Department of Education awards $145M contract to Navient for student financial aid servicing
Contract Overview
Contract Amount: $145,406,696 ($145.4M)
Contractor: Navient Corporation
Awarding Agency: Department of Education
Start Date: 2017-09-01
End Date: 2018-08-31
Contract Duration: 364 days
Daily Burn Rate: $399.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 09/01/2017 TO 08/31/2018. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L.111-152, 124 STAT. 1029) FOR THE PERIOD OF 09/01/2017 TO 08/31/2018. MODIFICATION TO PROVIDE FUNDING FOR PERIOD OF PERFORMANCE: 9/01/2017 - 8/31/2018 AND TITLE IV AID SERVICING THROUGH APPROXIMATELY 12/31/2017.
Place of Performance
Location: WILMINGTON, NEW CASTLE County, DELAWARE, 19801
State: Delaware Government Spending
Plain-Language Summary
Department of Education obligated $145.4 million to NAVIENT CORPORATION for work described as: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 09/01/2017 TO 08/31/2018. TASK ORDER: SERVICING… Key points: 1. The contract focuses on servicing Title IV student financial aid, a critical function for federal student loan programs. 2. Navient Corporation, the awardee, has a significant role in student loan servicing. 3. The award was made under full and open competition, suggesting a competitive bidding process. 4. The contract value is substantial at over $145 million for a one-year period. 5. The sector is related to credit intermediation and financial services for education.
Value Assessment
Rating: fair
The contract value of $145.4 million for one year of student financial aid servicing appears to be within a reasonable range for such a large-scale operation. Benchmarking against similar large federal student loan servicing contracts would provide a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. The specific pricing discovery mechanisms used during the bidding process are not detailed, but the competitive nature is a positive indicator for price discovery.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best value through a competitive process.
Public Impact
Millions of students relying on federal financial aid will be directly impacted by the services provided under this contract. The efficient servicing of student loans is crucial for the financial health of borrowers and the government's student loan portfolio. Navient's performance in managing these services affects student loan repayment processes, default rates, and borrower support. Transparency in the servicing process is important for maintaining public trust in the student financial aid system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in with large, long-term contracts.
- Complexity of student loan servicing can lead to administrative inefficiencies.
- Dependence on a single contractor for critical financial aid functions.
Positive Signals
- Awarded through full and open competition.
- Contract supports a critical government function.
- Clear period of performance and defined task order.
Sector Analysis
This contract falls within the 'Other Activities Related to Credit Intermediation' sector, specifically focusing on the servicing of federal student financial aid. Spending in this area is significant due to the large volume of federal student loans.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. The contract was awarded under full and open competition, suggesting that large businesses were likely the primary participants.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. The Inspector General (IG) may conduct audits or reviews to ensure compliance and effectiveness, but specific oversight activities are not detailed in this award notice.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for service disruptions if contractor performance falters.
- Reliance on a single entity for critical student aid functions.
- Complexity of student loan servicing may lead to unforeseen costs or issues.
- Past controversies or criticisms regarding student loan servicers could pose reputational risk.
Tags
other-activities-related-to-credit-inter, department-of-education, de, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $145.4 million to NAVIENT CORPORATION. IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 09/01/2017 TO 08/31/2018. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L.111-152, 124 STAT. 1029) FOR THE PERIOD OF 09/01/2017 TO 08/31/2018. MODIFICATION TO
Who is the contractor on this award?
The obligated recipient is NAVIENT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $145.4 million.
What is the period of performance?
Start: 2017-09-01. End: 2018-08-31.
What are the key performance indicators (KPIs) for Navient in servicing Title IV student financial aid, and how are they measured and enforced?
Key performance indicators likely include metrics related to timely processing of applications, accurate disbursement of funds, efficient handling of loan repayments, effective communication with borrowers, and low error rates. Enforcement mechanisms would typically involve contract clauses with penalties for non-performance and incentives for exceeding targets. The Department of Education's contract management team would monitor these KPIs regularly.
What is the historical performance record of Navient Corporation in fulfilling similar federal student loan servicing contracts?
Navient has a long history of servicing federal and private student loans. Its performance has been subject to scrutiny, with both praise for efficiency and criticism regarding customer service and compliance in certain areas. A thorough review would involve examining past contract performance evaluations, any reported compliance issues, and borrower satisfaction data from previous federal contracts.
How does the pricing structure of this $145 million contract compare to industry benchmarks for student financial aid servicing, considering the scope and duration?
Without detailed pricing breakdowns (e.g., cost per loan serviced, cost per transaction), a precise benchmark comparison is difficult. However, the total value suggests a significant volume of loans. Industry benchmarks would consider factors like the complexity of Title IV regulations, the number of borrowers managed, and the range of services provided (e.g., repayment options, default aversion). The 'fair' rating suggests it's not exceptionally high or low relative to expectations.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 123 S JUSTISON ST STE 300, WILMINGTON, DE, 19801
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $149,709,604
Exercised Options: $149,709,604
Current Obligation: $145,406,696
Actual Outlays: $144,491
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: EDFSA09D0015
IDV Type: IDC
Timeline
Start Date: 2017-09-01
Current End Date: 2018-08-31
Potential End Date: 2018-08-31 00:00:00
Last Modified: 2020-09-18
More Contracts from Navient Corporation
- Base Award: Servicing of Title IV Student Financial AID. Task Order: Provides Funding for Title IV AID Servicing, Through Approximately 08/31/2017 — $146.7M (Department of Education)
- Critical Function Base Award: Servicing of Title IV Student Financial AID, in Accordance With Section 2212 of the Health Care and Education Reconciliation ACT of 2010 (pub.l. 111-152, 124 Stat. 1029) for the Period of 6/17/2014 to 6/16/2019. Task Order: Servicing of Title IV Student Financial AID in Accordance With Section 2212 of the Health Care and Education Reconciliation ACT of 2010 (pub.l.111-152, 124 Stat. 1029) for the Period of 09/01/2018 to 08/31/2019. Modification: the Purpose of This Modification IS to Create a NEW Task Order for Contract Ed-Fsa-09-D-0015 With the Period of Performance: 9/01/2018 - 8/31/2019, and Provide Funding for Title IV AID Servicing Through Approximately 12/31/2018 — $143.6M (Department of Education)
- / Critical Function Idiq: Servicing of Title IV Student Financial AID. Task Order: Servicing of Title IV Student Financial AID, From 9/1/2015 Through 8/31/2016. Provides Funding for Title IV AID Servicing Through Approximately 12/31/2015. Provides Funding for the Delinquency Reduction Compensation Program, in a Not-To-Exceed Amount of $500,000 PER Quarter and $2,000,000 Annually — $141.2M (Department of Education)
- / Critical Function Idiq: Servicing of Title IV Student Financial AID. Task Order: Servicing of Title IV Student Financial AID, From 9/1/2014 Through 8/31/2015. Provides Funding for Title IV AID Servicing and Development and Maintenance, Through Approximately 12/31/2014. Provides Funding for the Delinquency Reduction Compensation Program, in a Not-To-Exceed Amount of $500,000 PER Quarter and $2,000,000 Annually — $133.9M (Department of Education)
- Critical Function - Task Order 0001 Provides Servicing of Title IV Student Financial AID in Accordance With Section 2212 of the Health Care and Education Reconciliation ACT of 2010 (pub.l.111-152, 124 Stat. 1029)FOR the January 01, 2013 to December 31, 2013 Time Period — $108.0M (Department of Education)
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