Department of Education awards $180M contract to The CBE Group for federal student loan debt collection
Contract Overview
Contract Amount: $179,903,447 ($179.9M)
Contractor: THE CBE Group, Inc.
Awarding Agency: Department of Education
Start Date: 2009-07-01
End Date: 2015-04-21
Contract Duration: 2,120 days
Daily Burn Rate: $84.9K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 26
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS.
Place of Performance
Location: CEDAR FALLS, BLACK HAWK County, IOWA, 50613
State: Iowa Government Spending
Plain-Language Summary
Department of Education obligated $179.9 million to THE CBE GROUP, INC. for work described as: PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS. Key points: 1. The contract focuses on debt collection and administrative resolution for federal student loans. 2. The CBE Group, Inc. is the sole awardee for this delivery order. 3. The contract was awarded under a competitive process. 4. This spending falls under the 'Offices of Certified Public Accountants' NAICS code, though the service is debt collection.
Value Assessment
Rating: fair
The contract's fixed-price incentive structure aims to control costs while incentivizing performance. However, without specific per-unit cost data or benchmarks for debt collection services, a precise value assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded via a competitive delivery order, indicating multiple vendors likely had the opportunity to bid. This competitive process should have facilitated price discovery and ensured a reasonable price for the services rendered.
Taxpayer Impact: Taxpayer funds are used to recover defaulted student loan debt, aiming to recoup losses and maintain the integrity of federal loan programs.
Public Impact
Impacts borrowers with defaulted federal student loans by engaging a private agency for collection. Ensures the government can recover funds from delinquent loan payments. Potential for varied borrower experiences depending on the collection agency's practices. Supports the financial sustainability of federal student aid programs.
Waste & Efficiency Indicators
Waste Risk Score: 85 / 10
Warning Flags
- NAICS code mismatch: 541211 (CPAs) is unusual for debt collection services.
- Fixed Price Incentive contract type can lead to cost overruns if not managed carefully.
Positive Signals
- Competitive award process.
- Clear objective: debt recovery for federal student loans.
Sector Analysis
This contract falls within the professional services sector, specifically related to financial services and debt management. Benchmarks for debt collection services can vary widely based on recovery rates and contract terms.
Small Business Impact
The data indicates this was not awarded to a small business. Further analysis would be needed to determine if small businesses were subcontracted.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Standard oversight mechanisms for federal contracts, including performance monitoring and financial audits, would apply.
Related Government Programs
- Offices of Certified Public Accountants
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- NAICS code discrepancy.
- Potential for high contractor fees impacting net recovery.
- Contract duration is lengthy (over 5 years).
- Lack of transparency on specific performance metrics and recovery rates.
Tags
offices-of-certified-public-accountants, department-of-education, ia, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $179.9 million to THE CBE GROUP, INC.. PRIVATE COLLECTION AGENCY PERFORMS COLLECTION AND ADMINISTRATIVE RESOLUTION ACTIVITIES ON DEBTS RESULTING FROM NON-PAYMENT OF STUDENT LOANS MADE UNDER THE VARIOUS FEDERAL STUDENT AID LOAN PROGRAMS.
Who is the contractor on this award?
The obligated recipient is THE CBE GROUP, INC..
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $179.9 million.
What is the period of performance?
Start: 2009-07-01. End: 2015-04-21.
What is the typical recovery rate for federal student loan debt collection, and how does The CBE Group's performance compare?
Recovery rates for federal student loan debt collection can vary significantly based on factors like loan age, borrower circumstances, and collection methods employed. Without specific performance data for this contract, it's challenging to benchmark The CBE Group's effectiveness. Agencies typically aim for rates that justify the cost of collection and maximize returned funds to the government.
What are the specific risks associated with using a private agency for student loan debt collection?
Risks include potential damage to the government's reputation if the agency engages in aggressive or non-compliant collection practices, leading to borrower complaints and legal challenges. There's also a risk of inefficient collection, where the agency's fees outweigh the recovered debt, or data security breaches of sensitive borrower information.
How effective is the fixed-price incentive contract structure in ensuring value for money in debt collection services?
The fixed-price incentive structure aims to align the contractor's profit with performance metrics, potentially driving efficiency and cost-effectiveness. However, its effectiveness hinges on well-defined performance standards and realistic cost targets. If targets are too easily met or incentives are poorly structured, it may not yield optimal value or could incentivize excessive costs.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 26
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: CBE Group Inc. the (UEI: 079116558)
Address: 1309 TECHNOLOGY PKWY, CEDAR FALLS, IA, 50613
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $183,789,665
Exercised Options: $183,789,665
Current Obligation: $179,903,447
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS23F0230P
IDV Type: FSS
Timeline
Start Date: 2009-07-01
Current End Date: 2015-04-21
Potential End Date: 2015-04-21 00:00:00
Last Modified: 2020-04-14
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