Department of Education awards $19.8M for financial transaction processing, with 5 bidders indicating healthy competition

Contract Overview

Contract Amount: $19,881,984 ($19.9M)

Contractor: Edfinancial Services LLC

Awarding Agency: Department of Education

Start Date: 2021-11-05

End Date: 2023-05-04

Contract Duration: 545 days

Daily Burn Rate: $36.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS.

Place of Performance

Location: KNOXVILLE, KNOX County, TENNESSEE, 37922

State: Tennessee Government Spending

Plain-Language Summary

Department of Education obligated $19.9 million to EDFINANCIAL SERVICES LLC for work described as: EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS. Key points: 1. Contract awarded to EDFINANCIAL SERVICES LLC for financial transaction processing. 2. Task orders are for ramp-up activities across non-servicing functional areas. 3. The contract utilizes a firm-fixed-price structure, providing cost certainty. 4. Competition was full and open, with 5 bidders participating. 5. The contract duration is 545 days, ending May 4, 2023. 6. This award falls under NAICS code 522320 for Financial Transactions Processing.

Value Assessment

Rating: good

The award amount of $19.8 million for financial transaction processing appears reasonable given the scope of ramp-up activities for BPO providers. Without specific performance metrics or detailed service breakdowns, a direct value-for-money assessment is challenging. However, the firm-fixed-price contract type suggests a degree of cost control. Benchmarking against similar contracts for BPO ramp-up services would provide further insight into pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five distinct bidders vying for the opportunity. This level of competition is generally positive, suggesting that multiple vendors were capable of meeting the requirement and that the government sought the best value. The presence of five bidders indicates a healthy market for these financial transaction processing services.

Taxpayer Impact: A competitive bidding process like this helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among contractors.

Public Impact

Benefits the Department of Education by enabling the ramp-up of critical financial transaction processing functions. Services delivered include the performance of tasks under non-servicing functional areas for BPO providers. Geographic impact is primarily national, supporting federal financial operations. Workforce implications may include the need for skilled personnel to manage and execute financial transactions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Reliance on a single awardee for critical financial functions could pose a risk if performance issues arise.

Positive Signals

Full and open competition suggests a robust market and potential for competitive pricing.
Firm-fixed-price contract type provides cost predictability for the government.
Multiple bidders indicate a healthy ecosystem of capable service providers.

Sector Analysis

The contract falls within the Financial Transactions Processing, Reserve, and Clearinghouse Activities sector, under NAICS code 522320. This sector is crucial for the smooth operation of government financial services. The market for such services is competitive, with numerous firms offering specialized solutions. The $19.8 million award is a significant but not unusually large sum for a federal contract of this nature, especially considering the ramp-up phase for BPO providers.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While EDFINANCIAL SERVICES LLC may utilize small businesses as subcontractors, there is no explicit requirement or tracking mentioned in the provided data. Further analysis would be needed to determine the extent of small business involvement and its impact on the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Education's contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to deliver services within the agreed-upon terms. Transparency is facilitated by the public nature of federal contract awards, though detailed performance reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Financial Management Services
Business Process Outsourcing (BPO)
Federal Payment Processing
Government Financial Systems

Risk Flags

Potential for performance issues impacting critical financial operations.
Data security and privacy risks associated with handling sensitive financial information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $19.9 million to EDFINANCIAL SERVICES LLC. EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS.

Who is the contractor on this award?

The obligated recipient is EDFINANCIAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $19.9 million.

What is the period of performance?

Start: 2021-11-05. End: 2023-05-04.

What is the track record of EDFINANCIAL SERVICES LLC with the Department of Education or other federal agencies?

A comprehensive review of EDFINANCIAL SERVICES LLC's track record would involve examining past performance evaluations, contract history, and any reported issues or successes with federal agencies. Without access to specific past performance databases or detailed contract award histories beyond this single award, it's difficult to provide a definitive assessment. Generally, agencies assess past performance as a key factor in source selection. A history of successful contract completion, adherence to schedules, and meeting quality standards would indicate a reliable contractor. Conversely, a history of disputes, performance failures, or contract terminations would raise concerns. Further investigation into federal procurement data systems like SAM.gov or FPDS would be necessary to fully evaluate their track record.

How does the $19.8 million award compare to similar financial transaction processing contracts awarded by the Department of Education or other agencies?

Benchmarking this $19.8 million award requires comparing it to contracts with similar scopes of work, durations, and service levels within the financial transaction processing domain. The provided data indicates this is for 'ramp-up task orders' for 'BPO providers' across 'non-servicing functional areas.' If this represents a multi-year effort or a significant portion of the Department's financial operations, it could be considered moderate. However, if it's a short-term or narrowly focused task order, it might be substantial. Comparing it to other BPO ramp-up contracts or general financial transaction processing awards of similar duration (545 days) and complexity would be key. Without access to a broader dataset of comparable federal contracts, a precise value comparison is challenging. However, the presence of five bidders suggests the market found the opportunity and potential pricing to be attractive.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks associated with this contract could include performance failures by EDFINANCIAL SERVICES LLC, leading to disruptions in financial transaction processing. There's also a risk of cost overruns if the firm-fixed-price model doesn't adequately account for unforeseen complexities, although this is less likely than with cost-reimbursement contracts. Another risk is data security and privacy breaches, given the sensitive nature of financial data. Mitigation strategies typically involve robust contract oversight by the Department of Education, including regular performance reviews, clear deliverables, and defined remedies for non-performance. Security protocols and compliance with federal data protection regulations (e.g., FISMA) are critical. The competitive nature of the award also serves as a form of risk mitigation, as the government selected from multiple capable vendors.

How effective is the current ramp-up strategy for BPO providers under this contract in achieving the Department of Education's objectives?

The effectiveness of the ramp-up strategy hinges on whether the 'identical ramp-up task orders' allow NextGen BPO providers to efficiently begin performing tasks under all non-servicing functional areas. Success would be measured by the timely and accurate execution of these tasks post-ramp-up, the seamless integration of new providers, and the overall improvement in the efficiency and effectiveness of the Department's financial operations. Without post-ramp-up performance data or specific objective metrics defined within the contract, assessing effectiveness is premature. Key indicators would include meeting transition timelines, achieving service level agreements (SLAs) once fully operational, and positive feedback from internal stakeholders relying on these financial services.

What are the historical spending patterns for financial transaction processing or BPO services at the Department of Education?

Analyzing historical spending patterns for financial transaction processing and BPO services at the Department of Education would involve reviewing budget allocations and contract awards over several fiscal years. This $19.8 million award needs to be contextualized against previous investments in similar capabilities. Understanding whether this represents an increase, decrease, or stable level of spending is crucial. For instance, if the Department has historically spent significantly more or less on these services, it could indicate a shift in strategy, increased need, or improved efficiency. Examining trends in contract types (e.g., fixed-price vs. cost-reimbursement), competition levels, and average award values over time would provide a comprehensive view of the Department's approach to procuring these essential financial services.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Financial Transactions Processing, Reserve, and Clearinghouse Activities

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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 298 N SEVEN OAKS DR K, KNOXVILLE, TN, 37922

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,881,984

Exercised Options: $19,881,984

Current Obligation: $19,881,984

Actual Outlays: $19,881,984

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003120D0001

IDV Type: IDC

Timeline