VA's $13M Loan Servicing Contract Awarded to Bank of America

Contract Overview

Contract Amount: $13,024,813 ($13.0M)

Contractor: Bank of America, National Association

Awarding Agency: Department of Veterans Affairs

Start Date: 2006-03-27

End Date: 2013-07-16

Contract Duration: 2,668 days

Daily Burn Rate: $4.9K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LOAN SERVICING

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20420, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.0 million to BANK OF AMERICA, NATIONAL ASSOCIATION for work described as: LOAN SERVICING Key points: 1. Significant contract value of $13 million for loan servicing. 2. Awarded to a major financial institution, Bank of America. 3. Contract duration of 2668 days indicates a long-term need. 4. The NAICS code 523999 suggests a broad category of financial activities.

Value Assessment

Rating: fair

The contract value of $13 million over approximately 7 years suggests a substantial investment in loan servicing. Benchmarking against similar contracts for financial services would be necessary to fully assess pricing effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract type is 'COMPETITIVE DELIVERY ORDER', indicating competition was involved. However, the specific details of the competition and how price discovery was achieved are not provided, making it difficult to assess the full impact on pricing.

Taxpayer Impact: Taxpayer funds are being utilized for loan servicing, a necessary function. The efficiency and cost-effectiveness of this contract will determine the ultimate taxpayer impact.

Public Impact

Impacts veterans who rely on VA loan programs. Ensures the smooth operation of VA's financial obligations. Potential for improved or degraded service based on vendor performance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition information.
Long contract duration without clear performance metrics.

Positive Signals

Awarded to a well-established financial institution.
Competitive delivery order suggests some level of market vetting.

Sector Analysis

This contract falls under financial services, specifically loan servicing. Spending in this sector is crucial for government agencies managing financial assets and obligations. Benchmarks for similar loan servicing contracts would provide context for the $13 million award.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine if small business participation was sought or achieved.

Oversight & Accountability

Oversight of this contract would involve monitoring Bank of America's performance in loan servicing, ensuring compliance with VA regulations, and managing financial disbursements. Accountability would rest with the VA contracting officers to ensure the contract meets its objectives.

Related Government Programs

Miscellaneous Financial Investment Activities
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Lack of transparency on competition details.
Potential for vendor lock-in due to long duration.
No explicit mention of small business participation.
Broad NAICS code may obscure specific service details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.0 million to BANK OF AMERICA, NATIONAL ASSOCIATION. LOAN SERVICING

Who is the contractor on this award?

The obligated recipient is BANK OF AMERICA, NATIONAL ASSOCIATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $13.0 million.

What is the period of performance?

Start: 2006-03-27. End: 2013-07-16.

What specific loan servicing functions are covered under this contract, and how do they align with VA's mission?

The contract covers miscellaneous financial investment activities (NAICS 523999), which likely includes tasks such as processing loan payments, managing escrow accounts, handling delinquencies, and potentially foreclosures for VA-backed loans. These functions are critical to supporting veterans utilizing VA home loan guarantees and ensuring the financial integrity of the program.

What were the key factors considered in the competitive delivery order process that led to selecting Bank of America?

While the award was a competitive delivery order, the specific evaluation criteria and the number of competing bids are not detailed. Typically, such processes consider factors like past performance, technical capabilities, price, and adherence to service level agreements. Bank of America's established presence and experience in financial services likely played a significant role.

How does the $13 million contract value compare to industry benchmarks for similar loan servicing contracts of this duration?

Without specific details on the scope of services and the number of loans serviced, a direct benchmark is challenging. However, $13 million over nearly 7 years for a major financial institution suggests a potentially competitive rate if the volume and complexity of loans are substantial. A detailed cost-benefit analysis against industry standards is recommended.

Industry Classification

NAICS: Finance and Insurance › Other Financial Investment Activities › Miscellaneous Financial Investment Activities

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bank of America Corporation (UEI: 055169452)

Address: 101 S TRYON ST STE 1000, CHARLOTTE, NC, 28280

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,027,813

Exercised Options: $13,027,813

Current Obligation: $13,024,813

Parent Contract

Parent Award PIID: GS23F0314K

IDV Type: FSS

Timeline