Last Friday Brought New Twist in Dept. of ED Debt Collection Road

Last Friday the Government Accountability Office (GAO) issued a press release for the GAO bid protest decision resolving 17 protests that challenged the Department of Education (ED) contract awards for student loan debt collection services.

A copy of the press release can be found here.

insideARM wrote about the GAO decision on March 29, 2017. In that article, we listed the companies involved and the results.

Key language from the March 31 press release:

“On March 27, 2017, the U.S. Government Accountability Office (GAO) sustained, in part, several protests against awards by the Department of Education (DOE) for student loan debt collection services. The protesters challenged the agency’s evaluation of proposals and contract award decisions under request for proposals No. ED-FSA-16-R-0009, which was issued by the DOE, for student loan debt collection services. Each contract has a ceiling value of $417.1 million.

GAO sustained, or upheld, several of the protests in part, finding that DOE made several prejudicial errors in evaluating proposals. These errors led DOE to make source selection decisions that GAO found were unreasonable because they were based on erroneous conclusions in support of the contracts awarded. GAO recommended that DOE, at a minimum, reevaluate proposals and make new source selection decisions.” Emphasis added by insideARM. 

As we wrote on March 29, it will be challenging to understand the impact of the GAO decision until the complete decision is released to the general public.  Again, per the press release: 

“Today’s decision was issued under a protective order because the decision may contain proprietary and source selection sensitive information. GAO has directed counsel for the parties to promptly identify information that cannot be publicly released so that GAO can expeditiously prepare and release a public version of the decision. When the public version of the decision is available, it will be posted to our website, www.gao.gov."

insideARM Perspective

insideARM has spoken with many industry experts on this matter over the past week.  Two things have come out of those discussions. First, no one is willing to go on the record regarding the RFP. The stakes are too high. Second, predictions on what will happen next are all over the board. 

Most observers seem to suggest three possible scenarios: 

1. ED simply “reevaluates” the current proposals and made new decisions.
2. ED requests some amount of additional new information from all impacted parties, reevaluates the old proposals and the new information, then makes new decisions.
3. ED withdraws the current RFP and issues a new RFP. 

In a related matter, on Thursday, March 30, 2017 the Court of Federal Claims issued a temporary restraining order (TRO) against ED blocking the Department from either moving ahead with performance on the disputed contract, or alternatively transferring any work intended to be performed under that deal to other contractors until April 12.  The TRO was issued in the matter of Continental Services Group, Inc. v. The United States (Case No. 17-449, The United States Court of Federal Claims). A copy of the TRO can be found here. 

Continental Services Group, Inc. (ConServe) filed its Complaint on March 28, the day after the GAO sustained several protests against awards for student loan debt collection services. As noted in our March 29, story, ConServe’s protests with GAO were left “undecided” on March 27. 

The Complaint to the claims court is sealed, so it is unclear what facts were alleged. However, from a review of the TRO that ConServe was told on December 29^th that its bid but was rejected from consideration by ED and deemed unacceptable because its subcontracting plan did not conform to commitments it offered in its small-business participation plan.