ED Collection Contract Award Pushed Back Again

http://www.insidearm.com/news/00008985-ed-collection-contract-award-pushed-back-/

The U.S. Department of Education told potential debt collection vendors recently that the announcement of winners of a new contract to collect bad student loan debt will be pushed back to as late as December. The contract was expected to be awarded in September.

In a letter sent last week to 26 collection agencies invited to bid for the multi-year collection contract, ED said that the contract would be awarded “in the November/December timeframe.” The letter did not give a reason for the delay and ED could not comment further on the matter.

This is the second time in less than a month that ED has formally announced a pushback in the award date. In mid-September, the department said that it would not award the student loan collection contracts by the end of the month, as anticipated (“ED to Delay New Collection Contract Award Announcement,” Sept. 17). But that announcement did not contain a timeline.

ED’s letter last week said that it is “still actively reviewing all proposals and taking the necessary preparations” to announce a decision by the end of the year. The department promised a more definitive timeline “at a later date.”

The department also asked each of the collection agencies chosen to bid on the contract to affirm that their proposals would remain valid through December 31.

A person close to contract awarding process told insideARM, on the condition of anonymity, that they were “not overly concerned about the delay.” The source noted that government contract award processes can be cumbersome and that delays are to be expected on a contract that will run for so long.

ED said at a pre-solicitation conference in January that the contract to be awarded in this procurement could run into 2014 (“ED Update: 2008 Contract Stakes are Higher,” Jan. 23).

The student loan collection contract has been very successful for the Department of Education. The 17 collection agencies on the current contract – awarded in 2004 — had collected a total of $4.33 billion as of the end of August.