HUD's single-family REO management contract awarded to Southwest Alliance of Asset Managers D6 LLC for $99.9M over 6 years
Contract Overview
Contract Amount: $99,898,362 ($99.9M)
Contractor: Southwest Alliance of Asset Managers D6 LLC
Awarding Agency: Department of Housing and Urban Development
Start Date: 2004-08-01
End Date: 2010-04-30
Contract Duration: 2,098 days
Daily Burn Rate: $47.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 11
Pricing Type: COMBINATION (TWO OR MORE)
Sector: Other
Official Description: SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT)
Place of Performance
Location: AUSTIN, TRAVIS County, TEXAS, 78731
State: Texas Government Spending
Plain-Language Summary
Department of Housing and Urban Development obligated $99.9 million to SOUTHWEST ALLIANCE OF ASSET MANAGERS D6 LLC for work described as: SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT) Key points: 1. The contract value of $99.9 million over approximately six years represents a significant investment in managing foreclosed properties. 2. The procurement method, 'Full and Open Competition After Exclusion of Sources,' suggests a competitive process but warrants scrutiny regarding the exclusion criteria. 3. The contract duration of 2098 days (approx. 5.7 years) is substantial, indicating a long-term need for these services. 4. The base contract award amount of $47,616 appears to be a placeholder or initial award, with the total obligated amount significantly higher. 5. The contract's focus on REO management and marketing is critical for stabilizing housing markets and minimizing losses from foreclosures. 6. The geographic scope, Texas, highlights a regional focus for this particular award within HUD's broader asset management strategy.
Value Assessment
Rating: fair
Benchmarking the value-for-money for this specific contract is challenging without detailed service delivery metrics and comparable contract data. The total award of $99.9 million over nearly six years suggests an average annual spend of approximately $17.5 million. This figure needs to be assessed against the volume and complexity of REO properties managed and the success rate in marketing and selling them. Without specific performance data or comparisons to similar HUD contracts or private sector REO management costs, it's difficult to definitively assess if this represents excellent or questionable value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, certain sources were excluded based on specific criteria. The number of bidders (11) suggests a moderate level of interest, but the exclusion of some potential bidders could limit the breadth of competition and potentially impact price discovery. Further details on the justification for excluding sources would be necessary to fully assess the competitive landscape.
Taxpayer Impact: The level of competition, while not fully open, likely resulted in a reasonably competitive price. However, the exclusion of certain sources means taxpayers may not have benefited from the absolute lowest possible price that a truly unrestricted competition might have yielded.
Public Impact
Homeowners in Texas facing foreclosure may indirectly benefit from efficient property management, potentially mitigating further market instability. The services delivered include the management and marketing of single-family Real Estate Owned (REO) properties, aiming to facilitate their sale. The geographic impact is concentrated in Texas, addressing HUD's needs for REO asset disposition within that state. The contract supports the real estate services workforce involved in property preservation, marketing, and sales.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The 'Exclusion of Sources' in the procurement process raises questions about the extent of competition and potential missed opportunities for cost savings.
- Lack of detailed performance metrics makes it difficult to assess the true value for money and effectiveness of the contractor's services.
- The significant contract value over a long duration necessitates robust oversight to ensure accountability and prevent potential cost overruns or inefficiencies.
Positive Signals
- The award to Southwest Alliance of Asset Managers D6 LLC indicates a selection based on perceived capability to manage and market REO properties.
- The contract's focus on REO management directly addresses a key function of HUD in managing distressed assets and stabilizing housing markets.
- The substantial number of bidders (11) suggests a healthy market for these types of services, even with some source exclusions.
Sector Analysis
The contract falls within the real estate services sector, specifically focusing on the management and disposition of foreclosed properties (REO). This is a critical niche within the broader real estate market, particularly relevant for government agencies like HUD that deal with distressed assets. The market for REO management services can be substantial, driven by economic cycles and foreclosure rates. Comparable spending benchmarks would typically involve analyzing the average cost per REO property managed or the percentage of sale price attributed to management fees across similar government or private sector contracts.
Small Business Impact
The provided data indicates that small business participation (sb) is false, meaning this contract was not set aside for small businesses. There is no explicit information on subcontracting plans or performance. This suggests that the primary focus was on securing the most capable large business or joint venture to handle the extensive REO management requirements, potentially limiting opportunities for small businesses within this specific contract's direct award.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). Specific oversight mechanisms would likely include regular performance reviews, financial audits, and adherence to contractual terms and conditions. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight and accountability measures are managed internally by HUD program officials. The Inspector General's office at HUD would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- HUD Single Family Housing Programs
- Government Owned/Concessionaire Managed Properties
- Real Estate Asset Disposal Services
- Foreclosure Prevention Programs
Risk Flags
- Procurement method involves exclusion of sources, potentially limiting competition.
- Lack of detailed performance metrics makes value assessment difficult.
- Long contract duration requires sustained oversight.
Tags
hud, real-estate, reo-management, asset-management, full-and-open-competition-after-exclusion-of-sources, texas, single-family-housing, contract-award, federal-spending, department-of-housing-and-urban-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Housing and Urban Development awarded $99.9 million to SOUTHWEST ALLIANCE OF ASSET MANAGERS D6 LLC. SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT)
Who is the contractor on this award?
The obligated recipient is SOUTHWEST ALLIANCE OF ASSET MANAGERS D6 LLC.
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 $99.9 million.
What is the period of performance?
Start: 2004-08-01. End: 2010-04-30.
What is the historical spending pattern for HUD's REO management and marketing contracts, and how does this award compare?
Analyzing historical spending for HUD's REO management contracts requires accessing detailed procurement data over multiple fiscal years. Generally, HUD's spending in this area fluctuates with economic conditions and foreclosure rates. Contracts for REO management are typically awarded through competitive processes, with values varying based on the volume of properties, geographic scope, and service requirements. This $99.9 million contract, awarded over approximately six years, represents a significant, long-term commitment. To compare, one would need to look at the total obligated amounts for similar REO contracts in preceding years, considering factors like the number of properties managed and the duration of those contracts. Without specific historical data points for comparison, it's challenging to definitively state if this award is higher or lower than average, but its substantial value suggests a considerable portfolio of REO assets being managed.
What specific services are included under this REO management and marketing contract, and what are the key performance indicators (KPIs)?
The contract primarily covers the management and marketing of single-family Real Estate Owned (REO) properties. This typically includes services such as property preservation (maintenance, repairs, securing the property), marketing and sales efforts (listing properties, managing showings, negotiating offers), and administrative tasks related to property disposition. Key Performance Indicators (KPIs) are crucial for assessing contractor performance but are not detailed in the provided summary. Common KPIs in such contracts might include the average time properties spend on the market, the ratio of sale price to list price, the number of bids received per property, property preservation compliance rates, and adherence to timelines for various tasks. Robust KPIs are essential for HUD to ensure efficient and cost-effective management of its REO portfolio.
What are the risks associated with a long-term contract for REO management, and how are they mitigated?
Long-term contracts for REO management carry several risks. Market fluctuations can impact property values and sales timelines, potentially affecting the contract's financial viability or HUD's return on investment. Contractor performance degradation over time is another risk, where initial efficiency might wane. There's also the risk of unforeseen property issues or escalating maintenance costs. Mitigation strategies typically include performance-based contract structures with clear KPIs and incentive/disincentive clauses, regular performance reviews by HUD, options for contract modification or termination for cause, and potentially periodic re-competition to ensure continued market competitiveness. Robust oversight and clear communication channels are vital for managing these risks effectively.
How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact cost-effectiveness for taxpayers?
The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific requirements. While 'full and open' suggests an intention to solicit widely, the 'exclusion of sources' implies that certain types of offerors or specific companies were deemed ineligible based on predefined criteria. This can impact cost-effectiveness in several ways. If the exclusion criteria were narrowly defined and justified, it might lead to a more specialized pool of bidders, potentially resulting in higher quality services but possibly at a higher price than a truly unrestricted competition. Conversely, if the exclusions were overly broad or poorly justified, it could limit the number of competitive bids, leading to less downward pressure on prices and potentially higher costs for taxpayers. The key is the justification and scope of the excluded sources.
What is the significance of the contract being awarded to Southwest Alliance of Asset Managers D6 LLC, and what is their track record?
The award to Southwest Alliance of Asset Managers D6 LLC signifies that, based on the evaluation criteria of the 'Full and Open Competition After Exclusion of Sources' procurement, this entity was deemed the most advantageous offeror. Information regarding their specific track record, past performance on similar HUD contracts, or experience in managing large REO portfolios is not provided in the summary data. A thorough assessment of their capabilities, financial stability, and previous performance metrics would be necessary to fully understand the significance of this award and to gauge the likelihood of successful contract execution. This information is typically available in more detailed contract files or past performance reviews.
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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: R-OPC-22505
Offers Received: 11
Pricing Type: COMBINATION (TWO OR MORE) (2)
Evaluated Preference: NONE
Contractor Details
Address: 7718 WOOD HOLLOW DR, AUSTIN, TX, 90
Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $99,898,362
Exercised Options: $99,898,362
Current Obligation: $99,898,362
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-08-01
Current End Date: 2010-04-30
Potential End Date: 2010-04-30 00:00:00
Last Modified: 2012-09-28
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