13 Firms Plan to Oppose ED Motion to Dismiss Debt Collection Litigation

The judge in the case of FMS v. USA (Department of Education or ED) set a deadline of last Friday for all parties to notify the court whether they intended to oppose ED’s motion to dismiss the case. ED is seeking to end the litigation in light of its cancellation of the contested solicitation for unrestricted private debt collection contractors. Unfortunately for ED, the matter isn’t going away just yet.

Here is the scorecard as of the Friday deadline:

• Thirteen parties said they intend to oppose the motion to dismiss the case: Account Control Technology, CBE Group, Continental Service Group, FMS, GC Services, Transworld Systems, Performant Corp., Progressive Financial Services, Windham Professionals, Texas Guaranteed Student Loan Corp., Value Recovery Holding, Williams & Fudge, and Central Credit Services.
• Two parties notified the court that they will not oppose the motion: EOS USA and Automated Collection Services.
• Five parties said they would not oppose the motion but want to remain involved as an interested party as long as there are proceedings in the case: Alltran, Pioneer Credit Recovery, Coast Professional, Immediate Credit Recovery, and Allied Interstate.

To encourage a quick resolution to the motion to dismiss, the court ordered all parties to file their responses to ED’s motion on or before this Friday, May 18; the Government is then ordered to file its reply by Wednesday May 23. Based on this Judge Wheelers past actions, we can expect a fast turnaround.

Background

For those who need the incredibly short recap…This all started in 2014 when the five-year 2009 contract ended, and new large-firm awards were delayed. Eventually, contracts were awarded in 2016 to seven large companies, down from 17 on the previous contract. This led to dozens of protests by firms that believed the process was flawed and unfair. So began Chapter Two of the matter, with a "re-do" of the solicitation, which resulted in awards to just two large companies. This led to more protests, and finally... nothing. No large company awards at all, as ED cancelled the whole solicitation on May 3, 2018, rescinded the contract awards from the two companies, and filed a motion to dismiss the litigation. And so began Chapter Three, with 13 parties opposing that motion.

For those who want to review all of the details, click here for the full coverage of the Department of Education collection contract on insideARM.