Department of Labor's $33.2M contract for technical schools awarded to Cherokee Nation shows long duration and limited competition

Contract Overview

Contract Amount: $33,195,619 ($33.2M)

Contractor: Cherokee Nation

Awarding Agency: Department of Labor

Start Date: 2013-12-01

End Date: 2019-02-28

Contract Duration: 1,915 days

Daily Burn Rate: $17.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: TALKING LEAVES JCC/OA/CTS 2013 IGF::OT::IGF

Place of Performance

Location: TAHLEQUAH, CHEROKEE County, OKLAHOMA, 74464

State: Oklahoma Government Spending

Plain-Language Summary

Department of Labor obligated $33.2 million to CHEROKEE NATION for work described as: TALKING LEAVES JCC/OA/CTS 2013 IGF::OT::IGF Key points: 1. The contract's duration of 1915 days (over 5 years) suggests a long-term need for the services. 2. Awarded as 'NOT AVAILABLE FOR COMPETITION', this indicates a lack of broader market engagement. 3. The Cost Plus Incentive Fee (CPIF) pricing structure can incentivize cost savings but requires careful monitoring. 4. The contract's value, while significant, needs to be benchmarked against similar technical training programs. 5. The geographic focus on Oklahoma for employment and training services is noted. 6. The absence of small business set-aside flags warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the $33.2 million total value against similar technical and trade school contracts is challenging without more specific service details. The CPIF structure, while offering potential for cost efficiency, also introduces complexity in performance and cost oversight. The contract's long duration suggests a stable, albeit potentially less dynamic, pricing environment. Without comparable contract data, a definitive value-for-money assessment is difficult, but the lack of competition may have limited price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification ('NOT AVAILABLE FOR COMPETITION'), meaning it was not openly competed. This approach limits the number of potential bidders and can reduce the pressure on pricing due to a lack of direct comparison between multiple offers. The specific reasons for this sole-source award would need to be examined to understand if it was due to unique capabilities or other factors.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as competitive pressures are absent, potentially foregoing savings that could be achieved through a more open bidding process.

Public Impact

Individuals in Oklahoma seeking technical and trade skills development are the primary beneficiaries. The contract supports the delivery of educational and training services aimed at improving employment outcomes. The geographic impact is concentrated within Oklahoma, aligning with the Department of Labor's regional employment initiatives. Workforce implications include the potential for job creation within the contractor organization and enhanced skills for program participants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to suboptimal pricing.
Long contract duration could indicate a lack of flexibility or innovation.
CPIF structure requires robust oversight to ensure cost control and performance alignment.

Positive Signals

Contract addresses a specific need for technical training services.
Award to Cherokee Nation may support economic development within a tribal community.
Long-term nature suggests a consistent service delivery model.

Sector Analysis

The contract falls within the broader education and training services sector, specifically focusing on technical and trade schools. This sector is crucial for workforce development, providing specialized skills demanded by various industries. Comparable spending benchmarks would typically involve analyzing federal and state investments in vocational training programs, community colleges, and private training providers. The market size for such services is substantial, driven by continuous needs for skilled labor across the economy.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'sb' field is false and there is no mention of small business set-asides. This suggests that opportunities for small businesses to participate as prime contractors or significant subcontractors may have been limited. Further review of subcontracting plans would be necessary to determine the extent of small business involvement and its impact on the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Labor's Employment and Training Administration. Accountability measures are typically embedded within the Cost Plus Incentive Fee (CPIF) structure, linking contractor performance to financial incentives. Transparency would depend on the public availability of contract performance reports and audits. The Inspector General for the Department of Labor would have jurisdiction over investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Labor Training Programs
Workforce Innovation and Opportunity Act (WIOA) Programs
Federal Grants for Vocational Education
Tribal Employment and Training Programs

Risk Flags

Sole-source award may limit price competition.
Long contract duration requires ongoing performance monitoring.
CPIF structure necessitates careful oversight of cost and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $33.2 million to CHEROKEE NATION. TALKING LEAVES JCC/OA/CTS 2013 IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CHEROKEE NATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.2 million.

What is the period of performance?

Start: 2013-12-01. End: 2019-02-28.

What specific technical and trade skills are being provided under this contract?

The provided data does not specify the exact technical and trade skills covered by the 'TALKING LEAVES JCC/OA/CTS 2013 IGF' contract. The North American Industry Classification System (NAICS) code 611519, 'Other Technical and Trade Schools,' indicates a broad range of vocational training. To understand the specific skills, one would need to review the contract's statement of work (SOW) or performance work statement (PWS). This would detail the curriculum, target industries, and desired outcomes for participants, such as training in specific trades like welding, HVAC, IT support, or healthcare support roles, depending on regional labor market demands identified by the Department of Labor.

How does the $33.2 million cost compare to similar technical training contracts awarded by the Department of Labor?

A direct cost comparison of the $33.2 million contract value is difficult without knowing the specific services rendered and the number of individuals trained. However, the contract's duration of over five years (1915 days) suggests a substantial, long-term investment. To benchmark effectively, one would need to identify comparable contracts for vocational training or technical education programs administered by the Department of Labor or other federal agencies. Factors like the cost per participant, the intensity of training, and the specific skills imparted are crucial for a meaningful comparison. Given the sole-source nature, it's possible this contract's unit costs might be higher than if it had undergone competitive bidding.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude and duration?

The primary risks with a CPIF contract of this size and duration include potential cost overruns if the incentive targets are not well-defined or achievable, and the contractor may focus on maximizing profit rather than efficiency. There's also a risk of scope creep if the contract's objectives are not clearly delineated. For the government, the risk lies in inadequate oversight to ensure the incentive structure truly drives desired performance and cost savings. The long duration (over 5 years) amplifies these risks, as market conditions and program needs can change, potentially making the original incentive structure less relevant or effective over time. Robust monitoring and potential contract modifications are essential.

What is the track record of Cherokee Nation as a federal contractor, particularly in delivering employment and training services?

Cherokee Nation has a significant track record as a federal contractor, often managing programs related to tribal self-governance, economic development, and social services, including employment and training. Their experience often involves working with agencies like the Department of Labor, Department of Health and Human Services, and others. While specific performance metrics for this particular contract are not detailed here, tribal organizations like Cherokee Nation are frequently awarded contracts to serve their communities and beyond, leveraging their understanding of cultural nuances and community needs. A deeper dive into their contract history, including past performance evaluations and any reported issues, would provide a more comprehensive view of their reliability and effectiveness in delivering similar services.

How does the sole-source award impact the potential for innovation and cost savings compared to a full and open competition?

A sole-source award inherently limits the potential for innovation and cost savings when compared to a full and open competition. In a competitive environment, multiple vendors vie to offer the best solution at the lowest price, driving innovation in service delivery and efficiency. This competition forces bidders to be creative and cost-conscious. Conversely, a sole-source award, by definition, bypasses this competitive process. While there might be specific justifications for such an award (e.g., unique capabilities, urgent need), it removes the market pressure that typically spurs innovation and aggressive pricing. Taxpayers may therefore pay a premium and potentially receive less innovative solutions than could have been achieved through open competition.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 17675 SOUTH MUSKOGEE AVE, TAHLEQUAH, OK, 74464

Business Categories: Category Business, Government, Native American Tribal Government, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $44,978,412

Exercised Options: $44,978,412

Current Obligation: $33,195,619

Actual Outlays: $1,439,516

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline