Treasury's $21.7M debt collection contract with The CBE Group shows a 7-year duration and 11 awards

Contract Overview

Contract Amount: $21,696,059 ($21.7M)

Contractor: THE CBE Group, 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: $7.9K/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 SERVICE

Place of Performance

Location: CEDAR FALLS, BLACK HAWK County, IOWA, 50613

State: Iowa Government Spending

Plain-Language Summary

Department of the Treasury obligated $21.7 million to THE CBE GROUP, INC. for work described as: PRIVATE COLLECTION AGENCY FOR DEBT COLLECTION SERVICE Key points: 1. The contract's duration of nearly 7.5 years suggests a long-term need for debt collection services. 2. With 11 awards, the contract indicates a potentially fragmented but active utilization of the service. 3. The firm-fixed-price structure aims to control costs by setting a predetermined payment amount. 4. The absence of small business set-asides means opportunities for smaller firms were not specifically prioritized. 5. This contract falls under the 'Offices of Certified Public Accountants' NAICS code, suggesting a focus on financial services. 6. The contract was awarded through full and open competition, implying a broad search for qualified vendors.

Value Assessment

Rating: fair

Benchmarking the value of this debt collection contract is challenging without specific performance metrics or comparable contract data. The total award amount of over $21 million spread across nearly 7.5 years suggests a significant investment in recovering delinquent debts. The firm-fixed-price nature of the contract provides cost certainty for the government, but the ultimate value depends on the effectiveness of the collection efforts and the recovery rates achieved. Without insight into the per-dollar collected, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that the Bureau of the Fiscal Service sought proposals from all eligible sources. The presence of 11 awards suggests that multiple delivery orders were issued under this contract, potentially to one or more contractors, though the data indicates a single primary contractor. The level of competition at the outset should theoretically drive competitive pricing, but the long duration and multiple awards might obscure the initial competitive impact.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider pool of bidders, which can lead to more competitive pricing and better service offerings. This approach ensures that the government is not limited to a single provider, fostering a more efficient use of taxpayer funds.

Public Impact

The primary beneficiaries are government agencies seeking to recover delinquent debts, improving fiscal health. The service delivered is debt collection, aiming to recoup funds owed to the federal government. The geographic impact is national, as the Bureau of the Fiscal Service operates across the United States. Workforce implications are primarily within the contractor's organization, which employs collection specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true effectiveness and value for money.
The long contract duration could lead to complacency or reduced urgency in collection efforts over time.
No small business set-aside was utilized, potentially limiting opportunities for smaller, specialized debt collection firms.

Positive Signals

Awarded through full and open competition, suggesting a robust vetting process for the contractor.
Firm-fixed-price contract type provides cost certainty for the government.
The contract has multiple delivery orders, indicating ongoing and potentially successful utilization of the service.

Sector Analysis

The debt collection services sector is a critical component of government financial management, enabling agencies to recover outstanding debts. This contract falls under the professional, scientific, and technical services category, specifically related to financial and accounting services (NAICS 541211). The market for government debt collection is competitive, with numerous private agencies vying for these contracts. Benchmarking against similar contracts is difficult without access to specific performance data and recovery rates, but the total value suggests a significant scale of operation.

Small Business Impact

This contract did not include a small business set-aside, meaning that the competition was open to all eligible businesses, regardless of size. Consequently, there is no explicit mechanism within this contract to ensure subcontracting opportunities for small businesses. The impact on the small business ecosystem is neutral to negative, as opportunities were not specifically directed towards them. Larger, established firms likely had an advantage in securing this type of contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Bureau of the Fiscal Service within the Department of the Treasury. Accountability measures are inherent in the firm-fixed-price structure, which ties payment to agreed-upon deliverables. Transparency is facilitated by the contract's public availability, allowing for scrutiny. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

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

Risk Flags

Long contract duration without clear performance milestones.
Lack of specific metrics to evaluate contractor effectiveness.
No small business participation requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21.7 million to THE CBE GROUP, INC.. PRIVATE COLLECTION AGENCY FOR DEBT COLLECTION SERVICE

Who is the contractor on this award?

The obligated recipient is THE CBE GROUP, 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 $21.7 million.

What is the period of performance?

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

What is the historical spending pattern for debt collection services by the Bureau of the Fiscal Service?

Analyzing the historical spending for debt collection services by the Bureau of the Fiscal Service requires access to detailed procurement data over multiple fiscal years. While this specific contract spans from 2012 to 2019 with a total value of approximately $21.7 million, it represents only one facet of the Bureau's debt collection efforts. The Bureau likely engages in various methods and contracts to manage and collect debts owed to the government. Understanding the overall historical spending would involve aggregating data from all such contracts and internal efforts, looking for trends in contract values, types of services procured, and the number of contractors utilized. This broader view would help contextualize the significance of this particular contract within the agency's overall debt recovery strategy and budget allocation for such services.

How does the performance of The CBE Group compare to other debt collection agencies contracted by the federal government?

Directly comparing the performance of The CBE Group to other federal debt collection agencies is challenging without access to standardized performance metrics and outcome data across all contracts. Federal agencies typically evaluate contractors based on factors such as recovery rates, cost per dollar collected, compliance with regulations, and customer service. The Bureau of the Fiscal Service would have internal data on The CBE Group's effectiveness under this contract. However, this data is not publicly available in a format that allows for direct benchmarking against other agencies' contractors. To make such a comparison, one would need access to aggregated, anonymized performance data from multiple agencies and contractors, which is typically proprietary or held within government oversight bodies.

What are the primary risks associated with using private contractors for federal debt collection?

Several risks are associated with using private contractors for federal debt collection. A primary concern is reputational risk; aggressive or non-compliant collection tactics by a contractor can damage the government's image and public trust. There's also the risk of data security breaches, as contractors handle sensitive personal and financial information of debtors. Performance risk is another factor, where the contractor may not achieve the expected recovery rates, leading to a poor return on investment. Furthermore, ensuring contractor compliance with the Fair Debt Collection Practices Act (FDCPA) and other relevant regulations requires robust oversight. Finally, there's the risk of contractor default or failure, which could disrupt collection efforts and necessitate a rapid transition to a new provider.

What is the typical duration for federal contracts of this nature (debt collection services)?

Federal contracts for debt collection services can vary significantly in duration, but contracts with longer terms are not uncommon, especially when they involve complex debt portfolios or require significant setup and integration. The contract in question, with a duration of approximately 2739 days (about 7.5 years), falls on the longer end but is within the plausible range for such services. Base periods for these contracts are often shorter (e.g., 1-3 years), with multiple option periods that can extend the total contract performance time considerably, provided the government exercises these options. The total duration is influenced by factors such as the estimated volume of debt, the complexity of the recovery process, and the desire for continuity and established relationships with a proven contractor. Longer durations can offer stability but also necessitate careful performance monitoring to ensure continued value.

How does the NAICS code 'Offices of Certified Public Accountants' relate to debt collection services?

The NAICS code '541211 - Offices of Certified Public Accountants' is primarily associated with accounting, auditing, tax preparation, and bookkeeping services. Its application to a debt collection contract might seem indirect. However, federal procurement often uses NAICS codes that broadly categorize the primary function or expertise required. In the context of debt collection, particularly for government debts, there can be a significant overlap with financial management, accounts receivable reconciliation, and the need for financial integrity and reporting that CPAs are well-versed in. It's possible that the contracting agency viewed the financial acumen and structured processes inherent in accounting services as relevant to managing and recovering financial obligations. Alternatively, the contractor might offer a suite of financial services, and debt collection is one component, or the code was selected based on the contractor's overall business classification rather than the specific service line.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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: CBE Group Inc. the (UEI: 079116558)

Address: 1309 TECHNOLOGY PKWY, CEDAR FALLS, IA, 50613

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,696,059

Exercised Options: $21,696,059

Current Obligation: $21,696,059

Actual Outlays: $119,672

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS23F0230P

IDV Type: FSS

Timeline