DOL's $80M Job Corps Contract with Res-Care Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $80,236,134 ($80.2M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2011-01-01

End Date: 2016-06-30

Contract Duration: 2,007 days

Daily Burn Rate: $40.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE 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 $80.2 million to RES-CARE, INC for work described as: OPERATION OF THE EDISON JOB CORPS CENTER Key points: 1. The contract awarded to Res-Care, Inc. for the Edison Job Corps Center totaled over $80 million. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract type, Cost Plus Incentive Fee, can lead to cost overruns if not managed carefully. 4. The sector involves technical and trade schools, crucial for workforce development.

Value Assessment

Rating: fair

The contract's value of $80.2 million over its duration appears substantial for operating a Job Corps center. Benchmarking against similar contracts for vocational training centers is needed to assess if this represents fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the Cost Plus Incentive Fee structure requires diligent oversight to ensure costs remain reasonable and aligned with performance.

Taxpayer Impact: Taxpayer funds are being used for workforce development. Ensuring cost-effectiveness and efficient service delivery is paramount to maximizing the return on this investment.

Public Impact

Operates a key federal workforce development program. Provides training and services to potentially thousands of students. Impacts local economy through employment and student spending. Contract performance directly affects the quality of job training provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee structure requires careful monitoring.
Lack of specific performance metrics in provided data.
Potential for scope creep given the contract type.

Positive Signals

Full and open competition utilized.
Contract supports a vital federal program.
Operates in New Jersey, a key economic region.

Sector Analysis

This contract falls within the 'Other Technical and Trade Schools' NAICS code, serving the education and workforce development sector. Spending benchmarks for similar vocational training centers would provide context for the $80 million award.

Small Business Impact

The provided data does not indicate any specific set-asides or participation goals for small businesses in this contract. Further investigation is needed to determine the extent of small business involvement.

Oversight & Accountability

The Department of Labor's Employment and Training Administration is the contracting agency. Oversight would focus on Res-Care's adherence to contract terms, student outcomes, and financial management to ensure accountability.

Related Government Programs

Other Technical and Trade Schools
Department of Labor Contracting
Employment and Training Administration Programs

Risk Flags

Cost Plus Incentive Fee (CPIF) contract type can lead to higher costs if not managed strictly.
Lack of specific performance metrics in the provided data.
Potential for contractor to prioritize profit over optimal service delivery.
The duration of the contract (2011-2016) means current relevance needs verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $80.2 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 $80.2 million.

What is the period of performance?

Start: 2011-01-01. End: 2016-06-30.

What were the key performance indicators (KPIs) for Res-Care, Inc. under this contract, and how did their performance against these KPIs influence the incentive fee payouts?

The provided data lacks specific details on the Key Performance Indicators (KPIs) established for this contract. Understanding these metrics, such as student graduation rates, job placement success, and program completion timelines, is crucial. The structure of the incentive fee would directly tie to the contractor's achievement of these pre-defined goals, impacting the final cost to the government and the overall value delivered.

Given the Cost Plus Incentive Fee structure, what mechanisms were in place to mitigate the risk of cost overruns and ensure the government received the best possible value?

The Cost Plus Incentive Fee (CPIF) contract type inherently carries a risk of cost overruns. Effective mitigation relies on robust government oversight, including detailed cost audits, regular performance reviews, and clear definition of cost ceilings and target costs. The incentive structure should be carefully designed to reward efficiency and cost control, while penalties or limitations should be in place for exceeding targets without justification.

How did the full and open competition process ensure that Res-Care, Inc. offered the most cost-effective and high-quality services for operating the Edison Job Corps Center?

Full and open competition theoretically allows multiple qualified vendors to bid, fostering a competitive environment that drives down prices and encourages innovation. The effectiveness of this process in ensuring cost-effectiveness and quality depends on the clarity and comprehensiveness of the solicitation requirements, the evaluation criteria used, and the rigor of the source selection process. A thorough evaluation of technical approach, past performance, and price is essential.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DOLJ10RFP00002

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Harris Hill Nursing Facility LLC (UEI: 081017660)

Address: 9901 LINN STATION RD, LOUISVILLE, KY, 40223

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $160,366,171

Exercised Options: $111,580,463

Current Obligation: $80,236,134

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline