USDA awards $56.1M for property preservation and inspection services to Mortgage Contracting Services LLC

Contract Overview

Contract Amount: $56,142,570 ($56.1M)

Contractor: Mortgage Contracting Services LLC

Awarding Agency: Department of Agriculture

Start Date: 2018-09-01

End Date: 2020-08-10

Contract Duration: 709 days

Daily Burn Rate: $79.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: PROPERTY PRESERVATION AND INSPECTION SERVICES

Place of Performance

Location: LEWISVILLE, DENTON County, TEXAS, 75067

State: Texas Government Spending

Plain-Language Summary

Department of Agriculture obligated $56.1 million to MORTGAGE CONTRACTING SERVICES LLC for work described as: PROPERTY PRESERVATION AND INSPECTION SERVICES Key points: 1. The contract value of $56.1M over two years indicates significant demand for these services. 2. Mortgage Contracting Services LLC is the sole awardee, raising questions about competition. 3. The Time and Materials pricing structure presents a potential risk for cost overruns. 4. This spending falls within the broader financial services sector, specifically mortgage-related operations.

Value Assessment

Rating: fair

The contract was awarded using a Time and Materials (T&M) pricing model. While T&M can be flexible, it lacks the cost certainty of fixed-price contracts and requires diligent oversight to manage potential overruns, especially given the $56.1M value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple bids were considered. However, the single awardee implies that Mortgage Contracting Services LLC was the most advantageous offer, though the specific price discovery mechanisms are not detailed.

Taxpayer Impact: Taxpayer funds are being used for essential property maintenance and inspection, which is necessary to protect federal assets. The T&M pricing model necessitates careful monitoring to ensure efficient use of funds.

Public Impact

Ensures the upkeep and security of properties managed by the Rural Housing Service. Supports the agency's mission to maintain the value of its housing loan portfolio. Provides employment opportunities within the property management and inspection industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing model
Single awardee for a large contract

Positive Signals

Full and open competition utilized
Services are essential for asset protection

Sector Analysis

This contract falls under the financial services sector, specifically related to mortgage and loan servicing. Spending benchmarks for property preservation services can vary widely based on geographic location, property type, and service scope, but $56.1M over two years suggests a substantial program.

Small Business Impact

The provided data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The use of a Time and Materials contract for a significant value requires robust oversight from the Department of Agriculture to ensure that costs are reasonable and that services are performed efficiently and effectively, preventing potential waste.

Related Government Programs

Mortgage and Nonmortgage Loan Brokers
Department of Agriculture Contracting
Rural Housing Service Programs

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Lack of detail on specific performance metrics and oversight mechanisms.
Single awardee for a large contract may limit future competitive opportunities.
Dependence on contractor's efficiency for effective property preservation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $56.1 million to MORTGAGE CONTRACTING SERVICES LLC. PROPERTY PRESERVATION AND INSPECTION SERVICES

Who is the contractor on this award?

The obligated recipient is MORTGAGE CONTRACTING SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Rural Housing Service).

What is the total obligated amount?

The obligated amount is $56.1 million.

What is the period of performance?

Start: 2018-09-01. End: 2020-08-10.

What specific metrics are used to evaluate the performance and cost-effectiveness of Mortgage Contracting Services LLC under this T&M contract?

The effectiveness of this contract hinges on the agency's ability to implement strong performance metrics and cost controls. Key metrics should include timely inspection completion rates, quality of inspection reports, adherence to preservation standards, and variance analysis against estimated costs. Regular audits and performance reviews are crucial to ensure value for money and prevent cost overruns inherent in T&M contracts.

How does the agency ensure that the 'full and open competition' process resulted in the most cost-effective solution, given the T&M structure?

While 'full and open competition' indicates a broad solicitation, the T&M structure requires additional measures for cost-effectiveness. The agency likely evaluated proposals based on factors beyond just price, such as past performance, technical approach, and proposed labor rates. Post-award, continuous monitoring of labor hours, material costs, and task efficiency is vital to validate that the competitive process yielded the best value over the contract's duration.

What is the potential long-term impact on the Rural Housing Service's portfolio if property preservation services are not adequately managed under this contract?

Inadequate property preservation can lead to significant long-term financial losses for the Rural Housing Service. Deteriorated properties can lose value, increasing the risk of foreclosure losses and reducing the agency's ability to recoup loan investments. Furthermore, neglected properties can become safety hazards or attract vandalism, incurring additional costs for remediation and potentially impacting community blight.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Mortgage and Nonmortgage Loan Brokers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 350 NORTH HIGHLAND DR STE 100, LEWISVILLE, TX, 75067

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,909,106

Exercised Options: $56,759,213

Current Obligation: $56,142,570

Actual Outlays: $3,803,266

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS00F107GA

IDV Type: FSS

Timeline