Education, Accenture to share

The Education Department is expanding its use of an innovative procurement method, awarding two share-in-savings contracts to continue the modernization of the Office of Student Financial Assistance (SFA).

Accenture announced the awards Dec. 12 to develop the Common Origination and Disbursement system and to integrate Direct Loan eServicing into the department's financial aid programs.

Using the share-in-savings concept, the vendor picks up some or all of the upfront costs of developing a system. In return, the company receives a portion of the savings expected to come from the system.

The Common Origination and Disbursement system modernization is expected to save the agency $94 million during the next 10 years, and the Direct Loan eServicing program is expected to save $79.1 million over five years.

The new disbursement system will consolidate and integrate legacy systems — such as the Recipient Financial Management System for the federal Pell grants — that handle $50 billion in financial aid funds.

The Accenture team, which includes AFSA Data Corp. and KPMG Consulting Inc., will pay for the development and implementation of the system. They will then be paid based on how well they meet performance metrics defined in the five-year contract, including whether they generate the expected level of savings and whether they cover the cost of the standard operational expenses.

The Internet-based services provided under the Direct Loan eServicing program will enable students to view and pay their Direct Loan bills online and receive their loan correspondence via e-mail. At the back end, the upgrade will provide SFA's Direct Loan Service Centers with new customer relationship management tools.

Accenture's team for this contract includes AFSA Data and Affiliated Computer Services Inc. Their payments will be capped at $41.6 million.

In 1999, SFA became the first agency to sign a share-in-savings contract for an information technology program. SFA expected that contract, also with Accenture, to retire the Central Data System and save the agency more than $30 million.

Many officials have endorsed the share-in-savings concept, including President Bush, Office of Federal Procurement Policy Administrator Angela Styles and Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee's Technology and Procurement Policy Subcommittee.