Department of Labor awards $71.9M contract to Serrato Corporation for Cleveland Job Corps Center services

Contract Overview

Contract Amount: $71,951,718 ($72.0M)

Contractor: Serrato Corporation

Awarding Agency: Department of Labor

Start Date: 2018-08-01

End Date: 2023-09-30

Contract Duration: 1,886 days

Daily Burn Rate: $38.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CLEVELAND JOB CORPS CENTER

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44110

State: Ohio Government Spending

Plain-Language Summary

Department of Labor obligated $72.0 million to SERRATO CORPORATION for work described as: CLEVELAND JOB CORPS CENTER Key points: 1. Contract value represents significant investment in vocational training and workforce development. 2. Competition was full and open after exclusion of sources, suggesting a deliberate procurement process. 3. Contract duration of 1886 days indicates a long-term commitment to service provision. 4. Firm Fixed Price contract type aims to control costs and provide budget certainty. 5. The contract supports educational services, aligning with federal goals for skill enhancement. 6. Geographic focus on Ohio highlights regional workforce needs. 7. The absence of small business set-aside suggests larger prime contractors are expected to manage the work.

Value Assessment

Rating: good

The contract value of $71.9 million over approximately five years for operating a Job Corps center is substantial. Benchmarking against similar contracts for Job Corps centers nationwide is crucial for a precise value-for-money assessment. However, the firm fixed-price structure suggests an effort to manage costs effectively. The specific services delivered and their outcomes will ultimately determine the true 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 indicates that while the competition was intended to be broad, certain sources were excluded prior to the solicitation. The number of bidders (2) is relatively low for a federal contract of this magnitude, which could suggest limited market interest or specific qualification requirements that narrowed the field. This level of competition may have implications for price negotiation.

Taxpayer Impact: A limited number of bidders can sometimes lead to higher prices for taxpayers if competition is not robust enough to drive down costs. However, the exclusion of sources might have been based on specific technical requirements necessary for effective service delivery.

Public Impact

Benefits students seeking vocational training and career development opportunities in the Cleveland area. Delivers essential educational and training services, including career counseling and job placement assistance. Geographic impact is concentrated in Cleveland, Ohio, addressing local workforce needs. Workforce implications include employment for instructors, administrative staff, and support personnel at the center. Aims to improve the employability and earning potential of participants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Low number of bidders (2) for a large federal contract could indicate potential issues with market reach or overly restrictive requirements.
The 'exclusion of sources' clause warrants further investigation to understand the rationale and ensure it did not unduly limit competition.
Performance metrics and outcomes for the Job Corps center are not detailed, making it difficult to assess effectiveness.
Potential for cost overruns if the firm fixed-price contract does not adequately account for all operational expenses.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Long contract duration (1886 days) suggests a stable provider and consistent service delivery.
The contract supports a vital federal program (Job Corps) aimed at workforce development.
Focus on a specific geographic location (Cleveland) allows for tailored service delivery.

Sector Analysis

The federal government invests significantly in education and training services through programs like Job Corps. This sector involves numerous educational institutions, vocational training providers, and support service contractors. The market size for such services is substantial, encompassing federal, state, and private funding. This contract fits within the broader category of government-funded educational services, often procured through competitive bidding processes to ensure quality and cost-effectiveness.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). The prime contractor, Serrato Corporation, is likely a larger entity capable of managing the full scope of services. There is no explicit information on subcontracting plans for small businesses within the provided data. The absence of a set-aside means that opportunities for small businesses would primarily be through subcontracting, if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's Office of the Assistant Secretary for Administration and Management. Accountability measures are usually embedded within the contract's performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS. The Inspector General for the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Job Corps Program
Workforce Innovation and Opportunity Act (WIOA) Programs
Federal Vocational Training Grants
Department of Labor Education Contracts

Risk Flags

Limited competition (2 bidders)
Exclusion of sources in procurement process
Lack of detailed performance metrics in summary data
Potential for cost overruns in fixed-price contracts if scope is not well-defined

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $72.0 million to SERRATO CORPORATION. CLEVELAND JOB CORPS CENTER

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 $72.0 million.

What is the period of performance?

Start: 2018-08-01. End: 2023-09-30.

What is the track record of Serrato Corporation in managing federal contracts, particularly those related to educational or training services?

Serrato Corporation has a history of receiving federal contracts, though specific details on their performance in managing educational or training services like Job Corps centers require deeper analysis. Examining past performance evaluations, any contract disputes, or awards associated with Serrato Corporation would provide insight into their capabilities and reliability. A review of their contract history within the Department of Labor and other agencies would be necessary to assess their experience in similar large-scale service delivery operations. Understanding their success in meeting performance metrics, managing budgets, and adhering to federal regulations on previous contracts is key to evaluating their suitability for this role.

How does the awarded amount of $71.9 million compare to the average cost of operating a Job Corps center of similar size and scope?

To benchmark the $71.9 million award, one would need to compare it against the average operational costs of other Job Corps centers nationwide. This comparison should account for factors such as the center's capacity (number of students served), the types of training programs offered, geographic location (which impacts labor and operational costs), and the contract duration. Data from the Department of Labor's own reporting or analyses by independent bodies like the Government Accountability Office (GAO) would be valuable. If this contract's value per student or per operational day is significantly higher or lower than the average, it could indicate either exceptional value or potential inefficiencies and cost concerns.

What specific risks are associated with a 'Full and Open Competition After Exclusion of Sources' procurement method for this contract?

The 'Full and Open Competition After Exclusion of Sources' method presents a unique set of risks. While intended to be competitive, the exclusion of specific sources prior to solicitation means that the pool of potential bidders is predetermined. This could limit innovation if excluded companies offered unique approaches. It also raises questions about the justification for exclusion; if the exclusions were arbitrary or not based on legitimate technical or capability requirements, it could lead to protests and delays. Furthermore, with only two bidders, the government might have less leverage in price negotiations, potentially increasing costs for taxpayers if the excluded sources could have offered more competitive bids. Transparency regarding the reasons for exclusion is crucial to mitigate these risks.

What are the key performance indicators (KPIs) used to measure the success of the Cleveland Job Corps Center under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for the Cleveland Job Corps Center contract. Typically, Job Corps contracts are evaluated based on metrics such as student enrollment rates, program completion rates, job placement rates for graduates, starting wages of placed graduates, and student satisfaction. The Department of Labor likely has a detailed statement of work with specific performance standards and deliverables that Serrato Corporation must meet. Regular performance reviews and reporting would track progress against these KPIs. Without access to the contract's SOW and performance metrics, a thorough assessment of program effectiveness is not possible.

How has federal spending on Job Corps centers evolved over the past five years, and does this contract align with historical spending patterns?

Analyzing historical spending patterns for the Job Corps program over the past five years would provide context for this $71.9 million award. This involves examining the total federal budget allocated to Job Corps, the number of centers funded, and the average contract values awarded. Trends in funding levels (increases or decreases), shifts in program focus, or changes in procurement strategies could be identified. This specific contract's value should be compared to the average award size and duration for similar Job Corps center operations during that period. Significant deviations from historical norms might warrant further investigation into the reasons behind them, such as changes in service requirements or market conditions.

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: 1630J5-18-R-00006

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 135 WEST COUNCIL ST, TUCSON, AZ, 85701

Business Categories: 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: $77,948,451

Exercised Options: $77,314,811

Current Obligation: $71,951,718

Actual Outlays: $59,690,275

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline