During the fourth quarter of 2009, requests for proposal from public sector entities seeking to outsource collection operations yielded at least 50 opportunities totaling more than $2 billion in portfolios available for bidding and eventual servicing. Requestors included well-established receivables management outsourcers such as the New York Department of Taxation, Memphis Light, Gas & Water Division, and The Medical University of South Carolina. New outsourcing opportunities this past quarter included those announced by Henry County, GA, Ada County, ID, and Douglas County, NE.

Pricing Bids or Playing Darts?

The First Judicial District of Pennsylvania recently released documents to MyGovWatch.com indicating that no less than 17 companies submitted offers to collect court fines and fees resulting from the procurement completed in 2008. For this portfolio, average balances fall just under $300, with accounts aged up to 12 months at the time of placement and monthly referrals expected to be up to 1,500 per month.

The results of the procurement point yet again to the importance of having adequate market intelligence in the public bidding process. Of the 17 bidders, several companies proposed fees that were up to 70% higher than the rates awarded to the winner, in this case ACS State & Local Solutions. Others appeared to not grasp the buyer’s state preference that fees be expressed as an add-on to the principal balance owed. Given the time and expense it takes for a company to be involved in a procurement, using the “dartboard” method of pricing hardly ever yields the desired result.

Progressive Progresses 

Last month, the State of South Dakota Governor’s Office of Economic Development, in conjunction with the Aberdeen Development Corporation, announced that leading government contractor Progressive Financial Services would be expanding its operations in the state by creating 75 new jobs in Aberdeen.

South Dakota Governor Mike Rounds stated, “Progressive Financial Services is exactly the kind of company any state would be proud to have as a corporate citizen,” continuing, “Since the company first came to South Dakota four years ago, it has exceeded its growth expectations. Progressive continues to excel, due in part to South Dakota’s pro-business climate and excellent workforce.”

Keeping Tabs 

The MyGovWatch.com website now gives users the ability to keep tabs on competitors within the site’s newly-launched Vendor Center, a tool that lets users:

1. Look up prices offered by specific vendors to government agencies by state, level of government, type of debt, pricing category, and other factors, helping users predict what their competitors will bid on active procurements based on previously submitted rates for similar procurements.

2. Find copies of winning proposals available to the public through open records laws throughout the country by vendor or type of account, helping users learn what competitors are doing operationally, why winners are winning, and why losers are losing in markets to include taxes, healthcare, utility, higher education, and more.

3. Identify trends associated with specific competitors — who's bidding on what, and where they're bidding, helping users to keep tabs on key competitors or learn more about new ones.

The launch of the Vendor Center coincides with a MyGovWatch.com promotion through January 31, 2010, in which new subscribers qualify to receive one free user license for each purchased by that date.  Click here to request a demo or a phone call to find out how you can take advantage of this offer.

Former ED Vendor Back in the Game 

Last November, CollectCorp, a past United States Department of Education (ED) vendor, announced it would make its staff of more than 100 ED collectors and managers available to work for other ED Private Collection Agencies (PCAs) as a subcontracting partner, retaining Net Gain Marketing to tap into related opportunities.

This announcement came as a result of CollectCorp’s unique position on the ED contract. As the only large business not retained as a result of ED’s 2008 procurement, the firm retained all its staff and infrastructure, putting it in a unique (in the true sense of the word) position to help other PCAs, both large and small (“Non-Restricted” and “Small Business Set-Aide” in ED-speak), meet the rigorous demands of ED’s capacity requirements and anticipated portfolio growth in the years ahead.

As of this writing, CollectCorp is back in the game. Other PCAs who see the benefit of having immediate access to an additional department of dozens of highly trained ED collectors should call 877-533-1680, x701, for more information.

Miami Vice 

Folks in Miami-Dade County, FL, with a vice for not paying their bills on time may get a call from any one of seven vendors hired and now working on a contract resulting from the procurement held by the county in 2008, namely: Oxford Management Services, Gila Corp. d/b/a Municipal Services Bureau, Progressive Financial Services, NCO Financial Systems, CBC Innovis, Penn Credit Corporation, and BCA Financial Services.

Accounts placed under this contract can originate from just about any department within Miami-Dade government, and are placed to primary, secondary, and tertiary agencies. Rates for this five-year contract go as high as 40% for third placements. The odds for bidders were good, with fully seven of nine bidders awarded. It pays to know things like this, and to see copies of winning proposals available at MyGovWatch.com, when contracts like this one come out for bid again—in this case possibly in three years.

Exploring Minnesota Higher Ed 

The Minnesota Office of Higher Education has released to MyGovWatch.com documents showing how it selected vendors as a result of its March 2009 procurement. The buyer assigned two people to act as evaluators. Those individuals scored ten bidders against six categories, and pricing was one of the six. In analysis of the scoring, the top two ranked firms were picked, the next three were skipped over, and those ranked sixth and seventh were also selected. The buyer revealed that interviews held with bidders caused them to select the chosen firms, a group that included Account Control Technology, Enterprise Recovery Systems, and General Revenue Corporation. This is a five-year contract with 1 five-year renewal option. Average balances are about $3,000, and the buyer expects to place upwards of 125 accounts per month to selected vendors.

GSA Feeling Refreshed 

The U.S. General Services Administration (GSA) on December 3, 2009, released refresh nine of the solicitation used by potential GSA vendors seeking to be listed on the Financial and Business Services (FABS) schedules, including Special Item Number (SIN) 520-4, Debt Collection. The purpose of the refresh appears to be to implement changes to small business subcontracting requirements while adding a new SIN, in this case 520-22, Grants Management Support Services. There do not appear to be any new administrative requirements. Parties who may now be preparing an offer to GSA should be sure to download the latest solicitation; GSA typically rejects offers submitted using out-dated versions of its solicitation.

RFPs on the Horizon …

Looking ahead, the following buyers are likely to release an RFP for bidding later this year: the Commonwealth of Massachusetts, the City of Baltimore, Maryland, and the City of Killeen, Texas.

As always, part of the process of winning public sector contracts is meeting with decision makers well before any procurement starts to gain the opportunity to develop a relationship that may favorably affect the written requirements of the next procurement and, at the very least, give you special insight into what the buyer needs. MyGovWatch.com users have access to MyWatchList, which lets users anticipate the release of future RFPs.

Around the Horn

Down South, the Louisiana State University and Agricultural and Mechanical College, on the banks of the Mississippi river, awarded a student loan collection contract to National Recovery Agency (NRA), which will receive nearly $100,000 in accounts per month. NRA won out over Alpat, the bidder with the lowest litigation fee but a slightly higher fee for regular accounts. Other bidders included NCO Financial Systems, Progressive Financial Services, and National Enterprise Systems, to name a few. This contract is for a one-year term with 4, one-year options.

Up near the Great Lakes, the Michigan Department of Management & Budget awarded a huge, 6-year contract with two 2-year options and an inventory of approximately 633,000 accounts and $1.8 billion dollars in 2009 to GC Services. The prior incumbent received an estimated monthly revenue of over $2 million under this contract. There were only three bidders on this project due to a requirement that vendors have a location within a 20-mile radius of Lansing. Only two vendors met the minimum point scoring threshold to have their pricing evaluated, the winner and Pioneer Credit. GC Services outscored Pioneer by only 3 points in the technical evaluation and offered slightly lower costs over five years.

Hernando County, Florida, awarded an emergency medical services contract to NRA out of 13 other bidders including Penn Credit and Premier Recovery. NRA scored the same as Municipal Services Bureau, so pricing was used as the tiebreaker, giving NRA the edge over MSB as a result of the 23% lower fees submitted by the former. The next closest scoring companies were Broward Adjustment Service at 264 points, Aargon Agency at 259 points, and Professional Recovery Consultants at 256 points. Monthly account assignments are approximately 183 accounts worth $61,000.

Hot Springs, Arkansas, named for a spring where water flows out of the ground at 147 degrees, awarded a utility and tax contract to Penn Credit, which won by only 4 points over Diversified Adjustment Service. Fees accounted for only 15 points in the evaluation process and the winning vendor did not score highest in this category, showing that the lowest price is often not the deciding factor for an award. Monthly account placements are approximately 167 accounts worth $16,700.