Department of Education awards $100.9M contract to Delta Management for student loan debt collection
Contract Overview
Contract Amount: $100,941,567 ($100.9M)
Contractor: Delta Management Associates, Inc
Awarding Agency: Department of Education
Start Date: 2009-07-01
End Date: 2015-04-21
Contract Duration: 2,120 days
Daily Burn Rate: $47.6K/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: CHELSEA, SUFFOLK County, MASSACHUSETTS, 02150
Plain-Language Summary
Department of Education obligated $100.9 million to DELTA MANAGEMENT ASSOCIATES, 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. Delta Management Associates, Inc. secured a significant contract for federal student loan debt resolution. 2. The contract value of $100.9 million indicates substantial government reliance on private agencies for debt recovery. 3. The fixed-price incentive contract structure aims to balance cost control with effective debt collection performance. 4. This spending falls within the Collection Agencies sector, supporting government efforts to recoup defaulted student loans.
Value Assessment
Rating: good
The contract value of $100.9 million for debt collection services appears reasonable given the scope of federal student loans. Benchmarking against similar large-scale debt collection contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The contract was awarded as a competitive delivery order. The specific details of the competition and how price discovery was achieved are not fully detailed, but competition generally leads to better pricing.
Taxpayer Impact: This contract aims to recover funds for taxpayers by collecting on defaulted student loans, potentially reducing the net cost of federal student aid programs.
Public Impact
Taxpayers benefit from the recovery of defaulted student loan funds, reducing the overall burden on federal programs. Students with defaulted loans will interact with Delta Management Associates for resolution, potentially impacting their credit and financial standing. The efficiency of this contract directly influences the government's ability to manage its student loan portfolio and associated financial risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed competition information
- Potential for aggressive collection tactics impacting borrowers
Positive Signals
- Focus on debt recovery for taxpayer benefit
- Use of a competitive delivery order
Sector Analysis
This contract falls under the Collection Agencies sector, which is crucial for government entities managing large portfolios of receivables. Spending benchmarks for this sector are highly variable, depending on the volume and age of debt being managed.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to assess small business participation.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Standard government oversight mechanisms, including performance reviews and audits, would be in place to ensure compliance and effectiveness.
Related Government Programs
- Collection Agencies
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for aggressive collection tactics
- Limited transparency on competition details
- Dependence on a single agency for a large debt portfolio
- Contract duration extends over several years, requiring ongoing monitoring
Tags
collection-agencies, department-of-education, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $100.9 million to DELTA MANAGEMENT ASSOCIATES, 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 DELTA MANAGEMENT ASSOCIATES, INC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $100.9 million.
What is the period of performance?
Start: 2009-07-01. End: 2015-04-21.
What is the historical success rate of Delta Management Associates in collecting federal student loan debt compared to industry averages?
Assessing Delta Management Associates' historical success rate is crucial for evaluating the value of this contract. A higher success rate would justify the investment and indicate efficient debt recovery. Comparing this rate to industry benchmarks and previous government contracts would provide context on performance and potentially identify areas for improvement or cost savings in future agreements.
What are the specific performance metrics and incentive structures within the fixed-price incentive contract that drive Delta Management's collection efforts?
Understanding the performance metrics and incentive structures is key to evaluating the contract's effectiveness and risk. These elements dictate how Delta Management is compensated and motivated, directly impacting collection efficiency and taxpayer return. Clear, measurable metrics tied to successful debt recovery and cost control are essential for ensuring the contractor is incentivized to perform optimally without undue risk to borrowers or the government.
How does the Department of Education ensure borrower protection and fair treatment during the debt collection process managed by Delta Management?
Ensuring borrower protection and fair treatment is paramount to the ethical and legal execution of this contract. The Department of Education must have robust oversight mechanisms in place, including clear guidelines on communication, dispute resolution, and adherence to consumer protection laws. Monitoring contractor practices and providing channels for borrower feedback are vital to prevent predatory behavior and maintain public trust in federal student aid programs.
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: 100 EVERETT AVE STE 6, CHELSEA, MA, 02150
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $105,487,002
Exercised Options: $105,487,002
Current Obligation: $100,941,567
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS23F0022T
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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