Student Loan Servicers Continue Opposition to U.S. Department of Education’s Contract Decisions

The DOE files a motion to dismiss a lawsuit protesting its contract awards weeks after canceling the contracts. Several parties announced their intent to oppose the motion as the court’s May 18 deadline approached.

5/18/2018 2:30 PM

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Student Loan Servicers Continue Opposition to U.S. Department of Education’s Contract Decisions

The U.S. Department of Education (DOE) is seeking to dismiss a U.S. Court of Federal Claims case protesting its contract awards for Performant Recovery Inc. and Windham Professionals Inc., now that it canceled those contracts effective May 7.

The plaintiffs in the case, FMS Investment Corp., et. al., had a Friday, May 18 deadline to oppose the DOE’s motion to dismiss.

Several plaintiffs, including FMS Investment Corp., GC Services Limited Partnership, Value Recovery Holding LLC, Continental Service Group Inc., Account Control Technology Inc., already announced their intent to oppose the motion with an official filing. At press time May 18, three companies filed opposition to the DOE’s motion to dismiss and ACA International expects approximately 23 more companies to do the same.

The original lawsuit from FMS Investment Corp. et. al., initiated in February 2018, contests the DOE’s decision to award contracts to Performant Recovery and Windham Professionals and not FMS, according to the motion to dismiss from the DOE.

Nineteen additional plaintiffs filed similar complaints as part of the FMS Investment Corp. lawsuit.

Then, also in February 2018, the U.S. Court of Federal Claims issued a preliminary injunction barring the DOE from recalling accounts held by five of the plaintiffs as part of contract extensions dating back to 2015.

Ultimately, the DOE is seeking the court’s dismissal of the plaintiffs’ complaint because it has canceled the contract awards to Performant and Windham.

The DOE also requests the court lift the February preliminary injunction predicated on the complaints from the plaintiffs, according to the motion to dismiss.

“This protest should be dismissed for lack of subject matter jurisdiction because ED’s decision to cancel the solicitation and terminate the awards renders the consolidated plaintiffs’ protests of that award decision moot,” it states.

More parties are expected to file motions in protest to the DOE’s request to dismiss their case by the final deadline May 18 and ACA International will continue to follow this developing story.

The DOE’s reply to the motions is due by Wednesday, May 23, followed by an ultimate decision in the case from U.S. Court of Federal Claims Judge Thomas C. Wheeler.

Related content from ACA International:

Education Department Cancels Debt Collection Contracts with Two Firms


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Student Loan Servicers Continue Opposition to U.S. Department of Education’s Contract Decisions

The U.S. Department of Education (DOE) is seeking to dismiss a U.S. Court of Federal Claims case protesting its contract awards for Performant Recovery Inc. and Windham Professionals Inc., now that it canceled those contracts effective May 7.

The plaintiffs in the case, FMS Investment Corp., et. al., had a Friday, May 18 deadline to oppose the DOE’s motion to dismiss.

Several plaintiffs, including FMS Investment Corp., GC Services Limited Partnership, Value Recovery Holding LLC, Continental Service Group Inc., Account Control Technology Inc., already announced their intent to oppose the motion with an official filing. At press time May 18, three companies filed opposition to the DOE’s motion to dismiss and ACA International expects approximately 23 more companies to do the same.

The original lawsuit from FMS Investment Corp. et. al., initiated in February 2018, contests the DOE’s decision to award contracts to Performant Recovery and Windham Professionals and not FMS, according to the motion to dismiss from the DOE.

Nineteen additional plaintiffs filed similar complaints as part of the FMS Investment Corp. lawsuit.

Then, also in February 2018, the U.S. Court of Federal Claims issued a preliminary injunction barring the DOE from recalling accounts held by five of the plaintiffs as part of contract extensions dating back to 2015.

Ultimately, the DOE is seeking the court’s dismissal of the plaintiffs’ complaint because it has canceled the contract awards to Performant and Windham.

The DOE also requests the court lift the February preliminary injunction predicated on the complaints from the plaintiffs, according to the motion to dismiss.

“This protest should be dismissed for lack of subject matter jurisdiction because ED’s decision to cancel the solicitation and terminate the awards renders the consolidated plaintiffs’ protests of that award decision moot,” it states.

More parties are expected to file motions in protest to the DOE’s request to dismiss their case by the final deadline May 18 and ACA International will continue to follow this developing story.

The DOE’s reply to the motions is due by Wednesday, May 23, followed by an ultimate decision in the case from U.S. Court of Federal Claims Judge Thomas C. Wheeler.

Related content from ACA International:

Education Department Cancels Debt Collection Contracts with Two Firms


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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