Department of Education awards $22.9M for financial transaction processing, with 5 bidders indicating robust competition

Contract Overview

Contract Amount: $22,920,840 ($22.9M)

Contractor: F.H. Cann & Associates, Inc.

Awarding Agency: Department of Education

Start Date: 2021-11-05

End Date: 2023-05-04

Contract Duration: 545 days

Daily Burn Rate: $42.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS.

Place of Performance

Location: NORTH ANDOVER, ESSEX County, MASSACHUSETTS, 01845

State: Massachusetts Government Spending

Plain-Language Summary

Department of Education obligated $22.9 million to F.H. CANN & ASSOCIATES, INC. for work described as: EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS. Key points: 1. Contract aims to enable Next Gen BPO providers to perform non-servicing functions, indicating a focus on operational efficiency. 2. The fixed-price contract type suggests predictable costs for the government. 3. With 5 bidders, the competition level appears healthy, potentially leading to better pricing. 4. The contract duration of 545 days provides a clear timeframe for service delivery. 5. This award falls under financial transaction processing, a critical back-office function. 6. The task order structure suggests a phased approach to onboarding new providers.

Value Assessment

Rating: good

The contract value of $22.9 million for financial transaction processing over approximately 18 months appears reasonable given the scope of enabling new providers for non-servicing functions. Benchmarking against similar large-scale financial processing contracts is difficult without more specific service details, but the number of bidders suggests market interest and potential for competitive pricing. The firm fixed-price nature helps control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 5 bidders participating. This indicates a broad outreach and a competitive marketplace for these financial transaction processing services. The presence of multiple bidders generally allows for price discovery and encourages contractors to offer competitive terms.

Taxpayer Impact: A competitive award process for this contract is beneficial for taxpayers as it likely resulted in a more favorable price compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are likely the Department of Education's internal operations, leading to more efficient financial transaction processing. The services delivered will support the operationalization of Next Gen BPO providers for non-servicing functional areas. The geographic impact is primarily national, supporting federal financial operations. Workforce implications may include the onboarding and training of personnel by the selected BPO providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen BPO providers become indispensable.
Risk of service disruption during the ramp-up phase if not managed effectively.
Ensuring data security and privacy for sensitive financial transactions is paramount.

Positive Signals

Awarding under full and open competition suggests a commitment to leveraging market capabilities.
The firm fixed-price contract provides cost certainty for the government.
The task order structure allows for phased implementation and management of new service providers.

Sector Analysis

This contract falls within the Financial Transactions Processing, Reserve, and Clearinghouse Activities sector (NAICS 522320). This sector is crucial for the smooth functioning of financial systems, both public and private. The market size for such services is substantial, encompassing a wide range of institutions that handle payment processing, transaction clearing, and reserve management. The Department of Education's spending here aligns with the need for efficient and secure financial operations to support its mission.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if the prime contractor, F.H. Cann & Associates, Inc., chooses to engage them. Without specific subcontracting plans, it's difficult to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Education's contracting officers and program managers. The firm fixed-price nature provides a degree of financial oversight by setting a ceiling on costs. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Financial Management Services
Payment Processing Services
Back Office Operations Support
Federal Financial Systems Modernization

Risk Flags

Data Security and Privacy
Service Disruption Risk
Vendor Performance Management
Contractor Capability Assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $22.9 million to F.H. CANN & ASSOCIATES, INC.. EO14042 - THE PURPOSE OF THIS REQUIREMENT (TASK ORDER 0002) IS TO ISSUE IDENTICAL RAMP-UP TASK ORDERS TO ALL BPO PROVIDERS. THE RAMP-UP TASK ORDERS WILL ALLOW NEXT GEN BPO PROVIDERS TO BEGIN PERFORMING TASKS UNDER ALL NON-SERVICING FUNCTIONAL AREAS.

Who is the contractor on this award?

The obligated recipient is F.H. CANN & ASSOCIATES, INC..

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $22.9 million.

What is the period of performance?

Start: 2021-11-05. End: 2023-05-04.

What is the track record of F.H. Cann & Associates, Inc. with federal contracts, particularly in financial transaction processing?

F.H. Cann & Associates, Inc. has a history of performing federal contracts, often related to debt collection and financial services. Their experience with the Department of Education and other federal agencies suggests familiarity with government procurement processes and requirements. While specific details on their performance for financial transaction processing under this particular task order (0002) are limited in the provided data, their established presence in the federal contracting space indicates a baseline level of capability. Further analysis would involve reviewing past performance evaluations and contract completion records to assess their reliability and effectiveness in similar roles.

How does the $22.9 million contract value compare to similar financial transaction processing contracts awarded by the Department of Education or other federal agencies?

Without specific details on the exact scope and duration of services for comparable contracts, a direct value comparison is challenging. However, $22.9 million for a task order enabling new providers for non-servicing functions over approximately 18 months appears to be a significant investment. The number of bidders (5) suggests that this is a competitive area, and the price achieved is likely reflective of market rates for such services. Agencies often procure financial processing services through various mechanisms, including large IDIQs or specific task orders like this one, making direct apples-to-apples comparisons difficult without granular data on service levels, transaction volumes, and contract types.

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

Key risks include potential service disruptions during the ramp-up phase for new BPO providers, ensuring robust data security and privacy for sensitive financial transactions, and the possibility of vendor lock-in. Mitigation strategies likely involve phased implementation, stringent security protocols and compliance checks, clear performance metrics, and contingency planning. The firm fixed-price contract also helps mitigate cost overrun risks. The Department of Education's oversight mechanisms and the competitive nature of the award are also risk-reduction factors.

How effective is the 'ramp-up task order' approach for onboarding new BPO providers in ensuring timely and efficient service delivery?

The 'ramp-up task order' approach is designed to facilitate a structured and controlled onboarding process for new Business Process Outsourcing (BPO) providers. This method allows the Department of Education to gradually integrate new capabilities, test performance, and ensure compliance before full operational deployment. Its effectiveness hinges on clear communication, well-defined milestones, adequate training, and robust oversight. If executed properly, it can minimize disruption and ensure that providers meet performance standards. However, challenges can arise if the ramp-up period is insufficient or if unforeseen technical or operational issues emerge.

What are the historical spending patterns for financial transaction processing at the Department of Education, and how does this award fit within them?

Historical spending patterns for financial transaction processing at the Department of Education would reveal the agency's reliance on external providers for these functions over time. This $22.9 million award suggests a strategic initiative to potentially modernize or expand its BPO capabilities, particularly for non-servicing functions. It may indicate an increase in outsourced financial operations or a shift towards newer providers ('Next Gen BPO'). Analyzing past spending would help determine if this award represents a significant deviation, an expansion, or a continuation of existing outsourcing strategies for financial management.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Financial Transactions Processing, Reserve, and Clearinghouse Activities

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

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1600 OSGOOD ST STE 2-120, NORTH ANDOVER, MA, 01845

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

Financial Breakdown

Contract Ceiling: $22,920,840

Exercised Options: $22,920,840

Current Obligation: $22,920,840

Actual Outlays: $22,920,840

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003120D0008

IDV Type: IDC

Timeline