Labor Department's $55.3M Contract with Chugach Education Services for Technical Schools Awarded Without Competition

Contract Overview

Contract Amount: $55,350,592 ($55.4M)

Contractor: Chugach Education Services, Inc.

Awarding Agency: Department of Labor

Start Date: 2014-10-31

End Date: 2017-04-30

Contract Duration: 912 days

Daily Burn Rate: $60.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CT::IGF NORTH TX JCC BRIDGE K 11/1/14 - 10/31/16 + 6MO EXTENSION

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75069

State: Texas Government Spending

Plain-Language Summary

Department of Labor obligated $55.4 million to CHUGACH EDUCATION SERVICES, INC. for work described as: IGF::CT::IGF NORTH TX JCC BRIDGE K 11/1/14 - 10/31/16 + 6MO EXTENSION Key points: 1. The contract value of $55.3 million is substantial, requiring careful scrutiny of its necessity and efficiency. 2. Awarded without competition, this contract raises questions about potential price inflation and lack of market-driven cost discovery. 3. The 'Other Technical and Trade Schools' sector is vital for workforce development, but procurement methods impact overall value. 4. The use of a Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns, increasing taxpayer risk.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Benchmarking against similar technical training contracts awarded competitively would be necessary to determine if the fixed fee and overall costs are reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed, indicating a limited source selection process. The absence of competitive bidding likely prevented the government from obtaining the best possible pricing and value through market forces.

Taxpayer Impact: The lack of competition and CPFF structure may lead to higher costs than a competitively bid contract, resulting in a less efficient use of taxpayer funds.

Public Impact

Taxpayers may be paying more than necessary due to the lack of competitive bidding. The effectiveness of the training provided under this contract is crucial for workforce development outcomes. The government's reliance on a single source for these services warrants scrutiny of the justification for not competing. The long duration of the contract (912 days) suggests a significant and ongoing need for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency in pricing

Positive Signals

Contract supports technical and trade education, a critical area.
Contract has a defined period of performance.
Fixed fee component provides some cost control.

Sector Analysis

This contract falls within the 'Other Technical and Trade Schools' sector, which is essential for equipping individuals with job-specific skills. Spending benchmarks in this area can vary widely based on the specialization and duration of training programs.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.

Oversight & Accountability

The non-competitive award and CPFF structure necessitate robust oversight from the Department of Labor to ensure funds are used efficiently and effectively, and that contract terms are adhered to.

Related Government Programs

Other Technical and Trade Schools
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Lack of competitive bidding may have led to inflated costs.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Potential for contractor to prioritize profit over efficiency due to non-competitive award.
Limited transparency into the justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $55.4 million to CHUGACH EDUCATION SERVICES, INC.. IGF::CT::IGF NORTH TX JCC BRIDGE K 11/1/14 - 10/31/16 + 6MO EXTENSION

Who is the contractor on this award?

The obligated recipient is CHUGACH EDUCATION SERVICES, INC..

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 $55.4 million.

What is the period of performance?

Start: 2014-10-31. End: 2017-04-30.

What was the specific justification for awarding this contract on a sole-source or limited basis, and was it adequately documented?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a limited or sole-source award. A thorough review of the contract file would be required to ascertain the specific justification, such as the existence of only one responsible source or an unusual and compelling urgency. The adequacy of this documentation is critical for assessing the procurement's compliance with federal acquisition regulations.

How does the fixed fee and overall cost of this contract compare to industry benchmarks for similar technical training services?

Without competitive bids, it is challenging to establish a precise benchmark. However, a comparison with publicly available data on similar government or private sector contracts for technical and trade school services, adjusted for scope and duration, could reveal potential cost deviations. The CPFF structure also warrants scrutiny to ensure the fixed fee is reasonable and doesn't incentivize excessive costs.

What metrics are in place to measure the effectiveness and quality of the technical training provided under this contract?

The effectiveness of the training is paramount given the contract's purpose. Key performance indicators (KPIs) related to student completion rates, job placement success, and employer satisfaction should be established and monitored. The Department of Labor's oversight should include regular assessments of these metrics to ensure the contractor is delivering high-quality training that meets workforce needs.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: DOL-ETA-14-R-00031

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation

Address: 3800 CENTERPOINT DR STE 1200, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $55,350,592

Exercised Options: $55,350,592

Current Obligation: $55,350,592

Actual Outlays: $2,959,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline