HUD's $116M REO Management Contract Awarded to Michaelson Connor & Boul Under Full and Open Competition

Contract Overview

Contract Amount: $116,040,092 ($116.0M)

Contractor: Michaelson Connor & Boul

Awarding Agency: Department of Housing and Urban Development

Start Date: 2004-08-01

End Date: 2010-01-31

Contract Duration: 2,009 days

Daily Burn Rate: $57.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: Other

Official Description: SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT)

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92649

State: California Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $116.0 million to MICHAELSON CONNOR & BOUL for work described as: SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration spans over five years, indicating a significant long-term commitment. 3. The contract's value of over $116 million suggests substantial services are being procured. 4. The procurement is for Real Estate Owned (REO) management and marketing, a critical function for housing agencies. 5. The award was made to a single contractor, Michaelson Connor & Boul. 6. The contract was awarded as a Definitive Contract, implying a fixed price or cost-reimbursement structure.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed service breakdowns and performance metrics. However, the total award of over $116 million over approximately five years indicates a significant investment in REO management. The absence of readily available comparable contract data makes a precise value-for-money assessment difficult. Further analysis would require understanding the scope of properties managed, the services provided (e.g., maintenance, marketing, sales), and the outcomes achieved (e.g., sale prices, time on market).

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of six bidders (no) suggests a reasonable level of competition for this type of specialized service. A competitive process is generally expected to drive down prices and ensure the government receives the best value. The specific number of bids received is a positive indicator of market interest and potential for price discovery.

Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by fostering a market-driven price for REO management services.

Public Impact

The primary beneficiaries are likely individuals and families seeking to purchase foreclosed or government-owned properties. The contract facilitates the management and marketing of Real Estate Owned (REO) properties, ensuring they are maintained and sold efficiently. The geographic impact is focused on California (sn: CALIFORNIA), where the properties are located. The contract supports the housing market by bringing distressed properties back into circulation through sales. The services provided likely involve property preservation, marketing, and sales support, contributing to the overall stability of the housing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the contractor's effectiveness and value for money.
The long contract duration could lead to complacency or reduced incentive for innovation if not managed proactively.
Limited public information on the specific services rendered and their outcomes hinders a comprehensive review.
The concentration of REO management in a single contractor might limit future competition if performance is not consistently high.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract addresses a critical need for managing and marketing distressed properties.
The contractor has been awarded a significant contract, suggesting a level of established capability.
The contract's duration implies a stable provider for essential housing services.

Sector Analysis

The Real Estate Owned (REO) management and marketing sector involves specialized services for handling properties acquired by lenders or government entities due to foreclosure. This contract falls within the broader real estate services industry, which is substantial. Comparable spending benchmarks are difficult to establish without more granular data on the specific services and property types. However, HUD's significant investment indicates the importance of efficient REO disposition for its programs.

Small Business Impact

There is no indication that this contract included small business set-asides (sb: false). Furthermore, the data does not specify any subcontracting requirements or goals for small businesses. This suggests that the primary contractor, Michaelson Connor & Boul, is expected to perform the majority of the work. The impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for specialized services not covered by the contract scope.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). Specific oversight mechanisms would typically include contract performance reviews, financial audits, and adherence to contractual terms and conditions. Transparency is moderate, with basic award information available, but detailed performance data and service breakdowns are less accessible. The Inspector General's office within HUD would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

HUD Single Family Mortgage Insurance Programs
FHA Homeownership Assistance
Government National Mortgage Association (Ginnie Mae)
Federal Housing Administration (FHA) REO Sales
Department of Veterans Affairs (VA) Home Loan Guaranty Program

Risk Flags

Potential for service degradation due to contractor scale
Risk of reduced competitive pressure over contract duration
Lack of detailed performance metrics for value assessment
Limited transparency on specific services and outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $116.0 million to MICHAELSON CONNOR & BOUL. SINGLE FAMILY REAL ESTATE OWNED (REO) MANAGEMENT AND MARKETING CONTRACTS (REPROCUREMENT)

Who is the contractor on this award?

The obligated recipient is MICHAELSON CONNOR & BOUL.

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 $116.0 million.

What is the period of performance?

Start: 2004-08-01. End: 2010-01-31.

What is the track record of Michaelson Connor & Boul in managing federal REO contracts?

Information regarding Michaelson Connor & Boul's specific track record with federal REO contracts prior to or during this award is not detailed in the provided data. However, being awarded a contract of this magnitude by HUD suggests they possess the necessary qualifications and experience to manage a significant portfolio of distressed properties. Further investigation into their past performance on similar contracts, client references, and any documented successes or failures would be necessary for a comprehensive assessment of their track record. Publicly available contract databases and agency performance reports could offer additional insights into their history with government contracts.

How does the value of this contract compare to similar REO management contracts awarded by HUD or other federal agencies?

Direct comparison of this $116 million contract to similar REO management contracts is challenging without specific details on the scope of services, number of properties managed, and geographic coverage. However, the total award value over approximately five years suggests a substantial operational scale. Federal agencies often procure REO management services through various contract vehicles, and values can fluctuate significantly based on market conditions, the volume of distressed properties, and the specific services required (e.g., preservation, marketing, legal, sales). To provide a robust comparison, one would need to identify contracts with similar property types (single-family residential), service requirements, and contract durations from agencies like the Federal Housing Finance Agency (FHFA) or the Department of Veterans Affairs (VA).

What are the key performance indicators (KPIs) used to measure the success of this REO management contract?

The provided data does not specify the key performance indicators (KPIs) used to measure the success of this REO management contract. Typically, for REO management, KPIs would include metrics such as the average time properties spend on the market before sale, the percentage of asking price achieved for sold properties, the cost per property for maintenance and preservation, the number of successful sales, and compliance with property standards. Effective oversight by HUD would involve regular monitoring of these or similar metrics to ensure the contractor is meeting its obligations and delivering value for money. Without these specific KPIs, a detailed assessment of performance is not possible.

What is the potential risk associated with a single contractor managing such a large portfolio of REO properties?

A significant risk associated with a single contractor managing a large REO portfolio is the potential for service degradation if the contractor becomes overextended or faces internal operational challenges. This could lead to delays in property sales, increased holding costs, and reduced property values. Another risk is the lack of competitive pressure once a contract is awarded, potentially leading to complacency. Furthermore, if the contractor fails or experiences significant financial distress, it could disrupt the entire REO management process, requiring a rapid and potentially costly transition to a new provider. Robust oversight and contingency planning by HUD are crucial to mitigate these risks.

How has HUD's spending on REO management contracts evolved over time, and does this contract represent a trend?

The provided data focuses on a single contract awarded in 2004 and ending in 2010. To understand HUD's evolving spending on REO management, a broader historical analysis of their procurement data would be necessary. This would involve examining spending patterns before, during, and after the period of this contract, considering factors like economic cycles, housing market conditions, and changes in federal housing policy. This specific contract, valued at over $116 million, indicates a substantial commitment to outsourcing REO management during its term. Whether it represents a trend would depend on the volume and value of similar contracts awarded by HUD in subsequent years.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Address: 5312 BOLSA AVE STE 200, HUNTINGTON BEACH, CA, 92649

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $116,040,093

Exercised Options: $116,040,093

Current Obligation: $116,040,092

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline