CFPB awards $36.5M task order to Rust Consulting for military travel penalty distribution

Contract Overview

Contract Amount: $36,524 ($36.5K)

Contractor: Rust Consulting, Inc.

Awarding Agency: Consumer Financial Protection Bureau

Start Date: 2021-06-18

End Date: 2024-12-31

Contract Duration: 1,292 days

Daily Burn Rate: $28/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TASK ORDER FOR EASY MILITARY TRAVEL (EMT) 3RD PARTY CIVIL PENALTY FUND DISTRIBUTION

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55402

State: Minnesota Government Spending

Plain-Language Summary

Consumer Financial Protection Bureau obligated $36,523.9 to RUST CONSULTING, INC. for work described as: TASK ORDER FOR EASY MILITARY TRAVEL (EMT) 3RD PARTY CIVIL PENALTY FUND DISTRIBUTION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration extends over three years, indicating a sustained need for these services. 3. Fixed-price contract type helps manage cost certainty for the agency. 4. The task order is a delivery order, a common mechanism for acquiring services under a larger contract. 5. The North American Industry Classification System (NAICS) code 522320 points to financial transaction processing activities. 6. The contract is not set aside for small businesses, implying larger firms were likely participants.

Value Assessment

Rating: fair

The contract value of $36.5 million over approximately 3.5 years averages to about $10.4 million annually. Benchmarking this against similar contracts for financial transaction processing and penalty distribution is challenging without more specific service details. However, the fixed-price nature provides some cost control. The value appears reasonable for a government-wide function, but a detailed cost-benefit analysis would be needed for a definitive assessment of value for money.

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 presence of two bidders suggests a moderate level of competition for this specific task order. While competition is present, the exact number of bids received can influence price discovery. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: A competitive award process generally benefits taxpayers by encouraging lower prices and better service quality from contractors vying for the award.

Public Impact

Service members and veterans who are eligible for penalty fund distributions will benefit from this contract. The contract facilitates the distribution of third-party civil penalties, ensuring funds are allocated appropriately. The geographic impact is likely nationwide, covering all eligible military personnel. The contract supports administrative functions within the Consumer Financial Protection Bureau (CFPB).

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for administrative inefficiencies if the distribution process is not streamlined.
Reliance on a single contractor for a critical financial distribution function carries inherent risk.
Ensuring timely and accurate distribution of funds to all eligible recipients requires robust oversight.

Positive Signals

Awarded through full and open competition, indicating a fair process.
Fixed-price contract type provides cost predictability.
The contract duration suggests a stable and ongoing need, allowing for process optimization.
The contractor, Rust Consulting, Inc., likely has experience in financial transaction processing.

Sector Analysis

This contract falls within the Financial Services sector, specifically focusing on financial transaction processing and reserve activities. The market for government financial processing and distribution services is competitive, with numerous firms specializing in these areas. The size of this contract, $36.5 million, is significant but not exceptionally large within the broader federal IT and financial services landscape. Comparable spending benchmarks would depend on the specific nature of the penalty distribution and the volume of transactions involved.

Small Business Impact

The contract was not awarded as a small business set-aside, and the data does not indicate any specific subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity, and opportunities for small businesses would likely be through subcontracting if Rust Consulting, Inc. chooses to engage them. The absence of set-aside provisions means the primary focus was on obtaining the best value from the overall market.

Oversight & Accountability

Oversight for this contract would primarily reside with the Consumer Financial Protection Bureau (CFPB). As a task order under a larger contract vehicle, the specific oversight mechanisms would be detailed in the contract's terms and conditions. Transparency is generally maintained through contract award notices and reporting requirements. The CFPB has internal audit functions and is subject to oversight by the Government Accountability Office (GAO) and potentially an Inspector General, though the CFPB does not have its own dedicated IG.

Related Government Programs

Consumer Financial Protection Bureau (CFPB) Operations
Financial Transaction Processing Services
Government Penalty Fund Distribution
Military and Veteran Financial Services

Risk Flags

Potential for performance issues impacting timely fund distribution.
Data security and privacy risks associated with financial transactions.
Dependence on a single contractor for a critical function.

Frequently Asked Questions

What is this federal contract paying for?

Consumer Financial Protection Bureau awarded $36,523.9 to RUST CONSULTING, INC.. TASK ORDER FOR EASY MILITARY TRAVEL (EMT) 3RD PARTY CIVIL PENALTY FUND DISTRIBUTION

Who is the contractor on this award?

The obligated recipient is RUST CONSULTING, INC..

Which agency awarded this contract?

Awarding agency: Consumer Financial Protection Bureau (Consumer Financial Protection Bureau).

What is the total obligated amount?

The obligated amount is $36,523.9.

What is the period of performance?

Start: 2021-06-18. End: 2024-12-31.

What is Rust Consulting, Inc.'s track record with government contracts, particularly in financial distribution?

Rust Consulting, Inc. has a history of working with government agencies on financial distribution and claims processing. While specific details on their performance for this particular task order are not publicly available in this data snippet, their engagement by the CFPB suggests they possess the necessary qualifications and experience. Government contractors are typically assessed on past performance during the bidding process. Further investigation into their contract history, including any performance reviews or past issues, would provide a more comprehensive understanding of their reliability in handling sensitive financial operations for federal agencies.

How does the $36.5 million value compare to similar government contracts for penalty distribution?

Directly comparing the $36.5 million value to similar government contracts for penalty distribution is difficult without knowing the exact scope, volume of transactions, and complexity of the 'Easy Military Travel (EMT) 3rd Party Civil Penalty Fund Distribution'. However, for context, large-scale financial processing and distribution contracts for government agencies can range from tens to hundreds of millions of dollars over their lifecycle. The value appears substantial, reflecting the potential volume and administrative requirements of distributing civil penalties to military personnel. Benchmarking would require identifying contracts with analogous functions, such as consumer redress funds or other penalty recovery programs.

What are the primary risks associated with this contract for the CFPB?

The primary risks associated with this contract include potential data security breaches given the sensitive financial information involved, operational failures leading to delayed or incorrect penalty distributions, and contractor performance issues. Ensuring compliance with all relevant financial regulations and consumer protection laws is critical. There's also a risk of reputational damage to the CFPB if the distribution process is perceived as unfair or inefficient by the beneficiaries. The fixed-price nature mitigates cost overrun risks but does not eliminate performance risks.

How effective is the current mechanism for distributing third-party civil penalties to military personnel?

The effectiveness of the current mechanism is not directly measurable from the provided data. However, the award of this task order indicates a continued need for a structured process to distribute these penalties. The CFPB's involvement suggests an effort to ensure compliance and proper allocation of funds. Effectiveness would be gauged by metrics such as the speed of distribution, accuracy of payments, the number of eligible recipients reached, and the overall administrative cost relative to the funds distributed. User feedback from recipients would also be a key indicator.

What has been the historical spending pattern for this type of service by the CFPB or similar agencies?

Historical spending patterns for this specific service by the CFPB are not detailed in the provided data. However, the CFPB was established in 2011, and its mandate includes consumer protection and enforcement, which often involves collecting and distributing penalties. Agencies involved in financial regulation and enforcement, such as the Department of Justice or other financial regulators, may have comparable historical spending on penalty distribution mechanisms. The duration and value of this task order suggest a significant and ongoing requirement, implying that similar or precursor contracts may have existed or that this represents a substantial new initiative.

What are the implications of the contract being a 'Delivery Order' under a larger contract vehicle?

The designation of this award as a 'Delivery Order' signifies that it is a specific task or order placed against an existing, pre-negotiated contract or 'blanket purchase agreement' (BPA). This approach allows agencies to procure goods or services incrementally as needed, often with pre-established terms, conditions, and pricing. For the CFPB, this means they likely leveraged an existing contract vehicle that had already undergone a competitive process, potentially streamlining the acquisition process and ensuring favorable terms. It implies that Rust Consulting, Inc. was awarded a position on a larger IDIQ (Indefinite Delivery/Indefinite Quantity) contract or similar framework, from which this specific delivery order was then issued.

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

Solicitation ID: 9531CB21Q0046

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 625 MARQUETTE AVE STE 900, MINNEAPOLIS, MN, 55402

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

Financial Breakdown

Contract Ceiling: $36,524

Exercised Options: $36,524

Current Obligation: $36,524

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: CFP17D00004

IDV Type: IDC

Timeline