Department of Labor awards $71.9M contract for Job Corps Center operations, highlighting a 4-year duration

Contract Overview

Contract Amount: $71,877,144 ($71.9M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2006-06-07

End Date: 2010-12-31

Contract Duration: 1,668 days

Daily Burn Rate: $43.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OPERATION OF THE EDISON JOB CORPS CENTER

Place of Performance

Location: EDISON, MIDDLESEX County, NEW JERSEY, 08817

State: New Jersey Government Spending

Plain-Language Summary

Department of Labor obligated $71.9 million to RES-CARE, INC for work described as: OPERATION OF THE EDISON JOB CORPS CENTER Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 2. With a single award, the long-term value and pricing competitiveness are difficult to assess without benchmarks. 3. The 4-year duration suggests a stable, long-term need for these services. 4. The contract's focus on operating an educational center indicates a significant public service component. 5. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The total award amount of $71.9 million over approximately 4 years suggests an average annual cost of $18 million. Without specific details on the services provided, student capacity, or performance metrics, it is challenging to benchmark this against similar contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while allowing for flexibility, can sometimes lead to higher costs if not managed diligently. A comparison to other Job Corps center operations would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. However, the data only shows one award, suggesting that either only one bid was received, or this is just one of potentially multiple awards under a larger IDIQ. The level of competition is not explicitly detailed beyond 'full and open,' making it difficult to ascertain the number of actual bidders and the resulting price discovery.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a competitive bidding process. However, without knowing the number of bids received, it's hard to definitively say if the best possible price was achieved.

Public Impact

The primary beneficiaries are students enrolled in the Edison Job Corps Center, who receive vocational training and education. The services delivered include the operation and management of a Job Corps center, encompassing training, housing, and support services. The geographic impact is concentrated in New Jersey, where the Edison Job Corps Center is located. The contract supports the education and workforce development sector, potentially impacting local employment through center staff and indirectly through student job placements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not rigorously monitored.
Lack of detail on the number of bidders limits assessment of true competition and price optimization.
No small business participation is indicated, potentially missing opportunities for smaller enterprises.

Positive Signals

Awarded under full and open competition, suggesting a broad market solicitation.
Long contract duration (1668 days) implies stability and a sustained commitment to the program.
Focus on vocational training addresses critical workforce development needs.

Sector Analysis

This contract falls within the Education and Training sector, specifically focusing on vocational and technical education services. The Job Corps program is a government-funded initiative aimed at providing job training and education to at-risk youth. The market for operating such centers involves educational service providers, non-profits, and potentially private companies specializing in workforce development. Benchmarking would require comparing costs and outcomes of similar Job Corps center contracts or other large-scale vocational training programs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means the competition was open to all eligible contractors, regardless of size. While this maximizes the pool of potential bidders, it also means that specific opportunities for small businesses to participate as prime contractors were not mandated. Further analysis would be needed to determine if significant subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's Employment and Training Administration. Mechanisms likely include regular performance reviews, financial audits, and adherence to program-specific regulations. The Inspector General's office within the Department of Labor would have jurisdiction for investigating fraud, waste, or abuse related to this contract. Transparency would depend on the Department's public reporting practices regarding contract performance and expenditures.

Related Government Programs

Job Corps Program
Vocational Training Contracts
Department of Labor Education Contracts
Federal Workforce Development Programs

Risk Flags

Cost-plus-fixed-fee contract type may lead to higher costs if not managed properly.
Limited information on the number of bidders makes it difficult to assess the effectiveness of competition.
No small business set-aside noted, requiring further review of subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $71.9 million to RES-CARE, INC. OPERATION OF THE EDISON 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 $71.9 million.

What is the period of performance?

Start: 2006-06-07. End: 2010-12-31.

What specific services are included under the 'OPERATION OF THE EDISON JOB CORPS CENTER' contract?

The contract, awarded to RES-CARE, INC, for the operation of the Edison Job Corps Center, encompasses a broad range of services essential for the program's success. These typically include academic instruction (GED, high school diploma), vocational skills training in various trades, career counseling, job placement assistance, health and wellness services, and residential support for students who require it. The goal is to provide at-risk youth with the education, training, and support needed to secure meaningful employment and become independent.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) structure is common for complex service contracts where the exact costs are difficult to predict upfront, such as operating educational centers. Under CPFF, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of costs, and cost-reimbursement contracts with lower profit margins. While CPFF offers flexibility, it carries a risk of cost escalation if the government's oversight and cost controls are not robust, potentially making it less cost-effective than well-defined fixed-price contracts if costs can be accurately estimated.

What is the historical spending pattern for the operation of the Edison Job Corps Center?

The provided data indicates a single award of $71,877,144 with a duration of 1668 days (approximately 4.5 years), spanning from June 7, 2006, to December 31, 2010. This suggests an average annual spending of roughly $16 million ($71.9M / 4.5 years). To understand the historical pattern, one would need to examine prior contracts for this specific center, looking at award amounts, durations, and contractors. Consistent long-term contracts suggest a stable program, while frequent changes might indicate performance issues or shifts in program strategy. Analyzing spending trends over multiple contract cycles would reveal if costs have increased or decreased over time.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

While specific KPIs are not detailed in the provided data, typical performance indicators for Job Corps center operations contracts include student enrollment and retention rates, academic achievement levels (e.g., GED attainment), vocational certification rates, job placement rates post-graduation, average wages of placed graduates, and student satisfaction surveys. The Department of Labor's Employment and Training Administration would establish these metrics in the contract's Statement of Work (SOW) and monitor the contractor's progress against them. Failure to meet KPIs could result in penalties or non-renewal of the contract.

What is the typical profit margin (fixed fee) for CPFF contracts in the education and training sector?

The 'fixed fee' in a Cost Plus Fixed Fee (CPFF) contract represents the contractor's profit. For government contracts, including those in the education and training sector, the fixed fee is typically negotiated and is often subject to regulatory caps. While it can vary based on the complexity, risk, and duration of the contract, fees often range from 5% to 15% of the estimated cost. Without the total estimated cost and the specific fixed fee amount for RES-CARE, INC's contract, it's impossible to determine their exact profit margin. However, the fee is intended to be a fair return for the services rendered and the risks undertaken.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1-JC-05-EDISON

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,877,144

Exercised Options: $71,877,144

Current Obligation: $71,877,144

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline