Department of Education awards $118.8M for Title IV Student Financial Aid Servicing
Contract Overview
Contract Amount: $118,818,539 ($118.8M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2014-09-01
End Date: 2015-08-31
Contract Duration: 364 days
Daily Burn Rate: $326.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: IGF::CT::IGF / 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.
Place of Performance
Location: LINCOLN, LANCASTER County, NEBRASKA, 68508
State: Nebraska Government Spending
Plain-Language Summary
Department of Education obligated $118.8 million to NELNET SERVICING LLC for work described as: IGF::CT::IGF / 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… Key points: 1. The contract focuses on servicing Title IV student financial aid, including development and maintenance. 2. A significant portion of the funding is allocated to a delinquency reduction compensation program. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The fixed-price with economic price adjustment contract type aims to manage cost fluctuations.
Value Assessment
Rating: good
The contract value of $118.8M for a one-year period appears reasonable for comprehensive student financial aid servicing, considering the scope of development, maintenance, and delinquency reduction programs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Awarded under full and open competition, this method likely ensured competitive pricing and a wide range of potential offerors, leading to a fair market price discovery.
Taxpayer Impact: Taxpayer funds are being used to ensure the efficient servicing of federal student financial aid programs, which is crucial for the education sector.
Public Impact
Ensures continued access to and proper management of federal student financial aid. Supports programs aimed at reducing student loan delinquency, potentially saving taxpayers money in the long run. Provides stability for students and educational institutions relying on these financial aid services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment could lead to cost overruns if not carefully monitored.
- Dependence on a single contractor for critical financial aid servicing.
Positive Signals
- Full and open competition likely secured a competitive price.
- Focus on delinquency reduction program shows proactive financial management.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation,' a sector that supports the financial infrastructure of educational programs. Spending benchmarks are difficult to establish without more granular data on similar comprehensive aid servicing contracts.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to assess small business participation.
Oversight & Accountability
The contract was awarded by the Department of Education, which has oversight responsibilities for federal student financial aid. The task order structure implies specific performance requirements and monitoring.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Lack of transparency on small business participation.
- Dependence on a single vendor for critical functions.
- Performance metrics for delinquency reduction program not detailed.
Tags
other-activities-related-to-credit-inter, department-of-education, ne, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $118.8 million to NELNET SERVICING LLC. IGF::CT::IGF / 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.
Who is the contractor on this award?
The obligated recipient is NELNET SERVICING LLC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $118.8 million.
What is the period of performance?
Start: 2014-09-01. End: 2015-08-31.
What is the specific breakdown of costs for aid servicing versus the delinquency reduction program?
The provided data specifies a not-to-exceed amount for the delinquency reduction program ($500,000 per quarter, $2,000,000 annually). The remaining portion of the $118.8M contract value would cover the core servicing of Title IV student financial aid, including development and maintenance. A detailed cost breakdown would offer greater transparency into resource allocation.
What are the key performance indicators (KPIs) for the delinquency reduction program, and how is success measured?
The effectiveness of the delinquency reduction compensation program is crucial for assessing its value. Key performance indicators might include metrics like reduced delinquency rates, successful recovery of defaulted loans, and cost-effectiveness of the compensation model. Understanding these KPIs would clarify the program's impact on taxpayer burden and student outcomes.
How does the economic price adjustment clause function, and what are the potential risks to the government?
The economic price adjustment (EPA) clause allows for adjustments to the contract price based on specified economic factors, such as inflation. While it can protect contractors from unforeseen cost increases, it also introduces risk for the government if these adjustments lead to significantly higher costs than initially anticipated. Careful monitoring of the EPA triggers and calculations is essential.
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: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Nelnet, Inc. (UEI: 134960447)
Address: 121 S 13TH ST STE 201, LINCOLN, NE, 68508
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $118,818,539
Exercised Options: $118,818,539
Current Obligation: $118,818,539
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: EDFSA09D0013
IDV Type: IDC
Timeline
Start Date: 2014-09-01
Current End Date: 2015-08-31
Potential End Date: 2015-08-31 00:00:00
Last Modified: 2019-07-16
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