Department of Education awards $28.4M contract for contact center support to Missouri Higher Education Loan Authority

Contract Overview

Contract Amount: $28,449,026 ($28.4M)

Contractor: Missouri Higher Education Loan Authority

Awarding Agency: Department of Education

Start Date: 2024-11-01

End Date: 2026-10-31

Contract Duration: 729 days

Daily Burn Rate: $39.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: STEADY-STATE TASK ORDER 2 AWARDED AGAINST MOHELA'S NEXT GEN (NG) BUSINESS PROCESS OPERATIONS (BPO) IDIQ CONTRACT FOR NON-SERVICING AND SPECIALTY PROGRAMS (SPS) CONTACT CENTER SUPPORT AND BACK-OFFICE PROCESSING.

Place of Performance

Location: CHESTERFIELD, SAINT LOUIS County, MISSOURI, 63005

State: Missouri Government Spending

Plain-Language Summary

Department of Education obligated $28.4 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for work described as: STEADY-STATE TASK ORDER 2 AWARDED AGAINST MOHELA'S NEXT GEN (NG) BUSINESS PROCESS OPERATIONS (BPO) IDIQ CONTRACT FOR NON-SERVICING AND SPECIALTY PROGRAMS (SPS) CONTACT CENTER SUPPORT AND BACK-OFFICE PROCESSING. Key points: 1. Contract awarded against an existing IDIQ for specialized contact center and back-office processing. 2. The award is for non-servicing and specialty programs, indicating a specific niche requirement. 3. The contract value of $28.4M over two years suggests a significant operational need. 4. The vendor, MOHELA, is a state authority, not a typical private sector contractor.

Value Assessment

Rating: fair

The contract value of $28.4M over 729 days results in a daily burn rate of approximately $38,900. Without specific performance metrics or comparable contract data, assessing value is difficult. However, the firm-fixed-price structure provides some cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition against an existing IDIQ, suggesting a competitive process. However, the specific IDIQ vehicle (MOHELA's Next Gen BPO) may limit the pool of eligible bidders.

Taxpayer Impact: Taxpayer funds are being used for contact center and back-office processing, which is a standard government function. The cost-effectiveness depends on the efficiency and quality of services provided by MOHELA.

Public Impact

Ensures continued support for critical student loan programs, impacting borrowers. Maintains essential back-office processing functions for the Department of Education. Supports a state-level entity, potentially diverting funds from private sector competition. Provides stability for program operations through a multi-year award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to IDIQ structure.
State authority as vendor may have different operational efficiencies than private firms.
Lack of detailed performance metrics makes value assessment challenging.

Positive Signals

Awarded under full and open competition.
Firm-fixed-price contract provides cost predictability.
Steady-state task order indicates ongoing need and established relationship.

Sector Analysis

The IT and financial services sector is heavily involved in government contracting for back-office and customer support. Benchmarks for similar contact center operations vary widely based on complexity and volume, but $28.4M over two years for specialized programs suggests a substantial operation.

Small Business Impact

The contract was awarded to the Missouri Higher Education Loan Authority, a state entity, not a small business. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The award is a task order against an existing IDIQ, implying prior oversight of the IDIQ vehicle itself. The Department of Education's contracting office is responsible for oversight of this specific task order, ensuring compliance with terms and conditions.

Related Government Programs

Financial Transactions Processing, Reserve, and Clearinghouse Activities
Department of Education Contracting
Department of Education Programs

Risk Flags

Potential for vendor lock-in due to IDIQ structure.
Lack of transparency on specific performance metrics.
State entity may not have the same competitive pressures as private firms.
Limited insight into the specific 'specialty programs' supported.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $28.4 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY. STEADY-STATE TASK ORDER 2 AWARDED AGAINST MOHELA'S NEXT GEN (NG) BUSINESS PROCESS OPERATIONS (BPO) IDIQ CONTRACT FOR NON-SERVICING AND SPECIALTY PROGRAMS (SPS) CONTACT CENTER SUPPORT AND BACK-OFFICE PROCESSING.

Who is the contractor on this award?

The obligated recipient is MISSOURI HIGHER EDUCATION LOAN AUTHORITY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.4 million.

What is the period of performance?

Start: 2024-11-01. End: 2026-10-31.

What specific metrics define 'success' for this contact center support and back-office processing, and how will they be measured against the $28.4M investment?

Success metrics would typically include call answer rates, average handling time, first-call resolution, data accuracy in back-office processing, and customer satisfaction scores. These should be clearly defined in the contract's performance work statement. The $28.4M investment needs to be benchmarked against these metrics to determine if the cost is justified by the achieved service levels and operational efficiency.

Given MOHELA is a state authority, what are the potential risks associated with using a non-traditional government contractor for these critical functions?

Risks include potential differences in agility, technological adoption rates, and cost structures compared to private sector competitors. There might also be unique compliance or reporting requirements for state entities. However, MOHELA's established role in higher education finance could also offer specialized expertise and stability, mitigating some risks.

How does the firm-fixed-price structure ensure cost-effectiveness for specialized contact center and back-office processing, especially if program needs fluctuate?

The firm-fixed-price structure provides cost certainty for the government, shifting the risk of cost overruns to the contractor. It is effective when requirements are well-defined and stable. If program needs fluctuate significantly, the fixed price might become less cost-effective if the contractor is overpaid for reduced services or under-resourced for increased demand, necessitating careful scope management.

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) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 633 SPIRIT DR, CHESTERFIELD, MO, 63005

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

Financial Breakdown

Contract Ceiling: $77,884,294

Exercised Options: $44,399,233

Current Obligation: $28,449,026

Actual Outlays: $16,206,814

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003120D0002

IDV Type: IDC

Timeline