HUD's $80M Mortgagee Compliance Manager contract awarded to Michaelsohn Connor & Boul for payroll services

Contract Overview

Contract Amount: $80,046,298 ($80.0M)

Contractor: Michaelson Connor & Boul

Awarding Agency: Department of Housing and Urban Development

Start Date: 2010-02-02

End Date: 2015-02-04

Contract Duration: 1,828 days

Daily Burn Rate: $43.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: M&MIII - MORTGAGEE COMPLIANCE MANAGER (MCM) CONTRACT

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92649

State: California Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $80.0 million to MICHAELSON CONNOR & BOUL for work described as: M&MIII - MORTGAGEE COMPLIANCE MANAGER (MCM) CONTRACT Key points: 1. The contract value of approximately $80 million over its duration suggests a significant need for specialized compliance management. 2. The fixed-price contract type aims to control costs, but the duration of the award warrants scrutiny for potential cost overruns. 3. The award was made under full and open competition, indicating a robust bidding process. 4. The contract's focus on payroll services within mortgage compliance highlights a critical but potentially niche area of government support. 5. The contract's performance period spans over five years, requiring sustained oversight to ensure continued value. 6. The relatively high number of bids (6) suggests a competitive market for these specialized services.

Value Assessment

Rating: good

The contract's total value of approximately $80 million over five years averages to about $16 million annually. Benchmarking this against similar government contracts for specialized compliance and payroll services is challenging without more specific data on the scope of services. However, the firm-fixed-price structure suggests an effort to contain costs. The number of bidders (6) indicates a healthy level of competition, which typically drives better pricing. Further analysis would require comparing the specific deliverables and service levels to industry standards and other government contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Six bids were received, indicating a competitive marketplace for these services. The open competition is a positive sign for price discovery, as it allows multiple vendors to vie for the contract, theoretically driving down costs and improving service quality. The level of competition suggests that the government was able to solicit a range of offers.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The presence of multiple bidders ensures that the government is not locked into a single provider, fostering a more cost-effective outcome.

Public Impact

The Department of Housing and Urban Development (HUD) benefits from this contract by ensuring compliance with mortgage regulations. The contract delivers essential payroll services, likely supporting the operational efficiency of HUD's mortgage compliance functions. The geographic impact is primarily national, given HUD's role in overseeing mortgage markets across the United States. Workforce implications include the employment of individuals with expertise in mortgage compliance, payroll processing, and government contracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the long contract duration and specialized nature of services.
Ensuring consistent service quality and performance over the five-year period.
Monitoring contractor performance to ensure adherence to all compliance and regulatory requirements.
The fixed-price nature might disincentivize innovation or proactive problem-solving if not carefully managed.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type helps control costs and provides budget certainty.
The contractor, Michaelsohn Connor & Boul, has a track record with government contracts.
The contract addresses a critical function for HUD's mortgage oversight responsibilities.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on administrative and support services related to financial compliance and payroll. The market for such services is competitive, with many firms offering specialized solutions. HUD's spending in this area is crucial for maintaining the integrity and efficiency of its mortgage insurance and housing programs. Comparable spending benchmarks would involve looking at other federal agencies that require similar compliance and administrative support functions, particularly those with large loan portfolios or regulatory oversight responsibilities.

Small Business Impact

There is no indication that this contract was set aside for small businesses, and the contractor, Michaelsohn Connor & Boul, is not listed as a small business. Therefore, the direct impact on small business set-asides is likely minimal. However, the prime contractor may engage small businesses for subcontracting opportunities, depending on the specific service requirements and their subcontracting plan. The overall impact on the small business ecosystem would depend on the extent of any subcontracting.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of Housing and Urban Development (HUD), likely through a contracting officer and program managers responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are typically built into the contract through performance standards, reporting requirements, and payment schedules. Transparency is generally maintained through federal procurement databases like FPDS-NG, which record contract awards and details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HUD Mortgagee Review Board
Federal Housing Administration (FHA) Programs
Government Payroll Services
Financial Compliance Auditing
Contractor Performance Management

Risk Flags

Contract Duration
Scope Definition
Performance Monitoring
Data Security

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $80.0 million to MICHAELSON CONNOR & BOUL. M&MIII - MORTGAGEE COMPLIANCE MANAGER (MCM) CONTRACT

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 $80.0 million.

What is the period of performance?

Start: 2010-02-02. End: 2015-02-04.

What is the specific scope of 'Mortgagee Compliance Manager' services provided under this contract?

The contract data indicates the North American Industry Classification System (NAICS) code 541214 for 'Payroll Services'. This suggests that the Mortgagee Compliance Manager (MCM) contract primarily involves the administration and processing of payroll for relevant personnel or entities within HUD's purview related to mortgage compliance. This could include managing payroll for staff involved in FHA loan reviews, default servicing, or other mortgage-related functions. The 'compliance manager' aspect implies that these payroll services are performed under strict regulatory and compliance frameworks specific to the mortgage industry, ensuring accuracy, timeliness, and adherence to all relevant labor laws and financial regulations. The contract likely encompasses tasks such as calculating wages, processing deductions, issuing payments, and maintaining payroll records, all while ensuring compliance with HUD's specific requirements for mortgagees.

How does the $80 million contract value compare to similar federal contracts for payroll and compliance services?

Benchmarking the $80 million contract value for 'Mortgagee Compliance Manager' services requires careful consideration of the specific scope and duration. The contract spans approximately five years (February 2010 to February 2015), making the average annual value around $16 million. While the NAICS code points to 'Payroll Services,' the 'Mortgagee Compliance Manager' title suggests a more specialized function that integrates payroll with regulatory compliance within the mortgage sector. Comparing this to general payroll service contracts might be misleading. However, for specialized government administrative and compliance support contracts of similar duration and complexity, an $80 million total value is substantial but not necessarily out of line, especially for a large agency like HUD. Without access to a detailed breakdown of services and deliverables, a precise comparison is difficult, but the value indicates a significant and ongoing requirement for these integrated services.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

While specific KPIs are not detailed in the provided data, typical performance indicators for a contract of this nature, focusing on payroll services and mortgage compliance, would likely include metrics related to accuracy, timeliness, and compliance. For payroll accuracy, this could involve the percentage of payroll runs processed without errors, the number of incorrect payments or deductions, and the timely resolution of any payroll discrepancies. For timeliness, KPIs might track the on-time delivery of payroll reports, the adherence to payroll processing schedules, and the promptness in remitting taxes and other withholdings. Compliance-related KPIs would focus on adherence to federal regulations (e.g., labor laws, tax laws), HUD-specific policies, and data security standards. The contractor's ability to maintain audit trails, provide timely and accurate compliance reports, and respond effectively to inquiries or issues would also be critical performance measures.

What is the track record of Michaelsohn Connor & Boul with federal contracts, particularly within HUD?

Michaelsohn Connor & Boul has a history of receiving federal contracts. Publicly available data indicates they have been awarded contracts by various federal agencies. To assess their specific track record with HUD and for similar services, a deeper dive into contract databases like the Federal Procurement Data System (FPDS) would be necessary. This would reveal the types of contracts they've held, their performance history on those contracts (if available), and their success rate in competitive bidding. For this particular $80 million MCM contract, its award under full and open competition with six bidders suggests that the agency found their proposal to be competitive and satisfactory. However, a comprehensive assessment would require reviewing past performance evaluations, any past performance issues or disputes, and their overall experience in managing large-scale, complex government contracts within the financial services or compliance sectors.

What are the potential risks associated with a five-year firm-fixed-price contract for payroll and compliance services?

A significant risk with a long-term, firm-fixed-price contract like this is the potential for the contractor to face unforeseen cost increases that erode their profit margin, potentially leading to performance issues or requests for contract modification. Conversely, if the contractor significantly underbid or if the scope of work expands without equitable adjustment, the government might not receive the full value. For payroll and compliance services, risks include data breaches or security failures, which could have severe financial and reputational consequences for HUD. Inaccurate payroll processing can lead to employee dissatisfaction and legal liabilities. Furthermore, changes in regulations or HUD policies during the contract term could necessitate costly adjustments by the contractor, potentially leading to disputes if not managed through proper change order processes. Ensuring the contractor maintains adequate staffing and expertise throughout the five years is also a consideration.

How does this contract contribute to HUD's overall mission and objectives?

This contract directly supports HUD's mission by ensuring the effective and compliant management of mortgage-related functions. By outsourcing payroll services for compliance-related personnel or functions, HUD can focus its internal resources on core policy development, program oversight, and strategic initiatives. The 'Mortgagee Compliance Manager' aspect implies that the contractor plays a role in ensuring that mortgagees adhere to federal regulations, which is crucial for maintaining the stability and integrity of the housing market and protecting consumers. Efficient and accurate payroll processing is fundamental to the operational continuity of any department, including those supporting HUD's vast mortgage insurance programs. Ultimately, this contract helps HUD operate more efficiently and effectively in its role of ensuring access to affordable housing and enforcing fair housing laws.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Payroll Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $80,046,298

Exercised Options: $80,046,298

Current Obligation: $80,046,298

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS23F0037V

IDV Type: FSS

Timeline