Department of Education awards $14.2M contract for student enrollment processing to National Student Clearinghouse

Contract Overview

Contract Amount: $14,238,576 ($14.2M)

Contractor: National Student Clearinghouse

Awarding Agency: Department of Education

Start Date: 2009-07-14

End Date: 2015-01-14

Contract Duration: 2,010 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROCESSING OF STUDENT ENROLLMENT INFORMATION TOTHE NSLDS.

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Education obligated $14.2 million to NATIONAL STUDENT CLEARINGHOUSE for work described as: PROCESSING OF STUDENT ENROLLMENT INFORMATION TOTHE NSLDS. Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost savings through competition. 2. The contract covers a significant period, indicating a long-term need for these student data services. 3. The fixed-price nature of the contract provides cost certainty but may limit flexibility for evolving needs. 4. The service category, 'Other Computer Related Services,' is broad and requires further definition of specific deliverables. 5. The contractor, National Student Clearinghouse, is a key player in managing student data, suggesting specialized expertise.

Value Assessment

Rating: fair

The contract value of $14.2 million over its period of performance appears to be a substantial investment for student enrollment processing. Without comparable contract data for similar services or a detailed breakdown of the services provided, it is difficult to definitively benchmark the value for money. The fixed-price structure suggests a predictable cost, but the absence of competition means there's no market-driven validation of the pricing. Further analysis would require understanding the scope of work and comparing it to industry standards for data processing and management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when there are compelling reasons to avoid a competitive process. The lack of competition means that the Department of Education did not benefit from the price discovery and potential cost reductions that typically arise from a competitive bidding environment. The justification for the sole-source award would need to be examined to understand why alternatives were not pursued.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. The government did not explore potentially more cost-effective solutions that might have been offered by other qualified vendors.

Public Impact

Students and educational institutions benefit from the accurate processing and management of enrollment information. The Department of Education utilizes this service to maintain critical data for federal student aid programs and policy-making. The service supports the National Student Loan Data System (NSLDS), a key component of student financial aid administration. The contract has implications for the administrative efficiency of higher education institutions nationwide by streamlining enrollment verification.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for new or innovative solutions from other vendors.
The long contract duration could lead to vendor lock-in and reduced flexibility.

Positive Signals

Contractor is a specialized entity with established expertise in student data.
Fixed-price contract provides budget certainty for the Department of Education.
Service supports critical functions of the National Student Loan Data System.

Sector Analysis

The contract falls within the broader Information Technology and Data Processing services sector, specifically focusing on specialized data management for educational institutions. This niche involves handling sensitive student information, including enrollment, degrees, and financial aid data. The market for such services is often characterized by a few key players who have developed the necessary infrastructure, security protocols, and relationships with educational bodies. Comparable spending benchmarks would likely be found within contracts related to government data management, student information systems, and educational technology services.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities for small businesses. The nature of the service, processing sensitive national student data, likely requires a highly specialized and established provider, which may limit the feasibility of subcontracting to smaller firms. Further investigation into the contractor's subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Education's contracting officers and program managers. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency regarding the sole-source justification and the specific services rendered is crucial for public accountability. The Inspector General's office for the Department of Education would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

National Student Loan Data System (NSLDS)
Federal Student Aid (FSA)
Student Information Systems
Educational Data Management Services

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $14.2 million to NATIONAL STUDENT CLEARINGHOUSE. PROCESSING OF STUDENT ENROLLMENT INFORMATION TOTHE NSLDS.

Who is the contractor on this award?

The obligated recipient is NATIONAL STUDENT CLEARINGHOUSE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2009-07-14. End: 2015-01-14.

What is the specific scope of 'processing of student enrollment information' covered by this contract?

The contract with the National Student Clearinghouse (NSC) for the 'PROCESSING OF STUDENT ENROLLMENT INFORMATION TOTHE NSLDS' involves the collection, verification, and transmission of student enrollment and degree data to the National Student Loan Data System (NSLDS). This includes confirming student enrollment status, academic progress, and degree conferrals for millions of students across the United States. The NSC acts as a central hub, aggregating data from participating educational institutions and providing it to federal agencies, lenders, and other authorized entities. The service is critical for administering federal student financial aid programs, managing loan repayment, and tracking educational outcomes.

Why was this contract awarded on a sole-source basis instead of being competed?

The contract was awarded on a sole-source basis because the National Student Clearinghouse is considered the primary, authoritative source for comprehensive student enrollment and degree data in the United States. Its extensive network of member institutions, established data aggregation infrastructure, and unique position in the educational ecosystem make it difficult to replicate or substitute. The Department of Education likely determined that NSC possessed unique capabilities and an unparalleled scope of data that could not be met by another vendor without significant duplication of effort, cost, and time. This determination would typically be supported by a Justification for Other than Full and Open Competition (JOFOC).

How does the $14.2 million contract value compare to historical spending on similar services?

The $14.2 million contract value represents the total obligated amount over the contract's performance period, which spanned from July 14, 2009, to January 14, 2015. To assess historical spending, one would need to examine prior contracts for NSLDS data processing services, potentially with the same or different contractors. Given the sole-source nature and the long duration, it's plausible that this contract reflects a continuation of services. Without access to historical contract databases detailing specific annual expenditures for this function, a direct comparison is challenging. However, the figure suggests a significant, ongoing investment in managing national student data.

What are the potential risks associated with a sole-source contract for critical data processing?

The primary risks associated with a sole-source contract for critical data processing include a lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. There is also a reduced incentive for the contractor to innovate or improve services beyond the contractual requirements, as there is no direct competition. Furthermore, reliance on a single provider can create vendor lock-in, making it difficult and costly to switch providers in the future. Security risks are also amplified, as a single point of failure or a data breach at the sole provider could have widespread consequences for the data managed.

What is the National Student Clearinghouse's track record and expertise in handling student data?

The National Student Clearinghouse (NSC) has a long-standing and extensive track record in managing student enrollment and degree data. Established in 1993, it serves as the central source for verifying academic credentials for higher education institutions across the U.S. and internationally. Its expertise lies in its ability to aggregate, verify, and securely manage vast amounts of sensitive student information from over 3,600 postsecondary institutions. NSC is widely recognized for its role in supporting student services, loan servicing, and employment verification, making it a trusted entity within the education sector for data management and compliance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13454 SUNRISE VALLEY DR STE 300, HERNDON, VA, 20171

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: $14,238,576

Exercised Options: $14,238,576

Current Obligation: $14,238,576

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline