Department of Labor awards $46.5M contract to Serrato Corporation for technical and trade school services

Contract Overview

Contract Amount: $46,518,692 ($46.5M)

Contractor: Serrato Corporation

Awarding Agency: Department of Labor

Start Date: 2020-11-01

End Date: 2026-04-30

Contract Duration: 2,006 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LITTLE ROCK JCC 2020 CONTRACT

Place of Performance

Location: LITTLE ROCK, PULASKI County, ARKANSAS, 72209

State: Arkansas Government Spending

Plain-Language Summary

Department of Labor obligated $46.5 million to SERRATO CORPORATION for work described as: LITTLE ROCK JCC 2020 CONTRACT Key points: 1. Contract value of $46.5 million over approximately 5.5 years suggests a significant investment in workforce development. 2. The contract type, Firm Fixed Price, indicates a defined scope and cost, potentially limiting cost overruns. 3. Full and Open Competition after Exclusion of Sources implies a competitive process, though the exclusion warrants scrutiny. 4. The duration of the contract (2006 days) suggests a long-term need for these services. 5. The North American Industry Classification System (NAICS) code 611519 points to specialized technical and trade instruction. 6. The award to Serrato Corporation requires an assessment of their past performance and capacity to deliver.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details or comparable contract data. The $46.5 million over roughly 5.5 years averages to approximately $8.4 million annually. This figure needs to be compared against the cost of similar workforce development or vocational training programs administered by the Department of Labor or other federal agencies to determine if it represents good value for money. The firm fixed-price nature of the contract provides some cost certainty, but the overall value hinges on the effectiveness and efficiency of the services delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources were excluded from the outset. The exact reasons for this exclusion are critical to understanding the level of competition achieved. If the exclusion was justified and a sufficient number of qualified bidders still participated, it could still lead to fair pricing. However, if the exclusion significantly limited the pool of potential offerors, it may have reduced competitive pressure and potentially led to a higher price than under truly unrestricted full and open competition.

Taxpayer Impact: The exclusion of sources, even with a 'full and open' designation, raises concerns about maximizing taxpayer value. If fewer bidders competed due to the exclusion, taxpayers may not have benefited from the most competitive pricing possible.

Public Impact

The primary beneficiaries are likely individuals seeking technical and trade skills development, potentially leading to improved employment opportunities. The services delivered are expected to be in the realm of vocational training and education, aligning with the NAICS code. The geographic impact is centered in Arkansas (ST: AR, SN: ARKANSAS), suggesting a focus on regional workforce needs. Workforce implications include the potential creation of jobs for instructors and support staff at Serrato Corporation and the upskilling of participants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type warrants further investigation to ensure it did not unduly restrict competition and inflate costs.
Lack of detailed service descriptions makes it difficult to assess the quality and effectiveness of the training provided.
The contract's long duration could pose a risk if training needs or methodologies change significantly over its term.

Positive Signals

The 'Full and Open Competition' aspect, despite exclusions, suggests an attempt to solicit multiple bids.
The Firm Fixed Price contract type provides cost predictability for the government.
The award is for technical and trade schools, addressing a critical need for skilled labor in the economy.

Sector Analysis

This contract falls within the Education and Training sector, specifically focusing on vocational and technical instruction. The market for federal workforce development and training programs is substantial, with various agencies investing in programs to upskill the civilian workforce and military personnel. Comparable spending benchmarks would involve analyzing other Department of Labor contracts for similar training services, as well as programs administered by the Department of Defense or Veterans Affairs for vocational training. The size of this contract suggests it is a significant program within the Department of Labor's portfolio for this fiscal year.

Small Business Impact

The data indicates that small business participation (SB: false) and set-asides (SS: false) were not primary considerations for this specific award. This suggests that the contract was not specifically targeted towards small businesses, and Serrato Corporation is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within the provided data. Further review would be needed to determine if subcontracting opportunities exist and if they are being utilized to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM), which awarded the contract. Accountability measures would be defined in the contract's terms and conditions, likely including performance metrics and reporting requirements. Transparency would be enhanced through contract award databases like FPDS.gov. The Inspector General for the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Labor Workforce Innovation and Opportunity Act (WIOA) Programs
Department of Education Career and Technical Education Programs
Department of Veterans Affairs Vocational Rehabilitation and Employment (VR&E) Program
Job Corps Program

Risk Flags

Competition Limitation
Performance Risk
Value for Money Assessment Required

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $46.5 million to SERRATO CORPORATION. LITTLE ROCK JCC 2020 CONTRACT

Who is the contractor on this award?

The obligated recipient is SERRATO CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $46.5 million.

What is the period of performance?

Start: 2020-11-01. End: 2026-04-30.

What specific technical and trade skills are being taught under this contract, and how do they align with current labor market demands?

The provided data identifies the contract under NAICS code 611519, 'Other Technical and Trade Schools.' This broad classification suggests a range of vocational training programs. To determine the specific skills, one would need to examine the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These documents detail the curriculum, training methodologies, and expected learning outcomes. Alignment with labor market demands would be assessed by comparing the skills taught against industry needs, job postings, and projections from the Bureau of Labor Statistics. For instance, if the training focuses on high-demand fields like advanced manufacturing, cybersecurity, or healthcare support, it would be considered well-aligned. Conversely, if the programs teach skills for declining industries, the alignment would be poor, potentially impacting the value for taxpayers and participants.

How does Serrato Corporation's past performance on similar federal contracts compare to other potential bidders?

Assessing Serrato Corporation's past performance is crucial for understanding the risk associated with this $46.5 million award. Federal agencies typically evaluate past performance as a key factor in contract selection. This involves reviewing performance evaluations from previous contracts, including timeliness of delivery, quality of work, cost control, and customer satisfaction. Information on Serrato's performance history can often be found in sources like the Contractor Performance Assessment Reporting System (CPARS). A review would compare Serrato's ratings against any available data on other bidders or industry averages for similar services. Strong past performance indicates a lower risk of contract failure and a higher likelihood of successful service delivery, justifying the investment. Conversely, a history of poor performance would raise concerns about value for money and necessitate closer oversight.

What is the cost per trainee or per training hour, and how does it benchmark against industry standards or similar government programs?

Determining the cost per trainee or per training hour is essential for evaluating the value for money of this contract. The total contract value is $46,518,691.52 over approximately 2006 days (about 5.5 years). To calculate a cost per trainee, we would need the expected number of individuals to be trained over the contract period. Similarly, to find the cost per training hour, the total number of training hours delivered must be known. Without these figures, a precise per-unit cost benchmark is impossible. However, one could make an educated estimate based on the average annual value ($8.4 million) and compare it to publicly available data on similar federal or state workforce development programs. If the calculated cost per trainee or hour is significantly higher than comparable programs, it suggests potential inefficiencies or overpricing, warranting further investigation into the contract's cost structure and Serrato's operational efficiency.

What are the specific justifications for the 'Exclusion of Sources' in the 'Full and Open Competition After Exclusion of Sources' award type?

The 'Full and Open Competition After Exclusion of Sources' (Fించి) award type is unusual and requires careful examination. Standard full and open competition aims to solicit offers from all responsible sources. The 'exclusion of sources' clause indicates that, for specific, documented reasons, certain potential offerors were not permitted to bid. These reasons typically fall under categories like national security, proprietary data restrictions, or unique capabilities held by a limited number of entities. The justification for such exclusions must be robust and publicly documented (often in a Justification for Other Than Full and Open Competition, or J&A). Without access to this specific J&A for the Serrato Corporation contract, it's impossible to definitively state the reasons. However, the existence of this clause suggests that the competition, while not entirely restricted, was narrower than a truly unrestricted solicitation, potentially impacting the level of price competition achieved.

What is the historical spending trend for similar technical and trade school services by the Department of Labor?

Analyzing historical spending trends for similar services by the Department of Labor provides crucial context for the $46.5 million award to Serrato Corporation. This involves examining contract data from previous fiscal years to identify patterns in contract values, durations, and awarded contractors for vocational training and technical education. Significant increases or decreases in spending could indicate shifts in program priorities, budget allocations, or market conditions. For example, if historical spending has been consistently lower, this award might represent an expansion of services or a change in procurement strategy. Conversely, if spending has been similar, it suggests a stable, ongoing need. Understanding these trends helps assess whether the current award is an anomaly or part of a consistent federal investment in workforce development through technical and trade schools.

What are the performance metrics and key performance indicators (KPIs) defined in the contract to measure the success of the training programs?

The success of any training contract hinges on clearly defined performance metrics and Key Performance Indicators (KPIs). For this Department of Labor contract with Serrato Corporation, these metrics would likely be detailed in the Performance Work Statement (PWS) or Statement of Work (SOW). Common KPIs for vocational training programs include trainee completion rates, job placement rates post-training, employer satisfaction with placed graduates, and the average starting wage of employed graduates. The contract would specify acceptable performance levels for these KPIs, and failure to meet them could result in penalties or corrective actions. Evaluating these metrics provides a data-driven assessment of whether the $46.5 million investment is yielding the desired outcomes in workforce development and is therefore a good use of taxpayer funds.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1630J4-20-R-00001

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 135 WEST COUNCIL ST, TUCSON, AZ, 85701

Business Categories: 8(a) Program Participant, Category Business, Community Developed Corporation Owned Firm, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $54,115,713

Exercised Options: $54,094,617

Current Obligation: $46,518,692

Actual Outlays: $34,241,924

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline