Department of Labor awards $43M technical training contract to Chugach Education Services, Inc

Contract Overview

Contract Amount: $43,076,285 ($43.1M)

Contractor: Chugach Education Services, Inc.

Awarding Agency: Department of Labor

Start Date: 2018-03-01

End Date: 2022-04-30

Contract Duration: 1,521 days

Daily Burn Rate: $28.3K/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: PAUL SIMON JCC CONTRACT

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60623

State: Illinois Government Spending

Plain-Language Summary

Department of Labor obligated $43.1 million to CHUGACH EDUCATION SERVICES, INC. for work described as: PAUL SIMON JCC CONTRACT Key points: 1. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 2. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a specific justification for limiting the initial pool. 3. The contract duration of over 1500 days indicates a long-term need for the services provided. 4. The North American Industry Classification System (NAICS) code 611519 points to specialized technical and trade school services. 5. The award was made to a single contractor, Chugach Education Services, Inc., highlighting the need to assess its capacity and past performance. 6. The contract's value of approximately $43 million over its term requires scrutiny of cost efficiency and value for money.

Value Assessment

Rating: fair

The contract value of $43,076,284.87 over approximately 4.2 years suggests an average annual spend of around $10.2 million. Benchmarking this against similar technical and trade school contracts would be necessary to determine if the pricing is competitive. The cost-plus-incentive-fee (CPIF) pricing structure means the final cost can vary based on performance, making a direct price comparison challenging without understanding the incentive targets and outcomes. Further analysis of the contractor's proposed costs against the government's estimate would provide more insight into value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method implies that while the competition was intended to be broad, certain sources were excluded for reasons that would need to be documented in the contract file. The number of bidders is not explicitly stated in the provided data, but the 'exclusion of sources' suggests a potentially narrower field than a truly 'full and open' competition. This could impact price discovery and potentially lead to higher costs if fewer qualified bidders were considered.

Taxpayer Impact: The limited competition, even if justified, may mean taxpayers did not benefit from the lowest possible price achievable through a wider bidding process. It is crucial that the exclusion of sources was properly justified to ensure fair market value was obtained.

Public Impact

The primary beneficiaries are individuals seeking technical and trade skills development, likely aligning with workforce needs in specific industries. The services delivered are expected to enhance the skills and employability of participants in technical and vocational fields. The contract's geographic impact is indicated by 'IL' (Illinois) as the place of performance, suggesting a focus on training within that state. Workforce implications include the potential for upskilling and reskilling the labor force, addressing specific industry demands for skilled tradespeople.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type raises questions about the breadth of market engagement and potential impact on price.
The cost-plus-incentive-fee (CPIF) structure requires careful monitoring to ensure incentives are met and costs remain controlled.
The long contract duration necessitates ongoing performance evaluation to ensure continued relevance and effectiveness of training programs.

Positive Signals

The use of 'full and open competition' (even with exclusions) indicates an effort to engage the market.
The CPIF contract type suggests a structured approach to performance management and cost control.
The award to a single entity implies a potentially specialized capability or a well-established relationship for delivering these specific training services.

Sector Analysis

The contract falls within the Education and Training sector, specifically focusing on technical and trade schools (NAICS 611519). This sector is crucial for developing a skilled workforce that meets the demands of various industries, including manufacturing, technology, and healthcare. Comparable spending in this area can vary widely depending on the scope and scale of training programs, but federal investment in workforce development through technical education is a consistent priority. The market for such services includes a range of educational institutions, private training providers, and non-profit organizations.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests the contract was likely awarded based on technical qualifications and price, rather than a specific small business goal. There is no explicit information on subcontracting plans for small businesses. The absence of small business set-aside requirements may mean that larger, established firms were the primary focus of the competition, potentially limiting opportunities for smaller specialized training providers.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM). Mechanisms likely include regular performance reviews, financial audits, and adherence to the terms of the Cost Plus Incentive Fee (CPIF) structure. Transparency would be facilitated through contract reporting requirements and potentially public contract databases. The Inspector General's office within the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Workforce Innovation and Opportunity Act (WIOA) Programs
Department of Labor Job Training Programs
Federal Vocational Education Funding
Apprenticeship and Training Grants

Risk Flags

Competition Method Justification
Cost Control in CPIF Contracts
Training Program Relevance
Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $43.1 million to CHUGACH EDUCATION SERVICES, INC.. PAUL SIMON JCC CONTRACT

Who is the contractor on this award?

The obligated recipient is CHUGACH EDUCATION SERVICES, 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 $43.1 million.

What is the period of performance?

Start: 2018-03-01. End: 2022-04-30.

What is the track record of Chugach Education Services, Inc. in delivering similar technical training programs for the federal government?

Assessing the track record of Chugach Education Services, Inc. is crucial for understanding their capability to fulfill this $43 million contract. A review of their past performance on federal contracts, particularly those involving technical and trade school services (NAICS 611519), would reveal their success in meeting performance metrics, managing costs, and delivering quality training. Information on previous contract awards, completion status, and any documented performance issues or commendations would provide valuable context. Specifically, examining their experience with Cost Plus Incentive Fee (CPIF) contracts would indicate their familiarity with performance-based payment structures. Without specific past performance data, it is difficult to definitively assess their reliability and effectiveness for this significant undertaking.

How does the pricing structure and overall cost of this contract compare to similar federal technical training initiatives?

The $43 million contract value for technical training services needs to be benchmarked against comparable federal programs to assess value for money. The Cost Plus Incentive Fee (CPIF) structure complicates direct price comparisons, as the final cost is contingent on performance outcomes and achieved efficiencies. To evaluate the pricing, one would ideally compare the estimated cost per trainee, cost per training hour, or cost per skill certification against similar contracts awarded by the Department of Labor or other agencies for comparable technical skills. Factors such as the complexity of the skills taught, the duration of the training, and the geographic location can influence costs. A detailed analysis of the contractor's proposed costs, including direct labor, indirect costs, and profit/fee, relative to government estimates and market rates, is essential for a comprehensive value assessment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this $43 million technical training contract include potential cost overruns due to the CPIF structure if performance incentives are not effectively managed or if unforeseen challenges arise in program delivery. There's also a risk that the training provided may not align with current or future labor market demands, leading to suboptimal workforce development outcomes. The 'exclusion of sources' in the competition could pose a risk if it limited the pool of qualified providers, potentially impacting innovation or price competitiveness. Mitigation strategies likely involve robust contract oversight by the Department of Labor, clear performance metrics tied to incentives, regular program reviews to ensure relevance, and potentially market research to adapt training curricula. The contractor's own risk management plan would also be a critical component.

How effective is the 'full and open competition after exclusion of sources' method in ensuring fair pricing and quality for this type of service?

The procurement method 'full and open competition after exclusion of sources' presents a nuanced approach to competition. While aiming for broad market engagement, the explicit exclusion of certain sources suggests a specific rationale, such as unique capabilities, prior performance, or national security considerations, that narrows the competitive field. This method can be effective if the exclusions are well-justified and the remaining pool of bidders is sufficiently competitive to drive fair pricing and quality. However, if the exclusions significantly limit the number of capable bidders, it could reduce price pressure and potentially lead to higher costs for taxpayers. The effectiveness hinges on the transparency and validity of the exclusion rationale and the subsequent competition among the remaining offerors.

What is the historical spending pattern for technical and trade school services (NAICS 611519) by the Department of Labor?

Analyzing historical spending patterns for NAICS code 611519 by the Department of Labor provides context for the $43 million award to Chugach Education Services, Inc. Understanding the typical contract values, durations, and types of providers the DOL has engaged with in the past for technical training can reveal trends and priorities. For instance, has the DOL consistently invested in this area? Are contracts typically awarded through full and open competition, or are sole-source awards more common? Examining past spending can also highlight any significant shifts in funding levels or program focus. This historical data is essential for assessing whether the current contract represents a typical investment or a notable deviation, and for understanding the agency's long-term strategy in workforce development through vocational training.

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: DOL12RA20002

Offers Received: 7

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Government Solutions, LLC

Address: 3800 CENTERPOINT DR STE 1200, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $58,715,880

Exercised Options: $44,384,929

Current Obligation: $43,076,285

Actual Outlays: $28,795,731

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $15,699,051

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline