Treasury's $36.2M debt collection contract with Coast Professional, Inc. awarded via full and open competition

Contract Overview

Contract Amount: $36,202,478 ($36.2M)

Contractor: Coast Professional, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2018-01-26

End Date: 2024-08-17

Contract Duration: 2,395 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 28

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRIVATE COLLECTION AGENCY (PCA) SERVICES [MULTIPLE AWARD 6 OF 6]

Place of Performance

Location: WEST MONROE, OUACHITA County, LOUISIANA, 71292

State: Louisiana Government Spending

Plain-Language Summary

Department of the Treasury obligated $36.2 million to COAST PROFESSIONAL, INC. for work described as: PRIVATE COLLECTION AGENCY (PCA) SERVICES [MULTIPLE AWARD 6 OF 6] Key points: 1. Contract awarded through a competitive process, suggesting potential for price discovery. 2. The contract duration of nearly 7 years indicates a long-term need for these services. 3. Fixed-price contract type may offer cost certainty for the government. 4. The agency's use of multiple award contracts for debt collection suggests a strategy to ensure availability and potentially leverage competition. 5. The North American Industry Classification System (NAICS) code 522310 points to a specialized service within the financial sector. 6. The contract's geographic scope is national, with a specific award location in Louisiana.

Value Assessment

Rating: fair

Benchmarking the value for money on this specific contract is challenging without access to detailed performance metrics and comparable contract data for debt collection services. However, the firm fixed-price structure provides a degree of cost predictability. The total award amount of $36.2 million over nearly seven years suggests an average annual expenditure of approximately $5.2 million. This figure needs to be evaluated against the volume and value of debt collected to determine true cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 28 bids (no) suggests a robust level of interest and competition for this service. A higher number of bidders generally correlates with better price discovery and potentially lower costs for the government, as contractors vie to win the award.

Taxpayer Impact: The extensive competition for this debt collection contract is beneficial for taxpayers, as it likely drove down prices and ensured the government secured services from qualified providers at a competitive rate.

Public Impact

The primary beneficiaries are the Department of the Treasury and its constituent bureaus, which require efficient debt collection services. The services delivered include the recovery of delinquent federal debts, thereby improving the government's financial standing. The contract has a national geographic impact, as it pertains to the collection of federal debts across the United States. While not directly creating a large number of new federal jobs, the contract supports the workforce of the contractor, Coast Professional, Inc., and potentially indirectly impacts the financial health of individuals and entities owing federal debt.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for aggressive collection tactics impacting individuals' financial well-being.
Reliance on a single contractor for a significant portion of debt collection could pose a risk if performance falters.
Ensuring data privacy and security in the handling of sensitive financial information is paramount.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
Firm fixed-price contract type provides cost certainty.
Long contract duration suggests a stable, ongoing need and established relationship.

Sector Analysis

The debt collection services sector is a critical component of the financial services industry, supporting government and private entities in recovering outstanding debts. This contract falls under the broader financial services and support sector. Comparable spending benchmarks are difficult to ascertain without specific data on debt recovery rates and the types of debt being collected. However, government agencies frequently contract for these services due to specialized expertise and efficiency.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor, Coast Professional, Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, though larger prime contractors may engage small businesses in other capacities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of the Fiscal Service within the Department of the Treasury. Mechanisms likely include performance reviews, regular reporting requirements from the contractor, and adherence to contract terms and conditions. Transparency is facilitated through contract award databases like FPDS. The Inspector General for the Department of the Treasury may have jurisdiction for audits and investigations into fraud, waste, or abuse.

Related Government Programs

Federal Debt Collection Programs
Treasury Financial Management Services
Bureau of the Fiscal Service Contracts
Accounts Receivable Management Services
Mortgage and Nonmortgage Loan Brokerage Services

Risk Flags

Potential for aggressive collection practices.
Data security and privacy concerns.
Contractor performance variability.
Long-term reliance on a single vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $36.2 million to COAST PROFESSIONAL, INC.. PRIVATE COLLECTION AGENCY (PCA) SERVICES [MULTIPLE AWARD 6 OF 6]

Who is the contractor on this award?

The obligated recipient is COAST PROFESSIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $36.2 million.

What is the period of performance?

Start: 2018-01-26. End: 2024-08-17.

What is the historical spending trend for federal debt collection services by the Department of the Treasury?

Analyzing historical spending trends for federal debt collection services by the Department of the Treasury requires access to comprehensive procurement data over multiple fiscal years. Generally, federal agencies utilize a mix of in-house collection efforts and contracted services. Spending in this area can fluctuate based on economic conditions, changes in legislation affecting debt forgiveness or collection statutes, and the volume of delinquent federal debt. The Treasury, being responsible for managing federal finances, would likely maintain consistent or increasing spending on effective debt collection mechanisms to recoup owed funds. Without specific historical data for this contract or related categories, it's difficult to provide precise figures, but the consistent use of multiple award contracts suggests a sustained budgetary allocation for these services.

How does the performance of Coast Professional, Inc. on this contract compare to industry benchmarks for debt recovery rates?

Evaluating the performance of Coast Professional, Inc. against industry benchmarks for debt recovery rates requires access to specific performance metrics from this contract, such as the percentage of debt recovered, cost per dollar collected, and client satisfaction scores. These metrics are typically not publicly disclosed in detail. Industry benchmarks for debt collection vary significantly based on the type of debt (e.g., consumer vs. commercial, secured vs. unsecured), the age of the debt, and the collection strategy employed. Generally, effective debt collection agencies aim for recovery rates that justify their operational costs and fees, often measured against the total value of debt assigned. A comparison would necessitate obtaining Coast Professional's specific recovery data and benchmarking it against aggregated data from similar government contracts or private sector debt collection firms operating under comparable conditions.

What are the primary risks associated with relying on a single contractor for a significant portion of federal debt collection?

Relying on a single contractor for a significant portion of federal debt collection presents several key risks. Firstly, there's a risk of performance degradation; if the contractor's efficiency declines or their financial stability weakens, the government's debt recovery efforts could suffer substantially. Secondly, a lack of ongoing competition can reduce the incentive for the contractor to innovate or optimize their processes, potentially leading to higher costs or lower effectiveness over time. Thirdly, a sole-source or limited-competition scenario can limit the government's leverage in negotiations and contract modifications. Finally, if the primary contractor faces unforeseen operational disruptions (e.g., data breaches, legal challenges, or major staffing issues), it could create a significant gap in essential government functions, impacting revenue streams.

What is the typical cost structure for federal debt collection services, and how does this contract's pricing align?

The typical cost structure for federal debt collection services often involves a commission-based fee, where the contractor receives a percentage of the debt successfully collected. Alternatively, some contracts might utilize a fixed fee per collection, a hybrid model, or hourly rates for specific services. The firm fixed-price (FFP) nature of this contract suggests that Coast Professional, Inc. has agreed to perform the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk to the contractor. To assess alignment, one would need to compare the effective commission rate or cost per dollar collected implied by this contract's total value and expected collection volume against industry standards and other government contracts for similar services. Without knowing the total debt value assigned and recovered, a direct comparison of cost-effectiveness is limited.

How does the Bureau of the Fiscal Service manage contractor performance and ensure compliance with federal regulations in debt collection?

The Bureau of the Fiscal Service (BFS) manages contractor performance and ensures compliance through a multi-faceted approach. This typically involves establishing clear performance work statements (PWS) that define specific deliverables, service levels, and key performance indicators (KPIs). Regular performance reviews, data reporting, and audits are conducted to monitor adherence to these requirements. BFS likely employs contract officers and specialists who oversee the contract, review contractor reports, and address any issues that arise. Compliance with federal regulations, such as the Fair Debt Collection Practices Act (FDCPA) and Treasury-specific directives, is a critical component, often enforced through contractual clauses, mandatory training for contractor personnel, and potential penalties for non-compliance. The Inspector General's office may also conduct independent audits to ensure accountability and regulatory adherence.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Mortgage and Nonmortgage Loan Brokers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TFSAFSA17Q0001

Offers Received: 28

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4273 VOLUNTEER RD, GENESEO, NY, 14454

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

Financial Breakdown

Contract Ceiling: $36,202,478

Exercised Options: $36,202,478

Current Obligation: $36,202,478

Actual Outlays: $31,611,894

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS23F0009U

IDV Type: FSS

Timeline