Labor Department's $24.8M Mathematica contract for WIA evaluation shows long duration and high cost

Contract Overview

Contract Amount: $24,829,516 ($24.8M)

Contractor: Mathematica Inc.

Awarding Agency: Department of Labor

Start Date: 2008-06-24

End Date: 2017-06-30

Contract Duration: 3,293 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: WORKFORCE INVESTMENT ACT GOLD-STANDARD EVALUATION CONTRACT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $24.8 million to MATHEMATICA INC. for work described as: WORKFORCE INVESTMENT ACT GOLD-STANDARD EVALUATION CONTRACT Key points: 1. Contract duration of nearly 9 years suggests a long-term need for evaluation services. 2. The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed carefully. 3. A single award for a large sum indicates potential for significant contractor impact. 4. The contract's focus on a 'gold-standard' evaluation implies a high bar for research quality. 5. The administrative management and general management consulting services NAICS code suggests a broad scope of work. 6. The contract was awarded under full and open competition, indicating a robust bidding process.

Value Assessment

Rating: fair

The total award amount of $24.8 million over nearly nine years averages to approximately $2.76 million per year. This figure needs to be benchmarked against similar large-scale, long-term program evaluations conducted by the government. Without specific comparable contracts for 'gold-standard' evaluations of workforce investment programs, it is difficult to definitively assess value for money. The CPFF structure, while allowing for flexibility, also carries inherent risks of cost escalation if not closely monitored by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The presence of three bidders (implied by 'no': 3) indicates a reasonable level of competition for this significant contract. This competitive process should have theoretically driven a more favorable price and quality outcome for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the significant investment in evaluating the Workforce Investment Act.

Public Impact

The primary beneficiaries are the Department of Labor and policymakers who will receive in-depth insights into the effectiveness of the Workforce Investment Act. The services delivered include rigorous research, data analysis, and reporting to inform future policy and program design. The geographic impact is national, as the Workforce Investment Act affects workforce development programs across the United States. The contract supports a specialized workforce of researchers, analysts, and project managers within Mathematica Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended duration of the contract (nearly 9 years) raises questions about the initial scope definition and potential for scope creep.
The cost-plus-fixed-fee (CPFF) contract type can incentivize contractors to incur more costs, potentially exceeding initial estimates if oversight is not stringent.
The significant dollar amount for a single contract could indicate a lack of task segmentation or opportunities for smaller firms.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent procurement process.
The contract aims for a 'gold-standard' evaluation, indicating a commitment to high-quality, evidence-based policy insights.
The long duration may reflect the complexity and longitudinal nature required for a comprehensive evaluation of a major federal program.

Sector Analysis

This contract falls within the management and general management consulting services sector, a broad category encompassing strategic advice, operational improvement, and program evaluation. The federal government is a significant consumer of these services, particularly for complex program assessments. Benchmarking this contract's value would require comparing its annual cost and scope to other large-scale federal program evaluations, which often span multiple years and involve substantial analytical rigor.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, Mathematica Inc., is expected to perform the majority of the work. The absence of small business involvement in this specific contract means potential opportunities for smaller, specialized research firms to contribute to this significant federal evaluation are limited.

Oversight & Accountability

Oversight would primarily be conducted by the Department of Labor's Employment and Training Administration, responsible for managing the contract and ensuring deliverables meet the 'gold-standard' requirements. Accountability measures would be tied to the contract's milestones and final reports. Transparency is facilitated by the public nature of federal contract awards, though the detailed methodologies and findings of the evaluation itself may have varying levels of public accessibility.

Related Government Programs

Workforce Investment Act (WIA)
Department of Labor Program Evaluations
Federal Research and Development Contracts
Management and Consulting Services Contracts

Risk Flags

Long Contract Duration
Cost-Plus Contract Type Risk
Potential for Scope Creep
Relevance of Findings Over Time

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $24.8 million to MATHEMATICA INC.. WORKFORCE INVESTMENT ACT GOLD-STANDARD EVALUATION CONTRACT

Who is the contractor on this award?

The obligated recipient is MATHEMATICA 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 $24.8 million.

What is the period of performance?

Start: 2008-06-24. End: 2017-06-30.

What is the historical spending pattern for evaluating the Workforce Investment Act?

The provided data focuses on a single, large contract awarded in 2008 for $24.8 million, running until 2017. To understand the historical spending pattern for WIA evaluations, one would need to examine prior and subsequent contracts related to WIA oversight and assessment. This would involve searching federal procurement databases for similar contracts awarded by the Department of Labor or other relevant agencies. Factors to consider would include the number of evaluation contracts, their durations, total dollar values, and the types of services procured (e.g., process evaluations, impact evaluations, cost-benefit analyses). Without this broader context, it's difficult to determine if this $24.8 million contract represents a typical investment or an outlier for WIA evaluation efforts.

How does the annual cost of this contract compare to other large federal program evaluations?

This contract, with a total value of $24.8 million over approximately 9 years, averages around $2.76 million per year. To compare this to other large federal program evaluations, we would need data on similar multi-year, comprehensive studies. For instance, evaluations of major social programs, healthcare initiatives, or defense projects can also run into millions of dollars annually. Key comparison points would include the scope of work (e.g., national scope, complexity of methodology), the duration of the evaluation, and the specific expertise required. Without a direct benchmark of comparable 'gold-standard' evaluations for other large federal programs, assessing whether $2.76 million annually is high, low, or average is challenging. However, for a long-term, in-depth evaluation of a significant piece of legislation like WIA, this annual figure is not inherently unreasonable, assuming the scope and quality justify the cost.

What are the specific risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risk with a CPFF contract, especially one as large and long-term as this $24.8 million WIA evaluation, is the potential for cost overruns. While the 'fixed fee' provides the contractor with a guaranteed profit margin, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's costs exceed initial projections due to inefficiencies, scope creep, or unforeseen challenges, the government bears that additional expense. For this contract, the nearly nine-year duration amplifies this risk, as more time allows for greater potential deviations from the original cost estimates. Effective oversight by the Department of Labor is crucial to scrutinize all incurred costs, ensure they are reasonable and allocable to the contract, and prevent unnecessary expenditures. Without rigorous monitoring, the final cost could significantly exceed the initial $24.8 million estimate.

What does 'gold-standard evaluation' imply for the contractor's responsibilities and the contract's objectives?

A 'gold-standard evaluation' implies the highest level of methodological rigor and scientific validity in assessing the Workforce Investment Act's effectiveness. For Mathematica Inc., this means employing robust research designs, such as randomized controlled trials (RCTs) where feasible, or quasi-experimental methods with strong controls to establish causality. It necessitates comprehensive data collection, sophisticated statistical analysis, and unbiased interpretation of findings. The contract's objectives would therefore extend beyond simple descriptive reporting to providing definitive insights into program impact, cost-effectiveness, and potential areas for improvement. This level of evaluation demands significant expertise in econometrics, survey design, and policy analysis, justifying the substantial investment and the long duration of the contract.

How might the long duration (3293 days) impact the relevance of the evaluation findings?

The extended duration of 3293 days (approximately 9 years) for the WIA evaluation contract presents both opportunities and challenges regarding the relevance of its findings. On one hand, a long timeframe allows for the tracking of long-term impacts and outcomes associated with workforce investments, which are often not immediately apparent. It enables the study of how program effects evolve over time and how they interact with broader economic conditions. However, a significant challenge is that the policy landscape and the nature of workforce development itself can change considerably over nearly a decade. The Workforce Investment Act, for example, was eventually replaced by the Workforce Innovation and Opportunity Act (WIOA) in 2014. Findings based on data collected throughout this long period might reflect conditions or program structures that are no longer fully applicable, potentially diminishing their direct relevance for current policy decisions unless carefully contextualized.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOL081RP20140

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mathematica Inc (UEI: 154125140)

Address: 600 MARYLAND AVE SW, WASHINGTON, DC, 20024

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Subchapter S Corporation

Financial Breakdown

Contract Ceiling: $51,229,898

Exercised Options: $51,229,898

Current Obligation: $24,829,516

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline