Department of Education's $707M contract for educational testing services awarded to Educational Testing Service

Contract Overview

Contract Amount: $70,707,078 ($70.7M)

Contractor: Educational Testing Service

Awarding Agency: Department of Education

Start Date: 2007-09-27

End Date: 2013-03-26

Contract Duration: 2,007 days

Daily Burn Rate: $35.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: NAEP DAR COMPONENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20202

State: District of Columbia Government Spending

Plain-Language Summary

Department of Education obligated $70.7 million to EDUCATIONAL TESTING SERVICE for work described as: NAEP DAR COMPONENT Key points: 1. The contract value of $707 million over its life cycle suggests a significant investment in educational assessment. 2. Awarded through full and open competition, indicating a potentially competitive bidding process. 3. The contract's duration (2007-2013) provides a substantial performance history for analysis. 4. The use of a Cost Plus Award Fee (CPAF) contract type implies performance incentives. 5. The North American Industry Classification System (NAICS) code 611710 points to a specialized educational support services market. 6. The contract was awarded to a single entity, Educational Testing Service, for the entire duration. 7. The absence of small business set-aside flags suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $707 million contract is challenging without specific performance metrics or comparable contracts for educational testing services of this scale and duration. The Cost Plus Award Fee (CPAF) structure suggests that the final cost could vary based on performance, making a direct price comparison difficult. However, the sheer scale of the award indicates a substantial need and commitment by the Department of Education.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit a bid. The fact that it resulted in a single award to Educational Testing Service after this process warrants further investigation into the number of bids received and the reasons for the single award. A competitive process is generally expected to yield better pricing and value.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it theoretically allows for the widest range of potential providers, fostering competition that can drive down costs and improve service quality.

Public Impact

Students and educators nationwide benefit from standardized assessments that inform educational policy and practice. The contract supports the delivery of critical educational testing and assessment services across the United States. The geographic impact is national, covering all states and territories participating in federal education initiatives. The contract likely involves a significant workforce within Educational Testing Service dedicated to test development, administration, and scoring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long duration of the contract (over 5 years) could lead to complacency or a lack of agility in adapting to evolving educational needs.
The Cost Plus Award Fee (CPAF) structure, while incentivizing performance, can also lead to cost overruns if not managed meticulously.
Reliance on a single contractor for such a large-scale, critical function may pose a risk if the contractor experiences performance issues or financial instability.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
The contract's substantial value indicates a recognized and ongoing need for these critical educational services.
The use of an award fee structure implies a focus on achieving specific performance targets.

Sector Analysis

This contract falls within the broader educational support services sector, specifically focusing on assessment and testing. This market is characterized by specialized firms with expertise in psychometrics, test design, and large-scale data management. The size of this contract, at $707 million, represents a significant portion of federal spending on educational assessment, likely encompassing national standardized testing programs.

Small Business Impact

The contract details indicate that small business set-asides were not utilized (ss: false, sb: false). This suggests that the primary award was not specifically targeted to small businesses. However, the prime contractor, Educational Testing Service, may engage small businesses as subcontractors for specific services or support functions, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Department of Education. The Cost Plus Award Fee (CPAF) structure implies performance monitoring to determine award fees. Transparency would be enhanced through regular reporting requirements and potentially through public access to aggregated test results and program evaluations, though specific oversight mechanisms for this contract are not detailed.

Related Government Programs

National Assessment of Educational Progress (NAEP)
Federal Student Aid Programs
State Education Agency Grants

Risk Flags

Potential for cost overruns due to CPAF structure
Risk associated with single-source award after open competition
Long contract duration may limit flexibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $70.7 million to EDUCATIONAL TESTING SERVICE. NAEP DAR COMPONENT

Who is the contractor on this award?

The obligated recipient is EDUCATIONAL TESTING SERVICE.

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $70.7 million.

What is the period of performance?

Start: 2007-09-27. End: 2013-03-26.

What was the specific performance history of Educational Testing Service (ETS) on this contract?

While the provided data confirms Educational Testing Service (ETS) as the contractor for this $707 million contract spanning from 2007 to 2013, it does not include specific details on their performance history. The contract type, Cost Plus Award Fee (CPAF), suggests that performance was evaluated, and award fees were paid based on achieving certain metrics. To assess ETS's performance, one would need access to contract performance reports, award fee determinations, and any associated quality assurance surveillance plans (QASPs) or contractor performance evaluation reports (CPARS) that were generated during the contract's life. These documents would detail whether ETS met or exceeded expectations in areas such as test development accuracy, timely administration, data security, and reporting quality.

How did the final awarded cost compare to the initial estimated cost for this contract?

The provided data lists the total obligated amount ('a') as $707,070,784.4, which represents the value of the contract. However, it does not specify an initial estimated cost or provide a breakdown of how the final awarded cost was determined, especially given the Cost Plus Award Fee (CPAF) structure. CPAF contracts have a base cost plus an award fee that is contingent upon meeting performance targets. To compare the final cost to an estimate, one would need to review the contract's initial solicitation, the negotiated base cost, and the criteria and amounts for the award fees. Without this information, it's impossible to determine if the contract was awarded at, above, or below an initial estimate or if the final cost was significantly influenced by performance incentives.

What were the key performance indicators (KPIs) used to determine award fees for Educational Testing Service?

The data indicates this contract utilized a Cost Plus Award Fee (CPAF) structure, implying that specific performance indicators (KPIs) were established to determine the amount of award fees paid to Educational Testing Service (ETS). However, the specific KPIs are not detailed in the provided summary. Typically, for educational testing contracts, these KPIs might include metrics related to the accuracy and validity of assessments, the timeliness of test administration and scoring, the security and integrity of data, the quality and clarity of reporting, and the responsiveness to Department of Education requirements. A thorough review of the contract's Statement of Work (SOW) and the award fee plan would be necessary to identify the precise KPIs and their associated weighting and targets.

What was the total number of bids received during the full and open competition for this contract?

The contract was awarded under 'full and open competition,' which theoretically allows all eligible sources to bid. However, the provided data does not specify the total number of bids received. While the competition was open, the fact that the award went to a single entity, Educational Testing Service, after this process could suggest several possibilities: a limited number of qualified bidders, a highly competitive initial round where ETS was the clear winner, or potentially a consolidation of services. To understand the true level of competition, one would need to consult the contract award documentation, which often includes details on the number of proposals received and the basis for award.

How does the spending on this contract compare to other federal contracts for similar educational assessment services?

The $707 million obligated amount for this contract (2007-2013) for educational testing services is substantial. To compare it to similar federal contracts, one would need to identify other large-scale contracts for national or statewide assessment programs awarded by the Department of Education or other federal agencies (like the Department of Defense for its schools). Benchmarking would involve looking at the contract duration, scope of services (e.g., development, administration, scoring, reporting), and the number of students assessed. Without specific comparable contract data, it's difficult to definitively state whether this contract represented high, low, or average spending. However, its significant value suggests it was a major undertaking in federal educational assessment.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › Education, Training, Employment, and Social Services R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 666 ROSEDALE ROAD MS 85-D, PRINCETON, NJ, 08541

Business Categories: Category Business, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $75,431,270

Exercised Options: $72,288,114

Current Obligation: $70,707,078

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline