Treasury's $44.6M tax collection contract with Pioneer Credit Recovery raises questions on value and competition

Contract Overview

Contract Amount: $44,649,756 ($44.6M)

Contractor: Pioneer Credit Recovery, Inc

Awarding Agency: Department of the Treasury

Start Date: 2016-09-23

End Date: 2021-09-22

Contract Duration: 1,825 days

Daily Burn Rate: $24.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF FOR CLOSELY ASSOCIATED - CYRBYME-C - TAX COLLECTION SERVICES PURSUANT TO THE FAST ACT.

Place of Performance

Location: ARCADE, WYOMING County, NEW YORK, 14009

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $44.6 million to PIONEER CREDIT RECOVERY, INC for work described as: IGF::CL::IGF FOR CLOSELY ASSOCIATED - CYRBYME-C - TAX COLLECTION SERVICES PURSUANT TO THE FAST ACT. Key points: 1. The contract's value proposition appears fair, with a fixed price structure aiming for cost control. 2. Limited public data makes a deep dive into Pioneer Credit Recovery's performance context challenging. 3. The contract's duration and fixed price suggest a moderate risk profile for the government. 4. This contract falls within miscellaneous financial investment activities, a broad category. 5. The relatively small contract value suggests it's not a major driver of overall sector spending.

Value Assessment

Rating: fair

The contract's fixed price structure provides a degree of cost certainty. However, without detailed performance metrics or comparisons to similar tax collection services, assessing the true value for money is difficult. The benchmark of $24.4M for comparable services suggests this contract may be priced at a premium, warranting further investigation into the scope of services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of four bidders suggests a reasonably competitive environment, which should theoretically lead to better pricing and service offerings for the government. However, the specific details of the bidding process and the evaluation criteria are not publicly available.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a level playing field and encourages cost-effectiveness, potentially leading to lower overall government spending on such services.

Public Impact

The primary beneficiaries are the U.S. taxpayers, through improved tax collection efficiency. The contract delivers tax collection services, aiming to recover delinquent tax debts. The contract has a geographic impact limited to New York, where Pioneer Credit Recovery is based. Workforce implications are likely concentrated within Pioneer Credit Recovery's operations in New York.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it hard to gauge effectiveness.
Limited transparency on the bidding process and award criteria.
Potential for higher costs compared to benchmarks if not managed tightly.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Fixed price contract provides cost predictability.
Contractor is based in New York, potentially offering localized expertise.

Sector Analysis

This contract falls under miscellaneous financial investment activities, a broad category that includes various financial services. The market for tax collection services is competitive, with numerous private sector firms offering specialized debt recovery solutions. Benchmarking this contract's value against similar services is challenging due to the diverse nature of 'tax collection' and the specific recovery targets set by the IRS.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary focus was on securing the most capable large-scale provider for these tax collection services, with limited direct impact on the small business ecosystem in this instance.

Oversight & Accountability

Oversight of this contract would typically fall under the purview of the Internal Revenue Service (IRS) and potentially the Treasury Inspector General for Tax Administration (TIGTA). The fixed-price nature of the contract provides a degree of accountability, but ongoing performance monitoring and audits are crucial to ensure value and compliance. Transparency is limited by the proprietary nature of specific collection activities.

Related Government Programs

Federal Tax Collection Services
Debt Collection Contracts
Financial Services Contracts
Internal Revenue Service Contracts

Risk Flags

Potential for higher cost compared to benchmark.
Lack of detailed performance metrics.
Limited transparency on contractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $44.6 million to PIONEER CREDIT RECOVERY, INC. IGF::CL::IGF FOR CLOSELY ASSOCIATED - CYRBYME-C - TAX COLLECTION SERVICES PURSUANT TO THE FAST ACT.

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 (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $44.6 million.

What is the period of performance?

Start: 2016-09-23. End: 2021-09-22.

What is the track record of Pioneer Credit Recovery, Inc. in handling federal contracts, particularly for tax collection?

Information regarding Pioneer Credit Recovery, Inc.'s specific track record with federal contracts, especially for tax collection services, is not readily available in the provided data. While the company was awarded this contract by the IRS, details about its past performance, previous federal engagements, or any history of successful tax debt recovery on a large scale are not specified. Further research into federal procurement databases and contractor performance reviews would be necessary to fully assess their track record. The existence of this contract itself indicates some level of qualification or suitability in the eyes of the contracting agency, but without more data, a comprehensive evaluation is not possible.

How does the awarded amount of $44.6 million compare to similar federal contracts for tax collection services?

The provided data includes a benchmark value of $24.4 million for comparable services, suggesting that the $44.6 million awarded to Pioneer Credit Recovery, Inc. might be significantly higher. This comparison raises questions about the scope of services, the complexity of the tax debts being collected, or the specific recovery targets associated with this contract. Without more detailed information on the services rendered, the duration of the collection efforts, and the success rates of comparable contracts, it is difficult to definitively state whether this contract represents a fair market price or an overpayment. However, the substantial difference from the benchmark warrants a closer examination of the contract's specifics and performance.

What are the primary risks associated with this contract for the federal government?

The primary risks associated with this contract include potential underperformance in tax collection, leading to lower-than-expected revenue recovery for the government. Given the fixed-price nature, there's a risk that the contractor may not exert maximum effort if the recovery targets are easily met or if the cost of effort outweighs the potential reward. Another risk is the potential for reputational damage if the collection practices are perceived as overly aggressive or non-compliant with regulations. Finally, the limited transparency and performance data make it challenging to proactively identify and mitigate risks related to the contractor's efficiency and effectiveness throughout the contract's lifecycle.

How effective has this contract been in achieving its stated goal of tax collection?

The provided data does not include specific performance metrics or outcomes related to the effectiveness of this contract in achieving its tax collection goals. While the contract was awarded and is active, there is no information on the amount of delinquent taxes recovered, the success rate of Pioneer Credit Recovery, Inc., or how these results compare to the initial objectives set by the IRS. To assess effectiveness, one would need access to performance reports, recovery data, and potentially audits conducted by the agency or its oversight bodies. Without such data, any assessment of effectiveness remains speculative.

What are the historical spending patterns for tax collection services by the IRS, and how does this contract fit in?

The provided data does not offer historical spending patterns for tax collection services by the IRS. To understand how this $44.6 million contract fits into the broader picture, one would need to analyze past IRS expenditures on similar services, including the number of contracts awarded, the total amounts spent annually, and the types of services procured. This contract, awarded in 2016 with an end date in 2021, represents a specific investment during that period. Without comparative historical data, it's difficult to determine if this contract represents an increase, decrease, or consistent level of spending for the IRS in this service area.

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

Solicitation ID: TIRNO16Q00085

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Navient Corporation

Address: 26 EDWARDS ST, ARCADE, NY, 14009

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $155,573,924

Exercised Options: $44,649,756

Current Obligation: $44,649,756

Actual Outlays: $33,399,804

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0217K

IDV Type: FSS

Timeline