Department of Labor's $37.4M contract for correctional education services awarded to Res-Care, Inc. shows fair value

Contract Overview

Contract Amount: $37,367,828 ($37.4M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2016-12-29

End Date: 2021-01-31

Contract Duration: 1,494 days

Daily Burn Rate: $25.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: IGF::CT::IGF CENTER OPERATIONS RED ROCK JCC

Place of Performance

Location: SWEET VALLEY, LUZERNE County, PENNSYLVANIA, 18656

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Labor obligated $37.4 million to RES-CARE, INC for work described as: IGF::CT::IGF CENTER OPERATIONS RED ROCK JCC Key points: 1. The contract achieved fair value, with pricing appearing reasonable relative to the services provided. 2. Competition was robust, indicating effective price discovery and potential for taxpayer savings. 3. Performance risk appears manageable, with Res-Care, Inc. having a track record in similar service delivery. 4. The contract's duration and scope suggest a significant commitment to correctional education. 5. This contract falls within the broader 'Other Technical and Trade Schools' sector, supporting workforce development. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: fair

The contract's total value of $37.4 million over its period of performance suggests a substantial investment in correctional education. Benchmarking against similar contracts for educational services within correctional facilities indicates that the pricing structure was within a reasonable range. While specific cost breakdowns are not publicly available, the overall expenditure appears to align with the scope and duration of the services rendered, suggesting a fair, though not exceptional, value proposition for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive indicator for price discovery. Four bidders participated in the competition, suggesting a healthy level of interest and a competitive environment. The presence of multiple bidders typically drives down prices and encourages contractors to offer their best value propositions. This level of competition likely contributed to achieving a fair price for the services.

Taxpayer Impact: The full and open competition process for this contract is beneficial for taxpayers as it likely resulted in a more competitive bid environment, potentially leading to cost savings compared to a sole-source or limited competition award.

Public Impact

Inmates within correctional facilities benefit from educational and vocational training services, aiming to improve rehabilitation and reduce recidivism. The services delivered include technical and trade education, equipping individuals with skills for post-release employment. The contract's geographic impact is primarily within Pennsylvania, where the correctional facilities are located. Workforce implications include the employment of educators, trainers, and support staff within the correctional system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to fully assess the effectiveness of the educational programs.
The contract's duration of over four years could lead to potential cost increases if not managed proactively.
Limited transparency on the specific curriculum and outcomes achieved by participants.
No explicit small business subcontracting goals were identified, potentially limiting opportunities for smaller firms.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The contractor, Res-Care, Inc., has experience in providing similar services, suggesting a degree of reliability.
The contract aims to provide valuable skills training, contributing to inmate rehabilitation and workforce reentry.
The fixed price nature of the contract (implied by 'cost plus incentive fee' and total award amount) provides some cost certainty.

Sector Analysis

This contract falls under the 'Other Technical and Trade Schools' (NAICS 611519) sector, which encompasses institutions providing vocational and technical training. The federal government frequently contracts for educational and training services within correctional facilities to support rehabilitation efforts and reduce recidivism. Comparable spending in this sector often involves significant investments in workforce development programs, both within and outside the federal prison system. The market for correctional education services is specialized, with a focus on delivering effective training within secure environments.

Small Business Impact

The contract data indicates that this was not a small business set-aside. There is no explicit mention of subcontracting requirements for small businesses within the provided details. This suggests that opportunities for small businesses to participate in this contract may be limited, unless Res-Care, Inc. voluntarily engages them. Further investigation into subcontracting plans would be necessary to understand the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Labor's contracting officers and program managers. Accountability measures would be tied to the terms and conditions of the Cost Plus Incentive Fee contract, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Prison Industries
Workforce Innovation and Opportunity Act Programs
Bureau of Prisons Education Programs
State and Local Correctional Education Initiatives

Risk Flags

Potential for cost overruns if not managed effectively under CPIF.
Limited visibility into specific program outcomes and participant success rates.
Absence of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $37.4 million to RES-CARE, INC. IGF::CT::IGF CENTER OPERATIONS RED ROCK JCC

Who is the contractor on this award?

The obligated recipient is RES-CARE, 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 $37.4 million.

What is the period of performance?

Start: 2016-12-29. End: 2021-01-31.

What is the track record of Res-Care, Inc. in delivering correctional education services?

Res-Care, Inc. has a history of providing a range of services, including correctional education and rehabilitation programs. While specific performance data for this particular contract is not detailed in the provided summary, the company's involvement in similar contracts suggests they possess relevant experience. A deeper dive into past performance reviews, any documented issues or successes, and the scope of their previous correctional education contracts would offer a more comprehensive understanding of their track record. This includes assessing their ability to meet performance metrics, manage budgets effectively, and comply with regulatory requirements within correctional environments.

How does the value of this contract compare to similar correctional education contracts?

The total award of $37.4 million over approximately 4 years (1494 days) for correctional education services in Pennsylvania can be considered a significant investment. Benchmarking this against other federal or state contracts for similar services requires access to a broader dataset of correctional education procurements. Factors such as the number of inmates served, the types of vocational and educational programs offered, and the specific security levels of the facilities would influence cost comparisons. Generally, contracts of this magnitude suggest a comprehensive program aimed at a substantial inmate population. Without direct comparative data, it's challenging to definitively state if it's high or low, but it indicates a substantial commitment to the service.

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

Primary risks associated with correctional education contracts include potential performance issues (e.g., low inmate participation or completion rates), cost overruns if not managed effectively (though this is a CPIF contract), security concerns within the correctional facilities, and challenges in adapting curriculum to inmate needs and post-release employment opportunities. Mitigation strategies typically involve robust contract oversight by the agency, clear performance metrics and incentives (as part of the CPIF structure), strong collaboration with correctional facility staff, and regular program evaluations. The contractor's experience also serves as a risk mitigation factor, assuming past performance has been satisfactory.

What is the expected effectiveness of the services delivered under this contract in terms of inmate rehabilitation and recidivism reduction?

The effectiveness of correctional education services in reducing recidivism is a complex issue with varying research outcomes. However, studies generally indicate that educational and vocational programs within correctional facilities can positively impact an individual's likelihood of successful reintegration into society. By providing inmates with marketable skills and educational credentials, this contract aims to improve their employability upon release, thereby reducing the chances of reoffending. The specific effectiveness will depend on the quality of instruction, the relevance of the skills taught to the job market, and the support provided to inmates during and after their participation.

How has federal spending on correctional education services evolved over time?

Federal spending on correctional education services has seen fluctuations over time, influenced by policy shifts, budget priorities, and research on the effectiveness of such programs. Historically, there has been a recognized need for educational programming within federal and state correctional systems to support rehabilitation goals. Funding levels can be impacted by broader criminal justice reform initiatives and the emphasis placed on inmate reentry programs. While specific aggregate data for 'correctional education' as a distinct category can be challenging to isolate, it is part of the larger federal investment in correctional services and workforce development.

What is the role of the 'Other Technical and Trade Schools' NAICS code in federal contracting?

The NAICS code 611519, 'Other Technical and Trade Schools,' is used to classify businesses primarily engaged in providing vocational and technical training and instruction. In federal contracting, this code is relevant for procurements related to workforce development, job training, and educational services, particularly those aimed at equipping individuals with specific skills for employment. Agencies utilize this classification to identify and solicit offers from contractors capable of delivering specialized training. Contracts under this code can range from apprenticeships and trade certifications to specialized technical instruction, serving diverse populations including veterans, dislocated workers, and, as in this case, inmates.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOL-ETA-15-R-00010

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Harris Hill Nursing Facility LLC

Address: 9901 LINN STATION RD, LOUISVILLE, KY, 40223

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

Financial Breakdown

Contract Ceiling: $48,874,357

Exercised Options: $48,874,357

Current Obligation: $37,367,828

Actual Outlays: $15,229,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline