Job Corps vocational training contract awarded to Education Management Corporation for $50.9M, serving youth in Arizona

Contract Overview

Contract Amount: $50,950,221 ($51.0M)

Contractor: Education Management Corporation

Awarding Agency: Department of Labor

Start Date: 2012-10-01

End Date: 2017-12-31

Contract Duration: 1,917 days

Daily Burn Rate: $26.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: IGF::CT::IGF JOB CORPS IS A VOCATIONAL TRAINING PROGRAM FOR YOUTH BETWEEN THE AGES OF 16 AND 24.

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85004

State: Arizona Government Spending

Plain-Language Summary

Department of Labor obligated $51.0 million to EDUCATION MANAGEMENT CORPORATION for work described as: IGF::CT::IGF JOB CORPS IS A VOCATIONAL TRAINING PROGRAM FOR YOUTH BETWEEN THE AGES OF 16 AND 24. Key points: 1. Contract value of $50.9 million over its duration indicates a significant investment in youth vocational training. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The definitive contract type and cost-plus-incentive-fee payment structure imply a focus on performance and cost control. 4. The contract duration of 1917 days (approximately 5.25 years) suggests a long-term commitment to the program. 5. The program targets youth aged 16-24, addressing a specific demographic for workforce development. 6. The contract is geographically focused on Arizona (AZ, SN), indicating a localized service delivery model.

Value Assessment

Rating: fair

The contract value of $50.9 million over nearly five years for vocational training services needs further benchmarking against similar large-scale youth development programs. Without specific per-student cost data or comparisons to other Job Corps centers or similar initiatives, it's difficult to definitively assess value for money. The cost-plus-incentive-fee structure suggests an attempt to align contractor performance with cost efficiency, but the overall value is contingent on the quality and outcomes of the training provided.

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,' indicating that multiple bidders were likely considered. The presence of 9 bidders (no) suggests a reasonably competitive landscape for this type of service. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive award process helps ensure taxpayer funds are used efficiently by driving down costs and encouraging providers to offer the best value.

Public Impact

Benefits disadvantaged youth aged 16-24 by providing vocational training and job placement assistance. Delivers essential skills training in various trades, aiming to improve employability. Geographic impact is concentrated in Arizona, providing local workforce development opportunities. Workforce implications include preparing young individuals for entry-level positions in skilled trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics and outcome data makes it challenging to assess the true effectiveness and value of the training.
The cost-plus-incentive-fee structure, while intended to control costs, can sometimes lead to less aggressive cost management if not tightly monitored.
The definitive contract type might limit flexibility in adapting to changing training needs or market demands over the contract's long duration.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contract duration suggests a stable, long-term program commitment.
The incentive fee component aims to reward efficient and effective performance.

Sector Analysis

The vocational training sector is crucial for workforce development, bridging the gap between education and employment. This contract falls under the broader 'Other Technical and Trade Schools' category (NAICS 611519). The federal government, through programs like Job Corps, invests significantly in this area to equip young people with marketable skills. Benchmarking this contract's value would involve comparing its per-student cost and placement rates against other Job Corps centers and similar federally funded workforce development initiatives.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. Typically, large federal contracts are encouraged to include provisions for small business participation. Without specific details, it's unclear what impact this contract had on the small business ecosystem or if subcontracting opportunities were leveraged.

Oversight & Accountability

Oversight for this contract would likely fall under the Department of Labor's Inspector General, responsible for ensuring program integrity and preventing fraud, waste, and abuse. The cost-plus-incentive-fee structure necessitates diligent monitoring of costs and performance against established targets. Transparency would depend on the public availability of performance reports and audits related to the Job Corps program.

Related Government Programs

Job Corps Program
Workforce Innovation and Opportunity Act (WIOA) Programs
Youth Training Programs
Vocational Education Grants

Risk Flags

Potential for cost overruns if not closely monitored
Risk of training programs not aligning with current labor market demands
Dependency on contractor's ability to achieve student placement goals

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $51.0 million to EDUCATION MANAGEMENT CORPORATION. IGF::CT::IGF JOB CORPS IS A VOCATIONAL TRAINING PROGRAM FOR YOUTH BETWEEN THE AGES OF 16 AND 24.

Who is the contractor on this award?

The obligated recipient is EDUCATION MANAGEMENT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $51.0 million.

What is the period of performance?

Start: 2012-10-01. End: 2017-12-31.

What is the historical spending trend for the Job Corps program, and how does this contract compare?

The Job Corps program is a significant federal investment in youth workforce development. Historically, annual appropriations for Job Corps have fluctuated but generally represent hundreds of millions of dollars. For instance, in fiscal years around 2012-2017, the program's budget was often in the range of $1.6 to $1.8 billion annually. This specific contract, valued at $50.9 million over approximately 5.25 years, represents a substantial portion of the funding allocated to a specific center or set of centers operated by Education Management Corporation. While this contract is large for a single award, it fits within the broader context of consistent, substantial federal funding for the Job Corps initiative aimed at providing vocational training to disadvantaged youth nationwide.

What are the key performance indicators (KPIs) for this Job Corps contract, and how has the contractor performed against them?

The provided data does not specify the key performance indicators (KPIs) established for this particular Job Corps contract awarded to Education Management Corporation. However, typical KPIs for Job Corps contracts often include metrics such as student enrollment rates, retention rates, completion rates for vocational programs, job placement rates post-completion, and starting wages of placed graduates. The 'cost-plus-incentive-fee' (CPIF) payment structure suggests that performance against certain targets would trigger incentive payments. Without access to the contract's Statement of Work (SOW) and subsequent performance reports or audits, a detailed assessment of the contractor's performance against these potential KPIs cannot be made.

How does the per-student cost of this contract compare to national averages for Job Corps or similar vocational training programs?

Calculating a precise per-student cost requires knowing the total number of students served and the total contract value over its duration. With a contract value of $50.9 million and a duration of 1917 days (approx. 5.25 years), the average annual cost is roughly $9.7 million. The number of students served annually by Job Corps centers can vary significantly, often ranging from a few hundred to over a thousand students per center, depending on its size and capacity. National average per-student costs for Job Corps can range widely, often cited between $15,000 to $30,000 per student per year, depending on the services provided and location. Without the specific student throughput for this contract, a direct comparison is difficult, but the annual expenditure suggests it operates at a scale consistent with a medium-to-large Job Corps center.

What is Education Management Corporation's track record with federal contracts, particularly in education and workforce development?

Education Management Corporation (EDMC) has a history of operating educational institutions, including vocational and career schools, and has held federal contracts. Their experience often involves managing large student populations and navigating federal regulations related to student aid and program delivery. However, EDMC has also faced scrutiny and legal challenges related to its business practices and student outcomes in the past, particularly concerning for-profit education models. Assessing their track record specifically for this Job Corps contract would require examining performance reviews, audit findings, and any disputes or corrective actions related to their federal agreements, especially those concerning workforce development and youth training.

What are the potential risks associated with a cost-plus-incentive-fee contract for vocational training?

Cost-plus-incentive-fee (CPIF) contracts aim to balance cost control with performance incentives. A key risk is that the 'cost-plus' nature might reduce the contractor's incentive to minimize costs if profit margins are guaranteed regardless of efficiency, although the 'incentive' portion mitigates this. Effective oversight is crucial to ensure costs are reasonable and allocable. For vocational training, risks also include ensuring the quality and relevance of the training provided, achieving desired student outcomes (like job placement), and managing potential fluctuations in student enrollment or program needs over the contract's life. If the incentive targets are poorly defined or not rigorously monitored, the contract may not achieve optimal value for taxpayer money.

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: DOLJ12SA00001

Offers Received: 9

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 221 LAUREL RD STE 100, VOORHEES, NJ, 08043

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $91,850,231

Exercised Options: $60,612,119

Current Obligation: $50,950,221

Actual Outlays: $798,308

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline