Private Collection Agency

Questions & Answers

1. Q. Does the Department of Education plan to acquire collection services through the GSA Schedules?

A. Yes. The services will be acquired by issuing orders under SIN 520-4, Debt Collection, of the GSA Federal Supply Service schedule for Financial and Business Solutions (FABS). The Department of Education (ED) will select vendors from GSA Schedule 520-4 contractors. An offeror must have a GSA Schedule Contract under SIN 520-4 to be invited to participate in this competition. However, not all GSA Schedule 520-4 contract-holders will be invited to participate.

2. Q. What is Schedule 520-4?

A. GSA Schedule 520-4 is a collection of contracts awarded by the General Services Administration for debt collection services. These multiple award contracts allow Federal agencies to place orders using less complex competition procedures. For more information on GSA Schedule 520-4, please see:



For general information about GSA schedules, see:

3. Q. What is the time frame involved for receiving a GSA#?

A. The time required to obtain a GSA schedule contract varies based on the quality of your proposal and other factors. If there are no omissions or other problems it may take about two months.

4. Q. How do we obtain a GSA Schedule 520-4 contract?

A. You must submit a proposal to GSA in response to solicitation FCXB-F4-020002-B. However, if you have not already submitted a proposal to GSA, you must act very quickly. If you submit your proposal to GSA in January 2008, it may still be possible to obtain a schedule 520-4 award from GSA in time to participate in ED's PCA 2008 task order competition. While GSA cannot make any guarantees, you will increase your odds of receiving a schedule contract in time if you comply fully with all the terms of GSA's solicitation. We recommend that when in doubt, you contact someone at GSA for guidance. There are also firms that specialize in helping collection agencies obtain GSA Schedule 520-4 contracts. For information about obtaining a GSA Financial and Business Solutions (FABS) schedule 520-4 contract, please view the following web links:

Guidance for getting on schedule:

General Information about Schedule 520:

Solicitation FCXB-F4-020002-B:

GSA Contractor Guide:

5. Q. What is a "team arrangement?"

A. A GSA Federal Supply Schedule Contractor Team Arrangement (CTA) is an arrangement between two or more GSA Schedule contractors to work together to meet task order requirements. ED's solicitation specifically invites small business contractors to participate in team arrangements, although it establishes limits and procedures applicable to such team arrangements. The following web links provide guidance on GSA Schedule Team Arrangements:

Contractor Team Arrangements:

Teaming FAQ:

6. Q. Will all information be conveyed via your website?

A. ED intends to use its website and the associated e-mail list to convey public information about this procurement. ED may also use paper mail or e-mail to send requests or notices to GSA Schedule contractors. ED obtains e-mail addresses for GSA schedule 520-4 contractors from the GSA Schedule e-Library:

7. Q. What is the GSA Schedule e-Library?

The GSA Schedule e-Library is a listing and database of GSA Schedule contractors that Federal agencies use to find information about GSA Schedule contractors and contact them to participate in competitions for orders placed by the Federal agencies. The e-Library listing for GSA Schedule 520-4 may be found at the link above.

ED strongly advises GSA Schedule 520-4 contractors to keep this e-library listing current. (As of January 10, 2008, a significant number of Contractor e-mail addresses were no longer current.) In addition to e-mail addresses, GSA Schedule 520-4 contractors should ensure that their "Contract Terms & Conditions" are posted in the GSA Schedule 520-4 e-Library. GSA provided all schedule contractors guidance on maintaining their e-Library information. If you need further assistance, please contact GSA.

8. Q. Where can I get more information about the current ED debt collection contracts?

All the documents available from ED's 2004 PCA award competition are available on the web at Documents and guidance related to performance of the current PCA contracts may be found at

9. Q. I tried calling DOE, but the contracts office said they do not contract for debt collection services. Whom should I contact?

A. First, please do not contact DOE. That acronym stands for the Department of Energy. This procurement is being conducted by the Department of Education. Our acronym is "ED." Please do us the courtesy of getting it correct. Second, rather than making a phone call, please submit any questions to the e-mail address, Several ED staff monitor that inbox. This allows us to incorporate your question and answer into Q&As that we post on our website. We use this process to ensure that all potential offerors receive fair treatment in receiving information. We may paraphrase your question when we post it to our website. E.g., we may incorporate several similar questions into one question. We may also reword it to avoid disclosing who asked the question.

10. Q. How can I obtain copies of the winning bids or proposals from the year 2004 procurement?

A. Bids or proposals are not available. By law, the Government may not release an offeror's proposal unless it was incorporated into the contract. The Contracting Officer did not incorporate proposals into the task orders.

11. Q. Do you award collection contracts to collection law firms?

A. The ED solicitation does not restrict law firms that hold GSA Schedule 520-4 contracts from competing for an award to perform debt collection and related services. However, the U.S. Department of Justice will handle any litigation related to debt owed to ED. No ED PCA contractor will be allowed to conduct litigation. Pursuant to the Fair Debt Collections Practices Act (FDCPA) a law firm cannot lend its name, letterhead, or form letters to a collection agency without being meaningfully involved in the collection process. Even a law firm that is "meaningfully involved in the collection process" must guard against any false, deceptive, or misleading communications with debtors. The draft Statement of Work requires that collection letters and forms be approved by ED before use. ED is very sensitive to the requirements of the FDCPA and would not approve a letter that it believes might mislead the borrower.

12. Q. We are a regional collection agency that specializes in collecting in our State and adjacent States. May we bid for a contract to collect student loans only in our regional area?

No. The task orders require nationwide coverage. However, you may wish to seek subcontracting opportunities from an ED PCA contractor. E.g., an ED PCA contractor may be willing to assign you accounts only for borrowers within your geographical region. The performance measures and incentives in the task orders are a major driver in PCA contractor's decisions. Thus, a PCA contractor would be more likely to give you a subcontract if you can show that you can perform better on accounts in your region than the PCA contractor could on its own.

13. Q. We are interested in getting qualified to subcontract skip-tracing/data solutions to your selected agencies. Please forward necessary information to my attention.

A. ED does not prequalify potential subcontractors. Potential subcontractors must do their own marketing directly to the prime contractors. Upon award of new task orders, ED will post contact information on the PCA procurement website Potential subcontractors should also be aware of the provisions in clause C.2, Subcontractors and Third Parties, of the Request for Proposals (RFP).

14. Q. What are the requirements to be considered in this RFP? Is there a minimum required number of accounts that we need in order to be considered in this RFP? I read your last award and it said it was awarded to collection agencies that had a large volume of accounts. Is this still the case?

A. The draft RFP is now posted on the website, so you may review the requirements for yourself. The RFP does not establish a minimum number of accounts. However, account volume is considered in evaluation of past performance (as a factor contributing to relevance) and the technical proposal (under systems capability). We anticipate that contractors in the unrestricted pool will each receive 15,000 accounts in the initial transfer and the small business contractors will receive 5,000 accounts each. On the 2004 contract account volumes in the unrestricted pool range from a little over 50,000 accounts to over 150,000 accounts. In the small business pool, current volumes are in the 30,000 to 50,000 account range.

15. Q. Would there be any opportunities for collections on deceased inventory?

A. ED does not attempt to collect Federal student loan debt from a deceased individual's estate. Instead, ED discharges such loans after obtaining a death certificate as described in Section 3.4.A of the draft Statement of Work. PCA contractors are paid an administrative resolution fee for completing this process. There may be subcontracting opportunities for firms that want to assist PCA contractors in this process, if, for example, the potential subcontractor can convince a PCA contractor that it can perform the work better or at a lower cost.

16. Q. I understand ED plans to send out the Questionnaire. How can I receive a copy?

A. If you are a GSA Schedule 520-4 contractor (and you listed your current, correct e-mail address contact in the GSA Schedule 520-4 e-Library), you should receive a notice about the Questionnaire from ED sometime in March 2008. The notice will include instructions on how to access the Questionnaire. If you are on schedule 520-4 and do not receive the notice, you should check that you have a current GSA Schedule 520-4 and that your current e-mail address contact is recorded in the GSA Schedule 520-4 e-Library.

A copy of the Questionnaire and notice will also available on our PCA procurement website (Organizations that do not currently hold a GSA Schedule 520-4 contract should not submit the Questionnaire to ED.)

17. Q. If we have not yet received a GSA Schedule 520-4 contract, may we submit the Questionnaire pending receipt of a contract?

A. No, ED will not accept Questionnaires without a GSA Schedule 520-4 contract number. If you receive a Schedule 520-4 contract from GSA after the due date ED establishes for the Questionnaire, you may submit the Questionnaire after the due date. Consideration of a Questionnaire received after the due date will be solely at the discretion of ED. While ED will try to accommodate a contractor that receives an award from GSA after the due date, we cannot make any promises. The later a Questionnaire is received after the due date, the less likely ED will be able to consider it.

18. Q. Are there several contracts that are up for bid right now?

A. Yes. ED anticipates making several task order awards in both the unrestricted (large business) category and the small business set-aside. The anticipated number of awards for each category is provided in the draft solicitation.

19. Q. Is the conference being held on the 22nd of January only for small businesses?

A. The conference is for all parties interested in the procurement. That may include both large and small businesses seeking a task order award from ED, potential subcontractors or parties interested in observing.

20. Q. Is attending any of the pre-solicitation or other conferences mandatory?

A. No. ED will post copies of the presentation slides on its PCA procurement website

21. Q. What is the definition of a "small business?"

A. "Small business concern" and other terms are defined in Federal Acquisition Regulation (FAR) 19.001 Essentially, the FAR defines a small business as a U.S. business entity, including any affiliates, that is:

  • Organized for profit,
  • Independently owned and operated,
  • Not dominant in the designated field of operation (i.e., debt collection, NAICS Code 561440),
  • Qualified under the established size standard for that field.

22. Q. What is the small business size standard for this procurement?

A. The small business size standard for this procurement is $6.5 million per year in "annual receipts." FAR 19.101 defines "annual receipts" as annual average gross revenue of the concern taken for the last 3 fiscal years.

For example, suppose a private collection agency (PCA), whose fiscal year runs from October through September, submits its proposal on June 13, 2008, and as of that date, the PCA's gross revenues are:

- FY 05 $5.6 million

- FY 06 $6.6 million

- FY 07 $7.2 million

- FY 08 YTD $8.5 million

In this case, its "annual receipts" would be $6.47 million (the average of $.5.6, $6.6 & $7.2 million) and it would just qualify under the size standard. Its FY 08 revenues are not considered because that fiscal year has not yet ended

Additional definitions and a detailed explanation of small business size standards may be found in the Small Business Administration (SBA) regulation at:

23. Q. According to SBA, small business standards should be set to ensure that no firm that meets the size standard is dominant in its field of operation. On that basis, a size standard of $6.5 million would appear to be too low. A size standard of $15 or even $20 million would seem more reasonable for the debt collection industry. Can you raise the size standard for this procurement?

A. No, ED is required by law to use the size standard set by SBA. Factors SBA considers in setting and changing size standards are explained in:

Even if SBA agreed to revise the standard, the change would require a few months to allow time for the required regulatory rule-making process. However, if you feel a change in the size standard for NAICS Code 561440, debt collection, is warranted, you may address a written request for a change to:

Assistant Administrator for Size Standards,

Small Business Administration,

409 3rd Street, SW.,

Washington, DC 20416

24. Q. We currently qualify as a small business. However, if we receive an award from ED, our revenues may soon exceed the $6.5 million size standard. Will this affect our status as a small business?

A. ED will rely on the GSA Contracting Officer's size determination. If a contractor receives an award under the small business set-aside, that contractor may continue to participate in the small business pool even after the GSA Contracting Officer determines that it has become a large business on its GSA Schedule 520-4 contract and the contractor will be treated as a small business for purposes of task order performance.

25. Q. We are currently listed as a Small Business under our GSA Schedule Contract. GSA has told us that our status will remain the same until our Contract expires. However, our annual sales have grown since we were originally awarded this GSA Contract and we may now exceed the $6.5 million per year size standard for consideration as a "Small Business." How do we proceed? If the Solicitation is issued this year, our GSA Contract will show us as a Small Business. Do we need to amend this with the GSA?

A. ED does not require you to amend your status with GSA. We recommend you direct any questions about GSA's requirements to your GSA contracting officer.

Please ask your GSA Contracting Officer if you need guidance in this area. Under new Federal Acquisition Regulation (FAR) and SBA regulations, a GSA Schedule contractor retains its size status until it recertifies its size status to GSA. Under these regulations, the contractor must recertify before the end of the fifth year of the GSA Schedule contract or upon execution of a novation or merger.

26. Q. Does being a Women-Owned Large Business have any bearing with this Solicitation?

A. No, women-owned large business concerns hold no special status. ED's small business goals include a goal for awards to Women-Owned Small Businesses, so ED is seeking qualified woman-owned small businesses from the GSA schedule to include in the competition.

27. Q. Will a veteran-owned small business received special consideration under this procurement?

A. The evaluation criteria under M.4.(a) of the RFP provide that a service-disabled veteran-owned small business concern will receive additional consideration.

28. Q. Can a small business concern work with more than one of the large contractors on the PCA contract?

A. The draft RFP provides that a small business concern (including a small business that received an award under the small business set-aside) may subcontract with more than one large PCA contractor.

29. Q. I am interested to know if there are Perkins Loans in this collection process as well as Stafford Loans. We are a FFELP and FDSLP consolidation company. I am very interested to get involved with collections via consolidation. We do have the ability to consolidate a student loan providing the borrower has less than 20% of the total Federal Loans in good standing. Please let me know what requirements we have to meet to assist with loan rehabilitation.

29. Q. I am interested to know if there are Perkins Loans in this collection process as well as Stafford Loans. We are a FFELP and FDSLP consolidation company. I am very interested to get involved with collections via consolidation. We do have the ability to consolidate a student loan providing the borrower has less than 20% of the total Federal Loans in good standing. Please let me know what requirements we have to meet to assist with loan rehabilitation.

A. Yes, as stated in the SOW, Perkins Loans and Stafford Loans are included in the portfolio. The requirements are covered in the draft RFP and the draft SOW. We discussed the requirements in detail at the 1/21/08 Presolicitation Conference. You will find copies of the draft RFP, draft SOW, and presentation slides from the 1/21/08 Presolicitation Conference at If you wish to focus on consolidations (or any other area), you may wish to seek subcontracting opportunities. Prime contractors are required to perform all requirements of the RFP and SOW.

30. Q. I just learned of the bidding for Debt Collection contracts. I had not applied for GSA 520-4 contract before the end of January, as recommended. Can you please let me know if there is any way that we can still be considered to compete and submit our proposal June 17th?

A. Maybe. As noted in the January Presolicitation Conference presentation, ED plans to send a questionnaire to GSA Schedule 520-4 contractors in March. If you are not yet on schedule, you will be able to download a copy from When you receive your GSA Schedule 520-4 contract, you may send the questionnaire to ED. ED will consider questionnaires submitted after the deadline as time permits. Realistically, ED will have to establish a final cut off sometime in the second half of April.

Even if you are not invited to submit a proposal to ED, you may still find opportunities as a subcontractor. There is no requirement for a subcontractor to hold a GSA 520-4 contract.

31. Q. If a contractors GSA schedule price list currently reflects an Administrative Resolution (AR) fee that is greater than the fee listed in the draft solicitation but does not qualify that price at all in terms of "per unit" or "per account," is it necessary to modify the price for AR to indicate "per unit?"

A. No. ED considers its AR units to be equivalent to ARs in contractors' GSA price lists. ED intentionally set its AR unit to be about the same amount of work as an Administrative Resolution in commercial practice. We know that ARs are rare in commercial practice and are often not separately compensated. We understand this has made it difficult for some contractors to establish appropriate AR fees in their GSA Schedule price lists. We also realize that the amount of work required for ED's ARs is significantly greater than for a commercial AR and that some ED AR tasks are more costly than others. The AR unit approach gives us a way to match compensation more closely to the amount of work involved.

32. Q. The SOW mentions a few publications that I have been unable to locate in the library of the 2004 or 2001 contract, or by searching the web. Can you please advise where copies of the "FSA Security Policy" and the "CSB Security Policy/Manual" can be retrieved?

A. The reference to the "CSB Security Policy/Manual" and the "FSA Security Policy" will be removed from the draft SOW and replace with the "Handbook for Information Assurance Security Policy," a copy of which has been posted on the website That document contains links to several other security related documents.

33. Q. Will there be any detail provided as to how the results of Remote Call Monitoring will be used? For example could egregious calls result in the request for removal of an employee, or will the results affect Service Quality points?

A. Remote call monitoring will be used to monitor contractor compliance and to intercede, where appropriate, to help a borrower or a PCA. Information from remote call monitoring may also be used to help ED identify training issues or topics for discussion at PCA meetings. Certainly, as stated in the SOW, egregious calls could result in the request for removal of an employee from the ED task order.

ED has no plans at this time to include a Remote Call Monitoring measure in the Service Quality points. However, it could have an indirect effect on Service Quality scores. For example, recorded calls will be used to verify or refute borrower complaints. That could affect the number of valid complaints counted in Service Quality measures.

34. Q. Now that the initial CPCS evaluation period is extended to September 30, 2009, is it anticipated that an INA/UNL return will occur on the placements from January - March 2009, as they will be over 180 days old before September 30?

A. As the SOW is currently drafted, PCAs may return uncollected accounts after 6 months and ED will send the returned accounts back out to other PCAs. However, the initial CPCS period is 9 months. So, the implied question here is whether allowing PCAs to return accounts during the first 9 months will create anomalies or undesired effects. ED invites further comment about what those undesirable effects might be and possible solutions. For example, one option that was suggested was for ED to require all PCAs to retain accounts at least through September 30, 2008.

35. Q. I am consulting with a company that is a large business as defined by the SBA size standard of $6.5 million. However, the company was awarded a GSA Schedule 520-4 as a small business and will not be required to recertify with the GSA until after the 2008 ED Task Order is awarded. Their Attorney reviewed the regulations sited in Q&A #25 and Section K of the Draft RFP. Section K of the Draft RFP, states that the company shall provide a copy of the most recent small business program representations it provided to the GSA for its Schedule 520-4 contract. This company's Attorney is concerned that if they provide the program representations it provided to the GSA for its Schedule 520-4 contract, it would fraudulently misrepresent the company since the company's "most recent" program representations (CCR and ORCA) certify that the company is no longer a small business concern. Please advise how this would not present a protest or fraudulent issue and that the company is legally allowed to submit a Task Order Offer in both the small business and non-restricted set asides.

A. Provision K.2 of the draft RFP requires offerors to submit a copy of the most recent small business program representations it provided to GSA for its Schedule 520-4 contract. That is the only representation that is relevant to this procurement, which will result in a task order placed under the successful offeror's Schedule 520-4 contract. The offeror's size determinations or representation for other procurements are not relevant to this procurement and are not desired. The wording of K.2 has been revised to help clarify this point. Offerors must comply with the requirements as written in the RFP.

36. Q. May a small business that is still considered by GSA to be a small business (has not had to recertify with GSA), but currently does not otherwise meet the SBA definition of a small business, compete in the small business set-aside? If yes, can they compete in both the unrestricted and the small business pools? If they can compete under both categories, will one pool (unrestricted vs. small business) take precedent if the Contractor wins an award (e.g. if the Contractor wins as an unrestricted, they will be excluded from the small business set-aside)?

A. Yes, a small business that the GSA Contracting Officer for the contractor's 520-4 contract still considers to be a small business may compete in the small business pool, even if the contractor no longer meets the small business size requirements for other procurements outside its GSA Schedule 520-4 contract.

Invitations will be for specific competitions, i.e., ED will invite offerors to compete in either the small business pool or the unrestricted pool, not both. An offeror may not submit a proposal under both pools. However, ED will allow, a small business invited to submit a proposal in the unrestricted pool competition to elect instead to submit a proposal in the small business pool competition.

37. Q. The Draft SOW indicates that ED will require all Contractors to record collector calls and/or provide access to remote phone monitoring. Currently there are several states that prohibit the recording/monitoring of calls and/or require express consent by the person being recorded/monitored before any recording/monitoring can take place. Will ED require Contractors to record/monitor calls in instances in which States prohibit such recording or monitoring, or require the party to follow procedures to do so that are burdensome, costly or impractical?

A. The Draft SOW, consistent with Federal law, requires contractors to comply with State and local laws. We encourage offerors to point out any State or local law that they believe, prohibits meeting a task order requirement, or makes it impractical to do so. If an offeror or contractor notifies ED of such a specific State or local law, ED will determine whether to modify the task order requirement. ED has no authority to waive compliance with State or local law and does not, under the contract, indemnify a contractor for losses it may incur for failure to comply with such laws. ED may provide informal support to a contractor if ED has concluded that the particular State or local law at issue did not prohibit the SOW required practice, or that Federal law superseded that law.

38. Q. I own a small (woman-owned) business and I need to find out what type of certification I need to complete in order to fill the requirements for PCA sub-contracting opportunities. Currently, we are not on the GSA schedule and when I contacted SBA, they told me "women-owned" was a self-certifying statement. Can you please confirm if that is correct? We are looking at contracting with one of the small businesses.

38. Q. I own a small (woman-owned) business and I need to find out what type of certification I need to complete in order to fill the requirements for PCA sub-contracting opportunities. Currently, we are not on the GSA schedule and when I contacted SBA, they told me "women-owned" was a self-certifying statement. Can you please confirm if that is correct? We are looking at contracting with one of the small businesses.

A. Although SBA establishes the rules defining small business categories, your prime contractor may establish additional requirements. We recommend you provide any documentation, representations or certifications required by your prime contractor. Many prime contractors find it convenient to require subcontractors to complete the Federal Acquisition Regulation (FAR) provision at 52.219-1, Small Business Program Representations This provision includes definitions of "women-owned small business concern" and other small business categories.

39. Q. If a small business takes a large business as a teaming partner, and the small business is the team lead, can the team win a small business pool task order?

A. Under RFQ H.14(a) payments by a small business to subcontractors that are not small are limited to 20% of proceeds to date. This clause has been modified include team members as well as subcontractors in the limitation. Therefore, a team arrangement where the large business partner was expected to receive more than 20% of the proceeds would not be acceptable. See also FAR 19.101(7)(v).

40. Q. We contacted our GSA Contracting Officer to get clarification on what to provide for in the Small Business Participation Response. She instructed us to contact ED directly and verify that what we plan to provide will be sufficient to include in the Volume 4 response to the RFP.
I have attached a draft of our Volume 4 RFP response that contains a copy of the section out of the GSA bid/contract that we provided to GSA with our Small Business representation. This was the ONLY representation that we made to GSA about our small business status at the time.
Since the instructions in the Draft RFP state that we should check with the GSA Contracting Officer regarding what to provide for this section and our GSA Contracting Officer is telling us to check back with ED, we feel the need to get a confirmation from ED that this will be sufficient representation of our small business status for the purpose of Volume 4 response to the RFP (if and when the time comes for it). Could you please comment on sufficiency of this content?

A. ED cannot give confirmation to individual contractors. Offerors must comply with the Request for Quotes (RFQ) as written. Please note that we have revised RFQ K.1(b) to recognize that GSA usually uses paragraph FAR 52.212-3(c) from the provision "Offeror Representations and Certifications-Commercial Items" for GSA Schedule contracts.

In your example, you state that your representation was the only representation you made to GSA about your small business status at the time (emphasis added). The RFQ K.1(b) requires you to submit the most recent small business program representations or size recertification you provided to the GSA Contracting Officer for its GSA Schedule 520-4 contract. Only you and your GSA Contracting Officer can confirm whether this was your most recent representation or recertification.

Also, please note that instructions in the RFQ do not state that you should check with the GSA Contracting Officer regarding what to provide to ED. As previously stated in Q&A #25, you should direct questions about GSA's requirements to your GSA contracting officer.

41. Q. ED has established the large vs. small size status per the current GSA Schedule listing. Some firms listed as small by GSA may be and will be gradating to large at or before the PCA award. This implies that a large business can receive a small business (SB) pool award, originally intended for a SB, especially if the large firm bids both size standards and ED evaluates the small lot first or independently from the large size evaluation.
Therefore, can ED evaluate the large and small size proposals concurrently, but award the large size contracts prior to the small size contracts? This equable action would maximize SB pool offers to actual SB per the size standards at the time of award.

A. No, ED cannot guarantee that awards under the unrestricted pool competition will be completed before the small business pool awards. The reverse is more likely. Moreover, we find it highly unlikely that, under current regulations, a small business would become large in the time between proposal submission and award. If that does happen, ED will follow applicable small business rules established by the SBA and the FAR.

42. Q. Pursuant to but distinct from question #25 on the PCA website, if a large business subcontracts collection activities to a business that is a small business on paper as of its GSA contract start date, but if that same small business has exceeded the size threshold since the GSA contract start date, will the large business be given credit for having subcontracted work to a small business or to a large business? If the large business will be given credit for small business subcontracting in that scenario, will this hold true until the subcontractor's GSA contract renewal takes effect five years after the initial award?

A. The rules cited under Q&A #25 only apply to task orders awarded under the contractor's GSA Schedule contract. The new SBA regulations did not extend the grace period to subcontracts. Subcontractors must meet the SBA size standards explained in Q&A #22.

43. Q. Small Business Subcontracting-This section appears to be in conflict with the comments of the Contracting Officer at the bid conference. He stated that small businesses that compete in the unrestricted contract need not submit a small business subcontracting plan and since they are small businesses would achieve the targets automatically. Is this a discretionary issue? A number of questions discuss various small business issues, however this specific issue of what was said at the conference has not been addressed. We do not believe ED can require a small business to subcontract to a small business in order to meet SBA requirements nor can ED deny credit for a small business getting credit for themselves in using small businesses. We are requesting specific guidance to this issue as to the FAR or regulation that permits the current interpretation in the RFP.

A. Section I.4 of the RFQ incorporates FAR clause 52.219-9 by reference. As the clause states, FAR 52.219-9 "does not apply to small business concerns." Thus, the Contracting Officer correctly stated that a small business concern (even one participating in the unrestricted pool) is not required to submit a Small Business Subcontracting Plan. ED does not intend to deviate from this FAR provision. Paragraph L.10(b).2 of the RFQ now clearly states that a small business concern is not required to submit a small business subcontracting plan with its proposal. Small business concerns in the unrestricted competition must still comply in full with all other paragraphs of subsection L.10(b).

Although small business concerns are exempt from the requirements of FAR 52.219-9, RFQ subsection (b) of H.14, Small Business Subcontracting Targets and Reports, applies to all contractors in the unrestricted pool. This provision does not conflict with the FAR or SBA requirements. Although subsection (b) requires the contractor to submit a subcontracting report, it does not require a subcontracting plan. The authority for ED to include this provision may be found at FAR 1.102(e).

As stated in H.14(a), ED included this provision to ensure that small businesses are given meaningful opportunities and collectively receive a substantial portion of the revenue from these task orders. ED also needs to ensure that CPCS measures all contractors on a similar basis. Since ED recognizes that a subcontractor may not always perform as well as the prime contractor, ED applies the H.14(b) subcontracting requirements to all contractors in the unrestricted pool. A small business concern that does not wish to accept the H.14(b) subcontracting requirements applicable to the unrestricted pool is welcome to submit a proposal for the small business pool instead.

44. Q. I believe ED approves all subcontractors, correct? What are the specific approval qualifications for a subcontractor working for a small-business pool contractor?

A. No, ED does not approve subcontractors. That is the responsibility of the prime contractor. However, please see RFQ clause C.2, Subcontractors and Third Parties.

45. Q. We are a law firm that does a substantial amount of debt collection in Puerto Rico. We have become aware that the ED plans to commence a bid process in this area. Does the Department of Education plan to acquire collection services in the Puerto Rico area or should we contact an ED PCA contractor in order to discuss the possibilities of a subcontract? Where do we find a list of contractors in this area?

A. ED's debt collection contracts are national in scope. Collections agencies interested in focusing on more limited geographic areas may be interested in seeking subcontracting opportunities. Contact information about potential offerors may be found in the GSA Schedules e-Library for category 520.4 ED has posted a list of offerors invited to submit proposals and will list the winning contractors shortly after award (planned for September 2008) on the website

46. Q. Though we do not have GSL or ED experience, we have been servicing NDSL/Perkins loans for many years. Would this qualify as student loan experience for us to pursue the contract?

A. Although perhaps not as strongly relevant as some other types of student loan collections (e.g., ED or guaranty agency collections), collecting defaulted NDSL/Perkins loans would be considered a type of relevant student loan experience.

47. Q. Are current 2004 ED vendors required to use the Department of Education as a reference under Part 1 of the Technical Response?

A. We are unsure why an incumbent contractor would not want to highlight such highly relevant experience. Nevertheless, we have revised the RFQ to require offerors holding current ED PCA task orders to include that task order as one of the references.

48. Q. The instructions under L.5 for the past performance proposal say that an offeror with "an average CPCS score of 75 or higher for the four most recent CPCS quarterly reports or all CPCS quarterly reports to date . . . is not required to submit other examples of past performance." Does this allow current contractors to pick "contract to date" or the "last twelve months" CPCS performance for evaluation?

A. No, ED will consider CPCS from all periods of the task order in its evaluation of past performance. We have revised the RFQ to emphasize that an incumbent contractor must cover its CPCS performance over the entire term of the task order in Volume III, Past Performance. "Other examples" means examples of past performance other than on the ED task order.

49. Q. Section L.4.1.c Technical Response - Experience and Section L.5 Past Performance Response - last paragraph, both request that we provide references with contact information. In the interest of complying with the required page limitations, can ED please clarify that vendors only need to provide this information in one of these sections? If so, which section is this information preferred in?

A. The offeror must provide information in both sections. Even if the offeror uses the same reference in each volume, the offeror must include the full reference information in each volume so that each volume stands on its own. As explained in the RFQ, one set of references is for relevant experience and the other is for past performance. In many cases, the references in each volume may be identical, since a single reference will show both relevant experience and relevant past performance. However, an offeror may use different references if that will show the offeror's experience or past performance better. E.g., the solicitation requested past performance information from January 1, 2005 forward only. An offeror may wish to show experience that goes several years further back.

Offerors should be aware that a reference cited for one area might provide information that ED may use in evaluating the other area. ED may (or may not) contact any or all references from either Volume 2 or Volume 3. While ED will use references from Volume 2 to verify experience and references from Volume 3 to check past performance, ED may use the information obtained from experience references in its evaluation of past performance or vice versa.

50. Q. Now that the initial evaluation period is extended to September 30, 2009, is it anticipated that an INA/UNL return will occur on the placements from January - March 2009, as they will be over 180 days old before September 30?

A. Yes. In fact, ED intends to recall accounts more frequently than 180 days during the first CPCS period. See the next Q&A.

51. Q. PCAs are required to hold accounts for 6 months. However, within the 9-month initial CPCS period, there is little benefit for a PCA to close and return accounts until month 8 or 9. Won't this end result in a "stagnant" inventory that is not being worked? These dormant accounts could be worked by other agencies if they were returned.

A. We share the concern that some PCAs may be tempted to hold unworked inventory longer than normal during the first CPCS period. During the first CPCS period, ED intends to require the close and return of accounts with no payments or pending resolutions as frequently as 4 months from transfer date.

52. Q. Rehabilitation Funding-ED has made it clear that rehabilitation is a 9-month program, not a 9-payment program. Having a 9-month CPCS leaves the very real possibility that some PCA's will accelerate rehabilitations (by soliciting borrowers to make their payments early) in order to earn CPCS credit and alter the rankings. This would not be beneficial to the borrowers.

A. The spirit and intent of the rehabilitation program is for a borrower to establish a habit of making regular monthly payments. To qualify for rehabilitation, a borrower is required to make at least 9 timely payments over a 10-month period. If a borrower made 9 monthly payments exactly on the due date, the rehabilitation process would take 8 months (about 240 days) between the first and last payment. Under the regulations, a borrower can reduce the time between the first and last payment by making the first payment up to 20 days late and the last payment up to 20 days early. Thus, one could construct a situation where a borrower might rehabilitate a loan in as little as 200 days. We believe that such "accelerated rehabilitations" are often not in the spirit of the rehabilitation program. An accelerated rehabilitation is not in the borrower's best interests if the borrower has not established a solid monthly payment discipline.

ED intends to monitor "accelerated rehabilitations" carefully and take appropriate action against any PCA that appears to be abusing the process. A requirement for PCAs to report monthly on accelerated rehabilitations has been added to the SOW.

53. Q. Incoming correspondence is currently documented on both our internal collection system screen and the ED Systems screen. To eliminate duplicate documentation, would it be possible to send a daily output file from our collection system to ED, which would contain all the information needed for your files?

A. Not at this time. While we require PCA contractors to document the receipt of correspondence on their systems, we do not require PCAs to record the receipt on ED system screens. We do require PCAs to input information related to certain specific correspondence (e.g., documents supporting administrative resolutions, AWG, consolidations, & rehabilitations) directly on the L102 screen. However, these updates cannot be handled effectively via electronic file transfer under our current system.

54. Q. We understand that ED has discontinued the Customer Service measurement under the current PCA task orders. Does that mean that ED plans to remove the Service Quality (SQ) measure from the draft RFP for the 2008 task orders?

A. ED has revised the RFQ to eliminate the Service Quality (SQ) performance indicator at the start of the contract, but retained the right to implement one at a later date. Also, the small business subcontracting measure applicable to PCAs in the unrestricted pool was separated from the SQ performance indicator. Implementation of the SQ measure will most likely await the availability of more objective data from improved ED systems.

The goal of the customer service measurement on the 2004 task orders was to gauge the level of service through a variety of compliance measurements including error rates in AWG validation, EFTs, P-note requests, borrower complaints, compromises, etc. A number of these areas allow for a level of discretion and judgment that is not purely objective or based on system-generated data. This element of subjectivity was in conflict with the goals of CPCS, which is to measure performance with an objective measurement.

Although the measurement areas in the 2004 task orders affected relatively few borrowers, we did see marked improvement in these areas. We consider the pilot and implementation successful from this standpoint. However the one thing the pilot did not show was the amount of staff-time required. In reviewing the estimated amount of time being used by each PCA and the Department review staff (in particular, the time required to review data to ensure that subjectivity did not distort the measurements), we felt we could not in good conscience continue this process. Accordingly, in April 2008, we discontinued use of the customer service measurement in the current task orders.

55. Q. Can you change the target rates to . . .? [We received many comments about the target rates. Most argued against lowering rehabilitation rates, particularly for BSRs. Some commenters felt that the initial narrow difference between rates for rehabilitation relative to regular collections would place too much emphasis on regular collections-particularly in the initial CPCS periods when PCA are striving to become profitable. In addition, many commenters felt that the separate target rate for Direct Loans was too low because many Direct Loans have already been cycled through PCA collections and are as difficult to collect as FFEL paper.]

A. One of our goals is to ensure that ED's PCA task orders attract the best of the best, including the best PCAs, the best managers, the best collectors and the best staff. After considerable analysis, we concluded that target rates for rehabilitations should remain at the level in 2004 task orders. We felt we could afford to lower rates for regular collections slightly and still attract the best of the best. Our analysis shows that Direct Loans that have been cycled through one or more PCAs are about as difficult to collect as the FFEL loans in ED's portfolio. However, newly defaulted Direct Loans are much easier to collect. Paying a separate, lower rate for newly defaulted Direct Loans under our current system would be challenging at best, but will likely be feasible later. Therefore, we included two pricing alternatives as described in section B.5 of the RFQ. ED would begin using the second alternative (which includes a rate applicable only to newly defaulted Direct Loans) when system changes allow. We believe the target rates in the RFQ represent the optimal balance of the three subfactors described in RFQ M.5.

56. Q. The response to Question #5 on the website advised that Contractor Team Arrangements (CTA) guidance is provided on the GSA website. GSA FAQ #3 & #11 responses state that each team member has a GSA contract and can interact with the Government. They also appear to say that each team member can invoice the Government. Your response to Question #5 on the pca website also notes that ED specifically invites small business contractors to participate in team arrangements although it establishes limits and procedures applicable to such team arrangements. Page 4 of the draft RFP states that a task order will be issued only to the team lead, which will be responsible for team performance, assigning tasks and coordinating the work of other team members. Please advise whether an ED CTA task order award will follow GSA CTA arrangements or if the "limits and procedures" referenced in the your response mean that ED will award the task order, communicate, and receive invoices only from the lead team member.

A. ED's RFQ takes precedence for the ED task orders. ED will award the task order and receive invoices only from the lead team member. ED may communicate with the other team member(s) where appropriate.

57. Q. With regard to security, is there a possibility of non-collection support activities being performed in an office outside the U.S.? For example: call monitoring, data server storage, production reporting, or IT programming. Would there be different parameters if the location was a subcontractor, or if the location were a suboffice of the PCA?

A. Security requirements will not be relaxed for subcontractors or suboffices of the PCA. (Please see clause C.2, Subcontractors and Third Parties.) Security concerns increase when work is to be performed outside the U.S., since the ability to monitor the work, control communication channels and perform security checks is greatly curtailed. Among other issues, ED monitors are not currently authorized to travel outside the U.S. Release of sensitive data outside the U.S., is a particular concern. Nevertheless, it is possible that some limited types of work may be suitable for performance outside the U.S. Each proposed arrangement would have to be examined on a case-by-case basis.