Accenture Inks Performance-Based Deals with Ed. Dept.

The Department of Education's Office of Student Financial Assistance will save about $173 million through two new share-in-savings contracts with Accenture, the technology and management consulting firm announced this week.


The two contracts are worth $234.6 million to Accenture of Hamilton, Bermuda, and its partners.


The contracts, the third and fourth share-in-savings agreements between Accenture and Student Financial Assistance office, are part of a modernization effort to transform the agency into the federal government's first performance-based organization.

Under the share-in-savings approach, Accenture and its team members will pay for system development and implementation and will be later reimbursed based on achieving specific results.


Under one contract, Accenture will develop and deploy a Common Origination and Disbursement system that will save the financial aid office about $94 million over the next 10 years, the company said.

The system will consolidate and integrate legacy systems that support the origination and disbursement of $50 billion in Title IV Student Financial Aid funds. Accenture's partners are AFSA Data Corp. and KPMG Consulting Inc.


The solution will reduce the need for phone calls to customer service representatives and Department of Education personnel. It also will reduce the workload required for monthly and yearly school reconciliation while reducing the potential for fraud and waste, Accenture said.


The contract's projected value is $193 million over five years, with portions of the payments tied to meeting specific objectives, generating anticipated savings over the life of the contract and covering the cost of operational expenses.


Under the second contract announced this week, the Title IV student financial aid programs administered by the Office of Student Financial Assistance will get new online service capabilities.


With Direct Loan eServicing, borrowers will be able to view and pay their loan bills online, receive loan correspondence via e-mail and conduct some deferment and forbearance transactions online or by phone. In addition, more efficient electronic customer relationship management tools will be installed at Direct Loan Service Centers, where about 700 employees handle calls about loans.


Use of the new capabilities is expected to streamline administrative processes, saving $79.1 million over five years. Accenture and its partners, AFSA Data and Affiliated Computer Services Inc., will be paid up to $41.6 million out of the savings from the new process efficiencies.