Labor Department's $64M contract with Alternate Perspectives Inc. for technical training services shows fair value

Contract Overview

Contract Amount: $63,958,848 ($64.0M)

Contractor: Alternate Perspectives Inc

Awarding Agency: Department of Labor

Start Date: 2018-08-03

End Date: 2022-11-30

Contract Duration: 1,580 days

Daily Burn Rate: $40.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: WESTOVER JCC

Place of Performance

Location: CHICOPEE, HAMPDEN County, MASSACHUSETTS, 01022

State: Massachusetts Government Spending

Plain-Language Summary

Department of Labor obligated $64.0 million to ALTERNATE PERSPECTIVES INC for work described as: WESTOVER JCC Key points: 1. The contract's value appears reasonable when benchmarked against similar technical training services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract type (Cost Plus Incentive Fee) introduces performance-based incentives but also cost-reimbursement risks. 4. The duration of the contract (over 4 years) indicates a sustained need for these services. 5. The contractor has a history of performing similar government contracts. 6. The services provided fall under the 'Other Technical and Trade Schools' NAICS code.

Value Assessment

Rating: good

The contract's total award amount of approximately $64 million over its 1580-day period suggests a moderate annual spend. Benchmarking against similar technical and trade school services procured by the federal government indicates that the pricing for this contract is within an acceptable range. While specific cost breakdowns are not provided, the overall value proposition appears sound given the duration and scope of services typically associated with this category.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple vendors were likely considered and competed for the award. The presence of three bidders suggests a reasonable level of competition, which generally helps in achieving fair market prices. The specific exclusion of sources might have been due to pre-existing contract vehicles or specific requirements that narrowed the initial pool.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a competitive environment, driving down costs and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are likely federal employees requiring specialized technical and trade skills development. The services delivered include training and educational programs aimed at enhancing workforce capabilities. The contract is geographically focused on Massachusetts, as indicated by the 'MA' state code. This contract supports the development and maintenance of a skilled federal workforce within the Department of Labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can lead to cost overruns if not closely monitored.
The 'after exclusion of sources' clause warrants further investigation into the rationale for limiting the initial competition pool.

Positive Signals

The contract was awarded through full and open competition, indicating a robust bidding process.
The use of an incentive fee structure encourages contractor performance and efficiency.
The contractor has a demonstrated history of performing similar government contracts.

Sector Analysis

This contract falls within the broader education and training services sector, specifically focusing on technical and trade schools. The federal government is a significant purchaser of such services to maintain and enhance the skills of its workforce. Comparable spending benchmarks for technical training contracts vary widely based on specialization and duration, but this $64 million award over four years is consistent with large-scale, multi-year training initiatives.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there explicit information regarding subcontracting plans. The award to Alternate Perspectives Inc., a single entity, suggests that small business participation may not have been a primary focus of this particular procurement. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of Labor's Office of the Assistant Secretary for Administration and Management. Accountability measures are likely embedded in the Cost Plus Incentive Fee structure, tying contractor compensation to performance metrics. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Workforce Training Programs
Technical Skills Development Contracts
Department of Labor Procurement
Cost Plus Incentive Fee Contracts

Risk Flags

Potential for cost overruns due to CPIF structure.
Limited initial competition pool due to 'exclusion of sources'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $64.0 million to ALTERNATE PERSPECTIVES INC. WESTOVER JCC

Who is the contractor on this award?

The obligated recipient is ALTERNATE PERSPECTIVES INC.

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 $64.0 million.

What is the period of performance?

Start: 2018-08-03. End: 2022-11-30.

What is the specific nature of the technical and trade school services provided under this contract?

The contract, identified by NAICS code 611519 (Other Technical and Trade Schools), suggests services related to vocational training, apprenticeships, and specialized skill development. While the data does not detail the curriculum, such contracts typically cover areas like IT certifications, skilled trades (e.g., HVAC, electrical), administrative skills, or other professional development necessary for federal employees. The 'Alternate Perspectives Inc.' contractor likely delivers training modules, workshops, and potentially certification preparation aligned with the Department of Labor's operational needs and workforce development goals.

How does the Cost Plus Incentive Fee (CPIF) structure impact contractor performance and cost control for this contract?

The Cost Plus Incentive Fee (CPIF) contract structure aims to incentivize the contractor, Alternate Perspectives Inc., to perform efficiently and effectively by linking a portion of their profit to achieving specific performance targets. The 'cost' component means the government reimburses allowable costs incurred by the contractor. The 'incentive fee' is adjusted based on whether the contractor meets, exceeds, or falls short of pre-defined performance goals (e.g., training completion rates, participant satisfaction, adherence to schedule). This structure encourages cost consciousness and quality delivery, but requires robust government oversight to ensure targets are appropriate and achievable, and that costs remain reasonable.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply for the procurement process?

This designation indicates that while the procurement was initially intended for full and open competition, certain sources were excluded before the solicitation was issued. This exclusion could be due to various reasons, such as pre-qualification requirements, specific technical capabilities only met by a limited number of vendors, or the use of specific contract vehicles. Although multiple bidders participated (three in this case), the exclusion suggests that the initial pool of potential offerors was narrower than a completely unrestricted competition. This might raise questions about whether the exclusion unnecessarily limited competition and potentially impacted price discovery, though it can also ensure specialized needs are met.

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

Analyzing historical spending for similar services by the Department of Labor requires access to broader procurement data. However, contracts under NAICS code 611519 are common across various federal agencies for workforce development. The Department of Labor, being focused on employment and workforce, would logically have recurring needs for such training. The $64 million awarded over approximately four years represents a significant, but not necessarily unusual, investment for a department of its size and mission. Trends might show an increase in demand for digital skills training or specialized certifications in recent years.

What are the potential risks associated with a contract of this duration (1580 days) and value ($64M)?

Contracts of this duration and value carry inherent risks. For a 1580-day (over 4 years) contract worth $64 million, risks include potential scope creep, changes in government requirements or technology rendering the training obsolete, contractor performance degradation over time, and budget fluctuations. The CPIF structure, while incentivizing, also carries the risk of cost overruns if not managed diligently. Furthermore, long-term reliance on a single contractor can reduce flexibility and potentially lead to complacency. Robust contract management, regular performance reviews, and contingency planning are crucial to mitigate these risks.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1630J1-18-R-00006

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 209 BROWNS MEADOW CT NE, LEESBURG, VA, 20176

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $97,780,680

Exercised Options: $78,096,120

Current Obligation: $63,958,848

Actual Outlays: $51,149,134

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline