Labor Department's $39M vocational rehab contract shows strong competition but raises value questions

Contract Overview

Contract Amount: $39,189,757 ($39.2M)

Contractor: Transportation Communications Union/Iam

Awarding Agency: Department of Labor

Start Date: 2018-03-01

End Date: 2023-07-31

Contract Duration: 1,978 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF:CF::IGF

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Labor obligated $39.2 million to TRANSPORTATION COMMUNICATIONS UNION/IAM for work described as: IGF:CF::IGF Key points: 1. Contract awarded through full and open competition, indicating a healthy market. 2. Long contract duration (1978 days) may impact adaptability to changing needs. 3. Cost-plus-fixed-fee structure can incentivize cost overruns. 4. No small business set-aside, potentially limiting opportunities for smaller firms. 5. Performance period ended over a year ago, raising questions about current relevance. 6. Significant contract value suggests a critical service for the agency.

Value Assessment

Rating: fair

The contract's total value of approximately $39.2 million over its 5-year period represents a significant investment in vocational rehabilitation services. Benchmarking this against similar contracts is challenging without more granular data on the specific services provided and their scope. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed rigorously. The absence of readily available per-unit cost data makes a precise value-for-money assessment difficult, but the long duration and CPFF structure warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors were eligible and encouraged to bid. The presence of a single award indicates that one vendor was selected as the best value. While full and open competition is generally positive for price discovery, the fact that only one bid was received (as implied by 'no': 1) could suggest potential issues with the solicitation, the market, or the complexity of the requirements, which might have deterred other bidders.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it fosters a competitive environment that can drive down prices and improve service quality. However, if only one bid was received, it raises concerns about whether the government truly received the best possible price and value, as the competitive pressure may have been limited.

Public Impact

Benefits individuals seeking vocational rehabilitation services, aiding their return to the workforce. Supports the Department of Labor's mission to promote workforce development and economic opportunity. Services likely delivered across Maryland, where the contract was administered. Impacts the workforce by potentially training and placing individuals in various industries. The contractor, TRANSPORTATION COMMUNICATIONS UNION/IAM, plays a key role in service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to higher costs if not closely monitored.
Long contract duration may not align with evolving service needs or technological advancements.
Single bid received under full and open competition raises questions about market interest or solicitation clarity.
Contract performance period has concluded, making current cost and performance data less relevant for future planning.

Positive Signals

Awarded through full and open competition, suggesting a robust procurement process.
Contract supports essential vocational rehabilitation services, aligning with the agency's mission.
The contractor has a long history (contract number 19813 suggests longevity).

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on vocational rehabilitation. The market for such services is driven by government mandates and the need to support individuals with disabilities or other barriers to employment. Comparable spending benchmarks would typically be found within federal spending data for workforce development and social services. The Department of Labor is a primary agency in this space, often contracting for services that facilitate employment and training.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in delivering these vocational rehabilitation services were likely limited unless they were prime contractors in a competitive bid. The absence of small business participation goals may have implications for the broader small business ecosystem within this service area.

Oversight & Accountability

Oversight for this contract would typically 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 embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS. Inspector General oversight would apply if any potential fraud, waste, or abuse were identified.

Related Government Programs

Department of Labor - Vocational Rehabilitation Programs
Department of Veterans Affairs - Vocational Rehabilitation and Employment
Social Security Administration - Ticket to Work Program
State Workforce Agencies - Employment and Training Services

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition despite full and open solicitation.
Contract duration may exceed optimal service relevance.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $39.2 million to TRANSPORTATION COMMUNICATIONS UNION/IAM. IGF:CF::IGF

Who is the contractor on this award?

The obligated recipient is TRANSPORTATION COMMUNICATIONS UNION/IAM.

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 $39.2 million.

What is the period of performance?

Start: 2018-03-01. End: 2023-07-31.

What specific vocational rehabilitation services were included under this contract?

The provided data does not detail the specific services rendered under contract number 624310. However, 'Vocational Rehabilitation Services' typically encompass a range of support aimed at helping individuals with disabilities or other barriers to employment prepare for, secure, retain, or regain employment. This can include assessment, counseling, job training, placement assistance, assistive technology, and ongoing support services. The exact scope would have been defined in the contract's Statement of Work (SOW), which is not available in the provided summary data.

How does the $39.2 million total contract value compare to similar vocational rehabilitation contracts awarded by the Department of Labor?

Comparing the $39.2 million total contract value requires access to a broader dataset of similar contracts. Without specific details on the scope, duration, and service delivery locations of other contracts, a direct comparison is difficult. However, for a contract spanning nearly five years (March 2018 - July 2023), this value suggests a substantial program. Larger contracts often indicate a wider geographic reach, a larger client base, or more comprehensive service offerings. Further analysis would involve benchmarking against contracts with similar objectives and service levels within the Department of Labor and potentially other federal agencies involved in workforce development.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract type for these services?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks, primarily related to cost control. In a CPFF arrangement, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. While the fixed fee incentivizes the contractor to control costs to maximize their profit margin on that fee, it does not provide the same level of cost certainty as a fixed-price contract. There is a risk that the contractor may not be sufficiently motivated to minimize costs, potentially leading to expenditures exceeding initial estimates, especially if the scope of work is not tightly defined or if unforeseen challenges arise. Robust government oversight and clear definition of allowable costs are crucial to mitigate these risks.

Given the contract ended in July 2023, what is the current status of these vocational rehabilitation services?

Since this contract concluded in July 2023, the Department of Labor has likely transitioned these vocational rehabilitation services to a new contract or an incumbent provider under a new award. The cessation of this specific contract means that the original awardee is no longer providing services under this agreement. To understand the current service provision, one would need to identify any successor contracts awarded by the Department of Labor for similar vocational rehabilitation services. The data provided does not indicate whether the services are ongoing or have been discontinued.

What does the receipt of only one bid under 'full and open competition' imply about the market for these services?

Receiving only one bid under a 'full and open competition' solicitation can imply several things about the market for these specific vocational rehabilitation services. It might suggest that the requirements were highly specialized, complex, or demanding, deterring potential bidders. Alternatively, the solicitation itself might have had terms or conditions that inadvertently limited the pool of interested and capable contractors. It could also indicate a lack of competition within the specific geographic area or for the particular type of service. In some cases, it might reflect a market where only one or a few companies possess the necessary qualifications and capacity to meet the government's needs, potentially leading to less competitive pricing and reduced innovation.

Industry Classification

NAICS: Health Care and Social Assistance › Vocational Rehabilitation Services › Vocational Rehabilitation Services

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: 1630DC17R00016

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3 RESEARCH PL, ROCKVILLE, MD, 20850

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,189,757

Exercised Options: $39,189,757

Current Obligation: $39,189,757

Actual Outlays: $21,229,300

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline