Department of Education awards $52.9M for Specialty Task Services to Nelnet Servicing LLC
Contract Overview
Contract Amount: $52,902,154 ($52.9M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2024-04-01
End Date: 2027-03-31
Contract Duration: 1,094 days
Daily Burn Rate: $48.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: SPECIALTY TASK SERVICES (STS) TASK ORDER IS FOR IMAGE REPOSITORY, DECOMMISSIONED SERVICER DATA AND PAYMENT SUPPORT, FFEL GUARANTY AGENCY REHABILITATION LOAN PURCHASES, AND LEGACY LOAN CONSOLIDATION ORIGINATION AND DISBURSEMENT SUPPORT FUNCTIONS.
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20202
Plain-Language Summary
Department of Education obligated $52.9 million to NELNET SERVICING LLC for work described as: SPECIALTY TASK SERVICES (STS) TASK ORDER IS FOR IMAGE REPOSITORY, DECOMMISSIONED SERVICER DATA AND PAYMENT SUPPORT, FFEL GUARANTY AGENCY REHABILITATION LOAN PURCHASES, AND LEGACY LOAN CONSOLIDATION ORIGINATION AND DISBURSEMENT SUPPORT FUNCTIONS. Key points: 1. Contract supports critical loan servicing functions including image repository, data, and payment support. 2. The awardee, Nelnet Servicing LLC, is a significant player in the student loan servicing market. 3. Fixed Price with Economic Price Adjustment contract type introduces potential for cost escalation. 4. The sector involves credit intermediation, a key area for government financial operations.
Value Assessment
Rating: good
The contract value of $52.9M over approximately 3 years appears reasonable for the specialized services described. Benchmarking against similar large-scale loan servicing contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method generally leads to better price discovery and value for the government.
Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for essential government functions.
Public Impact
Ensures continuity of operations for vital student loan servicing functions. Supports government efforts in managing and rehabilitating federal loans. Impacts borrowers through continued access to loan consolidation and payment support services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause may increase final cost.
- Contract duration of nearly 3 years requires ongoing monitoring.
Positive Signals
- Awarded through full and open competition.
- Supports essential government financial operations.
Sector Analysis
This contract falls within the 'Other Activities Related to Credit Intermediation' sector, which is crucial for managing federal financial obligations and borrower services. Spending in this area is often substantial due to the scale of government lending programs.
Small Business Impact
The data indicates that small businesses were not directly awarded this contract, as the awardee is Nelnet Servicing LLC. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Standard oversight mechanisms for federal contracts, including performance monitoring and financial reviews, should be in place.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for cost increases due to economic price adjustment.
- Reliance on a single large contractor for critical functions.
- Complexity of integrated loan servicing operations.
- Need for robust data security and privacy measures.
Tags
other-activities-related-to-credit-inter, department-of-education, dc, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $52.9 million to NELNET SERVICING LLC. SPECIALTY TASK SERVICES (STS) TASK ORDER IS FOR IMAGE REPOSITORY, DECOMMISSIONED SERVICER DATA AND PAYMENT SUPPORT, FFEL GUARANTY AGENCY REHABILITATION LOAN PURCHASES, AND LEGACY LOAN CONSOLIDATION ORIGINATION AND DISBURSEMENT SUPPORT FUNCTIONS.
Who is the contractor on this award?
The obligated recipient is NELNET SERVICING LLC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $52.9 million.
What is the period of performance?
Start: 2024-04-01. End: 2027-03-31.
What is the specific breakdown of services within the 'Specialty Task Services' and how do they align with the agency's core mission?
The Specialty Task Services encompass critical functions such as managing an image repository, decommissioning servicer data, providing payment support, handling FFEL guaranty agency rehabilitation loan purchases, and supporting legacy loan consolidation origination and disbursement. These services directly align with the Department of Education's mission to promote student achievement and preparation for global competitiveness by ensuring effective management and servicing of federal student loan programs.
What are the potential risks associated with the 'Fixed Price with Economic Price Adjustment' contract type for this service?
The primary risk of a Fixed Price with Economic Price Adjustment (FPEPA) contract is cost escalation. Fluctuations in economic factors, such as inflation or changes in labor costs, can lead to increased payments to the contractor beyond the initial fixed price. This necessitates careful monitoring of economic indicators and contract terms to manage potential budget overruns and ensure value for taxpayer money.
How will the effectiveness of Nelnet Servicing LLC's performance be measured and ensured throughout the contract period?
Effectiveness will likely be measured through Key Performance Indicators (KPIs) tied to service level agreements (SLAs) outlined in the contract. These could include metrics for data accuracy, processing times for loan consolidation, uptime of the image repository, and successful rehabilitation loan purchases. The Department of Education's contracting officer and technical representatives will monitor these KPIs and contractor performance reports.
Industry Classification
NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Other Activities Related to Credit Intermediation
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: 91003122R0007
Offers Received: 8
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 121 S 13TH ST, LINCOLN, NE, 68508
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $127,472,842
Exercised Options: $52,902,154
Current Obligation: $52,902,154
Actual Outlays: $22,570,254
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 91003123D0005
IDV Type: IDC
Timeline
Start Date: 2024-04-01
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 00:00:00
Last Modified: 2026-03-31
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