Department of Education Spends $24.6M on Collection Services for Delinquent Accounts
Contract Overview
Contract Amount: $24,643,353 ($24.6M)
Contractor: Allied International Credit CO
Awarding Agency: Department of Education
Start Date: 2003-12-05
End Date: 2005-08-31
Contract Duration: 635 days
Daily Burn Rate: $38.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 50
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: PROVIDE A MEAN OF CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTIONS RELATED TO IDENTIFYING DEFAULTED LOANS BILLING DEFAULTED BORROROWERS, AND PROCESSING REPAYMENTS DEFAULTED FOR THOSE LOAN ASSIGNED TO ED.
Place of Performance
Location: GEORGIA
State: Georgia Government Spending
Plain-Language Summary
Department of Education obligated $24.6 million to ALLIED INTERNATIONAL CREDIT CO for work described as: PROVIDE A MEAN OF CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTIONS RELATED TO IDENTIFYING DEFAULTED LOANS BILLING DEFAULTED BORROROWERS, AND PROCESSING REPAYMENTS DEFAULTED FOR THOSE LOAN ASSIGNED TO ED. Key points: 1. Contract awarded to Allied International Credit Co. for managing defaulted loan transactions. 2. Services include identifying, billing, and processing repayments for defaulted loans. 3. The contract was awarded under full and open competition. 4. This falls under the Collection Agencies NAICS code.
Value Assessment
Rating: fair
The contract value of $24.6 million over approximately two years suggests a significant investment in debt collection services. Benchmarking against similar contracts for collection agencies is difficult without more specific details on performance metrics and recovery rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a competitive bidding process. This method is generally expected to yield fair pricing and efficient service delivery.
Taxpayer Impact: Taxpayer funds are used to recover defaulted loan amounts, aiming to recoup losses and potentially reduce the overall burden of bad debt.
Public Impact
Ensures recovery of federal funds from defaulted student loans. Supports the financial health of federal education programs. Provides a structured process for borrowers to address their defaulted obligations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for high contractor fees impacting net recovery.
- Effectiveness of collection strategies may vary.
- Data privacy and security concerns with borrower information.
Positive Signals
- Competitive award process should drive efficiency.
- Clear objective to recover delinquent funds.
Sector Analysis
This contract falls within the professional services sector, specifically focusing on financial services and debt collection. Spending benchmarks for collection agencies can vary widely based on recovery rates and contract terms.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract. The focus appears to be on a large-scale collection effort.
Oversight & Accountability
Oversight would typically involve monitoring the contractor's performance against agreed-upon metrics, ensuring compliance with regulations, and verifying the accuracy of reported collections and fees.
Related Government Programs
- Collection Agencies
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Contract duration and value may indicate a long-term need for these services.
- Reliance on a single contractor for a critical function.
- Potential for disputes over collection fees and methodologies.
- Effectiveness is tied to the contractor's capabilities and market conditions.
Tags
collection-agencies, department-of-education, ga, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $24.6 million to ALLIED INTERNATIONAL CREDIT CO. PROVIDE A MEAN OF CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS, INCLUDING MANAGING ALL TRANSACTIONS RELATED TO IDENTIFYING DEFAULTED LOANS BILLING DEFAULTED BORROROWERS, AND PROCESSING REPAYMENTS DEFAULTED FOR THOSE LOAN ASSIGNED TO ED.
Who is the contractor on this award?
The obligated recipient is ALLIED INTERNATIONAL CREDIT CO.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $24.6 million.
What is the period of performance?
Start: 2003-12-05. End: 2005-08-31.
What is the expected recovery rate for defaulted loans under this contract, and how does it compare to industry averages?
The expected recovery rate is a critical performance indicator that should be defined in the contract. Without specific performance data or benchmarks, it's difficult to assess the effectiveness. Industry averages for student loan recovery can vary significantly based on borrower demographics, loan types, and collection methods employed.
What are the specific performance metrics used to evaluate Allied International Credit Co.'s success in managing delinquent accounts?
Performance metrics likely include the volume of accounts successfully contacted, the amount of debt recovered, the cost per dollar collected, and borrower satisfaction ratings. These metrics are essential for ensuring the contractor is meeting its obligations and providing value for taxpayer money.
How does the Department of Education ensure the fair treatment of borrowers during the collection process?
The Department of Education likely has established guidelines and regulations that collection agencies must follow to ensure fair treatment, including adherence to the Fair Debt Collection Practices Act (FDCPA). Oversight mechanisms would monitor compliance and address any borrower complaints.
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: 400 TECHNOLOGY CT SE, SMYRNA
Business Categories: Category Business, Not Designated a Small Business, Woman Owned Business
Financial Breakdown
Contract Ceiling: $39,763,328
Exercised Options: $36,763,328
Current Obligation: $24,643,353
Timeline
Start Date: 2003-12-05
Current End Date: 2005-08-31
Potential End Date: 2005-08-31 00:00:00
Last Modified: 2008-03-07
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