HUD awarded P.K. Management Group $53M for residential property management in Florida over 6 years

Contract Overview

Contract Amount: $52,989,242 ($53.0M)

Contractor: P.K. Management Group, Inc.

Awarding Agency: Department of Housing and Urban Development

Start Date: 2010-06-01

End Date: 2016-09-30

Contract Duration: 2,313 days

Daily Burn Rate: $22.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FIELD SERVICE MANAGER (FSM) M&M III-CONTRACT AREA 2A-4

Place of Performance

Location: CORAL GABLES, MIAMI-DADE County, FLORIDA, 33145

State: Florida Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $53.0 million to P.K. MANAGEMENT GROUP, INC. for work described as: FIELD SERVICE MANAGER (FSM) M&M III-CONTRACT AREA 2A-4 Key points: 1. The contract utilized a firm-fixed-price structure, which can help control costs by shifting risk to the contractor. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The contract duration of over six years indicates a long-term need for these property management services. 4. The contract was awarded to a single entity, P.K. Management Group, Inc. 5. The North American Industry Classification System (NAICS) code 531311 points to a specialized service area. 6. The contract was a definitive contract, often used for complex or long-term requirements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of services and the properties managed. The total award amount of $53 million over approximately six years averages to about $8.8 million per year. This figure needs to be compared against the number and type of properties managed, as well as the specific services provided (e.g., maintenance, tenant relations, financial management). Without comparable contract data for similar-sized portfolios in Florida, a precise value-for-money assessment is difficult. However, the firm-fixed-price nature suggests an attempt to establish a predictable cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the agency solicited bids from all responsible sources. The presence of 19 bidders suggests a competitive marketplace for residential property management services. A high number of bidders generally leads to better price discovery and potentially lower costs for the government, as contractors vie for the award. The agency's decision to use full and open competition implies confidence in the availability of multiple qualified vendors.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensured that the government received proposals from a wide range of providers, driving down costs through market forces.

Public Impact

Residents of HUD-managed properties in Florida benefit from the services provided, ensuring housing stability and maintenance. The contract supports the Department of Housing and Urban Development's mission to manage and maintain its housing portfolio. The geographic impact is concentrated in Florida, specifically within the designated contract areas. The contract likely supports a workforce involved in property management, maintenance, and administrative tasks within Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of over six years may limit flexibility to adapt to changing market conditions or service needs.
Reliance on a single contractor for a large portfolio could pose risks if the contractor's performance declines or if they face financial difficulties.

Positive Signals

Firm-fixed-price contract provides cost certainty for the agency.
Full and open competition with 19 bidders suggests a healthy market and competitive pricing.
The contract was awarded to P.K. Management Group, Inc., a specific entity responsible for service delivery.

Sector Analysis

The residential property management sector is a critical component of the real estate and services industry. This contract falls under the broader category of real estate services, specifically focusing on the management of residential properties, likely those owned or overseen by HUD. The market for property management services is substantial, driven by the need for professional oversight of rental properties, maintenance, tenant relations, and compliance. Comparable spending benchmarks would typically involve analyzing the cost per unit managed or the percentage of rental income allocated to management fees across similar portfolios.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no explicit small business subcontracting requirements were mandated. The award to P.K. Management Group, Inc., a single entity, does not provide immediate insight into their utilization of small business subcontractors. Without specific subcontracting plans or reporting, the direct impact on the small business ecosystem is unclear. However, large contracts like this can sometimes create opportunities for small businesses as lower-tier suppliers or service providers, depending on the prime contractor's strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). As a definitive contract awarded under full and open competition, it is subject to standard federal procurement regulations and oversight. Accountability measures would include performance reviews, adherence to contract terms, and financial reporting. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

HUD Public Housing Programs
HUD Multifamily Housing Programs
Federal Housing Administration (FHA) Single Family Programs
Government National Mortgage Association (Ginnie Mae)

Risk Flags

Long contract duration
Single awardee for a large scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $53.0 million to P.K. MANAGEMENT GROUP, INC.. FIELD SERVICE MANAGER (FSM) M&M III-CONTRACT AREA 2A-4

Who is the contractor on this award?

The obligated recipient is P.K. MANAGEMENT GROUP, 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 $53.0 million.

What is the period of performance?

Start: 2010-06-01. End: 2016-09-30.

What specific property management services were included in this $53 million contract?

The provided data does not detail the specific services rendered under the "FIELD SERVICE MANAGER (FSM) M&M III-CONTRACT AREA 2A-4" contract. However, based on the NAICS code 531311 (Residential Property Managers), typical services would likely encompass tenant relations, rent collection, property maintenance and repairs, lease administration, financial reporting, and ensuring compliance with housing regulations. The "M&M III" designation might refer to a specific program or initiative within HUD related to management and maintenance, potentially involving a portfolio of properties acquired through foreclosure or other means. A comprehensive understanding would require reviewing the contract's statement of work.

How does the average annual cost of approximately $8.8 million compare to industry benchmarks for managing a similar portfolio?

Determining if the average annual cost of $8.8 million is competitive requires a detailed comparison against industry benchmarks for managing a similar portfolio of residential properties in Florida. Key factors influencing this benchmark include the number of units, type of properties (e.g., single-family homes, apartment complexes), geographic density, and the scope of services (e.g., routine maintenance vs. extensive renovations). Property management fees typically range from 8% to 12% of collected rent for private sector properties. Without knowing the total rental income or the number of units managed under this HUD contract, a direct comparison is speculative. However, the firm-fixed-price nature suggests HUD aimed for predictable costs, and the competitive bidding process implies they sought value.

What is the track record of P.K. Management Group, Inc. with federal contracts, particularly with HUD?

Publicly available data indicates that P.K. Management Group, Inc. has been awarded federal contracts, including this significant definitive contract with the Department of Housing and Urban Development (HUD) valued at approximately $53 million. Further investigation into their contract history, including performance ratings on past federal awards, any past performance issues or awards, and their experience with similar government housing programs, would be necessary for a complete assessment. Examining their financial stability and capacity to manage large-scale federal contracts is also crucial. Information on their specific role and performance on this particular HUD contract would provide the most direct insight into their track record.

What were the primary risks identified for this contract, and how were they mitigated?

The provided data does not explicitly list the risks identified for this contract. However, common risks associated with large, long-term property management contracts include contractor performance issues (e.g., inadequate maintenance, poor tenant relations), financial instability of the contractor, changes in property portfolio size or condition, and potential cost overruns if the contract type is not strictly fixed-price. Mitigation strategies likely involved a robust selection process during the full and open competition, clear performance standards and metrics outlined in the contract, regular oversight and reporting by HUD, and potentially performance bonds. The firm-fixed-price structure itself serves as a risk mitigation tool by capping the government's financial exposure.

How has HUD's spending on residential property management services evolved over time, and does this contract represent a significant shift?

Analyzing HUD's spending evolution on residential property management requires access to historical spending data across multiple fiscal years and contract vehicles. This specific contract, awarded in 2010 and ending in 2016, represents a significant single award for property management services in Florida. To understand broader trends, one would need to examine aggregate spending on NAICS code 531311 or similar codes, as well as specific HUD program spending related to property disposition and management. Factors like changes in housing market conditions, federal budget allocations, and shifts in HUD's portfolio size (e.g., due to foreclosures or new initiatives) would influence overall spending patterns. This contract's value suggests a substantial, ongoing need for these services during its period of performance.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Activities Related to Real Estate › Residential Property Managers

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2100 CORAL WAY STE 603, MIAMI, FL, 33145

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,989,242

Exercised Options: $52,989,242

Current Obligation: $52,989,242

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline