Labor's $103M Vocational Services Contract with Res-Care Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $102,938,321 ($102.9M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2004-02-01

End Date: 2009-05-31

Contract Duration: 1,946 days

Daily Burn Rate: $52.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: VOCATIONAL AND ACADEMIC SERVICES FOR YOUTH

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94130

State: California Government Spending

Plain-Language Summary

Department of Labor obligated $102.9 million to RES-CARE, INC for work described as: VOCATIONAL AND ACADEMIC SERVICES FOR YOUTH Key points: 1. The contract's significant value of $103 million raises questions about cost-effectiveness for vocational and academic services. 2. Full and open competition was utilized, but the effectiveness of price discovery needs further examination. 3. Potential risks include the long duration (1946 days) and the cost-plus incentive fee structure, which can incentivize spending. 4. The sector, Facilities Support Services, is broad, and specific benchmarks for youth vocational programs are not readily available.

Value Assessment

Rating: questionable

The contract's total award value of $103 million over its period is substantial. Without specific per-unit cost data or comparison points for similar youth vocational and academic services, assessing its value relative to market rates is difficult. The cost-plus incentive fee structure warrants close monitoring to ensure efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for achieving fair pricing. However, the effectiveness of this competition in driving down costs for specialized youth services requires deeper analysis, especially given the contract's duration and fee structure.

Taxpayer Impact: The substantial award value suggests significant taxpayer investment. Ensuring the services provided are necessary, effective, and priced competitively is crucial for maximizing taxpayer return.

Public Impact

Taxpayers are funding extensive vocational and academic services for youth, with a significant portion allocated to this contract. The long-term nature of the contract raises concerns about adaptability to changing needs and potential for complacency. The specific outcomes and effectiveness of the services provided to youth are critical metrics for public accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus incentive fee structure may lead to higher costs.
Long contract duration (over 5 years) could reduce flexibility.
Lack of specific per-unit cost benchmarks makes value assessment difficult.
Small business participation is not indicated.

Positive Signals

Awarded under full and open competition.
Services target youth development, a potentially high-impact area.

Sector Analysis

The Facilities Support Services sector is broad. For youth vocational and academic services, spending benchmarks can vary widely based on program intensity, duration, and specific skill development. This contract's value of $103 million places it as a significant investment within this niche.

Small Business Impact

The provided data indicates that small business participation was not a factor in this contract (ss: false, sb: false). This suggests that opportunities for small businesses to contribute to or benefit from this significant federal spending were likely limited.

Oversight & Accountability

The contract's duration and cost-plus incentive fee structure necessitate robust oversight from the Office of the Assistant Secretary for Administration and Management to ensure performance standards are met and costs are controlled. Regular performance reviews and audits would be critical.

Related Government Programs

Facilities Support Services
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Potential for cost overruns due to CPIF structure.
Long contract duration may limit adaptability.
Lack of clear per-unit cost benchmarks hinders value assessment.
Limited transparency on specific youth outcomes.
No indication of small business involvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $102.9 million to RES-CARE, INC. VOCATIONAL AND ACADEMIC SERVICES FOR YOUTH

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 $102.9 million.

What is the period of performance?

Start: 2004-02-01. End: 2009-05-31.

What specific vocational and academic outcomes were achieved for the youth served under this contract, and how do these outcomes compare to the investment made?

Assessing the precise outcomes requires access to program-specific performance metrics and impact evaluations. Without this data, it's challenging to definitively state the return on the $103 million investment. Key indicators would include graduation rates, job placement success, and skill acquisition levels relevant to the vocational training provided.

Given the cost-plus incentive fee structure, what mechanisms were in place to prevent cost overruns and ensure the government received the best possible value?

A cost-plus incentive fee (CPIF) contract aims to incentivize both contractor efficiency and government cost control through shared savings or cost overruns. Effective oversight would involve rigorous monitoring of costs, clear performance targets tied to incentives, and robust negotiation of the fee structure to align contractor profit with mission success and cost containment.

How did the full and open competition process ensure that Res-Care's bid represented the most effective and cost-efficient solution for providing these youth services compared to potential competitors

Full and open competition theoretically allows all responsible sources to submit offers, fostering a competitive environment that drives down prices and improves quality. However, the effectiveness hinges on the clarity of the solicitation's requirements, the evaluation criteria used, and the government's ability to accurately assess the technical merit and cost proposals of all bidders in the specialized field of youth vocational services.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation ID: RFP-VI-03-01

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Parent Company: Harris Hill Nursing Facility LLC

Address: 10140 LINN STATION RD, LOUISVILLE

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $127,390,686

Exercised Options: $106,773,782

Current Obligation: $102,938,321

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline