DoD's $71M Call Center Contract with Ceridian LLC Awarded in 2007 Shows Mixed Value and Limited Competition Insights

Contract Overview

Contract Amount: $71,134,327 ($71.1M)

Contractor: Ceridian LLC

Awarding Agency: Department of Defense

Start Date: 2007-06-30

End Date: 2008-09-30

Contract Duration: 458 days

Daily Burn Rate: $155.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 1-800 CALL CENTER OPERATIONS

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55401

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $71.1 million to CERIDIAN LLC for work described as: 1-800 CALL CENTER OPERATIONS Key points: 1. The contract's value of $71.1 million over its period of performance suggests a significant investment in call center operations. 2. Awarded under full and open competition, the contract's pricing and value for money require deeper analysis against benchmarks. 3. The relatively short duration of 458 days may indicate a specific, time-bound need or a pilot program. 4. Performance context is limited without specific metrics on call volume, resolution rates, or customer satisfaction. 5. The contract falls under 'Other Individual and Family Services,' suggesting a focus on support for personnel or their families. 6. The absence of small business set-aside flags warrants examination of subcontracting opportunities. 7. The firm-fixed-price structure aims to control costs but relies on accurate initial scope definition.

Value Assessment

Rating: fair

Benchmarking the value of this $71.1 million contract is challenging without detailed performance data and comparable contract specifics. The firm-fixed-price award suggests an attempt to control costs, but the actual value delivered depends heavily on the efficiency and effectiveness of the call center operations. Without insights into per-call costs or service level agreement adherence, it's difficult to definitively assess if this represented excellent value for money. The contract's duration of just over a year also makes long-term value assessment complex.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, the number of bidders is not specified, which is crucial for understanding the true level of competition. A robust competition typically leads to better pricing and innovation. If only a few bids were received despite open competition, it could suggest market limitations or high barriers to entry for this specific service.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing. However, without knowing the number of bids, it's difficult to ascertain if the government secured the best possible price or if the competition was sufficiently robust to drive down costs effectively.

Public Impact

Beneficiaries likely include Department of Defense personnel and potentially their families who require support services. The services delivered involve call center operations, suggesting assistance with inquiries, information dissemination, or problem resolution. The geographic impact is primarily tied to the operational location of the call center, likely within Minnesota based on the award data. Workforce implications include the creation of jobs related to call center management, staffing, and support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the quality and efficiency of the call center operations.
The relatively short contract duration might indicate a need for follow-on contracts, potentially leading to re-competition challenges or continuity issues.
Without specific data on call volume and resolution rates, it's hard to gauge the true demand and effectiveness of the services provided.
The absence of explicit small business participation details raises questions about opportunities for smaller firms in this contract.

Positive Signals

Awarded under full and open competition, suggesting a broad market solicitation.
The firm-fixed-price contract type provides cost certainty for the government, assuming the scope was well-defined.
The contract was awarded to Ceridian LLC, a known entity in HR and payroll services, potentially indicating a reliable provider.
The contract falls under a specific NAICS code (624190), indicating a defined service category.

Sector Analysis

This contract for call center operations falls within the broader professional, scientific, and technical services sector, specifically related to individual and family services. The market for call center outsourcing is substantial, with government agencies being significant clients. Comparable spending benchmarks would involve analyzing other federal contracts for similar call center support services, considering factors like volume, complexity, and duration. The $71.1 million total award value places this contract in the mid-to-large range for a single-award service contract of its type.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the competition was open to all business sizes. While this maximizes the pool of potential bidders, it also means that specific opportunities for small businesses to directly participate as the prime contractor were not mandated. Analysis of subcontracting plans, if any, would be necessary to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver services within the agreed-upon cost. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Call Center Services
Individual and Family Support Services Contracts
Federal Contact Center Operations
Ceridian LLC Government Contracts

Risk Flags

Limited Performance Data
Short Contract Duration
Unspecified Number of Bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.1 million to CERIDIAN LLC. 1-800 CALL CENTER OPERATIONS

Who is the contractor on this award?

The obligated recipient is CERIDIAN LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $71.1 million.

What is the period of performance?

Start: 2007-06-30. End: 2008-09-30.

What was the specific nature of the '1-800 CALL CENTER OPERATIONS' provided under this contract?

The contract data indicates the service category as '1-800 CALL CENTER OPERATIONS' under NAICS code 624190, 'Other Individual and Family Services.' This suggests the call center was likely responsible for providing information, support, or assistance to individuals and families related to specific programs or benefits administered by the Department of the Army. Without further documentation, the exact scope could range from general inquiries to specialized support, such as benefits navigation, administrative assistance, or crisis intervention, tailored to the needs of the military community or their dependents.

How does the awarded amount of $71.1 million compare to similar federal call center contracts?

Comparing the $71.1 million award requires context on the contract's duration and scope. This contract had a period of performance of 458 days (approximately 15 months). If this represents the total value over that period, it suggests an average annual spending of roughly $57 million. Federal call center contracts can vary widely in cost based on call volume, complexity of inquiries, required staffing levels, and technology used. Larger, multi-year contracts for comprehensive support services can easily exceed hundreds of millions of dollars. This $71.1 million award, for a relatively short term, indicates a significant but not exceptionally large investment for a specialized call center operation within the DoD.

What are the key risk indicators associated with this contract?

Key risk indicators include the limited duration (458 days), which might suggest a short-term need or a pilot program, potentially leading to continuity risks if not properly managed or followed up. The lack of detailed performance metrics in the award data makes it difficult to assess operational risks related to service quality, efficiency, and customer satisfaction. Furthermore, while awarded under full and open competition, the number of bidders is not specified, which could indicate potential market concentration or barriers to entry, posing a risk if the primary contractor faces performance issues or ceases operations.

What does the firm-fixed-price contract type imply about cost control and potential risks?

A firm-fixed-price (FFP) contract type implies that the contractor, Ceridian LLC, agreed to perform the work for a predetermined price, regardless of the actual costs incurred. This structure is generally favored by the government for its cost certainty, as it shifts the risk of cost overruns to the contractor. For this $71.1 million contract, it means the DoD had a clear budget expectation. The primary risk associated with FFP contracts lies in the potential for the contractor to cut corners on quality or service to maintain profitability if the initial price was set too low or if unforeseen challenges arise. Conversely, if the contractor is highly efficient, they can achieve higher profit margins.

What is the historical spending pattern for similar call center operations within the Department of the Army?

Analyzing historical spending patterns for similar call center operations within the Department of the Army requires access to comprehensive contract databases over multiple fiscal years. Without that specific data, it's difficult to provide a precise historical context for this $71.1 million award. However, federal agencies, including the DoD, consistently utilize call centers for various functions, from HR and benefits support to logistics and public affairs. Spending in this area can fluctuate based on evolving needs, technological advancements, and shifts towards outsourcing versus in-house operations. The trend has generally been towards increased reliance on specialized service providers for efficiency and cost-effectiveness, suggesting sustained or growing investment in such services.

What is the significance of the NAICS code 624190 ('Other Individual and Family Services') in relation to this DoD contract?

The assignment of NAICS code 624190, 'Other Individual and Family Services,' to this Department of Defense contract is significant as it categorizes the call center's function. This code typically covers establishments primarily engaged in providing social assistance and support services to individuals and families in their homes or communities. For the DoD, this could translate to services supporting military families, such as assistance with relocation, benefits information, counseling referrals, or other personal support services. It indicates that the call center's operations were geared towards a social service function rather than purely administrative or technical support, highlighting a focus on the well-being and support infrastructure for personnel and their families.

Industry Classification

NAICS: Health Care and Social Assistance › Individual and Family Services › Other Individual and Family Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Foundation Holdings, Inc. (UEI: 808416841)

Address: 3311 E OLD SHAKOPEE RD, MINNEAPOLIS, MN, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,800,619

Exercised Options: $71,134,327

Current Obligation: $71,134,327

Contract Characteristics

Cost or Pricing Data: YES

Timeline