USDA's $4.6M contract for loan servicing awarded to Sagent M&C, LLC, without competition

Contract Overview

Contract Amount: $4,604,951 ($4.6M)

Contractor: Sagent M&C, LLC

Awarding Agency: Department of Agriculture

Start Date: 2025-02-07

End Date: 2030-02-06

Contract Duration: 1,825 days

Daily Burn Rate: $2.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS CONTRACT IS TO OBTAIN SUPPORT FOR LOAN/GRANT ORIGINATION AND SERVICING OF THE SINGLE-FAMILY HOUSING DIRECT PORTFOLIO UTILIZING LOANSERV FOR LOAN/GRANT SERVICING. IN ADDITION, HAZARD ELECTRONIC DATA INTERFACE (EDI) SERVICES AND AFT

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $4.6 million to SAGENT M&C, LLC for work described as: THE PURPOSE OF THIS CONTRACT IS TO OBTAIN SUPPORT FOR LOAN/GRANT ORIGINATION AND SERVICING OF THE SINGLE-FAMILY HOUSING DIRECT PORTFOLIO UTILIZING LOANSERV FOR LOAN/GRANT SERVICING. IN ADDITION, HAZARD ELECTRONIC DATA INTERFACE (EDI) SERVICES AND AFT Key points: 1. LoanServ platform for single-family housing direct portfolio servicing. 2. Hazard Electronic Data Interface (EDI) and AFT services included. 3. Contract awarded via Delivery Order, indicating a specific task under a larger agreement. 4. Firm Fixed Price contract type aims to control costs. 5. No small business participation noted.

Value Assessment

Rating: fair

The contract value of $4.6M over 5 years for loan servicing appears reasonable for specialized IT support. Benchmarking against similar government IT service contracts would provide a clearer picture of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting it may be a sole-source award or a delivery order against an existing contract. Lack of competition limits price discovery and potentially leads to higher costs.

Taxpayer Impact: Taxpayer funds are being used for loan and grant servicing, with potential for increased cost due to the non-competitive nature of the award.

Public Impact

Impacts recipients of single-family housing loans and grants managed by USDA. Ensures continued operation of critical loan origination and servicing functions. Potential for increased administrative costs passed on to taxpayers if pricing is not optimized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns
No small business set-aside

Positive Signals

Firm Fixed Price contract
Long-term support for essential housing programs

Sector Analysis

This contract falls under Computer Systems Design Services (NAICS 541512), a sector crucial for government IT infrastructure. Spending in this area is significant, and competitive bidding is typically encouraged to ensure value.

Small Business Impact

The data indicates no small business participation in this contract. Opportunities for small businesses in IT services are often sought through set-aside contracts, which were not utilized here.

Oversight & Accountability

The award method (Delivery Order, Not Competed) warrants oversight to ensure proper justification for the lack of competition and adherence to procurement regulations.

Related Government Programs

Computer Systems Design Services
Department of Agriculture Contracting
Rural Housing Service Programs

Risk Flags

Lack of competition
Potential for higher costs due to sole-source award
No small business participation
Reliance on a single vendor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $4.6 million to SAGENT M&C, LLC. THE PURPOSE OF THIS CONTRACT IS TO OBTAIN SUPPORT FOR LOAN/GRANT ORIGINATION AND SERVICING OF THE SINGLE-FAMILY HOUSING DIRECT PORTFOLIO UTILIZING LOANSERV FOR LOAN/GRANT SERVICING. IN ADDITION, HAZARD ELECTRONIC DATA INTERFACE (EDI) SERVICES AND AFT

Who is the contractor on this award?

The obligated recipient is SAGENT M&C, LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Rural Housing Service).

What is the total obligated amount?

The obligated amount is $4.6 million.

What is the period of performance?

Start: 2025-02-07. End: 2030-02-06.

What is the justification for not competing this contract, and how does it align with federal procurement regulations for sole-source or limited competition awards?

The justification for not competing this contract is not provided in the data. Federal procurement regulations generally require full and open competition unless specific exceptions apply, such as the existence of a unique capability or a critical need that can only be met by a specific vendor. A thorough review of the contract file would be necessary to determine the validity of the non-competitive award.

How does the pricing of this contract compare to industry benchmarks for similar loan servicing IT solutions, especially given the lack of competitive bidding?

Without competitive bidding, it is challenging to definitively assess the pricing against industry benchmarks. The firm fixed price structure provides some cost control, but the absence of competing offers means there's no direct market validation of the price's competitiveness. A detailed cost analysis comparing the proposed rates and total contract value to similar commercial or government contracts would be needed.

What are the potential risks associated with relying on a single vendor for critical loan origination and servicing functions, particularly if the vendor's performance or financial stability were to d

Relying on a single vendor for critical functions poses risks such as service disruptions if the vendor experiences performance issues or financial instability. There's also a risk of vendor lock-in, making it difficult and costly to switch providers. Contingency planning and robust performance monitoring by the agency are essential to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1000 CONTINENTAL DRIVE, SUITE 570, KING OF PRUSSIA, PA, 19406

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: $4,604,951

Exercised Options: $4,604,951

Current Obligation: $4,604,951

Actual Outlays: $2,074,619

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 12SAD125D0002

IDV Type: IDC

Timeline