17 Lawsuits Now Filed in Dept of ED Collection Contract, Chapter 2

Seventeen suits have so far been filed in the Court of Federal Claims in the matter of the Department of Education (ED) Private Collection Agency (PCA) contract. insideARM reported on February 13, 2018 that three suits had been filed. Since then, fourteen others have entered the fray. The Judge, Thomas Wheeler, has consolidated all of the suits into one case. This is the newest chapter in a story that began in 2014. The February 13 story provides a consolidated background.

The following companies have filed suit and were consolidated under FMS Investment Corp. et al., v. The United States and Performant Recovery, Inc., et al. as follows:

February 13:
1. FMS Investment Corp. (FMS)
2. Account Control Technology, Inc. (Account Control)
3. Transworld Systems, Inc. (TSI)
4. GC Services Limited Partnership (GC)
5. Texas Guaranteed Student Loan Corp. (TGSLC)
6. The CBE Group, Inc. (CBE)

February 14:
7. Pioneer Credit Recovery, Inc. (Pioneer)
8. Progressive Financial Services, Inc. (Progressive)
9. Coast Professional, Inc. (Coast)

February 16:
10. Central Credit Services, LLC (CCS)
11. Delta Management Associates, Inc. (Delta)
12. Gatestone & Co. International, Inc. (Gatestone)
13. Continental Service Group, Inc. (ConServe)
14. Immediate Credit Recovery, Inc. (Immediate Credit)

February 20:
15. Allied Interstate LLC (Allied)
16. Automated Collection Services, Inc. (ACSI)
17. Collecto, Inc. d/b/a EOS CCA (EOS-CCA)

You can download the consolidation order here.

insideARM Perspective

These 17 firms are across the board in their status with the ED contract, including:

• 2 that currently have a small business contract but had bid on the unrestricted (Coast and Immediate Credit),
• 5 that were on the 2009 unrestricted contract, bid on the new contract and lost (Account Control, ConServe, EOS-CCA, Pioneer, and Progressive),
• 4 that were on the 2009 unrestricted contract, bid on the new contract, received an award in December 2016, then lost the award in the corrective action announced in January 2018 (CBE, FMS, GC, TSI)
• 6 that had not been part of the 2009 contract but had bid on the original 2014 contract, were turned down in December 2016, and filed protests (ACSI, Allied, CCS, Delta, Gatestone, TGSLC). 

All complaints are currently sealed so the details are not available for review, but sources tell insideARM that the foundation of the complaints is that mistakes were made during the 2016 decision process which were evidently not corrected in the 2018 corrective action. In March 2017 insideARM reported that among the 47 protests filed with the Government Accounting Office, 29 (from 12 firms) were sustained and 5 (from 3 firms) were not decided.

Meanwhile, sources also tell insideARM that Patty Queen Harper, who has been the contracting officer on the PCA contract for several years, has left FSA. The reason for the departure is not known, but it is evidently common that contracting officers are changed out periodically, presumably in order to avoid the opportunity for bias.  

insideARM will continue to report on this case as it develops.