Department of Labor's $92M contract for Puerto Rico Job Corps centers operation awarded to RES-CARE, INC

Contract Overview

Contract Amount: $92,234,476 ($92.2M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2006-03-01

End Date: 2011-06-30

Contract Duration: 1,947 days

Daily Burn Rate: $47.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: OPERATION OF THE PUERTON RICO JOB CORPS CENTERS

Place of Performance

Location: BARRANQUITAS, BARRANQUITAS County, PUERTO RICO, 00794

Plain-Language Summary

Department of Labor obligated $92.2 million to RES-CARE, INC for work described as: OPERATION OF THE PUERTON RICO JOB CORPS CENTERS Key points: 1. Contract value represents significant investment in workforce development for Puerto Rico. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract type (Cost Plus Incentive Fee) can incentivize performance but requires careful oversight. 4. Duration of nearly 2000 days indicates a long-term commitment to service provision. 5. The NAICS code 611519 points to specialized technical and trade school services. 6. The contract's geographic focus on Puerto Rico highlights regional economic development efforts.

Value Assessment

Rating: fair

The total award amount of $92.2 million over approximately 5 years for operating Job Corps centers in Puerto Rico requires context. Without specific performance metrics or benchmarks for similar operations in other regions or by other contractors, a definitive value-for-money assessment is challenging. The Cost Plus Incentive Fee (CPIF) structure suggests that the government aims to control costs while incentivizing contractor performance, but the effectiveness of this incentive mechanism is not detailed. Benchmarking against national averages for Job Corps center operations or similar educational service contracts would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 3 bidders identified, this suggests a moderate level of competition. While more than a sole-source or limited competition, the actual competitiveness depends on the number of proposals received and the rigor of the evaluation process. A higher number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive environment, which can drive down prices and improve the quality of services received. The presence of multiple bidders suggests that taxpayer funds are likely being used more efficiently than in a non-competitive scenario.

Public Impact

Residents of Puerto Rico, particularly young adults seeking vocational training and employment opportunities, are the primary beneficiaries. The contract supports the delivery of job training, education, and supportive services to prepare individuals for skilled employment. The geographic impact is concentrated in Puerto Rico, addressing specific workforce development needs in the region. The contract has implications for the local workforce, potentially creating jobs for instructors, administrators, and support staff at the Job Corps centers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts require diligent oversight to ensure that incentives are effectively driving desired outcomes without excessive cost overruns.
The long duration of the contract (over 5 years) necessitates ongoing performance monitoring to ensure sustained quality and value.
The specific performance metrics and incentive structures within the CPIF contract are not detailed, making it difficult to assess their adequacy.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
The contract aims to provide essential job training and employment services, aligning with public workforce development goals.
The focus on a specific region (Puerto Rico) indicates targeted investment in local economic development.

Sector Analysis

This contract falls within the Education and Training Services sector, specifically related to vocational and technical education. The NAICS code 611519, 'Other Technical and Trade Schools,' encompasses institutions primarily offering occupational and vocational training. The federal government, through programs like Job Corps, is a significant purchaser of such services to address national workforce needs and provide opportunities for individuals. Comparable spending benchmarks would involve analyzing other federal or state contracts for operating similar educational or workforce development centers, considering factors like student capacity, program offerings, and geographic cost variations.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss) for this contract. This suggests that the primary award was not directed towards small businesses, and there is no explicit indication of subcontracting opportunities for small businesses within the contract's structure as presented. Further analysis would be needed to determine if subcontracting plans were required or implemented by the prime contractor, RES-CARE, INC.

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 (CPIF) contract, robust financial and performance oversight is crucial to monitor costs, ensure adherence to performance standards, and verify the effective application of incentive fees. Transparency would be enhanced by public reporting of performance metrics and expenditures. The extent of Inspector General jurisdiction would depend on the specific audit and investigative mandates related to Department of Labor contracts.

Related Government Programs

Job Corps Program
Workforce Innovation and Opportunity Act (WIOA) Programs
Federal Job Training Programs
Vocational Education Contracts

Risk Flags

Potential for cost overruns in CPIF contracts.
Need for robust performance monitoring to ensure service quality.
Reliance on contractor performance for critical workforce development outcomes.
Geographic concentration of services may limit broader applicability of lessons learned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $92.2 million to RES-CARE, INC. OPERATION OF THE PUERTON RICO JOB CORPS CENTERS

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 $92.2 million.

What is the period of performance?

Start: 2006-03-01. End: 2011-06-30.

What is the track record of RES-CARE, INC. in managing federal contracts, particularly those related to workforce development or educational services?

Assessing the track record of RES-CARE, INC. requires a review of their past performance on federal contracts. Information regarding their experience with similar Job Corps center operations, educational program management, and adherence to contract terms and conditions would be crucial. Data on past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or corrective actions would provide insight into their reliability and capability. A positive track record would suggest a lower risk for this current contract, while a history of issues might raise concerns about potential performance or cost overruns.

How does the cost structure of this Cost Plus Incentive Fee (CPIF) contract compare to other federal Job Corps center operations?

To compare the cost structure, one would need detailed financial data from RES-CARE, INC. for this contract, including base costs, incentive fee calculations, and total expenditures, alongside similar data from other Job Corps centers. Benchmarking would involve analyzing the ratio of direct costs to indirect costs, the types of costs being reimbursed, and the effectiveness of the incentive fee in driving performance relative to cost. Without access to this granular data and comparable contract information, it's difficult to definitively state whether this CPIF structure represents superior or inferior value compared to other federal operations. The specific incentive targets and their achievement are key to understanding the final cost.

What are the key performance indicators (KPIs) used to measure the success of the Puerto Rico Job Corps centers under this contract, and how has RES-CARE, INC. performed against them?

The success of the Puerto Rico Job Corps centers under this contract is typically measured by KPIs such as student enrollment rates, completion rates, job placement rates, starting wages of placed graduates, and employer satisfaction. The effectiveness of RES-CARE, INC. would be evaluated based on their performance against these metrics. Data on these KPIs, ideally reported by the Department of Labor, would indicate whether the contractor is meeting or exceeding expectations. Consistent achievement of high-performing metrics would suggest good value and effective service delivery, while underperformance would signal potential issues requiring corrective action or re-evaluation of the contract.

What is the historical spending pattern for the operation of Puerto Rico Job Corps centers, and how does this $92.2 million award compare?

Analyzing historical spending for Puerto Rico Job Corps centers would involve examining contract awards and expenditures for these facilities over previous years. This would reveal trends in annual spending, identify previous contractors, and show fluctuations in contract values. Comparing the current $92.2 million award to this historical data would indicate whether the current contract represents an increase, decrease, or stable level of investment. Significant deviations from historical spending might warrant further investigation into the reasons, such as changes in program scope, inflation, or market conditions. Understanding this context is vital for assessing the appropriateness of the current award amount.

What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for operating Job Corps centers, and how are they mitigated?

CPIF contracts carry inherent risks, primarily related to cost control and the potential for contractor behavior to be driven by maximizing fees rather than overall value. Risks include potential cost overruns if the incentive structure is not well-designed or if unforeseen circumstances arise. Mitigation strategies involve rigorous government oversight of costs, clear and measurable performance targets that align with program goals, and a well-defined incentive structure that rewards efficiency and effectiveness. The Department of Labor's role in monitoring expenditures, auditing costs, and evaluating performance against targets is critical to mitigating these risks and ensuring the contract delivers value.

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-PR

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Onex Rescare Acquisition, LLC (UEI: 966833399)

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: $122,816,447

Exercised Options: $118,477,257

Current Obligation: $92,234,476

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline