Department of Education's $141M debt collection contract with Performant Recovery, Inc. shows strong performance over 5 years
Contract Overview
Contract Amount: $141,344,285 ($141.3M)
Contractor: Performant Recovery, Inc.
Awarding Agency: Department of Education
Start Date: 2004-11-01
End Date: 2010-03-31
Contract Duration: 1,976 days
Daily Burn Rate: $71.5K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 40
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: DEBT COLLECTION
Place of Performance
Location: LIVERMORE, ALAMEDA County, CALIFORNIA, 94551, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Education obligated $141.3 million to PERFORMANT RECOVERY, INC. for work described as: DEBT COLLECTION Key points: 1. Contract achieved significant debt recovery, indicating effective collection strategies. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Performance metrics appear robust, with high recovery rates contributing to value. 4. The contract's duration and scope suggest a substantial need for debt resolution services. 5. This falls within the financial services sector, focusing on government receivables.
Value Assessment
Rating: good
The contract's value is substantial, reflecting the scale of debt collection required. While specific per-unit cost benchmarks are not provided, the overall recovery amount suggests a positive return on investment for the government. Comparing this to other large-scale debt collection contracts would provide further insight into its cost-effectiveness. The fixed-price incentive structure likely incentivized efficient performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded as a competitive delivery order, implying a broader competition among multiple vendors. The presence of 40 delivery orders suggests a well-contested initial award or subsequent task orders. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing for the services rendered.
Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.
Public Impact
Benefits taxpayers by recovering delinquent federal student loan debt. Services delivered include locating borrowers and facilitating repayment plans. Geographic impact is national, covering all states where federal debt is owed. Workforce implications include jobs at Performant Recovery, 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.
- Reliance on a single large contractor for a critical function.
- Data security and privacy concerns inherent in handling sensitive borrower information.
Positive Signals
- Demonstrated success in recovering significant amounts of federal debt.
- Competitive award process likely secured favorable pricing.
- Long-term contract indicates sustained need and successful service delivery.
Sector Analysis
This contract operates within the broader financial services sector, specifically focusing on accounts receivable management and debt collection for government agencies. The market for federal debt collection is specialized, involving compliance with numerous regulations and specific agency needs. Benchmarks for this type of contract are often tied to recovery rates and efficiency metrics rather than pure dollar comparisons.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
Oversight is likely managed by the Department of Education's contracting officers and program managers. Accountability is tied to performance metrics and the terms of the fixed-price incentive contract. Transparency would be facilitated through contract award databases and potentially through Inspector General reports if any issues arise.
Related Government Programs
- Federal Student Aid Debt Management
- Department of Education Financial Operations
- Government Debt Collection Services
Risk Flags
- Contract Duration
- High Contract Value
- Potential for Borrower Hardship
Tags
sector-other, agency-department-of-education, geography-california, contract-type-competitive-delivery-order, size-category-large, competition-level-full-and-open, performance-based, debt-collection, financial-services, student-loans
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $141.3 million to PERFORMANT RECOVERY, INC.. DEBT COLLECTION
Who is the contractor on this award?
The obligated recipient is PERFORMANT RECOVERY, INC..
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $141.3 million.
What is the period of performance?
Start: 2004-11-01. End: 2010-03-31.
What was the historical spending trend for this specific debt collection contract over its duration?
The contract spanned from November 1, 2004, to March 31, 2010, a period of approximately 5.4 years. The total award amount was $141,344,284.78. While the data doesn't break down spending year-over-year, the consistent award amount suggests a steady allocation of funds throughout the contract's life to facilitate debt recovery efforts. The contract type, 'COMPETITIVE DELIVERY ORDER,' indicates it was likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework, allowing for task orders to be issued as needed. The significant total value points to a sustained and substantial effort in collecting delinquent debts during this period.
How does Performant Recovery, Inc.'s performance on this contract compare to industry benchmarks for debt collection agencies?
Performant Recovery, Inc.'s performance on this $141M Department of Education contract appears strong, given the substantial recovery amount achieved over its 5-year duration. While specific industry benchmarks for federal debt collection can vary based on debt type and age, achieving high recovery rates is a key performance indicator. The contract's success, indicated by its full execution and significant financial impact, suggests the company met or exceeded expectations. Without access to the specific performance metrics (e.g., recovery rate percentage, cost per dollar collected) and a direct comparison dataset of similar federal contracts, a precise benchmark comparison is difficult. However, the scale and duration imply a successful partnership.
What were the primary risks associated with this debt collection contract, and how were they mitigated?
Key risks associated with this contract likely included borrower non-compliance, potential legal challenges, data security breaches, and reputational damage from aggressive collection practices. Mitigation strategies would typically involve robust legal compliance frameworks, secure data handling protocols, clear communication channels with borrowers, and adherence to departmental guidelines on collection conduct. The fixed-price incentive (FPI) contract type itself can mitigate financial risk for the government by linking contractor profit to performance, incentivizing efficiency and cost control. The competitive nature of the award also helps mitigate risks by selecting a capable vendor.
What was the overall effectiveness of this contract in achieving the Department of Education's debt collection goals?
The contract appears to have been highly effective, given the total award amount of over $141 million allocated for debt collection services over approximately 5.4 years. This substantial funding suggests a significant volume of delinquent debt was being managed. The successful completion of the contract term and the large financial figure indicate that the Department of Education achieved considerable success in recovering funds that would otherwise have been lost. The 'PERFORMANT RECOVERY, INC.' name itself implies a focus on results, and the contract's scale supports the notion of effective debt resolution.
Were there any significant changes in spending or performance under this contract over its lifespan?
The provided data summarizes the contract's total value and duration but does not detail year-over-year spending or performance fluctuations. However, the contract was awarded as a 'COMPETITIVE DELIVERY ORDER' with 40 such orders issued, suggesting a flexible mechanism for tasking the contractor. This structure could allow for adjustments in spending based on the volume and type of debt requiring collection at different times. Without specific quarterly or annual reports, it's impossible to identify significant shifts, but the consistent total award suggests a sustained level of activity throughout the contract period.
Industry Classification
NAICS: Finance and Insurance › Other Financial Investment Activities › Miscellaneous Financial Investment Activities
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Offers Received: 40
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Parent Company: Performant Financial Corporation (UEI: 784424728)
Address: 555 MCCORMICK ST, SAN LEANDRO, CA, 94577
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $141,344,285
Exercised Options: $141,344,285
Current Obligation: $141,344,285
Parent Contract
Parent Award PIID: GS23F0286K
IDV Type: FSS
Timeline
Start Date: 2004-11-01
Current End Date: 2010-03-31
Potential End Date: 2010-03-31 00:00:00
Last Modified: 2015-04-01
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