CDSI snares $30M pact to overhaul grant system

The Education Department last week awarded a $30 million contract to CDSI Business Applications Solutions (BAS) Co. to re-engineer operate and maintain the financial management computer system for the department's Pell Grant program one of the largest financial aid programs in the nation. The Clinton administration hopes to award about $7.8 billion in Pell grants to more than 4 million college students in the 1998-99 academic year. But the task of managing the finances behind the huge program which this fiscal year doled out $6.2 billion to more than 3.6 million students is one that requires fresh technology according to department officials. "It's a total redesign of the system but it's still the same function " said Roscoe Price the contracting officer for the procurement. CDSI which began work on the contract the day after it was awarded will be in charge of developing a PC-based software for the colleges and universities whose students are awarded Pell grants. The software will replace the current DOS-based software that is used for storing and transmitting records on student payments and awards to Education. The system and software should allow Education to deliver process and track Pell funds. CDSI will assist schools that need help in submitting Pell information electronically to the department. With the present computer system Education's Pell records are not reconciled with records at schools that distribute Pell awards until a month after the schools distribute grants to students. "One thing [Education officials] want to get out of a redesign is to increase productivity and efficiencies " said Steve Penyak vice president of operations at CDSI. "The redesign will have the reporting of the disbursement being almost simultaneous with the action." Reporting by schools takes place over a wide-area network that is administered under a separate contract. Around 7 000 universities and colleges participate in the computerized program. Building more efficiency into the system will be accomplished largely through software redesign - for the schools which use their own equipment to run Education-supplied Pell reporting software and for about 30 users at Education. Penyak said it is possible that CDSI may supply some new hardware in redesigning the system. CDSI also must maintain the current Pell system while designing a new one. Company officials hope to have the redesign completed within eight months. As winner of the Pell procurement CDSI will replace incumbent Litton/PRC Inc. which has held the contract since 1992. "[CDSI] provided the best value to the government " Price said. He would not disclose names of other bidders. National Computer Systems Inc. also is thought to have bid on the contract. "We're very disappointed " said Don Upson vice president of strategic programs at Litton/PRC. "We were debriefed yesterday and we were not cost-competitive." CDSI's win of the Pell contract does not represent the first work the company has done with the agency. The company has been involved in projects for a direct loan program an automated processing system for core financial functions at the agency and loan servicing Price said. Joe Cooper president of The Federal Capture Group an information technology procurement consulting firm based in Reston Va. said the system "is a major core system at the agency and fundamental to its mission.... This [procurement] is in direct response to the agency's commitment to streamline student financial aid administration. For CDSI's BAS unit this award reflects the intersection of a well-planned vertical market strategy and a strong customer focus strategy." When the Pell Grant program was formed in 1973 nearly $48 million in grants went to 176 000 students. Most Pell Grant recipients are from families earning less than $20 000 a year. The maximum award amount for a Pell Grant is only about $2 500.