Department of Labor awards $49.4M contract for Job Corps Center operations, highlighting a 5-year commitment

Contract Overview

Contract Amount: $49,404,775 ($49.4M)

Contractor: Horizons Youth Services, L.C.

Awarding Agency: Department of Labor

Start Date: 2009-07-31

End Date: 2014-07-31

Contract Duration: 1,826 days

Daily Burn Rate: $27.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: AWARD FOR THE OPERATION OF MUHLENBERG JOB CORPS CENTER FOR 2 YEAR BASE PLUS 3 OPTION YEARS (TOTAL 5 YEARS).

Place of Performance

Location: GREENVILLE, MUHLENBERG County, KENTUCKY, 42345

State: Kentucky Government Spending

Plain-Language Summary

Department of Labor obligated $49.4 million to HORIZONS YOUTH SERVICES, L.C. for work described as: AWARD FOR THE OPERATION OF MUHLENBERG JOB CORPS CENTER FOR 2 YEAR BASE PLUS 3 OPTION YEARS (TOTAL 5 YEARS). Key points: 1. The contract value of $49.4 million over five years suggests a significant investment in workforce development. 2. The award was made under full and open competition, indicating a potentially competitive pricing environment. 3. The use of a Cost Plus Incentive Fee (CPIF) contract type suggests a focus on performance-based outcomes. 4. The contract duration of five years provides stability for the contractor and continuity of services. 5. The geographic location in Kentucky (KY) indicates a focus on regional workforce needs. 6. The contractor, Horizons Youth Services, L.C., is responsible for operating the Muhlenberg Job Corps Center.

Value Assessment

Rating: good

The total award of $49.4 million over five years averages to approximately $9.88 million per year. Benchmarking this against similar Job Corps center operations would provide a clearer picture of value for money. The CPIF contract type allows for shared savings and cost control, which can be beneficial for taxpayers if managed effectively. However, without specific performance metrics and historical cost data for this center, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This typically means that after an initial exclusion of certain sources (which needs further investigation for clarity), the remaining opportunities were open to all responsible sources. The presence of 3 bidders (no) suggests a moderate level of competition, which is generally positive for price discovery and ensuring a fair market price.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs and encouraging the most capable provider to offer the best value.

Public Impact

The primary beneficiaries are young individuals in Kentucky seeking vocational training and employment opportunities. The contract delivers essential services for operating the Muhlenberg Job Corps Center, including training, education, and support services. The geographic impact is concentrated in Muhlenberg, Kentucky, addressing local workforce development needs. The contract supports the workforce involved in operating the center, including instructors, administrators, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPIF contract type, while performance-oriented, can lead to cost overruns if not closely monitored and managed.
The 'exclusion of sources' in the competition description warrants further investigation to ensure full transparency and fairness.
The specific performance metrics and incentive structures within the CPIF contract are not detailed, making it difficult to assess the effectiveness of incentives.
The long-term sustainability and impact of the Job Corps program itself can be subject to shifting political and economic priorities.

Positive Signals

The award signifies a commitment to youth workforce development and training programs.
The use of full and open competition suggests an effort to secure competitive pricing.
The CPIF contract structure incentivizes the contractor to achieve performance goals and manage costs effectively.
The 5-year duration provides program stability and continuity for participants.
The contract supports a vital federal program aimed at improving employment outcomes for disadvantaged youth.

Sector Analysis

This contract falls within the broader education and training services sector, specifically focusing on vocational and technical education. The Job Corps program is a significant federal initiative aimed at preparing young people for careers. Comparable spending benchmarks would involve analyzing other Job Corps center contracts and similar workforce development programs administered by the Department of Labor and other agencies. The market for operating such centers is likely specialized, with a limited number of experienced providers.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. It is also unclear if there are subcontracting requirements that would benefit small businesses. Further analysis would be needed to determine the extent of small business participation, either as prime contractors or subcontractors, in the execution of this award.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Labor's Employment and Training Administration. Accountability measures are likely embedded within the CPIF contract's performance metrics and incentive clauses. Transparency is generally facilitated through contract award databases, but detailed operational performance and financial reporting may be less publicly accessible. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Job Corps Program
Workforce Innovation and Opportunity Act (WIOA) Programs
Department of Labor Training Grants
Vocational Rehabilitation Services

Risk Flags

Potential for cost overruns under CPIF contract type if not managed closely.
Need for further clarity on 'exclusion of sources' in the competitive process.
Dependence on federal funding and program priorities.
Challenges in ensuring high job placement rates in varying economic conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $49.4 million to HORIZONS YOUTH SERVICES, L.C.. AWARD FOR THE OPERATION OF MUHLENBERG JOB CORPS CENTER FOR 2 YEAR BASE PLUS 3 OPTION YEARS (TOTAL 5 YEARS).

Who is the contractor on this award?

The obligated recipient is HORIZONS YOUTH SERVICES, L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.4 million.

What is the period of performance?

Start: 2009-07-31. End: 2014-07-31.

What is the track record of Horizons Youth Services, L.C. in operating Job Corps centers or similar educational/training facilities?

Horizons Youth Services, L.C. is the entity awarded this contract. To assess their track record, one would need to investigate their history with the Department of Labor and other federal agencies. This would involve reviewing past performance evaluations, any prior contract awards for similar services, and any documented issues or successes. A positive track record would indicate experience in managing complex training programs, adhering to federal regulations, and achieving desired participant outcomes. Conversely, a history of performance deficiencies or unresolved issues could raise concerns about their capacity to effectively operate the Muhlenberg Job Corps Center.

How does the average annual cost of $9.88 million compare to other Job Corps centers of similar size and scope?

To benchmark the average annual cost of $9.88 million, a comparative analysis with other Job Corps centers is necessary. This comparison should ideally account for factors such as the center's capacity (number of students served), the types of training programs offered, the geographic location (which can influence labor and operational costs), and the specific services provided (e.g., housing, transportation, health services). Without access to detailed cost data for comparable centers, it is difficult to definitively state whether this contract represents excellent, good, or fair value. However, the Department of Labor likely has internal benchmarks for evaluating such costs.

What are the specific performance metrics and incentive structures tied to the Cost Plus Incentive Fee (CPIF) arrangement?

The CPIF contract type implies that the contractor's fee is adjusted based on achieving certain performance targets. Specific metrics could include student enrollment rates, on-time graduation rates, job placement rates, starting wages of placed graduates, and cost control measures. The incentive structure would define how deviations from target costs and performance levels impact the contractor's fee. A well-defined CPIF contract with clear, measurable, and achievable metrics can drive efficiency and effectiveness. Conversely, poorly defined metrics or overly generous incentives could lead to increased costs without commensurate improvements in outcomes.

What is the historical spending pattern for the Muhlenberg Job Corps Center operations prior to this award?

Understanding the historical spending for the Muhlenberg Job Corps Center is crucial for assessing the current award's value and continuity. This would involve examining previous contracts for the center's operation, including their duration, total value, and contract types. Analyzing trends in spending over time can reveal patterns of cost increases or decreases, and whether previous contracts were awarded competitively. If this is a new center or a significant change in service provider, historical data from the previous operator would be the most relevant comparison point.

What are the potential risks associated with operating a Job Corps center, and how are they mitigated by this contract?

Operating a Job Corps center involves risks such as fluctuating student enrollment, challenges in securing employment for graduates, potential for facility maintenance issues, and ensuring compliance with federal regulations. This contract, through its CPIF structure, aims to mitigate some risks by incentivizing performance and cost efficiency. The Department of Labor's oversight and the contractor's own risk management protocols are also critical. However, risks related to economic downturns affecting job placement or changes in federal funding priorities are largely external to the contract's direct control.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 08-JC-REG2-MUHL

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Endless Horizons Inc (UEI: 103263760)

Address: 3586 HORIZONS WAY, HARRISONBURG, VA, 22802

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,569,702,972

Exercised Options: $1,051,100,415

Current Obligation: $49,404,775

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline