Labor Department's $24.25M UAW contract for educational support services shows questionable value and limited competition

Contract Overview

Contract Amount: $24,250,362 ($24.3M)

Contractor: UAW- Labor Employment and Training Corporation

Awarding Agency: Department of Labor

Start Date: 2013-06-01

End Date: 2018-02-28

Contract Duration: 1,733 days

Daily Burn Rate: $14.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF,THIS CONTRACT PROVIDES FOR THE IMPLEMENTATION OF THE UAW CONTRACT.

Place of Performance

Location: CERRITOS, LOS ANGELES County, CALIFORNIA, 90703

State: California Government Spending

Plain-Language Summary

Department of Labor obligated $24.3 million to UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION for work described as: IGF::OT::IGF,THIS CONTRACT PROVIDES FOR THE IMPLEMENTATION OF THE UAW CONTRACT. Key points: 1. The contract's value-for-money is questionable given the lack of competition and the cost-plus-fixed-fee structure. 2. Limited competition was observed, with the contract being sole-sourced. 3. Risk indicators include the sole-source nature and the cost-plus-fixed-fee pricing, which can incentivize cost overruns. 4. Performance context is provided by the implementation of the UAW contract for educational support services. 5. The contract falls within the 'Educational Support Services' sector. 6. Spending on this contract represents a small fraction of the Department of Labor's overall budget.

Value Assessment

Rating: questionable

The contract's value is difficult to assess due to its sole-source nature and cost-plus-fixed-fee (CPFF) award. CPFF contracts can sometimes lead to higher costs as the contractor is reimbursed for expenses plus a fixed fee, potentially reducing the incentive to control costs. Without competitive bids, it's challenging to benchmark pricing against market rates or similar contracts. The total award of $24.25 million over approximately five years suggests a significant investment, but the lack of comparative data makes a definitive value assessment problematic.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential vendors. This approach is typically used when only one vendor possesses the unique capabilities or qualifications required for the service. The lack of competition means there was no opportunity for price discovery through bidding, and it limits the government's ability to secure the best possible price through market forces.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the most cost-effective outcome. Without competitive pressure, the awarded price may be higher than what could have been obtained in an open market.

Public Impact

The primary beneficiaries of this contract are likely members of the UAW (United Auto Workers) union, who receive educational support services. The services delivered focus on educational support, aiming to enhance the skills and opportunities for the targeted workforce. The contract's geographic impact is centered in California, as indicated by the 'SN' field. Workforce implications include the potential for improved job skills and career advancement for UAW members.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost-plus-fixed-fee structure may not provide sufficient incentive for cost control.
Lack of transparency in the justification for sole-source award.
Contract duration of over 5 years could lead to complacency or outdated service delivery if not actively managed.

Positive Signals

Addresses a specific need for educational support services for a defined workforce (UAW).
The fixed fee component of the contract provides some level of cost predictability.
The contract is managed by the Employment and Training Administration, suggesting relevant agency oversight.

Sector Analysis

The contract falls under the 'Educational Support Services' category (NAICS 611710). This sector includes establishments primarily engaged in providing educational support activities, such as academic tutoring, test preparation, and student exchange programs. The market for such services can vary widely, from small, specialized tutoring centers to large organizations contracted by government agencies or unions to provide workforce development and training. The Department of Labor frequently contracts for services aimed at workforce development and training, making this a relevant area of spending.

Small Business Impact

This contract was not awarded to small businesses, nor does it appear to have specific small business set-aside provisions. The contractor is listed as UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION. There is no indication of subcontracting plans for small businesses within the provided data. Therefore, this contract is unlikely to have a direct positive impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Labor's Employment and Training Administration. As a sole-source, cost-plus-fixed-fee contract, robust oversight would be crucial to ensure that costs are reasonable and that the services delivered meet the stated objectives. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key accountability measures. The Inspector General for the Department of Labor would have jurisdiction for audits and investigations.

Related Government Programs

Department of Labor Workforce Development Programs
Union-Specific Training Initiatives
Federal Contracts for Educational Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $24.3 million to UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION. IGF::OT::IGF,THIS CONTRACT PROVIDES FOR THE IMPLEMENTATION OF THE UAW CONTRACT.

Who is the contractor on this award?

The obligated recipient is UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2013-06-01. End: 2018-02-28.

What is the specific justification for awarding this contract on a sole-source basis to the UAW-Labor Employment and Training Corporation?

The provided data indicates the contract was 'NOT COMPETED' and awarded to 'UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION'. While the specific justification for a sole-source award is not detailed in the abbreviated data, common reasons include unique capabilities, urgent needs where competition is impractical, or specific statutory requirements. For this contract, it's highly probable that the UAW-Labor Employment and Training Corporation was deemed the only entity capable of fulfilling the specific requirements related to implementing the UAW contract, likely due to its direct affiliation and established relationship with the union membership it serves. A full justification would typically be documented by the contracting agency.

How does the cost-plus-fixed-fee (CPFF) contract type potentially impact the overall cost compared to a fixed-price contract?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government. Unlike a fixed-price contract, where the contractor bears the risk of cost overruns to maintain their profit margin, a CPFF contract provides less incentive for the contractor to control costs rigorously. While the fixed fee provides some predictability, the government is still responsible for all incurred costs. This can lead to higher overall expenditures compared to a competitive fixed-price contract where cost efficiency is paramount for the contractor's profitability.

What historical spending patterns exist for similar educational support services contracts within the Department of Labor?

Historical spending patterns for similar educational support services contracts within the Department of Labor would require a broader analysis of federal procurement data. However, the Department of Labor consistently invests in workforce development, training, and educational programs, often through grants and contracts with various entities, including unions, non-profits, and educational institutions. Spending in this area is driven by legislative mandates and the need to address unemployment, skill gaps, and economic transitions. Analyzing past contracts for workforce training and educational support, particularly those targeting specific industries or labor groups, would reveal trends in contract values, durations, and types of services procured.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for educational support services contracts, KPIs would focus on metrics such as participant enrollment rates, completion rates, skill attainment levels, job placement rates post-training, participant satisfaction surveys, and potentially wage progression for participants. The success of 'implementation of the UAW contract' would likely be measured against specific objectives outlined in the contract's statement of work, which are not detailed here. Effective oversight would involve tracking these KPIs regularly.

What is the track record of the UAW-Labor Employment and Training Corporation as a federal contractor?

The provided data identifies the contractor as 'UAW- LABOR EMPLOYMENT AND TRAINING CORPORATION' and lists the agency as the 'Department of Labor'. However, it does not offer details on the contractor's specific track record, such as past performance ratings, previous contract awards, or any history of disputes or performance issues with federal agencies. To assess their track record, one would need to consult comprehensive federal procurement databases (like FPDS or SAM.gov) to review their history of contract performance, compliance, and overall reliability as a government contractor.

Industry Classification

NAICS: Educational Services › Educational Support Services › Educational Support Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: DOL121RP20538

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 11010 ARTESIA BLVD STE 100, CERRITOS, CA, 90703

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

Financial Breakdown

Contract Ceiling: $43,836,500

Exercised Options: $43,836,500

Current Obligation: $24,250,362

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline