Treasury awards $8.7M contract for debt collection services to Transworld Systems Inc

Contract Overview

Contract Amount: $8,704,265 ($8.7M)

Contractor: Transworld Systems Inc.

Awarding Agency: Department of the Treasury

Start Date: 2025-05-18

End Date: 2026-08-17

Contract Duration: 456 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRIVATE COLLECTION AGENCY (PCA) SERVICES BRIDGE CONTRACT

Place of Performance

Location: FORT WASHINGTON, MONTGOMERY County, PENNSYLVANIA, 19034

State: Pennsylvania Government Spending

Plain-Language Summary

Department of the Treasury obligated $8.7 million to TRANSWORLD SYSTEMS INC. for work described as: PRIVATE COLLECTION AGENCY (PCA) SERVICES BRIDGE CONTRACT Key points: 1. Contract aims to enhance federal debt recovery efforts through specialized collection services. 2. Focus on efficient and compliant debt collection practices to maximize recovery rates. 3. Performance period spans over 1.5 years, indicating a need for sustained collection support. 4. Firm Fixed Price contract type suggests predictable costs for the government. 5. This award is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, allowing for flexibility. 6. The contract is managed by the Bureau of the Fiscal Service, a key agency in managing federal financial operations.

Value Assessment

Rating: good

The contract value of $8.7 million for a 456-day period appears reasonable for specialized debt collection services. Benchmarking against similar contracts for federal debt collection agencies is challenging without more specific service details and performance metrics. However, the firm fixed-price structure provides cost certainty. The Bureau of the Fiscal Service's role suggests a focus on efficient and compliant recovery, which can be a good indicator of value if performance targets are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and service quality. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and encouraging innovation among service providers, ensuring the government receives the best possible value for its investment in debt collection.

Public Impact

Benefits taxpayers by improving the recovery of delinquent federal debts, thereby reducing the net cost of government programs. Services delivered include the collection of outstanding debts owed to the federal government. Geographic impact is nationwide, as the services are likely to address debts from individuals and entities across the United States. Workforce implications are primarily within the contractor's organization, with potential for specialized roles in collections and compliance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for aggressive collection tactics that could negatively impact debtors.
Ensuring compliance with all federal debt collection regulations (e.g., FDCPA) is critical.
Data security and privacy of debtor information must be rigorously maintained.

Positive Signals

Leverages specialized expertise in debt collection, which government agencies may not possess internally.
The firm fixed-price contract provides budget predictability.
Awarded through full and open competition, suggesting a competitive selection process.

Sector Analysis

The debt collection services sector is a specialized segment within the broader business services industry. Federal agencies often contract out these services to specialized firms due to the complex legal and regulatory environment, as well as the need for dedicated resources. Comparable spending benchmarks are difficult to establish without knowing the specific types and volumes of debt being collected, but the overall market for accounts receivable and debt collection services is substantial.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a small business set-aside. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Transworld Systems Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight is likely managed by the Bureau of the Fiscal Service, which is responsible for managing federal debt collection. Accountability measures would be tied to the performance metrics outlined in the contract and the firm fixed-price terms. Transparency is generally facilitated through contract award databases and reporting requirements, though specific operational details of the collection process may be proprietary.

Related Government Programs

Treasury Debt Management
Federal Debt Collection Programs
Accounts Receivable Management Services
Financial Services Contracts

Risk Flags

Compliance Risk
Data Security Risk
Reputational Risk
Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $8.7 million to TRANSWORLD SYSTEMS INC.. PRIVATE COLLECTION AGENCY (PCA) SERVICES BRIDGE CONTRACT

Who is the contractor on this award?

The obligated recipient is TRANSWORLD SYSTEMS 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 $8.7 million.

What is the period of performance?

Start: 2025-05-18. End: 2026-08-17.

What is the track record of Transworld Systems Inc. in performing similar federal contracts?

Transworld Systems Inc. (TSI) has a history of performing debt collection services for various entities, including government agencies. While specific details on past federal contracts are not readily available in this summary, TSI is a large player in the private sector debt collection market. Federal agencies typically vet contractors based on past performance, financial stability, and compliance records. For this specific contract, the Bureau of the Fiscal Service would have conducted due diligence to ensure TSI's capability to meet the requirements, including adherence to strict federal regulations governing debt collection and data privacy. Further investigation into their performance on similar government contracts, if publicly accessible, would provide a more comprehensive view of their track record.

How does the pricing structure of this contract compare to industry standards for debt collection?

This contract is structured as Firm Fixed Price (FFP). In the debt collection industry, pricing can vary significantly based on the age and type of debt, the volume of accounts, and the success rate of collection. FFP contracts are generally preferred by the government when the scope of work is well-defined, as they shift the risk of cost overruns to the contractor. While a direct per-dollar-collected fee is not specified here, the overall contract value of $8.7 million for a 456-day period suggests an anticipated level of collection activity. Industry benchmarks often involve a percentage of the debt recovered, or a fixed fee per account. Without knowing the specific recovery targets and the types of debt, a precise comparison to industry standards is difficult. However, the competitive bidding process is intended to ensure that the FFP offers a fair market price.

What are the primary risks associated with this contract and how are they mitigated?

Key risks include potential non-compliance with debt collection regulations (e.g., Fair Debt Collection Practices Act), data breaches compromising sensitive debtor information, and reputational damage to the government if collection practices are perceived as overly aggressive or unfair. Mitigation strategies likely involve strict contractual clauses requiring adherence to all applicable laws and regulations, robust data security protocols mandated by the government, and performance monitoring by the Bureau of the Fiscal Service. The FFP structure also incentivizes the contractor to manage operational risks efficiently to maintain profitability. Regular audits and performance reviews would be crucial oversight mechanisms.

How effective is the Bureau of the Fiscal Service in overseeing debt collection contracts?

The Bureau of the Fiscal Service (BFS) is a primary agency within the Treasury Department responsible for managing federal financial operations, including the collection of delinquent debts. BFS has established processes and expertise in overseeing such contracts. Their effectiveness is generally measured by the success rate of debt recovery, the efficiency of the collection process, and the contractor's compliance with legal and ethical standards. BFS utilizes performance metrics, reporting requirements, and potentially audits to monitor contractor performance. While specific effectiveness metrics for this particular contract are not yet available, BFS's mandate and experience suggest a structured approach to oversight aimed at maximizing recovery while protecting debtor rights and government reputation.

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

The Department of the Treasury, particularly through the Bureau of the Fiscal Service, has consistently utilized contracted services for debt collection. Historical spending in this area fluctuates based on the volume of delinquent debt and the specific strategies employed for recovery. Agencies often use a mix of in-house efforts and external contractors to manage diverse debt portfolios. The use of IDIQ contracts, like the one this delivery order is under, suggests a recurring need for these services. Analyzing past spending on similar contracts by BFS and other Treasury bureaus would reveal trends in the utilization and cost of outsourced debt collection, indicating whether this $8.7 million award is in line with historical investment in this function.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Collection Agencies

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: 2033H625Q00058

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 VIRGINIA DR STE 514, FORT WASHINGTON, PA, 19034

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

Financial Breakdown

Contract Ceiling: $8,704,265

Exercised Options: $8,704,265

Current Obligation: $8,704,265

Actual Outlays: $3,408,187

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QRAA20D001D

IDV Type: FSS

Timeline