Department of Education Spends $30.7M on Collection Agencies for Delinquent Loans
Contract Overview
Contract Amount: $30,760,764 ($30.8M)
Contractor: National Asset Management Ente
Awarding Agency: Department of Education
Start Date: 2003-12-05
End Date: 2005-03-31
Contract Duration: 482 days
Daily Burn Rate: $63.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 50
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: PROVIDING THE U.S. DEPARTMENT OF EDUCATION A MEANS OF CONTROLLING DELINQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTION RELATED TO IDENTIFYING DEFAULTED LOANS AND BILLING DEFAULTED BORROWERS
Place of Performance
Location: GEORGIA
State: Georgia Government Spending
Plain-Language Summary
Department of Education obligated $30.8 million to NATIONAL ASSET MANAGEMENT ENTE for work described as: PROVIDING THE U.S. DEPARTMENT OF EDUCATION A MEANS OF CONTROLLING DELINQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTION RELATED TO IDENTIFYING DEFAULTED LOANS AND BILLING DEFAULTED BORROWERS Key points: 1. The contract focuses on managing defaulted student loan accounts, a critical function for the Department of Education. 2. National Asset Management Enterprise is the sole contractor, raising questions about competition. 3. The contract's duration and fixed-price nature suggest potential risks if costs escalate. 4. Collection agencies are a vital but often scrutinized sector within government contracting.
Value Assessment
Rating: fair
The contract's total value of $30.7 million over approximately 1.5 years is difficult to assess without specific performance metrics or per-unit cost data. However, the fixed-price nature suggests the government aimed to control costs upfront.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION,' but the data indicates only one awardee. This suggests that while the opportunity was open, only one entity was selected or capable of performing the service, potentially limiting price discovery.
Taxpayer Impact: The use of collection agencies aims to recover funds from defaulted loans, ultimately benefiting taxpayers by reducing the burden of unrecovered debt.
Public Impact
Ensures the Department of Education can effectively manage and recover funds from defaulted student loans. Supports the financial health of federal student loan programs. Provides a mechanism for addressing delinquent borrowers and preventing further financial strain on the government.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition despite 'Full and Open' designation.
- Fixed-price contract may not adapt to unforeseen collection complexities.
- Lack of detailed performance metrics makes value assessment challenging.
Positive Signals
- Addresses a critical need for debt recovery.
- Contract aims to control costs through a fixed-price structure.
Sector Analysis
The collection agency sector is crucial for government entities managing receivables. Spending benchmarks vary widely based on the type of debt and recovery rates, but consistent oversight is key to ensuring efficiency and fairness.
Small Business Impact
The provided data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The contract was awarded by the Department of Education, which is responsible for oversight. However, the limited competition and fixed-price nature warrant scrutiny to ensure effective performance and taxpayer value.
Related Government Programs
- Collection Agencies
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for limited competition.
- Fixed-price contract rigidity.
- Lack of performance metrics.
- Difficulty in assessing true value for money.
Tags
collection-agencies, department-of-education, ga, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $30.8 million to NATIONAL ASSET MANAGEMENT ENTE. PROVIDING THE U.S. DEPARTMENT OF EDUCATION A MEANS OF CONTROLLING DELINQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTION RELATED TO IDENTIFYING DEFAULTED LOANS AND BILLING DEFAULTED BORROWERS
Who is the contractor on this award?
The obligated recipient is NATIONAL ASSET MANAGEMENT ENTE.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $30.8 million.
What is the period of performance?
Start: 2003-12-05. End: 2005-03-31.
What was the average recovery rate achieved under this contract, and how does it compare to industry benchmarks for similar debt collection services?
The provided data does not include specific recovery rates. To assess the contract's value, an analysis of the funds recovered versus the contract cost would be necessary. Comparing this to industry benchmarks for defaulted student loans would reveal if the chosen agency performed efficiently and effectively.
Given the 'Full and Open Competition' designation, why was only one award made, and what were the criteria that led to this limited award?
The designation 'Full and Open Competition' indicates the solicitation was broadly advertised. However, the single award suggests that either only one offer was received, or only one offer met the technical and cost requirements. Understanding the specific evaluation criteria and the number of proposals received is crucial to assessing the true level of competition.
How does the per-account cost of managing defaulted loans under this contract compare to other methods or contracts used by the Department of Education?
Without specific data on the number of accounts managed and the associated costs, a direct per-account cost comparison is not possible. Benchmarking against other contracts or internal efforts would require detailed operational data. This information is essential for evaluating the cost-effectiveness of this specific contract.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Collection Agencies
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 50
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 2253 NORTHWEST PARKWAY, MARIETTA, GA, 11
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $52,164,108
Exercised Options: $45,164,108
Current Obligation: $30,760,764
Timeline
Start Date: 2003-12-05
Current End Date: 2005-03-31
Potential End Date: 2005-08-31 00:00:00
Last Modified: 2008-02-15
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