During the second quarter of 2010, requests for proposal from public sector entities seeking to outsource collection operations yielded at least 60 opportunities totaling more than $2.3 billion in portfolios available for bidding and eventual servicing, as reported by MyGovWatch.com. Requestors included well-established receivables management outsourcers such as the City of Tulsa, Oklahoma, Washington, DC, and the Western Virginia Water Authority. New outsourcing opportunities this past quarter included those announced by East Hampton, NY, Miami-Dade County, FL, and the California Department of Toxic Substance Control.

Aiken Goes with Pros 

Aiken County, SC, has hired Professional Recovery Consultants (PRC) to collect on ambulatory debt and other miscellaneous accounts from among a field of no less than ten competing agencies—including some formidable opponents. As shown on MyGovWatch.com, agencies scoring high in the buyer’s evaluation process included winner PRC, which scored 8.63, and nationwide government contractor Penn Credit, a close second at 8.35. Six other vendors scored up to 7.5 for this one-year contract with four, one-year renewal options. The buyer scored all vendors using an objective matrix that included the vendor’s track record and references as well as the vendor’s collection methods.

Under the terms of the contract, PRC will pursue collection of accounts typically aged 3–6 months at date of placement, with an average balance just under $200. Referrals historically have averaged more than 300 accounts per month. This contract should be let out for bidding again in 2014, as indicated at MyGovWatch.com.

More Loot for Utes

In January 2009, the University of Utah held concurrent procurements for the collection of healthcare and higher education receivables. Six companies located all over the country were selected. For the healthcare contract, MyGovWatch.com indicates that University fired three incumbents out of five but retained Outsource Receivables Management (ORM) and Express Recovery Services, adding Progressive Financial Services and NCO Financial Systems to the contract. For the higher education contract, the University let three others go but stuck with Windham Professionals, adding ORM and Enterprise Recovery Systems to the mix.

A total of 23 offers were accepted for both opportunities, which could each last five years from the project start date. Across both contracts, rates ranged from 14% on the low end up to 50% on the high end. A review of scoring documentation and winning proposals available to clients at MyGovWatch.com shows why the vendor picked the companies it selected for these contracts, and what enabled those companies to stand out from the crowd.

RFPs on the Horizon … 

Looking ahead, the following buyers are likely to release an RFP for bidding later this quarter: Palo Alto, California, Eastern New Mexico University, and The New York State Thruway Authority.

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 hundreds of future government solicitations.

Not Horseshoes or Hand Grenades 

Proving the old adage that “almost counts only in horseshoes and hand grenades,” the Florida Department of Education recently awarded contracts to incumbents NCO Financial Systems, iQor, and Diversified Collection Services to collect Federal student loans for a procurement that was held in December 2009. Another leading student loan collection company (let’s call this firm “ABC Corp.” here to protect the innocent) and a few others were also vying for a piece of the pie, which, during the prior contract period, saw each vendor average more than $188,000,000 and 40,5000 accounts in inventory at the time the solicitation was active and open.

Users of MyGovWatch.com have access to documents showing that—if not for a difference in exactly one (1) percentage point in pricing for consolidations between ABC Corp. and the winners—ABC Corp. would have outscored all three of the winners. Without a doubt, this example shows that it pays to have the ability to look back on prior procurements to see how various competitors have structured pricing in the past so that such a large contract does not go into the loss column over a single percentage point in fee for a relatively insignificant part of the contract.

During the contract period leading up to the latest procurement, vendors delivered more than $680 million in gross recoveries and an average recovery rate exceeding 29%. For 2010, the buyer anticipates a 15% increase in overall volume compared to the $208.5 million in claim payments it paid in fiscal year 2009.

Around the Horn

The Affiliated Group was awarded a contract resulting from the State of South Dakota’s procurement held in 2009. This contract, with options, could run through 2014, and will see TAG collect on a variety of state receivables from five distinct state departments and will include damage claims, healthcare accounts, higher education accounts, taxes, and other fines and fees. At the time the buyer received bids, it expected to place more than 100 accounts per month with an average balance just under $2,000. To win the contract, TAG went up against six other firms from all over the country. TAG and two others were short-listed and invited to make a presentation to the buyer’s evaluation committee. TAG was scored the highest among presenting firms hands-down, across all six evaluators.

Down in Texas, Gila Corp d/b/a Municipal Services Bureau (MSB) edged out Pennsylvania-based National Recovery Agency (NRA) to take over collections for the City of Irving in a re-bid for a contract last awarded to NRA in 2008. The contract was re-bid to enable the buyer to add additional types of placements to the contract. MSB was awarded at a rate higher than the prior incumbent, in part due to a start-up incentive in which MSB offers a 10% rebate for commissions it was to earn in the first 100 days of the contract. This potential four-year contract sees placements forwarded to the vendor after about two months, and may include the collection of accounts related to water and sewer services, garbage collection, mowing charges, false alarms, property damage, and more.

In the Empire State, the State University of New York at Albany (SUNY Albany) has retained the services of Universal VAT Services of Decatur, Georgia, to recover value added tax (VAT), which is assessed on study abroad program charges by some countries with institutions that work with SUNY Albany’s program. The buyer was seeking a vendor with some experience with this type of recovery, specifically in France and the United Kingdom. The vendor will charge SUNY Albany 35% of funds recovered. The buyer had not previously contracted for this service.