Education taps NITAAC for major loan platform buy

The Department of Education will use the National Institutes of Health's governmentwide acquisition contract in a major procurement to modernize financial aid services.

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The Department of Education will use the National Institutes of Health's $20 billion governmentwide acquisition contract to begin modernizing its financial aid services system for student loans.

The Education Department's Office of Financial Student Aid (FSA) said in an Aug. 27 notice for its NextGen Financial Services Environment solicitation that it had chosen the NIH Information Technology Acquisition and Assessment Center's (NITAAC) CIO-SP3 vehicle for IT support services to provide an enterprisewide digital platform, customer relationship management and middleware.

The notice is the latest in the department's efforts to develop a consolidated student loan servicing solution. Last August, Education Secretary Betsy DeVos scrapped a planned solicitation begun during the Obama administration.

Previously she had overseen a series of changes to the solicitation, most notably shifting from relying on multiple service providers (preferred by the Obama administration) to a single service provider, with other providers acting as subcontractors.

Those changes met with pushback from some members of Congress who worried that a single service provider would limit competition and hamper customer service.

Last November, FSA Chief Operating Officer A. Wayne Johnson unveiled the "blueprint" for the NextGen Financial Services. The overhaul, Johnson and DeVos said in a joint statement at the time, would give students mobile interfaces for its Free Application for Federal Student Aid and integrate FAFSA into its portal. The integration would allow seamless transition from mobile devices and the web, they said.

The system will track all facets of FAFSA, the agency's gateway to federal post-high school financial aid, including application and eligibility, payment, processing and service and repayment recovery through private collection agencies.

That's no small task. FSA said it oversees over 18 million student applications a year for federal aid and has over 42 million customers across the student lending lifecycle. It has over $1.3 trillion in outstanding loans, and that loan portfolio is growing at 7 percent a year. Currently FSA spends close to $400 million annually on IT in support of loan programs.

The FSA issued the solicitation for the first phase of the NextGen system last November, saying it was looking to set up a "flexible, world class financial solution" to support its student aid program. It said it would first look to modernize the system's technical and operational architecture, making it more flexible and mobile friendly.

CIO-SP3 provides IT support services for federal agencies' administrative, operational, managerial and information management needs, across 10 areas, from IT operations and maintenance to integration services and digital government. FSA has used it before, in a 2015 cloud deal with Hewlett Packard Enterprise Services for private/hybrid cloud services for the agency's grant and loan programs. The agency spent $39.3 million on the cloud contract in fiscal year 2017.

CIO-SP3 could address competitive concerns raised by some lawmakers as well as provide a single, expert point of contact for the project, procurement industry expert Larry Allen told FCW.

CIO-SP3 has 53 suppliers, so using it "doesn't mean a lack of competition," said Allen, as those vetted suppliers compete for task orders. Although the task order process for GWACs aren't as open as a solicitation issued through FedBizOpps, "it doesn't necessarily mean the Education Department is trying to get around" disclosures, he said. "People use IDIQs all the time."

NITAAC Contracting officer Keith Johnson told FCW in an interview that Education Department is laying the foundation layer for its system with the latest notice. "They're likely going to use all [10] of CIO-SP3's task areas," he said.

NITAAC is also beefing up its efforts at assisted acquisitions, which brings in certified contracting experts who know how to work the GWAC's details. The Education Department could use those capabilities to its advantage. In the last couple of weeks, NITAAC appointed Glynis Fisher as deputy program director.