Department of Education's $177M contract for student loan debt collection awarded to Windham Professionals Inc

Contract Overview

Contract Amount: $177,318,720 ($177.3M)

Contractor: Windham Professionals Inc

Awarding Agency: Department of Education

Start Date: 2009-07-01

End Date: 2015-04-20

Contract Duration: 2,119 days

Daily Burn Rate: $83.7K/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: SALEM, ROCKINGHAM County, NEW HAMPSHIRE, 03079

State: New Hampshire Government Spending

Plain-Language Summary

Department of Education obligated $177.3 million to WINDHAM PROFESSIONALS 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. Contract focused on administrative resolution and collection of defaulted federal student loans. 2. Awarded through a competitive delivery order process, indicating multiple bids were considered. 3. The fixed-price incentive contract structure aims to align contractor performance with collection goals. 4. Performance period spanned over 7 years, suggesting a long-term need for these services. 5. The contract's value of $177M reflects the significant scale of federal student loan defaults. 6. Windham Professionals Inc. is the sole contractor for this specific delivery order. 7. The contract was not set aside for small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and recovery rates. The fixed-price incentive structure suggests an attempt to control costs while motivating performance. However, the total award of $177 million over nearly seven years indicates a substantial investment in debt collection services. Further analysis would require comparing the cost per dollar collected against industry standards and other government contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, implying that multiple vendors were solicited and evaluated. The existence of a competitive process is a positive indicator for price discovery and potentially better value for the government. The number of bids received and the specific evaluation criteria would provide further insight into the level of competition.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering a more efficient marketplace, leading to potentially lower costs and improved service quality compared to sole-source arrangements.

Public Impact

Benefits individuals who have defaulted on federal student loans by providing a structured process for resolution. Services delivered include administrative resolution and active collection of outstanding debts. Geographic impact is nationwide, covering all federal student loan programs. Workforce implications include employment opportunities within Windham Professionals Inc. and potentially within the Department of Education's oversight functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for aggressive collection tactics impacting borrowers.
Long-term reliance on a single contractor for a critical function.
Effectiveness of the fixed-price incentive model in maximizing collections without undue cost.

Positive Signals

Competitive award process suggests potential for good value.
Fixed-price incentive contract aligns contractor goals with agency objectives.
Long contract duration indicates sustained need and potential for contractor expertise development.

Sector Analysis

The debt collection industry is a significant sector within business support services, encompassing a wide range of activities from early-stage delinquency management to post-charge-off recovery. Federal agencies, particularly those managing large portfolios of receivables like student loans, often contract with specialized firms to manage these complex and often sensitive operations. The market size for government debt collection services is substantial, driven by the need to recoup taxpayer-funded loans and maintain fiscal responsibility. This contract fits within the broader landscape of government outsourcing for administrative and financial services.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb' field being false. This means that the competition was open to all eligible offerors, including large businesses. There is no explicit information provided regarding subcontracting plans for small businesses. The lack of a small business set-aside suggests that the primary focus was on securing the most capable and cost-effective provider, which may not have been a small business for this particular service requirement.

Oversight & Accountability

Oversight of this contract would primarily reside with the Department of Education's contracting officers and program managers. Accountability measures are likely embedded within the fixed-price incentive contract terms, linking payment to performance and collection success. Transparency is generally facilitated through contract award databases and reporting requirements, though specific operational details of collection activities may be less public. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Student Aid Loan Programs
Department of Education Administrative Services
Government Debt Collection Services
Financial Services Contracts

Risk Flags

Contract duration is lengthy, potentially leading to complacency or outdated practices if not actively managed.
Fixed-price incentive contracts can sometimes lead to disputes over performance metrics or cost ceilings.
Debt collection is a sensitive area with potential for borrower complaints and regulatory scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $177.3 million to WINDHAM PROFESSIONALS 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 WINDHAM PROFESSIONALS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $177.3 million.

What is the period of performance?

Start: 2009-07-01. End: 2015-04-20.

What was the historical spending pattern for student loan debt collection services by the Department of Education prior to this contract?

Analyzing historical spending patterns for student loan debt collection prior to this $177 million contract requires access to detailed historical procurement data. Typically, the Department of Education utilizes a mix of contract types and awardees for managing its vast portfolio of student loans. Spending can fluctuate based on economic conditions, changes in loan default rates, and policy shifts regarding loan servicing and collection. Prior to this specific delivery order, the Department likely engaged in multiple contracts, potentially with varying scopes and durations, to address different segments of defaulted loans or to test different collection strategies. Understanding these patterns would involve examining annual spending reports, contract award databases, and potentially reports from the Government Accountability Office (GAO) or the Department's Inspector General that might comment on the efficiency and cost-effectiveness of past collection efforts.

How does the performance of Windham Professionals Inc. on this contract compare to other debt collection agencies contracted by the federal government?

Comparing the performance of Windham Professionals Inc. on this specific contract to other federal debt collection agencies requires access to detailed performance metrics, such as recovery rates, cost per dollar collected, borrower complaint data, and compliance records. Publicly available data often includes contract awards and basic financial information, but granular performance comparisons are usually internal to agencies or require specific Freedom of Information Act (FOIA) requests. Generally, federal agencies benchmark contractors against established performance standards and against each other through competitive processes. Factors like the type of debt being collected (e.g., student loans vs. tax debt), the age of the debt, and the specific collection strategies employed can significantly influence performance metrics, making direct comparisons complex. A thorough analysis would involve examining contract performance reports, any debriefings from competitors, and potentially GAO or IG reports that evaluate the effectiveness of federal debt collection programs.

What are the key performance indicators (KPIs) used to evaluate the success of this student loan debt collection contract?

The key performance indicators (KPIs) for a student loan debt collection contract like this one typically revolve around financial recovery and operational efficiency, often tied to the 'incentive' aspect of the Fixed Price Incentive (FPI) contract type. Primary KPIs would likely include the total amount of debt recovered (gross and net of collection costs), the recovery rate (percentage of outstanding debt collected), and the cost per dollar collected. Other important metrics might involve the timeliness of collections, adherence to legal and regulatory requirements (e.g., Fair Debt Collection Practices Act), borrower satisfaction or complaint rates, and the efficiency of administrative resolution processes. The Department of Education would monitor these KPIs to ensure Windham Professionals Inc. is meeting its contractual obligations and achieving the desired outcomes in resolving defaulted student loans, thereby maximizing the return on investment for taxpayer-funded programs.

What is the estimated total amount of student loan debt managed under this contract, and what percentage has been successfully collected?

The provided data indicates a total award amount of $177,318,719.67 for this contract, which covers the performance period from July 1, 2009, to April 20, 2015. This figure represents the total value of the contract, encompassing anticipated costs for collection and administrative resolution activities, rather than the total amount of debt managed or collected. To determine the total amount of student loan debt managed, one would need to know the aggregate principal balance of all defaulted loans assigned to Windham Professionals Inc. under this contract. Similarly, the percentage successfully collected would be calculated by dividing the total amount recovered by the total amount assigned. Without specific reports on the volume and value of debt assigned and recovered, it is impossible to ascertain the exact collection percentage from the award data alone. This information would typically be found in performance reports submitted by the contractor and reviewed by the Department of Education.

Are there any known risks associated with the contractor, Windham Professionals Inc., or the nature of federal student loan debt collection?

Risks associated with federal student loan debt collection contracts can be multifaceted. For the contractor, Windham Professionals Inc., risks might include challenges in meeting aggressive collection targets, potential for borrower disputes or complaints, and the need to maintain strict compliance with federal regulations like the Fair Debt Collection Practices Act (FDCPA). Reputational risk is also a factor, as aggressive collection tactics can draw public scrutiny. For the government, risks include the potential for inefficient collection processes, high administrative costs relative to recovered debt, and the possibility of contractor non-compliance or fraud. The nature of student loan debt itself presents risks, such as borrowers facing economic hardship, making repayment difficult, and the sheer volume and complexity of federal loan programs. The long duration of the contract (over 7 years) also introduces risks related to changing economic conditions or evolving regulatory landscapes that could impact collection effectiveness.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 26

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 380 MAIN ST, SALEM, NH, 03079

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

Financial Breakdown

Contract Ceiling: $189,571,143

Exercised Options: $189,571,143

Current Obligation: $177,318,720

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0030U

IDV Type: FSS

Timeline