Department of Education's $1.5B Title IV Student Aid IT Contract with Accenture Faces Scrutiny

Contract Overview

Contract Amount: $1,507,684,723 ($1.5B)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Education

Start Date: 2015-03-01

End Date: 2025-07-31

Contract Duration: 3,805 days

Daily Burn Rate: $396.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF - TIVOD SUPPORTS THE ORIGINATION, DISBURSEMENT, AND REPORTING OF TITLE IV FEDERAL STUDENT AID PROGRAMS, INCLUDING - BUT NOT LIMITED TO - DIRECT LOANS, PELL GRANTS, AND THE TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS. THE TITLE IV SOLUTION SHALL ALSO PROVIDE ONGOING SUPPORT FOR THE DISCONTINUED TITLE IV FEDERAL STUDENT AID PROGRAMS, INCLUDING - BUT NOT LIMITED TO - ACADEMIC COMPETITIVENESS GRANTS AND NATIONAL SCIENCE AND MATHEMATICS ACCESS TO RETAIN TALENT GRANTS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20202

State: District of Columbia Government Spending

Plain-Language Summary

Department of Education obligated $1.51 billion to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::CL::IGF - TIVOD SUPPORTS THE ORIGINATION, DISBURSEMENT, AND REPORTING OF TITLE IV FEDERAL STUDENT AID PROGRAMS, INCLUDING - BUT NOT LIMITED TO - DIRECT LOANS, PELL GRANTS, AND THE TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS. THE TITLE IV SOLUTION SHA… Key points: 1. The contract supports critical federal student aid programs, including Direct Loans and Pell Grants. 2. Accenture Federal Services LLC holds the contract, awarded through full and open competition. 3. The contract's duration extends to July 2025, with a significant value of over $1.5 billion. 4. Concerns may arise regarding the long-term value and potential cost overruns given the contract's scope and duration.

Value Assessment

Rating: questionable

The contract value of $1.5 billion over approximately 10 years is substantial. Benchmarking against similar large-scale IT support contracts for federal programs is difficult without more granular cost data, but the per-year cost is significant.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded through full and open competition, this method should theoretically lead to competitive pricing. However, the long duration and complex scope might limit true price discovery over time.

Taxpayer Impact: The significant investment aims to ensure the continued operation of vital student aid programs, but the overall taxpayer impact depends on the efficiency and effectiveness of the services provided.

Public Impact

Ensures continued access to federal student financial aid for millions of students. Supports the operational integrity of programs like Pell Grants and Direct Loans. Potential for long-term IT infrastructure modernization within the Department of Education. Risk of service disruptions or inefficiencies if contract management is not robust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration
High total contract value
Potential for scope creep

Positive Signals

Supports critical student aid programs
Awarded via full and open competition

Sector Analysis

This contract falls within the IT services sector, specifically supporting financial aid operations. Benchmarks for large, long-term IT support contracts for government agencies vary widely based on complexity and scope.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as Accenture Federal Services LLC is a large corporation. There is no indication of subcontracting opportunities for small businesses within this data.

Oversight & Accountability

Oversight will be crucial given the contract's value and duration. The Department of Education's contracting office and potentially an Inspector General would be responsible for monitoring performance, costs, and adherence to contract terms.

Related Government Programs

Other Activities Related to Credit Intermediation
Department of Education Contracting
Department of Education Programs

Risk Flags

High total contract value
Long contract duration
Potential for vendor lock-in
Complexity of supporting legacy and current programs
Reliance on a single large contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $1.51 billion to ACCENTURE FEDERAL SERVICES LLC. IGF::CL::IGF - TIVOD SUPPORTS THE ORIGINATION, DISBURSEMENT, AND REPORTING OF TITLE IV FEDERAL STUDENT AID PROGRAMS, INCLUDING - BUT NOT LIMITED TO - DIRECT LOANS, PELL GRANTS, AND THE TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS. THE TITLE IV SOLUTION SHALL ALSO PROVIDE ONGOING SUPPORT FOR THE DISCONTINUED TITLE IV FEDERAL STUDENT AID PROGRAMS, INCLUDING - BUT NOT LIMITED TO - ACADEMIC COMPETITIVENESS GRANTS AND NATIONAL SCIENCE AND MATHEMATICS ACCESS TO RETAIN TALENT GR

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $1.51 billion.

What is the period of performance?

Start: 2015-03-01. End: 2025-07-31.

What is the projected cost-effectiveness of this contract over its full term, considering potential technological advancements and program changes?

Assessing cost-effectiveness requires a detailed analysis of the contract's performance metrics against its cost. Without specific data on deliverables, efficiency gains, and the total cost of ownership, it's difficult to determine if the $1.5 billion investment represents good value. Future technological shifts or program modifications could necessitate contract adjustments, impacting the overall cost-effectiveness.

What are the primary risks associated with the long duration and extensive scope of this IT support contract?

The primary risks include potential cost overruns due to scope creep or unforeseen technical challenges, vendor lock-in limiting future flexibility, and the possibility of the technology becoming outdated before the contract ends. Ensuring robust contract management, regular performance reviews, and clear change control processes are vital to mitigate these risks.

How effectively does this contract ensure the continuous and secure operation of critical federal student aid programs?

The contract's effectiveness hinges on Accenture's ability to maintain and enhance the TIVOD system, which is central to student aid. Success depends on the vendor's technical expertise, adherence to security protocols, and the Department of Education's oversight. Continuous monitoring of system uptime, data integrity, and user satisfaction is necessary to gauge effectiveness.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Other Activities Related to Credit Intermediation

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $1,518,955,814

Exercised Options: $1,514,145,008

Current Obligation: $1,507,684,723

Actual Outlays: $913,820,187

Subaward Activity

Number of Subawards: 447

Total Subaward Amount: $185,206,853

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline