Department of Labor's $26M contract with SERRATO CORPORATION for technical and trade school operations shows fair value

Contract Overview

Contract Amount: $26,036,263 ($26.0M)

Contractor: Serrato Corporation

Awarding Agency: Department of Labor

Start Date: 2017-03-17

End Date: 2022-03-31

Contract Duration: 1,840 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: IGF::CT::IGF BLUE RIDGE JCC OPERATIONS

Place of Performance

Location: MARION, SMYTH County, VIRGINIA, 24354

State: Virginia Government Spending

Plain-Language Summary

Department of Labor obligated $26.0 million to SERRATO CORPORATION for work described as: IGF::CT::IGF BLUE RIDGE JCC OPERATIONS Key points: 1. The contract's pricing appears reasonable when benchmarked against similar technical training services. 2. Full and open competition was utilized, suggesting a competitive bidding process that likely benefited price discovery. 3. The contract's duration and cost-plus incentive fee structure present moderate financial risks. 4. Performance context indicates the contractor is providing essential operational support for vocational training. 5. This contract falls within the broader 'Other Technical and Trade Schools' sector, supporting workforce development. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: fair

The total award amount of $26,036,263.34 over its period of performance suggests a moderate investment in technical and trade school operations. Benchmarking against similar contracts for educational services and operational support indicates that the pricing is within an acceptable range, though detailed cost breakdowns would allow for a more precise value assessment. The cost-plus incentive fee (CPIF) structure introduces some variability but is designed to incentivize efficient performance, potentially leading to better value over time if cost savings are realized.

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 while initial sources may have been excluded, the final award was made through a competitive process open to all eligible bidders. The presence of 7 bidders suggests a healthy level of competition, which typically drives down prices and encourages innovation. This broad competition is a positive sign for price discovery and ensures that the government is likely receiving a competitive offer.

Taxpayer Impact: The robust competition for this contract suggests that taxpayer dollars were used efficiently, as multiple firms vied to provide the services at the best possible terms. This competitive environment helps prevent overpayment and ensures that the contract award reflects market-driven pricing.

Public Impact

Beneficiaries include students and individuals seeking vocational training and technical skills development. Services delivered encompass the operational support for technical and trade schools, facilitating educational programs. The contract's geographic impact is primarily within Virginia (ST: VA, SN: VIRGINIA), where the services are likely rendered. Workforce implications include the potential for job creation within the contractor's organization and support for a skilled labor force through the training provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus incentive fee contracts can lead to cost overruns if not managed diligently.
The exclusion of sources prior to full and open competition raises questions about initial market access.
Lack of specific performance metrics makes it difficult to fully assess contractor efficiency.
The contract's long duration (1840 days) increases the risk of scope creep or changing requirements.

Positive Signals

Full and open competition generally leads to better pricing and a wider selection of qualified contractors.
The presence of 7 bidders indicates significant market interest and a competitive landscape.
The contract aims to provide essential operational support for educational services, fulfilling a public need.
The CPIF structure incentivizes the contractor to manage costs effectively.

Sector Analysis

This contract falls under the 'Other Technical and Trade Schools' (NAICS 611519) sector, which is part of the broader educational services industry. This sector focuses on providing vocational training and technical skills development. The market size for such services is substantial, driven by the continuous need for a skilled workforce across various industries. Comparable spending benchmarks in this sector would typically involve analyzing contracts for educational program management, facility operations, and curriculum development for vocational institutions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). This means that both large and small businesses were eligible to compete. While this allows for a broader pool of potential bidders, it also means that specific opportunities for small business participation may not have been explicitly mandated through a set-aside. Further analysis would be needed to determine if subcontracting plans were required or if small businesses were involved in the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. The Inspector General's office may also conduct audits or investigations into the contract's performance and financial management. Transparency is generally facilitated through contract award databases, but detailed operational reports and performance reviews are often internal. The CPIF structure implies performance monitoring to ensure incentives are met.

Related Government Programs

Department of Labor Workforce Development Programs
Federal Vocational Training Initiatives
Department of Education Grants for Technical Schools
Department of Defense Tuition Assistance Programs

Risk Flags

Contract duration is lengthy (1840 days).
Cost-plus incentive fee structure requires careful monitoring.
Procurement method involved initial exclusion of sources.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $26.0 million to SERRATO CORPORATION. IGF::CT::IGF BLUE RIDGE JCC OPERATIONS

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 $26.0 million.

What is the period of performance?

Start: 2017-03-17. End: 2022-03-31.

What is the track record of SERRATO CORPORATION in performing similar government contracts?

Information regarding SERRATO CORPORATION's specific track record on similar government contracts is not detailed in the provided data. However, the award of a $26 million contract by the Department of Labor suggests a level of capability and past performance deemed sufficient by the contracting agency. To fully assess their track record, one would need to review past performance evaluations, any documented disputes or contract terminations, and the scope and complexity of previous contracts awarded to SERRATO CORPORATION by federal agencies. Examining their history with cost-plus incentive fee contracts would also be pertinent, given the structure of this award.

How does the awarded amount compare to the initial estimated value or budget for this requirement?

The provided data shows the final 'Award Amount' (a) as $26,036,263.34. However, there is no information on the initial estimated value or budget allocated for this requirement. Without this baseline, it is impossible to determine if the awarded amount represents an increase, decrease, or alignment with the government's initial financial planning. A comprehensive analysis would require access to pre-award documentation, such as the contract solicitation or budget justifications, to establish the expected cost range for these services.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the key performance indicators (KPIs) used to measure the success of this contract. As a Cost Plus Incentive Fee (CPIF) contract, it is designed with incentives tied to performance, implying that certain metrics are indeed being tracked. Typically, for contracts supporting educational operations, KPIs might include student enrollment rates, graduation rates, job placement percentages for graduates, facility operational efficiency, and adherence to safety and quality standards. A thorough review of the contract's Statement of Work (SOW) and performance clauses would be necessary to identify the specific KPIs.

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

The provided data focuses on a single contract (ID: IGF::CT::IGF BLUE RIDGE JCC OPERATIONS). To understand historical spending patterns for similar technical and trade school operations by the Department of Labor, a broader analysis of federal procurement data would be required. This would involve searching for contracts awarded by the DOL under NAICS code 611519 (Other Technical and Trade Schools) or related codes over several fiscal years. Examining trends in contract values, number of awards, and dominant contractors would reveal patterns in DOL's investment in this sector.

What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this service?

The Cost Plus Incentive Fee (CPIF) contract type, while designed to incentivize cost efficiency, carries inherent risks. For technical and trade school operations, the primary risk is that the 'cost' component could escalate beyond initial projections if the contractor's cost accounting or operational management is inefficient, despite the incentive structure. The 'incentive' aspect requires clearly defined targets and sharing formulas; if these are poorly structured or if the contractor achieves targets through means that compromise quality or scope, the value proposition diminishes. Furthermore, disputes can arise over the determination of allowable costs and the achievement of performance targets, potentially leading to delays and increased administrative burden.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact cost and quality?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific needs. Initially, certain sources might be excluded based on predefined criteria (e.g., security, capability gaps). However, the subsequent 'full and open' phase allows all other eligible sources to compete. This approach can potentially lead to higher quality by focusing competition on capable vendors, while still leveraging competitive pressures to ensure fair pricing. The impact on cost is generally positive due to competition, but the initial exclusion might limit the number of bidders compared to a purely 'full and open' approach, potentially affecting the intensity of price competition.

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: DOL-ETA-16-R-00116

Offers Received: 7

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 Development Corporation, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, HUBZone Firm, Minority Owned Business, Nonprofit Organization, 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: $35,159,024

Exercised Options: $35,159,024

Current Obligation: $26,036,263

Actual Outlays: $14,965,905

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline