CollectCorp Will Make ED Collectors Available for Other PCAs

Phoenix, Arizona: CollectCorp, a United States Department of Education (ED) vendor, has announced it will make its staff of ED collectors and managers available to work for other ED Private Collection Agencies (PCAs) as a subcontracting partner.  This strategic decision comes as a result of CollectCorp’s unique position on the ED contract.  As the only large business not retained as a result of ED’s 2008 procurement, the firm has more than 100 highly-trained ED collectors and managers in multiple call centers, coast to coast, who are available to help other PCAs, both large and small (“Non-Restricted” and “Small Business Set-Aide” in ED-speak), meet the rigorous demands of ED’s capacity requirements and anticipated portfolio growth in the years ahead.  

The firm simultaneously announced it has exclusively retained Net Gain Marketing, Inc. (www.netgain4results.com), to tap into opportunities arising from this announcement, and that NGM will hold two conference calls next week in which interested parties will have the opportunity to receive more information and ask questions.  The first conference call, to be held on Tuesday, November 24th, at 1:30 PM EST, would be open to authorized representatives of any ED PCAs.  The second call, later that day at 3:30 PM EST, would be open to any other interested parties, to include those wanting to enter the Federal contracting arena, media members, consultants, and M&A advisors representing sellers.  The purpose of this call would be to provide information to those parties and answer questions also.  (Parties interested in participating in either or both calls are encouraged to contact Nick Bernardo at 877-533-1680, x701, to receive the dial-in number in lieu of contacting CollectCorp).

Some ED PCAs have voiced strong interest in using CollectCorp as a subcontractor.  Although use of CollectCorp as a sub does not count toward any large PCA’s small business subcontracting goals because CollectCorp itself is a large company, the potential practical advantages are hard to ignore, mainly due to continued and expected growth in ED’s portfolio the ongoing challenge collection agencies have finding and retaining good people.  In 2004, according to ED presentation materials made available to interested parties at the start of its 2008 procurement, ED had 2.45 million accounts in default, compared to 2.56 million at the start of the 2008 procurement.  Over the same period, total dollars outstanding grew from $16.8 billion to $23.8 billion and ED’s average balance grew from $6,800 to $9,300.  And these growth numbers do not factor in any growth that may result from Student Aid and Fiscal Responsibility Act of 2009, should that legislation become law.

Among other opportunities that may arise, CollectCorp envisions signing “indefinite delivery, indefinite quantity” contracts with several ED PCAs, similar to the contract all ED PCAs sign with the U.S. General Services Administration (GSA).  In this kind of contract, the parties define and agree to a series of standard terms and conditions, even if the buyers (in this case, other ED PCAs) do not have an immediate need for help.  That way, when a need does arise, only a limited number of items need to be negotiated and set by the parties, expediting start up.

Nicholas Wilson, who is Chairman and Chief Executive Officer with CollectCorp, commented, “We look forward to making our people and facilities available to other ED PCAs who know the importance of having the ability to rapidly expand capacity to meet the needs of ED’s portfolio, and we look forward to entertaining other options also.”