Treasury Department Moves to Hire More PCAs for Non-Tax Debts

The U.S. Department of Treasury (Treasury) released a request for proposal last month for the collection of non-tax debts, coinciding with a major announcement in the ARM industry that four firms have been hired to collect taxes for the Internal Revenue Service (IRS), a unit of Treasury. 

While the decision to award the IRS tax collection contract to four firms was announced through an IRS press release linked within the article last week, news of the start of this new procurement, issued through Treasury’s Bureau of the Fiscal Service, was not as forthcoming.

The RFP’s issue date is September 13th, but a search on both FedBizOpps (the Federal clearinghouse for procurement information) and on major search engines against the title and solicitation number of the RFP produce no results.  The solicitation is restricted to firms that are on the U.S. General Services Administration (GSA) schedule for debt collection, and was released on GSA’s eBuy website

Further, the opportunity cautions offerors that submissions by firms without five years of experience providing debt collection services for non-tax Federal debts on a large scale and national level will not be further evaluated.

The four firms also selected by IRS, CBE Group (Cedar Falls, Iowa), ConServe (Fairport, N.Y.), Performant (Livermore, Calif.) and Pioneer (Horseheads, N.Y.), have serviced this contract since the last procurement held in 2011.  While tax collection privatization policies at the IRS have waffled over the years, non-tax collection efforts by private collection agencies (PCAs) have been continuous since at least 1998.

In 2012, MyGovWatch.com, a clearinghouse for documents and intelligence not generally available to the public for all government collection contracts, sued Treasury when it balked at providing contract pricing information and a list of companies that submitted an offer in response to the 2011 solicitation.  A Federal judge later summarily ruled in favor of the website.

Placements under the contract originate from more than 40 different Federal agencies, and are broadly characterized as fines, fees, overpayments, loans, penalties, grants, employee advances, and miscellaneous debts.  Slightly more than half are commercial.  Procurement documents indicate that, during Federal fiscal year 2015, Treasury placed more than 360,000 accounts with PCAs with an average balance close to $20,000.  Over the last five fiscal years, it has averaged 449,000 placements per year.

Bids are currently due on October 12th.

By Stephanie Eidelman