies to procure services incrementally as needed, providing flexibility while leveraging pre-competed contract vehicles.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 140D0423Q0031

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Magellan Federal Inc.

Address: 2800 S SHIRLINGTON RD STE 350, ARLINGTON, VA, 22206

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $354,178,860

Exercised Options: $207,431,776

Current Obligation: $111,744,103

Actual Outlays: $88,258,493

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $45,506,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS02F013BA

IDV Type: FSS

Timeline