Department of Education awards $11.1M firm-fixed-price contract to Maximus Education LLC for student loan servicing system readiness

Contract Overview

Contract Amount: $11,079,060 ($11.1M)

Contractor: Maximus Education LLC

Awarding Agency: Department of Education

Start Date: 2023-04-25

End Date: 2025-11-20

Contract Duration: 940 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE INITIAL TASK ORDER IS A FIRM-FIXED PRICE TASK ORDER FOR THE TASKS AND DELIVERABLES REQUIRED FOR THE USDS SERVICER TO BECOME PERFORMANCE READY, ATTAIN ITS AUTHORIZATION TO OPERATE (ATO), AND ACHIEVE GO-LIVE (GO- LIVE) OF ITS SERVICING SYSTEM.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20202

State: District of Columbia Government Spending

Plain-Language Summary

Department of Education obligated $11.1 million to MAXIMUS EDUCATION LLC for work described as: THE INITIAL TASK ORDER IS A FIRM-FIXED PRICE TASK ORDER FOR THE TASKS AND DELIVERABLES REQUIRED FOR THE USDS SERVICER TO BECOME PERFORMANCE READY, ATTAIN ITS AUTHORIZATION TO OPERATE (ATO), AND ACHIEVE GO-LIVE (GO- LIVE) OF ITS SERVICING SYSTEM. Key points: 1. Contract aims to prepare the USDS Servicer for performance, achieve Authorization to Operate (ATO), and go-live. 2. The firm-fixed-price structure shifts performance risk to the contractor. 3. This is a single award task order, indicating a specific need for Maximus Education's capabilities. 4. The contract duration is 940 days, spanning from April 2023 to November 2025. 5. The North American Industry Classification System (NAICS) code 522390 suggests services related to credit intermediation. 6. The contract is not set aside for small businesses.

Value Assessment

Rating: fair

The contract value of $11.1 million for a task order focused on system readiness and ATO attainment appears reasonable given the complexity of federal IT systems. Benchmarking against similar system development and implementation contracts within the federal government would provide a clearer picture of value for money. Without specific performance metrics or comparable contract data, a definitive assessment of cost-effectiveness is challenging. However, the firm-fixed-price nature of the award suggests a defined scope and budget, which can aid in cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, potentially leading to better pricing and innovation. This approach allows the agency to select the offer that best meets its technical and cost requirements from a broad range of potential sources.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive prices and encourages a wider pool of contractors to participate, potentially leading to more efficient use of government funds.

Public Impact

The primary beneficiaries are students and borrowers who will interact with the improved servicing system. The contract delivers essential IT services to ensure the operational readiness of the USDS Servicing System. The geographic impact is national, affecting student loan borrowers across the United States. Workforce implications include the need for skilled IT professionals to develop, implement, and maintain the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not precisely defined.
Dependence on contractor expertise for critical system functionalities.
Risk of delays in ATO attainment impacting system go-live.
Ensuring data security and privacy throughout system development.

Positive Signals

Firm-fixed-price contract shifts risk to the contractor.
Full and open competition promotes a competitive bidding process.
Clear objectives for performance readiness and ATO attainment.
Contract duration allows for thorough development and testing.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software development, system integration, and operational readiness for a critical financial servicing system. The market for federal IT services is substantial, with agencies continually investing in modernizing their platforms. Comparable spending benchmarks would involve looking at other large-scale IT system implementation and modernization projects within federal agencies, particularly those involving financial systems or student loan servicing.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This means that opportunities for small business participation are not explicitly mandated within this specific award. The agency's overall small business utilization goals and subcontracting plans would need to be reviewed to understand the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight will likely be managed through the Department of Education's contracting officers and program managers, ensuring adherence to the firm-fixed-price terms and deliverables. Accountability measures are embedded in the contract's performance requirements and the achievement of milestones such as ATO and go-live. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Student Aid (FSA) IT Modernization Efforts
Student Loan Servicing Contracts
Federal Authorization to Operate (ATO) Processes
Government IT System Development and Implementation

Risk Flags

Potential for delays in ATO
Scope creep risk
System integration complexity
Cybersecurity vulnerabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $11.1 million to MAXIMUS EDUCATION LLC. THE INITIAL TASK ORDER IS A FIRM-FIXED PRICE TASK ORDER FOR THE TASKS AND DELIVERABLES REQUIRED FOR THE USDS SERVICER TO BECOME PERFORMANCE READY, ATTAIN ITS AUTHORIZATION TO OPERATE (ATO), AND ACHIEVE GO-LIVE (GO- LIVE) OF ITS SERVICING SYSTEM.

Who is the contractor on this award?

The obligated recipient is MAXIMUS EDUCATION LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.1 million.

What is the period of performance?

Start: 2023-04-25. End: 2025-11-20.

What is the track record of Maximus Education LLC in delivering similar federal IT system readiness projects?

Maximus Education LLC, a subsidiary of Maximus, Inc., has a significant history of working with federal agencies, particularly in areas related to education and student financial services. While specific details on past projects directly mirroring this task order's scope (USDS Servicer performance readiness, ATO, and go-live) are not detailed in the provided data, Maximus, Inc. has extensive experience in government IT modernization, citizen services platforms, and large-scale data management. Their past performance in managing complex federal contracts, including student loan servicing and benefits administration, suggests a capability to handle such initiatives. A deeper dive into their contract history, past performance evaluations, and specific project outcomes would be necessary for a comprehensive assessment of their track record for this particular type of task.

How does the $11.1 million contract value compare to similar federal IT system readiness and ATO attainment contracts?

Benchmarking the $11.1 million contract value requires comparing it to similar firm-fixed-price task orders for IT system readiness, Authorization to Operate (ATO) attainment, and system go-live within federal agencies, particularly those with complex financial or student servicing components. The duration of 940 days (approximately 2.5 years) suggests a substantial undertaking. Without access to a comprehensive database of comparable federal IT contracts, a precise comparison is difficult. However, large-scale IT system implementations for federal agencies often range from millions to tens or even hundreds of millions of dollars, depending on the system's complexity, scope, and the number of users. This $11.1 million award appears to be a significant investment, likely reflecting the critical nature of the USDS Servicing System and the comprehensive effort required for its successful deployment and accreditation.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential delays in achieving the Authorization to Operate (ATO), which could postpone the system's go-live date and impact student loan servicing operations. Another risk is the possibility of scope creep, where additional requirements emerge beyond the initial agreement, potentially increasing costs or extending timelines, although the firm-fixed-price structure aims to mitigate this by capping the contractor's profit. Technical risks, such as integration challenges with existing systems or cybersecurity vulnerabilities, are also present. Mitigation strategies likely involve rigorous project management, clear definition of deliverables, phased implementation with regular reviews, robust testing protocols, and adherence to federal cybersecurity standards (e.g., NIST guidelines) throughout the development lifecycle. The contractor's expertise and the agency's oversight are crucial for managing these risks.

What is the expected effectiveness of the USDS Servicing System once it achieves performance readiness and go-live?

The expected effectiveness of the USDS Servicing System upon achieving performance readiness and go-live is centered on providing a more efficient, secure, and user-friendly platform for managing federal student loans. The contract's objectives—performance readiness, ATO attainment, and go-live—indicate a focus on establishing a fully functional and compliant system. This should translate into improved borrower services, streamlined repayment processes, enhanced data accuracy, and better compliance with federal regulations. The system's effectiveness will ultimately be measured by its ability to support the Department of Education's mission in administering federal student aid programs, reducing operational inefficiencies, and potentially improving borrower outcomes through better servicing tools and communication.

How has federal spending on student loan servicing IT infrastructure evolved, and where does this contract fit in?

Federal spending on student loan servicing IT infrastructure has seen significant evolution, driven by the need to modernize aging systems, enhance cybersecurity, improve borrower experience, and ensure compliance with changing regulations. Historically, the Department of Education has managed student loans through various contractors and internal systems, often facing challenges with legacy technology. Recent years have seen increased investment in upgrading these platforms to be more agile, data-driven, and accessible. This $11.1 million contract for the USDS Servicer's readiness and go-live represents a specific, targeted investment within this broader trend. It signifies a commitment to deploying a new or significantly upgraded system designed to meet contemporary demands for efficiency, security, and user interaction in the student loan servicing domain.

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

Solicitation ID: 91003122R0007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1891 METRO CENTER DR, RESTON, VA, 20190

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: $11,079,060

Exercised Options: $11,079,060

Current Obligation: $11,079,060

Actual Outlays: $7,874,941

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003123D0001

IDV Type: IDC

Timeline