HUD's $88.8M lease for residential buildings in Georgia shows long-term commitment with limited competition

Contract Overview

Contract Amount: $88,795,835 ($88.8M)

Contractor: Best Assets-City West Joint VE

Awarding Agency: Department of Housing and Urban Development

Start Date: 2000-05-15

End Date: 2005-02-28

Contract Duration: 1,750 days

Daily Burn Rate: $50.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 21

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: LITHIA SPRINGS, DOUGLAS County, GEORGIA, 30122

State: Georgia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $88.8 million to BEST ASSETS-CITY WEST JOINT VE for work described as: Key points: 1. The contract's duration of 1750 days suggests a significant, ongoing need for the leased properties. 2. The fixed-price contract type offers cost certainty for the government, but limits flexibility. 3. The absence of a small business set-aside indicates potential missed opportunities for smaller enterprises. 4. The contract's value of $88.8 million warrants scrutiny regarding its efficiency and market alignment. 5. The limited competition aspect raises questions about potential price inflation and value for taxpayer money. 6. The specific nature of leasing residential buildings points to a need for housing services, likely for a specific population.

Value Assessment

Rating: fair

The total contract value of $88.8 million over approximately 4.8 years averages to about $18.5 million annually. Without specific details on the number of units or services provided, direct comparison to similar contracts is challenging. However, the significant expenditure suggests a substantial need. The fixed-price nature provides budget predictability, but the lack of competitive bidding could mean the government is not achieving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. This means that only one vendor was considered or approached for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they often lead to higher prices and reduced innovation compared to full and open competition. The lack of multiple bidders limits the government's ability to leverage market forces for better terms.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without a bidding process, there is less assurance that the price reflects the true market value for the leased residential buildings.

Public Impact

The primary beneficiaries are likely individuals or families requiring residential housing facilitated by the Department of Housing and Urban Development. The services delivered involve the leasing of residential buildings, providing essential shelter. The geographic impact is concentrated in Georgia (ST: GA, SN: GEORGIA), serving the housing needs within that state. Workforce implications are minimal for the government, but the contractor will employ staff for property management and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source award raises concerns about the necessity and justification for not seeking competitive bids.
The long duration of the contract could lock the government into a potentially suboptimal arrangement if market conditions change.

Positive Signals

The fixed-price contract provides cost certainty for the duration of the award.
The contract addresses a clear need for residential housing, indicating a direct public service delivery.
The award to 'BEST ASSETS-CITY WEST JOINT VE' suggests a specific entity was identified as capable of meeting the requirement.

Sector Analysis

The contract falls within the real estate and property management sector, specifically focusing on residential leasing. The North American Industry Classification System (NAICS) code 531110, 'Lessors of Residential Buildings and Dwellings,' confirms this. The federal government, through agencies like HUD, often leases properties to fulfill various mission requirements, including housing assistance, temporary accommodations, or office space. The total value of $88.8 million over nearly five years is substantial for a single leasing contract, highlighting the significant role of real estate acquisition in government operations.

Small Business Impact

The contract details indicate that this was not a small business set-aside (ss: false, sb: false). This means that small businesses were not specifically targeted or prioritized for this award. Consequently, there are no explicit subcontracting requirements for small businesses mandated by this contract. The absence of a set-aside suggests that the procurement was either not suitable for small business participation or that opportunities for small businesses to bid were not pursued.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). As a sole-source award, the justification for the procurement and the reasonableness of the price would be key areas of scrutiny. Transparency is limited due to the non-competitive nature. While specific Inspector General (IG) jurisdiction isn't detailed, HUD's Office of Inspector General typically oversees agency spending and contract compliance to ensure accountability and prevent fraud, waste, and abuse.

Related Government Programs

Public Housing Programs
Housing Choice Vouchers Program
Federal Real Property Management
Government Lease Agreements

Risk Flags

Sole-source award raises concerns about competition and potential overpayment.
Lack of transparency regarding the justification for non-competitive award.
Potential for vendor lock-in due to long contract duration and single source.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $88.8 million to BEST ASSETS-CITY WEST JOINT VE. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is BEST ASSETS-CITY WEST JOINT VE.

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 $88.8 million.

What is the period of performance?

Start: 2000-05-15. End: 2005-02-28.

What specific services or properties are included under this $88.8 million lease agreement?

The provided data indicates the contract is for 'Lessors of Residential Buildings and Dwellings' (NAICS 531110) awarded to 'BEST ASSETS-CITY WEST JOINT VE' by the Department of Housing and Urban Development (HUD). The contract value is $88,795,835, with a duration of 1750 days (approximately 4.8 years), spanning from May 15, 2000, to February 28, 2005. While the exact number of units or specific locations within Georgia are not detailed, the nature of the contract implies HUD is leasing residential properties. These properties could be used for various purposes, such as providing housing assistance to low-income families, temporary shelter for displaced individuals, or potentially housing for specific government personnel. The fixed-price nature suggests a defined scope of services and rental payments.

Why was this contract awarded on a sole-source basis, and what are the implications for cost-effectiveness?

The contract was designated as 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source award. The specific justification for this determination is not provided in the summary data. Sole-source awards are typically made when only one responsible source can satisfy the agency's needs, often due to unique capabilities, proprietary technology, or urgent and compelling circumstances. However, the lack of competition generally leads to higher prices as the government cannot leverage market forces to negotiate the best possible deal. For taxpayers, this means a higher likelihood of paying a premium compared to a competitively procured contract, as the selected vendor faces no direct pressure from rivals to offer lower pricing or better value.

How does the $88.8 million expenditure compare to typical federal spending on residential leasing?

Comparing the $88.8 million expenditure requires context regarding the scale and duration. Over approximately 4.8 years, this amounts to an average annual spending of roughly $18.5 million. Federal agencies, particularly HUD, do engage in significant real estate leasing to support their missions. However, without knowing the number of units, geographic scope beyond 'Georgia,' and the specific services included (e.g., property management, utilities), a direct benchmark is difficult. Generally, large-scale residential leasing contracts can run into tens or hundreds of millions of dollars, especially if they involve acquiring or managing a substantial portfolio of properties for housing programs. The sole-source nature, however, makes it harder to assess if this amount represents good value compared to what could have been achieved through competition.

What are the potential risks associated with a long-term, sole-source lease agreement for residential buildings?

A primary risk is financial inefficiency; the government might be overpaying due to the lack of competitive bidding, especially if market rental rates decrease over the contract's 4.8-year term. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially limiting its ability to adapt to changing needs or explore more cost-effective alternatives. Performance risk exists as well; while the contract is fixed-price, the quality of maintenance and services provided by 'BEST ASSETS-CITY WEST JOINT VE' could degrade over time without competitive pressure. Furthermore, the justification for the sole-source award itself could be questioned, potentially indicating a failure in procurement processes or a lack of due diligence in exploring competitive options.

What is the track record of 'BEST ASSETS-CITY WEST JOINT VE' in federal contracting, particularly with HUD?

The provided data identifies 'BEST ASSETS-CITY WEST JOINT VE' as the contractor for this $88.8 million HUD lease. However, the summary data does not include information on the contractor's past performance, previous contracts, or overall track record with HUD or other federal agencies. To assess their reliability and experience, further investigation into federal procurement databases (like SAM.gov or FPDS) would be necessary to review their contract history, performance evaluations, and any potential issues or disputes encountered on prior awards. Without this information, it's impossible to evaluate their established credibility.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Lessors of Real Estate › Lessors of Residential Buildings and Dwellings

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 21

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 3836 PURDY DR, LITHIA SPRINGS, GA, 06

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $176,081,293

Exercised Options: $176,081,293

Current Obligation: $88,795,835

Timeline