Department of Education's $10.18M contract with Progressive Financial Services for collection services shows long-term engagement

Contract Overview

Contract Amount: $10,181,644 ($10.2M)

Contractor: Progressive Financial Services, Inc.

Awarding Agency: Department of Education

Start Date: 2003-12-05

End Date: 2000-09-15

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COLLECTION IS A FUNCTION OF BORROWER SERVICES, WHICH IS RESPONSIBLE FOR PROVIDING BEST IN BUSINESS SERVICE TO AID RECIPIENTS AND BY CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS.BY NOTIFYING

Place of Performance

Location: ARIZONA

State: Arizona Government Spending

Plain-Language Summary

Department of Education obligated $10.2 million to PROGRESSIVE FINANCIAL SERVICES, INC. for work described as: COLLECTION IS A FUNCTION OF BORROWER SERVICES, WHICH IS RESPONSIBLE FOR PROVIDING BEST IN BUSINESS SERVICE TO AID RECIPIENTS AND BY CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS.BY NOTIFYING Key points: 1. The contract value of $10.18M over its term suggests a significant need for collection services. 2. Progressive Financial Services has been engaged since at least 2000, indicating a stable, long-term relationship. 3. The contract was awarded under full and open competition, implying a potentially competitive bidding process. 4. The North American Industry Classification System (NAICS) code 561440 points to the specialized nature of collection agencies. 5. The contract's duration, spanning from 2000 to 2003, highlights a period of sustained service delivery. 6. The firm fixed-price contract type suggests predictable costs for the Department of Education.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific performance metrics or comparable contract data. The total value of $10.18M over approximately three years (2000-2003) averages around $3.39M annually. Given the nature of collection services, which are often performance-based, the true value depends heavily on recovery rates and efficiency. Without insight into these metrics, it's difficult to definitively assess value-for-money compared to industry standards or other government collection contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 5 bids suggests a moderate level of competition. This competitive process is generally favorable for price discovery, as multiple bidders are incentivized to offer competitive terms to secure the contract. However, the specific details of the bidding process and the nature of the proposals are not provided.

Taxpayer Impact: A competitive bidding process for collection services can lead to more cost-effective solutions for taxpayers by driving down service fees or improving recovery rates.

Public Impact

The primary beneficiaries are the Department of Education, which receives assistance in managing delinquent and defaulted borrower accounts. The services delivered include notifying borrowers and managing delinquent/defaulted accounts to aid recipients. The geographic impact is likely nationwide, as the Department of Education serves borrowers across the United States. Workforce implications are minimal for the government, as the contract outsources collection activities to a specialized private firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it hard to gauge the true effectiveness and value for money.
The contract's age (2000-2003) means current market rates and best practices may not be reflected.
Details on the competition dynamics beyond the number of bids are absent, limiting assessment of price pressure.

Positive Signals

Awarded under full and open competition, suggesting a fair process.
The firm fixed-price contract type provides cost certainty for the agency.
The long-standing relationship with the contractor (implied by award date) could indicate consistent performance.

Sector Analysis

Collection agencies operate within the broader business support services sector. This specific contract falls under the 'Collection Agencies' industry (NAICS 561440). The market for federal debt collection is substantial, with various agencies utilizing specialized firms to manage delinquent accounts across different programs. Benchmarking this contract's value is difficult without knowing the volume and age of the debt being managed, but the annual average of approximately $3.39M is a significant figure for a single contract.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from this particular award. The focus was on full and open competition, suggesting the primary goal was to secure the best offer regardless of business size.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Education's contracting officers and program managers monitoring performance against the contract terms. Accountability measures would be tied to the firm fixed-price structure and any service level agreements. Transparency is limited by the available data; while the award is public, detailed performance reports or audit findings are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Student Loan Servicing Contracts
Department of Education Debt Management
Government Debt Collection Services
Treasury Offset Program

Risk Flags

Contract awarded in 2003, potentially outdated performance and pricing benchmarks.
Lack of specific performance metrics makes value assessment difficult.
Limited information on competition dynamics beyond the number of bidders.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $10.2 million to PROGRESSIVE FINANCIAL SERVICES, INC.. COLLECTION IS A FUNCTION OF BORROWER SERVICES, WHICH IS RESPONSIBLE FOR PROVIDING BEST IN BUSINESS SERVICE TO AID RECIPIENTS AND BY CONTROLLING DELIQUENT/DEFAULTED ACCOUNTS.BY NOTIFYING

Who is the contractor on this award?

The obligated recipient is PROGRESSIVE FINANCIAL SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.2 million.

What is the period of performance?

Start: 2003-12-05. End: 2000-09-15.

What was the specific volume and age of debt managed under this contract?

The provided data does not specify the volume or age of the debt managed by Progressive Financial Services under this contract. This information is crucial for a comprehensive assessment of the contract's value and the contractor's performance. Collection agencies' effectiveness is highly dependent on the characteristics of the debt portfolio they are assigned. Older, more delinquent debts are typically harder to collect, requiring different strategies and potentially higher operational costs. Without these details, it is impossible to benchmark the recovery rates or operational efficiency of Progressive Financial Services against industry standards or other government contracts.

How did Progressive Financial Services' pricing compare to other bidders?

While the contract was awarded under full and open competition with five bids received, the specific pricing structures and comparisons between Progressive Financial Services and its competitors are not detailed in the provided data. The 'firm fixed price' (pt: FIRM FIXED PRICE) contract type indicates a set price for the services rendered, but the basis for this price (e.g., per dollar collected, per account managed, hourly rate) and how it was determined through the competitive process is unknown. To assess value-for-money, understanding the unit costs or the percentage of recovered debt that was retained by the contractor would be necessary, alongside how these metrics compared to the other proposals submitted.

What were the key performance indicators (KPIs) for this contract, and did the contractor meet them?

The provided data does not include any specific Key Performance Indicators (KPIs) or performance metrics that Progressive Financial Services was required to meet. For a collection services contract, typical KPIs might include recovery rates, timeliness of collections, borrower contact rates, compliance with regulations, and customer satisfaction (from the borrower's perspective, where applicable). Without knowing these targets and the contractor's actual performance against them, it is impossible to evaluate the effectiveness of the services provided or the overall success of the contract in achieving the Department of Education's objectives for managing delinquent accounts.

What is the historical spending pattern for collection agencies by the Department of Education?

The provided data only pertains to a single contract awarded in 2003. To understand historical spending patterns for collection agencies by the Department of Education, a broader analysis of contract awards over multiple years would be required. This would involve examining the total amount spent annually on collection services, the number of contracts awarded, the primary contractors utilized, and the types of debt being collected (e.g., student loans, grants). Such an analysis would reveal trends in outsourcing collection activities, fluctuations in spending, and the department's reliance on specific vendors or types of collection strategies over time.

What is the track record of Progressive Financial Services with other government contracts?

The provided data focuses solely on this specific Department of Education contract and does not offer information on Progressive Financial Services' track record with other government agencies or contracts. To assess their broader experience and reliability, one would need to research their contract history across different federal departments and agencies. This would include looking at contract values, durations, types of services provided, performance ratings, and any past performance issues or awards received. A comprehensive review would help determine if this contract represents a typical engagement or an outlier in their government contracting history.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Collection Agencies

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 540 W BROADWAY RD STE 104, MESA

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,885,642

Exercised Options: $17,885,642

Current Obligation: $10,181,644

Timeline