Department of Labor's $115M Job Corps Center Management contract awarded to RES-CARE, INC

Contract Overview

Contract Amount: $11,534,062 ($11.5M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2007-08-24

End Date: 2009-08-31

Contract Duration: 738 days

Daily Burn Rate: $15.6K/day

Competition Type: FOLLOW ON TO COMPETED ACTION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: MANAGEMENT OF JOB CORPS CENTER.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85719

State: Arizona Government Spending

Plain-Language Summary

Department of Labor obligated $11.5 million to RES-CARE, INC for work described as: MANAGEMENT OF JOB CORPS CENTER. Key points: 1. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 2. This is a follow-on to a competed action, suggesting a competitive history for this service. 3. The duration of 738 days indicates a significant, medium-term commitment for managing Job Corps centers. 4. The contract's value of $115.34 million positions it as a substantial investment in workforce development. 5. The North American Industry Classification System (NAICS) code 611519 points to specialized technical and trade school services. 6. The contract was awarded as a definitive contract, implying a clear scope and terms.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable Job Corps center management contracts. The cost-plus-incentive-fee (CPIF) pricing structure is common for services where performance can be measured and incentivized, but it requires careful monitoring to ensure cost control. The total award amount of $115.34 million over approximately two years suggests a significant operational scale. Further analysis would require comparing per-participant costs or service delivery metrics against national averages or similar centers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract is noted as a 'FOLLOW ON TO COMPETED ACTION,' indicating that the initial award was subject to full and open competition. This suggests that multiple bidders likely participated in the original competition, leading to price discovery and potentially competitive pricing. The follow-on nature implies that RES-CARE, INC. was the incumbent or a successful bidder in the prior competition, and the current award is a continuation or re-competition of those services.

Taxpayer Impact: A competitive history generally benefits taxpayers by fostering a market that drives efficiency and potentially lower costs for essential services like Job Corps center management.

Public Impact

The primary beneficiaries are the participants in the Job Corps program, who receive training and support services. The contract delivers management services for Job Corps centers, ensuring operational continuity and program delivery. The geographic impact is localized to Arizona (AZ), where the centers managed by RES-CARE, INC. are located. Workforce implications include the employment of staff to manage and operate the Job Corps centers, as well as the training and placement of program participants into jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not rigorously managed.
Ensuring consistent quality of training and support services across all managed centers.
Measuring the long-term effectiveness of Job Corps programs in placing participants into sustainable employment.
Dependency on a single contractor for managing critical workforce development infrastructure.

Positive Signals

Follow-on to a competed action suggests a proven track record or competitive advantage.
Incentive fee structure can motivate contractor performance and efficiency.
Definitive contract provides clear terms and scope for service delivery.
Focus on Job Corps centers addresses a critical need for youth workforce development.

Sector Analysis

This contract falls within the Education and Training Services sector, specifically focusing on vocational and technical training. The Job Corps program is a significant federal initiative aimed at providing job training and education to at-risk youth. The market for managing such centers involves organizations with expertise in education, social services, and workforce development. Comparable spending benchmarks would involve analyzing other large federal contracts for managing educational or training facilities, particularly those focused on youth or disadvantaged populations.

Small Business Impact

The data indicates that small business participation (sb) was false and the contract was not a small business set-aside (ss). This suggests that the primary award was made to a large business. There is no explicit information on subcontracting plans for small businesses within this data. The impact on the small business ecosystem would depend on whether RES-CARE, INC. actively seeks small business subcontractors for specialized services, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Labor's Employment and Training Administration. As a cost-plus-incentive-fee contract, performance metrics and financial expenditures would be subject to regular review and auditing. Transparency would be facilitated through contract reporting requirements. While specific Inspector General jurisdiction isn't detailed, the Department of Labor's Office of Inspector General typically oversees federal funds to ensure accountability and prevent waste, fraud, and abuse.

Related Government Programs

Workforce Innovation and Opportunity Act (WIOA) Programs
Youth Training Programs
Federal Job Training Contracts
Vocational Education Services

Risk Flags

Cost-plus contracts require diligent oversight to prevent cost overruns.
Performance metrics must be clearly defined and measurable to ensure accountability.
Incumbent contractor status may present challenges for new entrants in future competitions.
Dependence on federal funding appropriations introduces budget uncertainty.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $11.5 million to RES-CARE, INC. MANAGEMENT OF JOB CORPS CENTER.

Who is the contractor on this award?

The obligated recipient is RES-CARE, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2007-08-24. End: 2009-08-31.

What is the historical spending pattern for Job Corps center management by the Department of Labor, and how does this contract compare?

Historical spending on Job Corps center management by the Department of Labor has been substantial, reflecting the program's scale and importance in addressing youth unemployment and skill gaps. While this specific contract is for $115.34 million over approximately two years, the overall federal investment in Job Corps fluctuates annually based on appropriations and program needs. Analyzing historical data would reveal trends in contract values, the number of centers managed, and the types of contracts awarded (e.g., cost-plus, fixed-price). This $115.34 million award represents a significant portion of the budget allocated to managing centers within its operational scope (Arizona). Comparing it to previous awards to RES-CARE, INC. or other contractors for similar services would provide context on whether the price per center or per participant has increased or decreased over time, indicating potential efficiency gains or inflationary pressures.

How does the performance of RES-CARE, INC. on previous contracts inform the risk assessment for this award?

Assessing the risk associated with RES-CARE, INC. for this Job Corps center management contract requires examining their past performance. As this is a 'FOLLOW ON TO COMPETED ACTION,' it implies RES-CARE, INC. likely has prior experience managing Job Corps centers or similar government contracts. Key risk indicators would include their record on meeting performance targets (e.g., participant completion rates, job placement success, cost control), any history of contract disputes, past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and compliance with federal regulations. A strong performance history would mitigate risks related to operational disruption, cost overruns, and failure to meet program objectives. Conversely, a history of deficiencies would elevate concerns about the contractor's ability to effectively manage the centers and deliver required services, potentially necessitating closer oversight.

What are the key performance indicators (KPIs) typically used to evaluate the success of Job Corps center management contracts?

Key performance indicators for Job Corps center management contracts typically focus on participant outcomes, operational efficiency, and compliance. Common KPIs include: 1. **Participant Completion Rate:** The percentage of enrolled participants who successfully complete their training programs. 2. **Job Placement Rate:** The percentage of graduates who secure employment within a specified period after program completion. 3. **Wage Attainment:** The average starting wage of placed graduates, indicating the quality of training and job matches. 4. **Retention Rate:** The percentage of placed graduates who remain employed for a sustained period (e.g., 6 months or 1 year). 5. **Cost Efficiency:** Managing operational costs within budget while maintaining service quality. 6. **Program Compliance:** Adherence to all federal regulations, safety standards, and reporting requirements set forth by the Department of Labor. 7. **Participant Satisfaction:** Feedback from participants regarding the quality of training, support services, and overall experience. The incentive fee structure in this contract likely ties financial rewards to achieving specific targets within these or similar KPIs.

What is the typical profit margin for companies managing large federal training programs like Job Corps?

Profit margins for companies managing large federal training programs like Job Corps can vary significantly based on contract type, competition level, operational complexity, and the contractor's efficiency. Cost-plus contracts, especially those with incentive fees (like this one), allow for a base fee plus potential additional profit tied to performance. Historically, profit margins on government contracts can range from 5% to 15% or higher, depending on the risk and reward. For cost-plus-incentive-fee contracts, the target profit is established, and the final profit can be adjusted based on performance against pre-defined metrics. Factors such as overhead costs, administrative expenses, and the specific services provided (e.g., academic instruction, vocational training, counseling) also influence the overall profitability. Without specific details on RES-CARE, INC.'s fee structure and performance outcomes for this contract, estimating the exact profit margin is speculative.

How does the geographic concentration (Arizona) of this contract impact its overall significance and risk profile?

The geographic concentration of this Job Corps center management contract in Arizona (AZ) means its direct impact is localized to that state's workforce development landscape. This focus can allow for tailored program delivery that addresses specific regional labor market needs and challenges. From a risk perspective, concentrating operations in one state can simplify management oversight compared to a multi-state contract. However, it also means that any disruptions specific to Arizona—such as state-level policy changes, economic downturns affecting local job markets, or natural disasters—could have a more pronounced impact on the contract's success. The Department of Labor's ability to monitor performance might be more direct due to the limited geographic scope, potentially allowing for quicker identification and resolution of issues.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: RESEARCH AND DEVELOPMENT › Education, Training, Employment, and Social Services R&D Services

Competition & Pricing

Extent Competed: FOLLOW ON TO COMPETED ACTION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Carestream Health, Inc. (UEI: 244882650)

Address: 10140 LINN STATION RD, LOUISVILLE, KY, 40223

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,666,987

Exercised Options: $11,666,987

Current Obligation: $11,534,062

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline