Labor Department's $78M Guthrie JC Center contract to Res-Care, Inc. shows stable performance over 5 years

Contract Overview

Contract Amount: $78,387,807 ($78.4M)

Contractor: Res-Care, Inc

Awarding Agency: Department of Labor

Start Date: 2005-07-01

End Date: 2010-06-30

Contract Duration: 1,825 days

Daily Burn Rate: $43.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: OPERATION OF GUTHRIE JC CENTER

Place of Performance

Location: GUTHRIE, LOGAN County, OKLAHOMA, 73044

State: Oklahoma Government Spending

Plain-Language Summary

Department of Labor obligated $78.4 million to RES-CARE, INC for work described as: OPERATION OF GUTHRIE JC CENTER Key points: 1. The contract demonstrates a consistent need for operational support services for the Guthrie Job Corps Center. 2. Res-Care, Inc. has maintained operational continuity, indicating a reliable performance history. 3. The cost-plus incentive fee structure suggests an alignment of contractor incentives with government objectives. 4. The contract's duration of five years allowed for long-term planning and service delivery. 5. The absence of significant performance issues (st: OK) points to effective contract management and execution.

Value Assessment

Rating: good

The total award amount of $78.4 million over five years averages approximately $15.7 million annually. Benchmarking this against similar Job Corps center operations would provide a clearer picture of value for money. However, the stable performance indicators (st: OK) suggest that the pricing was adequate to secure reliable service delivery throughout the contract period. The contract type (Cost Plus Incentive Fee) aims to control costs while incentivizing performance, which is a positive sign for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple offerors had the opportunity to bid. This competitive process is generally expected to yield fair market pricing and encourage innovation. The fact that a single award was made suggests Res-Care, Inc. was the most advantageous offer based on the evaluation criteria.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the individuals seeking vocational training and employment services at the Guthrie Job Corps Center. The contract delivers essential operational and support services to maintain the functionality of the training center. The geographic impact is localized to the area served by the Guthrie Job Corps Center in Oklahoma. Workforce implications include the employment of staff by Res-Care, Inc. to manage and operate the center, as well as the training and placement of students into the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not closely monitored.
Reliance on a single contractor for an extended period could lead to complacency or reduced innovation over time.
The specific performance metrics and incentive structure are not detailed, making it difficult to fully assess performance alignment.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Contractor performance was rated as 'OK' (st: OK), indicating satisfactory execution of services.
The contract duration allowed for stability and continuity of essential services for trainees.
Cost Plus Incentive Fee structure can align contractor and government interests for optimal outcomes.

Sector Analysis

This contract falls within the broader 'Education and Training Services' sector, specifically related to vocational training and workforce development. Job Corps centers are a key component of the federal government's strategy to provide education and career training to young people. Spending in this sector is influenced by federal appropriations for workforce development programs and the demand for skilled labor. Comparable spending benchmarks would involve analyzing other Job Corps center contracts and similar government-funded training initiatives.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. The prime contractor, Res-Care, Inc., is a large corporation. Subcontracting opportunities for small businesses would depend on Res-Care's procurement practices and the specific needs of operating the Job Corps center. Without detailed subcontracting plans, the direct impact on the small business ecosystem is unclear, though large federal contracts often create indirect opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Labor's Employment and Training Administration. Mechanisms likely include regular performance reviews, financial audits, and site visits to ensure compliance with contract terms and service delivery standards. The Inspector General's office within the Department of Labor would have jurisdiction for investigating any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Job Corps Program
Workforce Innovation and Opportunity Act (WIOA) Programs
Federal Job Training Programs
Vocational Education Contracts

Risk Flags

Potential for cost creep in CPIF contracts.
Need for detailed performance metrics beyond 'OK' rating.
Lack of specific competition numbers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $78.4 million to RES-CARE, INC. OPERATION OF GUTHRIE JC CENTER

Who is the contractor on this award?

The obligated recipient is RES-CARE, INC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Employment and Training Administration).

What is the total obligated amount?

The obligated amount is $78.4 million.

What is the period of performance?

Start: 2005-07-01. End: 2010-06-30.

What was the specific performance history of Res-Care, Inc. on this contract, beyond the 'OK' rating?

While the contract status is marked as 'OK', a deeper dive into performance metrics would be necessary for a comprehensive assessment. 'OK' typically signifies satisfactory performance, meeting basic requirements without significant issues. However, it doesn't necessarily indicate exceptional service. Specific performance data, such as student graduation rates, job placement success, and trainee satisfaction scores, would provide a more granular understanding of Res-Care's effectiveness. Without access to these detailed performance reports, it's challenging to ascertain if the contractor consistently exceeded expectations or merely met the minimum standards throughout the contract's five-year duration.

How does the average annual cost of $15.7 million compare to other Job Corps center operations of similar size and scope?

Benchmarking the average annual cost of $15.7 million against similar Job Corps centers is crucial for assessing value for money. Factors such as geographic location, student demographics, the range of vocational programs offered, and local labor costs can significantly influence operational expenses. A comprehensive comparison would require analyzing data from other Job Corps centers with comparable student populations and service offerings. If this contract's cost is significantly higher or lower than comparable centers, it could indicate potential issues with pricing, efficiency, or the scope of services provided. Without this comparative data, it's difficult to definitively state whether the $78.4 million award represented a good or fair price.

What were the key performance incentives and penalties defined in the Cost Plus Incentive Fee (CPIF) structure?

The Cost Plus Incentive Fee (CPIF) contract type is designed to share costs and provide incentives for meeting or exceeding certain performance targets. To fully evaluate the value and effectiveness of this contract, understanding the specific metrics tied to the incentive fee is essential. These metrics could include targets for student completion rates, job placement success, cost savings, or adherence to specific program quality standards. The CPIF structure would detail how deviations from target costs and performance levels would affect the final payment to Res-Care, Inc. Without these specifics, it's hard to gauge how effectively the incentive mechanism drove performance and ensured taxpayer value.

What was the total number of bids received during the full and open competition for this contract?

The award notice indicates 'FULL AND OPEN COMPETITION,' but does not specify the number of bids received. A higher number of bids generally suggests a more robust competition, which typically leads to better pricing and terms for the government. Conversely, a low number of bids might indicate barriers to entry, limited market interest, or potential issues with the solicitation itself. Knowing the number of competitors would provide context for evaluating the effectiveness of the competition in achieving optimal value for the Department of Labor and the taxpayers.

Were there any significant challenges or disputes encountered during the contract's performance period?

The contract status being 'OK' suggests no major, unresolved disputes or performance failures that jeopardized the contract's continuation. However, 'OK' can encompass a range of experiences, from smooth sailing to minor issues that were addressed. Information regarding contract modifications, cure notices, show-cause letters, or formal disputes would offer a more complete picture of the contractor's relationship with the agency and any challenges faced in delivering services. Understanding these aspects is key to assessing the overall risk and management of the contract.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: JC-RIV-4-02

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Carestream Health, Inc. (UEI: 244882650)

Address: 10140 LINN STATION RD, LOUISVILLE, KY, 40223

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $78,606,199

Exercised Options: $78,387,807

Current Obligation: $78,387,807

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline