HUD's $42.8M Asset Manager contract for Hawaii awarded to PEMCO, LIMITED, spanning over 7 years

Contract Overview

Contract Amount: $42,826,830 ($42.8M)

Contractor: Pemco, Limited

Awarding Agency: Department of Housing and Urban Development

Start Date: 2010-06-01

End Date: 2016-03-31

Contract Duration: 2,130 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 27

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ASSET MANAGER (AM) M&M III - AREA 1A

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96826

State: Hawaii Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $42.8 million to PEMCO, LIMITED for work described as: ASSET MANAGER (AM) M&M III - AREA 1A Key points: 1. Contract value appears reasonable given the extended duration and scope of asset management services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract was awarded as a delivery order, indicating it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. The contract duration of over 7 years (2130 days) is substantial for asset management services. 6. The North American Industry Classification System (NAICS) code 522310 points to mortgage and nonmortgage loan brokers.

Value Assessment

Rating: good

The contract's total value of approximately $42.8 million over more than seven years suggests a significant investment in asset management. Benchmarking this against similar large-scale asset management contracts for federal agencies would provide a clearer picture of value for money. However, the firm fixed-price structure generally indicates a commitment to a defined cost, which is positive for budget predictability. The duration implies a need for consistent, long-term support in managing a portfolio of assets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, potentially leading to better pricing and service quality. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition was intended and likely achieved.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it increases the likelihood of securing services at a fair market price and encourages contractors to offer their best value propositions.

Public Impact

The primary beneficiaries are the Department of Housing and Urban Development (HUD) and potentially homeowners or property owners whose assets are being managed. The services delivered involve the management of mortgage and nonmortgage loans and related assets. The geographic impact is focused on Hawaii, as indicated by the 'HI' and 'HAWAII' fields. The contract supports the government's role in managing its real estate and financial assets, ensuring stability and compliance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential complacency or reduced innovation if not actively managed.
Reliance on a single contractor for an extended period might limit flexibility in adapting to changing market conditions or agency needs.
The specific performance metrics and quality assurance mechanisms are not detailed, posing a potential risk if not robust.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded a fair price.
Firm fixed-price contract type provides cost certainty for the government.
The contractor, PEMCO, LIMITED, has secured a significant contract, indicating a level of trust and capability in asset management.

Sector Analysis

The mortgage and nonmortgage loan brokerage sector (NAICS 522310) is a critical component of the financial services industry. Federal contracts in this area often involve managing distressed assets, foreclosed properties, or loan portfolios on behalf of government agencies. The size of this contract, over $42 million, indicates a substantial portfolio requiring management. Comparable spending benchmarks would involve looking at other large federal contracts for asset management or loan servicing, particularly those managed by HUD or other housing finance agencies.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration (ss: false, sb: false). This suggests the contract was competed broadly, and while small businesses could have bid, there was no specific requirement for them to do so. Subcontracting opportunities for small businesses may exist at the discretion of the prime contractor, PEMCO, LIMITED, but are not explicitly mandated by the contract terms provided.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Housing and Urban Development (HUD). As a delivery order under a larger IDIQ, oversight might be managed through the contracting officer's representative (COR) responsible for monitoring performance, adherence to terms, and quality of services. Transparency is generally facilitated through contract databases like FPDS, where award details are published. Specific accountability measures would be detailed in the contract's statement of work and performance standards.

Related Government Programs

HUD Single Family Mortgage Insurance Programs
Government National Mortgage Association (Ginnie Mae)
Federal Housing Administration (FHA) Asset Management
Troubled Asset Relief Program (TARP) Oversight

Risk Flags

Long contract duration may reduce flexibility.
Potential for performance degradation over extended period if not actively managed.
Lack of specific performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $42.8 million to PEMCO, LIMITED. ASSET MANAGER (AM) M&M III - AREA 1A

Who is the contractor on this award?

The obligated recipient is PEMCO, LIMITED.

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 $42.8 million.

What is the period of performance?

Start: 2010-06-01. End: 2016-03-31.

What was the specific nature of the assets managed under this contract?

The contract, identified by NAICS code 522310 (Mortgage and Nonmortgage Loan Brokers), suggests the assets managed likely included a portfolio of mortgage loans, potentially including single-family or multi-family residential properties, as well as nonmortgage loans. Given the contracting agency is HUD, these assets could be foreclosed properties, defaulted loans requiring servicing and disposition, or other real estate-owned (REO) properties that HUD acquired through its various programs, such as those administered by the Federal Housing Administration (FHA). The 'Asset Manager' title implies responsibility for overseeing the maintenance, marketing, and sale of these properties or the servicing and resolution of the loan portfolios to minimize losses for the government.

How does the per-unit cost or value of this contract compare to similar asset management contracts?

Determining a precise per-unit cost or value comparison is challenging without more granular data on the number and type of assets managed throughout the contract's duration. The total contract value of $42.8 million over approximately 7 years (2130 days) averages to roughly $6 million per year. If we consider the number of assets managed, a comparison could be made on a per-asset basis (e.g., cost per property managed or cost per loan serviced). However, without knowing the volume and complexity of the assets handled by PEMCO, LIMITED, direct benchmarking against other federal or private sector asset management contracts is difficult. Generally, large-scale, long-term contracts like this aim for economies of scale, but the specific market rates for asset management services in Hawaii and the complexity of HUD's portfolio would be key factors in assessing value.

What are the key performance indicators (KPIs) used to evaluate PEMCO, LIMITED's performance?

The provided data does not specify the key performance indicators (KPIs) used to evaluate PEMCO, LIMITED's performance under this contract. Typically, for asset management contracts, KPIs would focus on metrics such as the speed of property disposition (time on market, time to close), the percentage of asking price achieved, property maintenance costs, compliance with environmental and safety regulations, timely reporting, and overall portfolio performance in terms of minimizing losses or maximizing recovery for HUD. The effectiveness of oversight by HUD's contracting officer's representative (COR) would be crucial in monitoring these KPIs and ensuring the contractor meets contractual obligations.

What is the historical spending pattern for asset management services by HUD in Hawaii?

The provided data focuses on a single contract award from 2010 to 2016. To establish a historical spending pattern for HUD asset management services in Hawaii, one would need to analyze contract awards over a longer period, potentially including contracts awarded before and after this specific one. This would involve querying federal procurement databases (like FPDS) for contracts with similar NAICS codes (e.g., 522310, 531210 - Offices of Real Estate Agents and Brokers) and service descriptions related to asset or property management, specifically filtered for the geographic region of Hawaii and the contracting agency HUD. Analyzing trends in contract values, durations, and the number of awarded contracts would reveal historical spending patterns.

What risks are associated with a long-term (7+ year) fixed-price contract for asset management?

A significant risk with a long-term, fixed-price contract for asset management is the potential for the contractor to become complacent or less efficient over time, especially if performance monitoring is not rigorous. Inflation and changes in market conditions (e.g., real estate values, interest rates) could make the fixed price less favorable to the contractor as the contract progresses, potentially leading to reduced service quality or attempts to cut corners. Conversely, if market conditions improve dramatically, the government might be paying above market rates by the end of the contract term. Another risk is the 'lock-in' effect; if the government's needs change or a better service provider emerges, switching contractors mid-term can be difficult and costly. Robust contract management, regular performance reviews, and clear mechanisms for addressing scope changes or market fluctuations are essential to mitigate these risks.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Mortgage and Nonmortgage Loan Brokers

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: 27

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1632 S KING ST STE 100, HONOLULU, HI, 96826

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

Financial Breakdown

Contract Ceiling: $45,983,110

Exercised Options: $45,983,110

Current Obligation: $42,826,830

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS23F0033V

IDV Type: FSS

Timeline