HUD awards $72.1M to Selene Finance LP for Ginnie Mae MBS support, a non-competed contract

Contract Overview

Contract Amount: $72,116,850 ($72.1M)

Contractor: Selene Finance LP

Awarding Agency: Department of Housing and Urban Development

Start Date: 2019-08-12

End Date: 2023-08-11

Contract Duration: 1,460 days

Daily Burn Rate: $49.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SINGLE FAMILY MASTER SUBSERVICER SERVICES (SF MSS) IN SUPPORT OF GINNIE MAE'S MORTGAGE-BACKED SECURITIES (MBS) PROGRAMS.

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77042

State: Texas Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $72.1 million to SELENE FINANCE LP for work described as: SINGLE FAMILY MASTER SUBSERVICER SERVICES (SF MSS) IN SUPPORT OF GINNIE MAE'S MORTGAGE-BACKED SECURITIES (MBS) PROGRAMS. Key points: 1. Contract awarded to Selene Finance LP for single-family master sub-servicer services. 2. Supports Ginnie Mae's Mortgage-Backed Securities (MBS) programs. 3. Contract value is $72,116,850.10 over its duration. 4. Awarded by the Department of Housing and Urban Development. 5. Contract type is Time and Materials.

Value Assessment

Rating: questionable

The Time and Materials contract type for a service valued at over $72 million raises concerns about cost control. Without a ceiling or fixed price, the final cost could significantly exceed the current estimate, especially over a four-year period. Benchmarking against similar master sub-servicer contracts is difficult without more detailed service scope and performance data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition award. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers. The rationale for not competing this significant service contract needs further justification.

Taxpayer Impact: The absence of competition may result in a higher cost to taxpayers than if the services were procured through a competitive bidding process.

Public Impact

Ensures continuity of critical financial services for Ginnie Mae's MBS programs. Supports the housing finance market by facilitating mortgage-backed securities. Potential for increased costs due to non-competitive award and T&M contract type. Lack of transparency in the procurement process could erode public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award
Time and Materials contract type
Lack of clear performance metrics for cost justification

Positive Signals

Supports critical Ginnie Mae MBS programs
Ensures market stability in housing finance

Sector Analysis

This contract falls under the Investment Banking and Securities Dealing sector, specifically supporting mortgage-backed securities programs. Federal spending in this area is crucial for housing finance but requires careful oversight to ensure fair pricing and competition.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on a large, specialized service provider.

Oversight & Accountability

The non-competitive nature of this award warrants close oversight to ensure the government is receiving fair value. Transparency regarding the justification for sole-sourcing and the monitoring of T&M expenditures is essential.

Related Government Programs

Investment Banking and Securities Dealing
Department of Housing and Urban Development Contracting
Department of Housing and Urban Development Programs

Risk Flags

Lack of competition
Time and Materials contract type with no ceiling
Potential for cost overruns
Limited transparency in procurement
No clear performance-based cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $72.1 million to SELENE FINANCE LP. SINGLE FAMILY MASTER SUBSERVICER SERVICES (SF MSS) IN SUPPORT OF GINNIE MAE'S MORTGAGE-BACKED SECURITIES (MBS) PROGRAMS.

Who is the contractor on this award?

The obligated recipient is SELENE FINANCE LP.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $72.1 million.

What is the period of performance?

Start: 2019-08-12. End: 2023-08-11.

What is the justification for awarding this contract on a sole-source basis instead of through a competitive process?

The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, urgent needs, or specific program requirements. However, without further documentation, it is difficult to assess the validity of this determination and its impact on potential cost savings.

How are costs being controlled under the Time and Materials contract to prevent overruns?

Time and Materials (T&M) contracts, by their nature, have less inherent cost control than fixed-price contracts. Cost control relies heavily on robust government oversight, including detailed monitoring of labor hours, labor categories, material costs, and the application of indirect rates. Establishing a contract ceiling and requiring regular reporting and justification for expenditures are critical. The effectiveness of cost control depends on the diligence of the contracting officer and the contractor's adherence to agreed-upon terms.

What is the expected impact on Ginnie Mae's MBS program efficiency and taxpayer cost given the contract's terms?

The impact on efficiency and taxpayer cost is uncertain due to the sole-source, T&M nature of the contract. While continuity of service is ensured, the lack of competition and the T&M structure create a risk of inflated costs compared to a competitive, fixed-price scenario. The efficiency gains, if any, would need to be substantial to offset potential cost increases. Without performance metrics tied to cost, it's difficult to definitively assess the value proposition for taxpayers.

Industry Classification

NAICS: Finance and Insurance › Securities and Commodity Contracts Intermediation and Brokerage › Investment Banking and Securities Dealing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 9990 RICHMOND AVE SUITE 400 SOUTH, HOUSTON, TX, 77042

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,116,850

Exercised Options: $72,116,850

Current Obligation: $72,116,850

Actual Outlays: $5,707,021

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline