Labor Department's $36.7M technical school contract awarded to Alutiiq Management Services shows fair competition

Contract Overview

Contract Amount: $36,698,567 ($36.7M)

Contractor: Alutiiq Management Services, LLC

Awarding Agency: Department of Labor

Start Date: 2017-02-27

End Date: 2021-03-31

Contract Duration: 1,493 days

Daily Burn Rate: $24.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: IGF::OT::IGF ALBUQUERQUE JCC

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87104

State: New Mexico Government Spending

Plain-Language Summary

Department of Labor obligated $36.7 million to ALUTIIQ MANAGEMENT SERVICES, LLC for work described as: IGF::OT::IGF ALBUQUERQUE JCC Key points: 1. Contract value of $36.7 million over four years suggests a significant investment in technical training services. 2. Awarded through full and open competition, indicating a robust bidding process. 3. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 4. Services provided under NAICS code 611519 (Other Technical and Trade Schools) support workforce development. 5. The contract duration of approximately four years allows for sustained program delivery. 6. Geographic focus on New Mexico for these services.

Value Assessment

Rating: good

The contract's total value of $36.7 million over nearly four years averages to approximately $9.2 million annually. Benchmarking this against similar contracts for technical and trade school services is challenging without more specific service details. However, the cost-plus-incentive-fee (CPIF) pricing structure suggests an effort to control costs while incentivizing performance, which is a positive sign for value. The absence of a specific price per unit makes direct comparison difficult, but the overall value appears reasonable for a federal contract of this scope and duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, certain sources may have been excluded for specific reasons. There were 4 bidders, indicating a healthy level of competition. This suggests that the pricing was likely subject to market forces, and the government received competitive offers. The exclusion of sources, if justified, could still lead to a fair price, but it warrants understanding the rationale behind the exclusion.

Taxpayer Impact: The competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. Having multiple bidders generally drives down costs and ensures the government obtains services at a fair market value.

Public Impact

Benefits individuals seeking technical and trade skills development, potentially enhancing their employability. Delivers educational and training services crucial for workforce development initiatives. Primarily impacts the workforce and potential beneficiaries in New Mexico. Supports the development of a skilled labor force aligned with industry needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type requires further investigation to ensure it did not unduly limit competition or inflate costs.
CPIF contracts can sometimes lead to cost overruns if not managed meticulously, requiring strong government oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive marketplace for these services.
The use of a CPIF contract structure indicates a focus on performance-based outcomes and cost efficiency.
The contract duration allows for stable service delivery and program continuity.

Sector Analysis

This contract falls within the broader education and training sector, specifically focusing on technical and trade schools (NAICS 611519). The federal government is a significant purchaser of training services to support workforce development, military readiness, and vocational rehabilitation. Spending in this area can fluctuate based on economic conditions, specific agency needs, and legislative priorities. Comparable spending benchmarks would depend on the specific technical skills being taught and the scale of the training programs.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As the contract was awarded to Alutiiq Management Services, LLC, an analysis of their typical subcontracting practices would be necessary to determine the impact on the small business ecosystem. Without explicit set-aside goals, the direct benefit to small businesses through this specific award is unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM). The CPIF structure necessitates close monitoring of costs and performance against established metrics. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Labor Workforce Training Programs
Federal Vocational Rehabilitation Services
Department of Defense Training Contracts
GI Bill Education Benefits

Risk Flags

Potential for limited competition due to source exclusion.
CPIF contracts require diligent oversight to manage costs and ensure performance.
Need for clarity on specific training outcomes and their market relevance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $36.7 million to ALUTIIQ MANAGEMENT SERVICES, LLC. IGF::OT::IGF ALBUQUERQUE JCC

Who is the contractor on this award?

The obligated recipient is ALUTIIQ MANAGEMENT SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $36.7 million.

What is the period of performance?

Start: 2017-02-27. End: 2021-03-31.

What specific technical and trade skills are being provided under this contract, and how do they align with current labor market demands?

The contract falls under NAICS code 611519, 'Other Technical and Trade Schools.' While the specific curriculum is not detailed in the provided data, this code typically encompasses institutions offering training in fields such as automotive repair, HVAC, welding, culinary arts, cosmetology, and various skilled trades. The alignment with labor market demands would depend on the specific programs chosen by the Department of Labor and the contractor. Federal training contracts often aim to address identified skill gaps in critical industries or to support specific demographic groups, such as veterans or dislocated workers, in acquiring in-demand skills.

How does the average annual cost of approximately $9.2 million compare to similar federal contracts for technical training?

Directly comparing the average annual cost of $9.2 million for this contract to similar federal contracts is challenging without more granular data on the scope, duration, student capacity, and specific training disciplines involved. Federal training contracts can vary widely in cost based on these factors. For instance, contracts for highly specialized technical training (e.g., advanced manufacturing, cybersecurity) might command higher per-student costs than general vocational training. The CPIF structure also introduces variability based on performance incentives. A comprehensive benchmark would require analyzing a portfolio of contracts with similar NAICS codes, award types, and geographic scopes.

What are the specific performance metrics and incentive structures within the Cost Plus Incentive Fee (CPIF) arrangement for this contract?

The provided data indicates a Cost Plus Incentive Fee (CPIF) contract type, but does not detail the specific performance metrics or incentive fee structures. In a CPIF contract, the final fee is adjusted based on the contractor's performance relative to predetermined targets. These targets could relate to factors such as cost savings, schedule adherence, quality of training, student completion rates, or post-graduation employment rates. The government and contractor negotiate a target cost, a target fee, and a sharing ratio for any cost underruns or overruns, as well as incentive fees tied to achieving specific performance objectives. Detailed insight would require reviewing the contract's statement of work and award details.

What is the rationale behind the 'Exclusion of Sources' in the 'Full and Open Competition After Exclusion of Sources' award type?

The 'Full and Open Competition After Exclusion of Sources' award type suggests that while the competition was intended to be broad, certain potential sources were deliberately excluded. The rationale for such exclusions typically stems from specific government requirements, such as unique capabilities, proprietary technology, national security concerns, or prior performance issues with certain contractors. The Federal Acquisition Regulation (FAR) outlines conditions under which sources may be excluded. Understanding the specific justification for excluding certain bidders is crucial to assessing whether the competition was truly optimized for the government's best interest and if the exclusion potentially impacted pricing or innovation.

What has been the historical spending by the Department of Labor on technical and trade school services, and how does this contract fit into that pattern?

Historical spending data for the Department of Labor on technical and trade school services would reveal trends in investment in workforce development. This $36.7 million contract, awarded over approximately four years, represents a significant, albeit potentially episodic, investment. Analyzing past spending patterns would help determine if this contract is part of a sustained effort or a response to specific, time-limited needs. It would also provide context for the scale of this award relative to the agency's overall training budget and priorities. Without historical data, it's difficult to definitively state how this contract fits into the broader spending pattern.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOL-ETA-16-R-00006

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Afognak Native Corporation

Address: 3909 ARCTIC BLVD, STE 500, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $61,988,373

Exercised Options: $46,986,226

Current Obligation: $36,698,567

Actual Outlays: $15,429,554

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $731,464

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline