Department of Labor awards $30M+ contract to Serrato Corporation for technical and trade school services

Contract Overview

Contract Amount: $30,089,769 ($30.1M)

Contractor: Serrato Corporation

Awarding Agency: Department of Labor

Start Date: 2017-05-01

End Date: 2021-05-31

Contract Duration: 1,491 days

Daily Burn Rate: $20.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: IGF::OT::IGF NEW FLINT HILLS AWARD

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20210

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $30.1 million to SERRATO CORPORATION for work described as: IGF::OT::IGF NEW FLINT HILLS AWARD Key points: 1. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract duration of nearly five years indicates a significant, long-term commitment. 4. The award falls within the 'Other Technical and Trade Schools' NAICS code, highlighting a specific service area. 5. The contract's value is substantial, requiring careful monitoring of performance and cost efficiency.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The cost-plus-incentive-fee (CPIF) pricing structure means the final cost will depend on Serrato Corporation's performance against defined targets. While CPIF can incentivize efficiency, it also carries inherent cost uncertainty compared to fixed-price contracts. Further analysis would require understanding the incentive targets and Serrato's historical performance on similar contracts.

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. The presence of two bids suggests some level of competition, but the exact number of bidders and the nature of their proposals would be needed to fully assess the competitive landscape and its impact on price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better value. However, the ultimate benefit depends on the number and quality of bids received.

Public Impact

The contract is expected to provide technical and trade school services, potentially benefiting individuals seeking vocational training and skill development. The services delivered will likely support the Department of Labor's mission in workforce development and education. The contract is geographically located in the District of Columbia, suggesting a local impact on training providers and recipients. The contract may have implications for the workforce by creating opportunities for instructors and support staff within the vocational training sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost uncertainty inherent in Cost Plus Incentive Fee (CPIF) contracts requires diligent oversight to ensure costs remain reasonable.
Performance metrics and incentive targets need to be clearly defined and rigorously monitored to ensure value for money.
The long duration of the contract necessitates ongoing evaluation of the contractor's performance and adaptability to changing needs.

Positive Signals

The use of full and open competition suggests a commitment to leveraging market forces for best value.
The CPIF structure, if well-managed, can incentivize contractor efficiency and alignment with government goals.
The contract addresses a specific need within technical and trade education, supporting workforce development initiatives.

Sector Analysis

This contract falls within the broader education and training services sector, specifically focusing on technical and vocational education. The market for such services is driven by workforce development needs, industry demand for skilled labor, and government initiatives to promote employment and economic mobility. Comparable spending benchmarks would involve analyzing other federal, state, and local contracts for similar vocational training programs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The primary impact on the small business ecosystem would be through Serrato Corporation's own procurement practices, if any, or through indirect competition if small businesses offer complementary services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Labor's contracting officers and program managers. Accountability measures would be tied to the performance standards and incentive clauses within the Cost Plus Incentive Fee (CPIF) contract. Transparency would be facilitated through contract reporting requirements and public contract databases, though specific performance details might be sensitive. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Workforce Innovation and Opportunity Act (WIOA) programs
Department of Labor Training and Employment Services
Federal Vocational Education Grants
Contracting for Educational Services

Risk Flags

Cost Uncertainty (CPIF)
Performance Measurement Complexity
Long-Term Contract Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $30.1 million to SERRATO CORPORATION. IGF::OT::IGF NEW FLINT HILLS AWARD

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 $30.1 million.

What is the period of performance?

Start: 2017-05-01. End: 2021-05-31.

What is Serrato Corporation's track record with federal contracts, particularly those involving technical and trade education?

Information regarding Serrato Corporation's specific track record with federal contracts, especially in the realm of technical and trade education, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous government engagements. This would involve searching federal procurement databases like SAM.gov and FPDS-NG for awards, modifications, and performance reviews associated with Serrato Corporation. Understanding their experience with similar contract types (e.g., CPIF) and service areas is crucial for evaluating their capability to successfully execute this new award.

How does the awarded amount of over $30 million compare to similar technical and trade school contracts awarded by the Department of Labor or other federal agencies?

Without specific comparable contract data, it is difficult to definitively benchmark the $30 million award. However, contracts for comprehensive technical and trade education services can range significantly based on scope, duration, and the number of individuals served. Larger, multi-year contracts awarded under full and open competition, especially those with CPIF structures, often represent substantial investments in workforce development. To provide a precise comparison, one would need to analyze recent awards for similar NAICS codes (e.g., 611519) from the Department of Labor and other agencies like the Department of Defense or Veterans Affairs, considering factors like contract duration, service delivery model, and geographic reach.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude and duration?

The primary risks associated with a CPIF contract of this magnitude and duration include cost overruns if performance targets are not met efficiently, potential for scope creep, and challenges in accurately defining and measuring performance metrics. For the government, there's a risk that the incentive structure may not perfectly align contractor efforts with desired outcomes, or that the final cost could exceed initial projections. For the contractor, the risk lies in not achieving the incentive targets, thereby reducing profit margins. Effective risk mitigation requires robust government oversight, clear performance metrics, and a well-defined incentive framework that truly drives value and efficiency.

How will the effectiveness of the technical and trade school services delivered under this contract be measured?

The effectiveness of the services delivered under this contract will be measured through specific performance metrics and Key Performance Indicators (KPIs) outlined in the contract's Performance Work Statement (PWS). These metrics likely include factors such as student completion rates, job placement rates post-training, employer satisfaction with graduates' skills, and adherence to training curriculum standards. The Cost Plus Incentive Fee (CPIF) structure implies that Serrato Corporation's performance against these defined metrics will directly influence their final payment and profit. Regular reporting and government evaluation of these KPIs will be essential to assess program effectiveness and ensure taxpayer value.

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

The provided data snippet does not offer historical spending patterns for technical and trade school services by the Department of Labor. To analyze this, one would need to examine historical contract awards within the relevant NAICS codes (e.g., 611519) over several fiscal years. This analysis would reveal trends in contract values, types of services procured, primary contractors, and the overall investment in vocational training. Understanding these patterns can help contextualize the current $30 million award and identify any significant shifts in the Department's procurement strategy or funding priorities for workforce development.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOL-ETA-16-R-00071

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

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, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $41,595,036

Exercised Options: $32,897,758

Current Obligation: $30,089,769

Actual Outlays: $9,122,684

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline