Subscribe by RSS
Best Practices: Improving Contracts
Significant Results through Strengthened Vendor Communication
Executive Summary
The Department of Education’s (Education) Office of Federal Student Aid (FSA) administers the student financial assistance programs authorized under Title IV of the Higher Education Act. These programs collectively represent the nation’s largest source of federal financial aid for postsecondary students. Last year, the office processed over 21 million applications for federal student aid, resulting in the delivery of approximately $134 billion in grant, work-study and loan assistance to over 14 million postsecondary students and their families attending approximately 6,000 institutions of higher education located across the world.
FSA’s Virtual Data Center (VDC) directly supports the information technology used for these programs. The VDC provides technical, operational and maintenance services in support of mainframe and midrange hardware and software. The facility provides electronic access to these applications over the World Wide Web, providing benefits to the end user including: reduction in application errors, immediate end user confirmation of Free Application for Federal Student Aid (FAFSA) filing requirements completion, and immediate preliminary summary of expected parental financial support.
VDC’s existing contract from 1989 through 2006 was held by a single vendor. Without competition, this vendor acted as a monopoly for this service, charging prices far exceeding market rates. Between the time of original contract in 1989 and the year in which the contract was going to be rebid, Education had implemented a process of pre-RFP market research and vendor communication. This process resulted in an effective new contract with competitive prices able to take advantage of emerging technologies and services.
