Department of Education awards $155M contract to Coast Professional for student loan debt collection
Contract Overview
Contract Amount: $155,246,779 ($155.2M)
Contractor: Coast Professional, Inc.
Awarding Agency: Department of Education
Start Date: 2009-07-01
End Date: 2015-04-21
Contract Duration: 2,120 days
Daily Burn Rate: $73.2K/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: GENESEO, LIVINGSTON County, NEW YORK, 14454
State: New York Government Spending
Plain-Language Summary
Department of Education obligated $155.2 million to COAST PROFESSIONAL, 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 collecting and resolving debts from federal student loans. 2. Coast Professional, Inc. is the sole awardee for this specific delivery order. 3. The contract duration is 2120 days, indicating a long-term need for these services. 4. The sector is financial services, specifically loan servicing and debt collection.
Value Assessment
Rating: fair
The contract was awarded via a competitive delivery order, suggesting some price discovery. However, without specific benchmarks for debt collection services, a precise value assessment is difficult. The fixed-price incentive structure aims to align contractor performance with government objectives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This was a competitive delivery order, implying that multiple vendors likely had an opportunity to bid. The competitive nature should have driven a reasonable price, but the specific details of the competition and the pricing model are not fully detailed here.
Taxpayer Impact: Taxpayer funds are used to pay for the services of a private agency to collect delinquent federal student loans, aiming to recover funds and reduce the burden of defaulted loans.
Public Impact
Impacts borrowers with defaulted federal student loans by engaging a private agency for collection. Ensures the government recovers funds from defaulted loans, potentially reducing the overall cost to taxpayers. The use of a private collection agency may lead to varied borrower experiences compared to in-house government collection efforts.
Waste & Efficiency Indicators
Waste Risk Score: 73 / 10
Warning Flags
- Lack of detailed performance metrics in the provided data.
- Potential for aggressive collection tactics impacting borrower relations.
- Reliance on a single vendor for a critical function.
Positive Signals
- Competitive award process for the delivery order.
- Fixed-price incentive contract structure aligns incentives.
- Clear objective of debt recovery for federal student loans.
Sector Analysis
The financial services sector, particularly debt collection, is crucial for government revenue recovery. Benchmarks for this sector often focus on recovery rates and cost per dollar collected, which are not explicitly provided here.
Small Business Impact
The data indicates this contract was not set aside for small businesses (sb: false). Therefore, large businesses likely dominated the bidding and performance of this contract.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Accountability would be measured by the agency's ability to meet performance metrics, collection rates, and adherence to regulations governing debt collection.
Related Government Programs
- Mortgage and Nonmortgage Loan Brokers
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for high contractor profit margins if collection is efficient.
- Risk of aggressive or non-compliant collection practices.
- Dependence on a single vendor for a critical function.
- Lack of transparency in specific performance metrics and outcomes.
Tags
mortgage-and-nonmortgage-loan-brokers, department-of-education, ny, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $155.2 million to COAST PROFESSIONAL, 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 COAST PROFESSIONAL, INC..
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $155.2 million.
What is the period of performance?
Start: 2009-07-01. End: 2015-04-21.
What is the average cost per dollar collected under this contract, and how does it compare to industry benchmarks or previous government collection efforts?
The provided data does not include the cost per dollar collected, making a direct comparison difficult. To assess value, one would need to analyze the agency's fee structure against the total amount of debt recovered. Comparing this to historical government collection costs or private sector averages would reveal efficiency and potential savings or overspending.
What are the specific performance metrics and incentives tied to the fixed-price incentive contract, and how are they monitored to mitigate risk?
The data specifies a 'FIXED PRICE INCENTIVE' contract type but lacks details on the specific performance metrics and incentive targets. Effective oversight requires clear, measurable goals related to collection rates, borrower resolution, and compliance. Robust monitoring mechanisms are essential to ensure the contractor meets these objectives and to mitigate risks associated with collection practices and cost overruns.
How does the performance of this private collection agency compare to the Department of Education's internal collection capabilities in terms of efficiency and borrower satisfaction?
A direct comparison is not possible with the given data. Evaluating effectiveness would require analyzing collection success rates, operational costs, and borrower feedback for both private agencies and internal government efforts. Understanding these differences is key to determining the optimal approach for managing federal student loan debt recovery.
Industry Classification
NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Mortgage and Nonmortgage Loan Brokers
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: 4273 VOLUNTEER RD, GENESEO, NY, 14454
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $157,058,611
Exercised Options: $157,058,611
Current Obligation: $155,246,779
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS23F0009U
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: 2020-04-03
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