HUD's HECM Services Contract Awarded to OptumServe for $33M, Full and Open Competition
Contract Overview
Contract Amount: $32,985,331 ($33.0M)
Contractor: Optumserve Technology Services, Inc.
Awarding Agency: Department of Housing and Urban Development
Start Date: 2009-09-30
End Date: 2014-09-29
Contract Duration: 1,825 days
Daily Burn Rate: $18.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: HOME EQUITY CONVERSION MORTGAGE SERVICE (HECM) PROVIDER SERVICES
Place of Performance
Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20878, UNITED STATES OF AMERICA
State: Maryland Government Spending
Plain-Language Summary
Department of Housing and Urban Development obligated $33.0 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: HOME EQUITY CONVERSION MORTGAGE SERVICE (HECM) PROVIDER SERVICES Key points: 1. Contract Value: $32.99 million over 5 years. 2. Competition: Awarded under full and open competition. 3. Risk: Firm Fixed Price contract type mitigates cost overrun risk. 4. Sector: Primarily IT services (NAICS 541519).
Value Assessment
Rating: good
The contract value of $32.99 million over five years suggests a reasonable annual spend of approximately $6.6 million. Benchmarking against similar IT service contracts of this scale would be necessary for a definitive assessment, but the fixed-price nature provides cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors have the opportunity to bid.
Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring the government receives the best value and price for services rendered.
Public Impact
Ensures continued operation of the Home Equity Conversion Mortgage (HECM) program. Supports homeowners seeking reverse mortgages. Maintains critical financial services infrastructure for seniors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- No small business participation noted.
Positive Signals
- Firm Fixed Price contract.
- Full and open competition awarded.
Sector Analysis
This contract falls under IT services, specifically 'Other Computer Related Services'. The annual spend of $6.6 million is moderate for a federal IT service contract of this duration and scope.
Small Business Impact
The data indicates that small businesses were not awarded this contract, nor is there an indication of subcontracting to small businesses. Further analysis would be needed to determine if opportunities were missed.
Oversight & Accountability
The Department of Housing and Urban Development (HUD) is responsible for oversight. The contract's duration and fixed-price nature suggest a degree of established oversight mechanisms.
Related Government Programs
- Other Computer Related Services
- Department of Housing and Urban Development Contracting
- Department of Housing and Urban Development Programs
Risk Flags
- No small business participation.
- Potential for price uncompetitiveness over contract duration.
- Scope inflexibility if program needs evolve significantly.
Tags
other-computer-related-services, department-of-housing-and-urban-developm, md, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Housing and Urban Development awarded $33.0 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. HOME EQUITY CONVERSION MORTGAGE SERVICE (HECM) PROVIDER SERVICES
Who is the contractor on this award?
The obligated recipient is OPTUMSERVE TECHNOLOGY SERVICES, INC..
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 $33.0 million.
What is the period of performance?
Start: 2009-09-30. End: 2014-09-29.
What is the specific scope of 'HECM Provider Services' and how does it align with HUD's mission?
HECM Provider Services likely encompass the administrative, servicing, and operational functions required to manage the Home Equity Conversion Mortgage program. This includes tasks such as loan origination support, ongoing servicing, default management, and customer support for homeowners utilizing reverse mortgages. This directly aligns with HUD's mission to create strong, sustainable communities and quality, affordable homes for all Americans, particularly seniors.
What are the potential risks associated with a 5-year fixed-price contract for IT services in the HECM program?
A primary risk is that the fixed price may become uncompetitive if market rates for IT services increase significantly over the five-year term, potentially leading to vendor dissatisfaction or reduced service quality if costs escalate unexpectedly. Conversely, if technology or program needs change drastically, the fixed scope might not adapt efficiently, requiring costly modifications or new contracts.
How effectively does the 'full and open competition' method ensure optimal value for taxpayer dollars in this specific HECM service contract?
Full and open competition is designed to maximize value by allowing all qualified vendors to bid, fostering a competitive environment that drives down prices and encourages innovation. For this HECM contract, it suggests that multiple vendors were capable of providing the required services, and the chosen vendor, OptumServe, offered the best value proposition based on the bidding process. This method generally leads to better taxpayer outcomes compared to sole-source or limited competition.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Unitedhealth Group Incorporated (UEI: 112871561)
Address: 9801 WASHINGTONIAN BLVD STE-210, GAITHERSBURG, MD, 20878
Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,985,331
Exercised Options: $32,985,331
Current Obligation: $32,985,331
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2009-09-30
Current End Date: 2014-09-29
Potential End Date: 2015-09-19 00:00:00
Last Modified: 2015-09-19
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