FMS Collection Contracts Set to Expire, Procurement Process to Begin Q1

Net Gain Marketing has announced it is anticipating that the Department of Treasury, Financial Management Service (FMS), will most likely initiate its procurement for Private Collection Agency (PCA) services during the first quarter of 2006. This is based on the expiration of current Private Collection Agency (PCA) contracts, estimated to be September 30, 2006, and the typical timeframe for procurement cycles at the Federal level, which can extend to several months.

The FMS contract aggregates the debt portfolios of Federal entities to include non-tax, non-student loan receivables, such as consumer and commercial accounts from entities like the Environmental Protection Agency and Department of Veterans Affairs, for example. During the last procurement cycle, the awarded vendors were Allied Interstate, Diversified Collection Services, Linebarger Goggan Blair & Sampson, Ocwen Federal Bank, and Pioneer Credit Recovery.

The contract is administered by FMS and is used as part of its Cross-Servicing program. Under the program, debts that are not collected or resolved within 30 days after transfer to FMS for Cross-Servicing are referred to a PCA for collection action. Over the past four fiscal years, PCA collections have totaled $27.8 million, $42.9 million, $73.3 million, and $70.4 million.

Special Item Number (SIN) 520-4, Debt Collection, is the General Services Administration (GSA) schedule under which FMS procures collection services. In order to participate in the FMS PCA procurement, collection agencies must first secure a contract with GSA.

Nick Bernardo, principal of Net Gain Marketing, which advises collection agencies on how to pursue public sector contracting opportunities, including how to get on GSA schedule, noted, “FMS will probably pre-qualify vendors, inviting only a subset of GSA schedule contract holders to actually submit a proposal. This will be another highly competitive process.”