Treasury's $25.2M debt collection contract with Pioneer Credit Recovery shows mixed value and limited competition

Contract Overview

Contract Amount: $25,198,831 ($25.2M)

Contractor: Pioneer Credit Recovery, Inc

Awarding Agency: Department of the Treasury

Start Date: 2012-03-12

End Date: 2019-09-11

Contract Duration: 2,739 days

Daily Burn Rate: $9.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRIVATE COLLECTION AGENCY FOR DEBT COLLECTION SERVICES

Place of Performance

Location: ARCADE, WYOMING County, NEW YORK, 14009

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $25.2 million to PIONEER CREDIT RECOVERY, INC for work described as: PRIVATE COLLECTION AGENCY FOR DEBT COLLECTION SERVICES Key points: 1. The contract's value proposition is questionable given the extended performance period and the nature of debt collection services. 2. Competition was limited, with only one bid received, raising concerns about price discovery and potential overpayment. 3. Risk indicators are moderate, primarily related to contractor performance in a sensitive area like debt recovery. 4. The contract's performance context is within the Bureau of the Fiscal Service's mandate for managing federal debt. 5. This contract falls under miscellaneous financial investment activities, a broad category with varying spending patterns.

Value Assessment

Rating: questionable

Assessing the value for money on this debt collection contract is challenging. While the total award amount is $25.2 million, the performance period spanned over seven years. Without specific metrics on recovery rates or cost per dollar collected, it's difficult to benchmark against industry standards. The firm fixed-price structure suggests a predictable cost, but the effectiveness of the service in maximizing debt recovery relative to cost is not explicitly detailed. Compared to other government debt collection efforts, the lack of competitive bids suggests potential inefficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but only one bid was received. This limited competition raises concerns about whether the government received the best possible pricing and service. A single bidder scenario can indicate a lack of market interest, potential barriers to entry for other firms, or a poorly defined solicitation. The limited number of bidders restricts the government's ability to negotiate favorable terms and may lead to higher costs than if multiple firms had competed.

Taxpayer Impact: Taxpayers may have paid more than necessary due to the lack of robust competition. The single bid limits the government's leverage in price negotiations, potentially resulting in less efficient use of public funds for debt recovery.

Public Impact

The primary beneficiaries are the Department of the Treasury and the Bureau of the Fiscal Service, aiming to recover outstanding federal debts. The service delivered is the collection of delinquent debts owed to the federal government. The geographic impact is national, as the contract covers debt collection across the United States. Workforce implications are minimal, primarily affecting the contractor's employees and potentially reducing the burden on internal government staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing.
Performance metrics for debt recovery effectiveness are not readily available for public assessment.
The long performance period without clear performance adjustments could mask inefficiencies.

Positive Signals

The contract was awarded under a full and open competition framework.
The firm fixed-price contract provides cost certainty for the government.
The Bureau of the Fiscal Service is responsible for managing federal debt, indicating a strategic function.

Sector Analysis

The debt collection services sector is a niche within financial services, characterized by specialized firms focused on recovering overdue payments for various clients, including government agencies. The market size for federal debt collection is significant, driven by the government's vast portfolio of receivables. This contract fits within the broader financial services and administrative support categories for government operations. Comparable spending benchmarks are difficult to establish without detailed performance data, but government agencies often seek cost-effective solutions for debt recovery.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans specifically targeting small businesses. The award to Pioneer Credit Recovery, Inc., a single entity, suggests that small business participation was not a primary consideration or requirement for this particular contract.

Oversight & Accountability

Oversight for this contract would fall under the Bureau of the Fiscal Service within the Department of the Treasury. Accountability measures would typically involve performance reviews, adherence to collection regulations, and reporting on recovery rates. Transparency is limited as detailed performance data and recovery metrics are not publicly disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Debt Collection Programs
Treasury Financial Management Services
Bureau of the Fiscal Service Contracts
Accounts Receivable Management Services

Risk Flags

Limited competition
Lack of detailed performance metrics
Extended contract duration without clear performance adjustments

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $25.2 million to PIONEER CREDIT RECOVERY, INC. PRIVATE COLLECTION AGENCY FOR DEBT COLLECTION SERVICES

Who is the contractor on this award?

The obligated recipient is PIONEER CREDIT RECOVERY, INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $25.2 million.

What is the period of performance?

Start: 2012-03-12. End: 2019-09-11.

What was the contractor's track record prior to this award?

Information regarding Pioneer Credit Recovery, Inc.'s specific track record prior to or during this contract award is not detailed in the provided data. Federal procurement databases often contain past performance information, but this is typically assessed during the bidding process and not always made public. For a comprehensive understanding, one would need to review the contractor's history with federal agencies, including any previous contracts, performance evaluations, and any reported issues or successes in debt collection.

How does the cost per dollar collected compare to industry benchmarks?

The provided data does not include specific metrics on the cost per dollar collected for this contract. To perform such a comparison, one would need data on the total amount of debt recovered by Pioneer Credit Recovery, Inc. under this contract, and the total cost incurred by the government (award amount). Industry benchmarks for debt collection agencies vary widely based on the age and type of debt, the recovery methods used, and the success rates. Without these figures, a direct comparison to industry standards or other government contracts is not possible.

What are the primary risks associated with this type of contract?

The primary risks associated with federal debt collection contracts include: 1) Contractor performance: Failure to effectively recover debts, leading to lost revenue for the government. 2) Compliance and legal risks: Ensuring the contractor adheres to all relevant debt collection laws and regulations (e.g., FDCPA), avoiding legal challenges and reputational damage. 3) Data security: Protecting sensitive taxpayer and debtor information handled by the contractor. 4) Cost overruns: While a fixed-price contract aims for cost certainty, inefficiencies in collection could still represent a poor return on investment. 5) Limited competition: As seen here, a lack of bidders can lead to suboptimal pricing and reduced incentive for the contractor to perform exceptionally.

How effective has the Bureau of the Fiscal Service been in managing its debt collection contracts historically?

The effectiveness of the Bureau of the Fiscal Service (BFS) in managing its debt collection contracts historically is a complex question that requires analyzing trends in debt recovery rates, contract performance metrics, and overall cost-efficiency across multiple contracts and over time. The BFS is responsible for a significant portion of federal debt management, and its success is crucial for government revenue. While specific aggregate performance data is not provided here, the agency's continued use of such contracts suggests a perceived necessity and ongoing effort to optimize recovery. However, the limited competition observed in this specific contract may be indicative of broader challenges or market dynamics within the federal debt collection space.

What is the typical duration for federal debt collection contracts?

The typical duration for federal debt collection contracts can vary significantly depending on the scope of work, the type of debt being collected, and the agency's strategic approach. Contracts can range from shorter-term engagements focused on specific debt portfolios to longer-term agreements that encompass ongoing collection efforts. The contract awarded to Pioneer Credit Recovery, Inc. had a performance period of approximately 2,739 days (over 7 years), which is on the longer side but not necessarily unusual for comprehensive debt management services. Agencies often structure these contracts with base periods and option periods to allow for flexibility and continuity.

Are there specific performance standards or KPIs tied to this contract?

The provided data does not specify the exact performance standards or Key Performance Indicators (KPIs) tied to this contract. Typically, federal contracts for debt collection would include metrics such as the percentage of debt recovered, the cost per dollar collected, compliance rates, and timeliness of reporting. These KPIs are crucial for evaluating the contractor's effectiveness and ensuring value for money. Without access to the contract's statement of work or performance work statement, these specific metrics remain unknown.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navient Corporation (UEI: 016242890)

Address: 26 EDWARDS ST, ARCADE, NY, 14009

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,198,831

Exercised Options: $25,198,831

Current Obligation: $25,198,831

Actual Outlays: $47,273

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0217K

IDV Type: FSS

Timeline