Department of Labor's $57M contract for application processing services awarded to EXCEED, LLC shows potential value concerns

Contract Overview

Contract Amount: $57,056,322 ($57.1M)

Contractor: Exceed, LLC

Awarding Agency: Department of Labor

Start Date: 2004-06-30

End Date: 2007-12-31

Contract Duration: 1,279 days

Daily Burn Rate: $44.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 16

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: APPLICATION PROCESSING

Place of Performance

Location: HYATTSVILLE, PRINCE GEORGES County, MARYLAND, 20785

State: Maryland Government Spending

Plain-Language Summary

Department of Labor obligated $57.1 million to EXCEED, LLC for work described as: APPLICATION PROCESSING Key points: 1. The contract's cost-plus-fixed-fee structure warrants scrutiny for potential cost overruns. 2. Limited information on competition dynamics makes it difficult to assess price reasonableness. 3. The contract's duration and cost suggest a significant investment in administrative support. 4. Performance context is lacking, making it hard to evaluate the effectiveness of services. 5. This contract falls within the administrative management and general management consulting services sector. 6. The absence of small business set-asides may limit opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this $57 million contract is challenging without more detailed performance metrics and comparable contract data. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can sometimes lead to higher costs if not managed tightly. Without specific details on the services delivered and their outcomes, it's difficult to definitively assess if the government received excellent value for its investment. Further analysis of the fixed fee component relative to the scope of work would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests some level of competition occurred, but the specifics of how sources were excluded are not detailed. The presence of only one awardee (no: 16) implies that while competition might have been initiated, it resulted in a single successful bidder. This limited competition could potentially impact price discovery and may not have driven the most cost-effective solution.

Taxpayer Impact: Limited competition can sometimes lead to higher prices for taxpayers if the chosen contractor faces less pressure to offer the most competitive bid.

Public Impact

Benefits the Department of Labor by providing essential administrative support for application processing. Services delivered likely include managing and processing various applications, ensuring efficient workflow. The geographic impact is primarily within Maryland, where the contract is managed. Workforce implications may involve supporting federal employees and potentially contractors involved in the application process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may incentivize higher spending.
Limited transparency on competition exclusion raises questions about fairness.
Lack of performance metrics hinders value assessment.

Positive Signals

Awarded under a competitive process, indicating some level of market vetting.
Long contract duration suggests a sustained need for these services.
Contractor EXCEED, LLC has a track record with federal contracts.

Sector Analysis

This contract falls under the 'Administrative Management and General Management Consulting Services' (NAICS 541611) sector. This sector is characterized by firms providing expertise in organizational efficiency, management strategies, and operational support. The market size for such services is substantial within the federal government, as agencies constantly seek to optimize their operations. This specific contract appears to be a significant investment in supporting the administrative functions of the Employment and Training Administration.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as 'sb' is false and there is no mention of small business set-asides. This suggests that the competition, while initiated, did not specifically target or prioritize small businesses. Consequently, there are likely no direct subcontracting opportunities mandated for small businesses under this award, potentially limiting their involvement in this particular federal spending.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's contracting officers and program managers. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is assessed through the availability of contract data, such as that provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Labor Administrative Support Contracts
Federal Application Processing Services
Management and Consulting Services Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Cost-plus-fixed-fee contract type can lead to cost overruns if not managed properly.
Limited competition details raise questions about optimal price discovery.
Lack of explicit performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $57.1 million to EXCEED, LLC. APPLICATION PROCESSING

Who is the contractor on this award?

The obligated recipient is EXCEED, LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Employment and Training Administration).

What is the total obligated amount?

The obligated amount is $57.1 million.

What is the period of performance?

Start: 2004-06-30. End: 2007-12-31.

What is the track record of EXCEED, LLC in performing similar application processing services for the federal government?

Information on EXCEED, LLC's specific track record for application processing services is not detailed in the provided data. However, the 'no' field (16) suggests this is one of multiple awards to the contractor. A deeper dive into their contract history, past performance reviews, and any reported issues would be necessary to fully assess their capability and reliability in handling application processing tasks. Examining previous contracts of similar scope and value awarded to EXCEED, LLC would provide better insight into their performance trends and ability to meet government requirements effectively.

How does the cost-plus-fixed-fee structure of this contract compare to industry benchmarks for similar services?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for services where the scope is not precisely defined or is expected to evolve. For application processing, CPFF can be appropriate if the volume or complexity of applications is variable. However, it carries a risk of cost overruns if the 'cost' component is not rigorously managed and audited. Benchmarking requires comparing the fixed fee percentage and the total estimated cost against similar contracts for application processing or administrative support services. Without access to detailed breakdowns of costs and fees, and comparable contract data, it's difficult to definitively state if this structure is optimal or if the fee is competitive. Agencies often aim for a fixed fee that represents a reasonable profit margin for the contractor's management effort.

What are the key performance indicators (KPIs) used to measure the success of this application processing contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for application processing services, KPIs would include metrics such as application processing time, accuracy rates, error rates, backlog management, and user satisfaction (if applicable). The effectiveness of the contract hinges on whether EXCEED, LLC meets these performance standards. Without explicit KPIs and associated performance data, it is challenging to evaluate the contract's success and the value delivered to the Department of Labor. A thorough review of the contract's Statement of Work (SOW) and any appended performance requirements would be needed to identify these metrics.

What is the historical spending trend for application processing services at the Department of Labor?

The provided data only details a single contract award of $57,056,321.93 to EXCEED, LLC for application processing services from June 30, 2004, to December 31, 2007. To understand the historical spending trend, one would need to analyze spending data for similar application processing contracts across multiple fiscal years and potentially across different administrations within the Department of Labor. This would involve querying federal procurement databases for all contracts related to application processing, filtering by the Department of Labor as the awarding agency, and aggregating the total spending over time. This single data point does not provide a trend but represents a specific historical expenditure.

Were there any specific risks identified during the procurement process for this contract, and how were they mitigated?

The provided data does not explicitly detail the risks identified during the procurement process for this contract or the mitigation strategies employed. The contract type is 'Cost Plus Fixed Fee' (CPFF), which inherently carries risks related to cost overruns. The award was made under 'Full and Open Competition After Exclusion of Sources,' suggesting that while competition was sought, certain sources may have been excluded, which could introduce risks related to the breadth of competition and potential for best value. A comprehensive risk assessment would typically involve evaluating factors like contractor performance history, technical approach, management capability, and financial stability. Mitigation strategies would be documented in the source selection decision document.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 16

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8100 PROFRESSIONAL PLACE, LANDOVER, MD, 20785

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $121,385,556

Exercised Options: $121,385,556

Current Obligation: $57,056,322

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline