HUD Spends $195M on Pool Processing Agent Services with Bank of New York Mellon, Sole-Source Contract
Contract Overview
Contract Amount: $194,819,571 ($194.8M)
Contractor: Bank of NEW York Mellon (THE)
Awarding Agency: Department of Housing and Urban Development
Start Date: 2015-01-01
End Date: 2025-03-27
Contract Duration: 3,738 days
Daily Burn Rate: $52.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: POOL PROCESSING AGENT SERVICES IGF::OT::IGF
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10007
State: New York Government Spending
Plain-Language Summary
Department of Housing and Urban Development obligated $194.8 million to BANK OF NEW YORK MELLON (THE) for work described as: POOL PROCESSING AGENT SERVICES IGF::OT::IGF Key points: 1. Significant spending on essential financial transaction processing. 2. Sole-source award raises questions about price discovery and competition. 3. Long contract duration (10 years) may limit flexibility. 4. Sector is financial services, critical for agency operations.
Value Assessment
Rating: questionable
The contract value of $195M over 10 years is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar financial transaction processing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on a nearly $200M contract likely results in a higher cost to taxpayers than a competitively awarded contract would.
Public Impact
Taxpayers may be overpaying for essential financial services due to lack of competition. HUD's reliance on a single provider for critical financial operations could pose a risk if service is disrupted. The long-term nature of the contract locks in the current provider, potentially missing out on innovative solutions or better pricing from competitors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Essential service provided
- Established provider
Sector Analysis
The financial services sector, particularly for government agencies, involves critical infrastructure for managing funds and transactions. Spending benchmarks for such services can vary widely based on scope and provider, but competitive bidding is standard practice to ensure value.
Small Business Impact
This contract does not appear to involve small businesses, as it is a sole-source award to a large financial institution. There is no indication of subcontracting opportunities for small businesses.
Oversight & Accountability
The sole-source nature of this contract warrants scrutiny from oversight bodies to ensure the government is receiving fair value and that the justification for not competing the award is sound.
Related Government Programs
- Financial Transactions Processing, Reserve, and Clearinghouse Activities
- Department of Housing and Urban Development Contracting
- Department of Housing and Urban Development Programs
Risk Flags
- Sole-source award
- Lack of competition
- Long contract duration
- Potential for overpayment
- Limited oversight on pricing justification
Tags
financial-transactions-processing-reserv, department-of-housing-and-urban-developm, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Housing and Urban Development awarded $194.8 million to BANK OF NEW YORK MELLON (THE). POOL PROCESSING AGENT SERVICES IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is BANK OF NEW YORK MELLON (THE).
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 $194.8 million.
What is the period of performance?
Start: 2015-01-01. End: 2025-03-27.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available alternatives. Without further details, it's impossible to definitively assess the validity of this justification. However, for a contract of this magnitude and duration, a thorough review by oversight agencies is crucial to ensure taxpayer funds are used efficiently and effectively.
How does the pricing compare to industry benchmarks for similar financial transaction processing services?
Without competitive bids, directly comparing pricing to industry benchmarks is challenging. The Bank of New York Mellon is a major financial institution, and their pricing may reflect their scale and established infrastructure. However, the absence of competition means there's no direct market validation of whether this price represents the best value achievable for the government.
What are the risks associated with a 10-year sole-source contract for critical financial services?
The primary risks include potential overpayment due to lack of competitive pressure, reduced incentive for the contractor to innovate or improve services, and vulnerability if the contractor faces financial instability or operational issues. A long-term sole-source agreement also limits the government's ability to adapt to changing technological landscapes or market conditions.
Industry Classification
NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Financial Transactions Processing, Reserve, and Clearinghouse Activities
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: DU100G-14-R-0008
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 101 BARCLAY ST FRNT A, NEW YORK, NY, 10007
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $243,422,938
Exercised Options: $195,547,571
Current Obligation: $194,819,571
Actual Outlays: $34,426
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $3,477,768
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2015-01-01
Current End Date: 2025-03-27
Potential End Date: 2025-03-28 00:00:00
Last Modified: 2025-03-27
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