HUD's $24.5M Mortgage Brokerage Contract Awarded to PEMCO, Limited, Ran for Over 6 Years

Contract Overview

Contract Amount: $24,478,512 ($24.5M)

Contractor: Pemco, Limited

Awarding Agency: Department of Housing and Urban Development

Start Date: 2010-06-01

End Date: 2015-12-31

Contract Duration: 2,039 days

Daily Burn Rate: $12.0K/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 1D

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96826

State: Hawaii Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $24.5 million to PEMCO, LIMITED for work described as: ASSET MANAGER (AM) M&M III - AREA 1D Key points: 1. The contract provided mortgage and nonmortgage loan brokerage services, indicating a need for specialized financial intermediation. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The firm fixed-price contract type likely provided cost certainty for the agency. 4. The contract duration of over 6 years suggests a long-term need for these services. 5. The geographic scope was limited to Hawaii, implying a regional focus for the services. 6. The contract was not set aside for small businesses, indicating it was awarded based on best value to the government.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The total award amount of $24.5 million over approximately six years suggests an average annual expenditure of around $4 million. This figure needs to be assessed against the volume and complexity of the mortgage and nonmortgage loans brokered. Without details on the number of loans, their value, or the specific services rendered (e.g., origination, servicing, default management), a precise value-for-money assessment is difficult. However, the duration and scale suggest a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 27 bids indicates a competitive marketplace for mortgage and nonmortgage loan brokerage services. A high number of bidders generally suggests that the government has a good opportunity to obtain competitive pricing and favorable terms, as contractors vie for the award. This level of competition can lead to better price discovery and potentially lower costs for the agency.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received services at a competitive market rate. It also suggests that taxpayer funds were used efficiently by selecting the best offer from a wide pool of qualified providers.

Public Impact

The primary beneficiaries of this contract are likely individuals and entities seeking mortgage or nonmortgage loans, particularly those within the purview of the Department of Housing and Urban Development's programs. The services delivered involved facilitating loan transactions, which could include origination, servicing, or other brokerage functions related to real estate financing. The geographic impact was concentrated in Hawaii, suggesting that the contract supported HUD's initiatives or programs specifically within that state. The workforce implications are indirect, potentially supporting jobs within the mortgage brokerage industry and related financial services sectors in Hawaii.

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 efficiency.
The significant duration of the contract (over 6 years) raises questions about the initial needs assessment and potential for service obsolescence.
Limited geographic scope to Hawaii might indicate a lack of broader market analysis or a very specific regional program.

Positive Signals

Awarded under full and open competition with 27 bids, indicating a healthy and competitive market.
Firm fixed-price contract type provides cost certainty for the agency.
The contract was awarded to PEMCO, Limited, suggesting established capabilities in mortgage brokerage.

Sector Analysis

The mortgage and nonmortgage loan brokerage sector is a critical component of the financial services industry, facilitating billions of dollars in transactions annually. This contract falls under financial services, specifically mortgage intermediation. The market size for loan brokerage is substantial, driven by real estate transactions and various lending programs. HUD's spending in this area likely supports its mission to increase homeownership and provide affordable housing. Comparable spending benchmarks would typically involve analyzing other federal agencies' contracts for similar brokerage services or private sector market rates for loan origination and servicing.

Small Business Impact

This contract was not set aside for small businesses, as indicated by `sb: false`. The presence of 27 bids suggests that larger, established firms likely competed for and won this award. There is no explicit information regarding subcontracting plans for small businesses. The lack of a small business set-aside means that opportunities for small businesses to directly participate in this contract were limited, though they might have been involved as subcontractors if PEMCO, Limited, chose to engage them.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Department of Housing and Urban Development (HUD) contracting officers and program managers. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, including delivery schedules and service level agreements. Transparency is generally facilitated through contract award databases like FPDS-NG (now SAM.gov). Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported within the contract's execution.

Related Government Programs

Federal Housing Administration (FHA) Loan Programs
Government National Mortgage Association (Ginnie Mae)
Department of Veterans Affairs (VA) Loan Guaranty Program
Small Business Administration (SBA) Loan Programs
Federal Home Loan Banks

Risk Flags

Contract Duration
Limited Geographic Scope
Lack of Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $24.5 million to PEMCO, LIMITED. ASSET MANAGER (AM) M&M III - AREA 1D

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 $24.5 million.

What is the period of performance?

Start: 2010-06-01. End: 2015-12-31.

What was the specific nature of the mortgage and nonmortgage loan brokerage services provided by PEMCO, Limited?

The contract description indicates 'Mortgage and Nonmortgage Loan Brokers' (NAICS code 522310). This suggests PEMCO, Limited, acted as an intermediary to facilitate the origination, sale, or servicing of various types of loans. For mortgage loans, this could involve connecting borrowers with lenders, processing applications, underwriting, or managing loan portfolios. Nonmortgage loans could encompass a broader range of financial products. Without more specific details in the contract award data, the exact scope of services remains general, but it clearly falls within the financial services sector focused on debt instruments and real estate financing.

How does the total contract value of approximately $24.5 million compare to similar federal contracts for loan brokerage services?

Comparing this contract's value requires access to a broader dataset of federal procurement for loan brokerage services. However, $24.5 million over roughly six years (2010-2015) averages about $4 million annually. This is a substantial amount, suggesting a significant volume of business or high-value transactions were handled. To benchmark effectively, one would need to identify contracts with similar NAICS codes (522310) awarded by agencies like HUD, Ginnie Mae, FHA, or even the VA, and analyze their total values, durations, and the scope of services. The number of bids (27) suggests the market was active, but without direct comparisons, it's hard to definitively say if this represents a premium or standard rate.

What were the key performance indicators (KPIs) or metrics used to evaluate PEMCO, Limited's performance under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate PEMCO, Limited's performance. Typically, contracts of this nature would include metrics related to loan origination volume, loan approval rates, turnaround times for processing applications, borrower satisfaction, default rates (if servicing was involved), and adherence to regulatory compliance. The firm fixed-price nature suggests that meeting defined service levels and deliverables would be paramount. A thorough performance assessment would require access to contract performance reports or post-award evaluations, which are not included in the summary data.

What is the historical spending pattern for mortgage and nonmortgage loan brokerage services by the Department of Housing and Urban Development?

The provided data represents a single contract award from 2010-2015. To understand HUD's historical spending patterns for these services, a broader analysis of procurement data over multiple fiscal years would be necessary. This would involve querying databases like SAM.gov (formerly FPDS) for all contracts awarded under NAICS code 522310 by HUD. Examining trends in spending, the number and value of contracts awarded, and the types of firms receiving these awards would reveal patterns. This specific contract suggests a significant, long-term need during its period of performance, but it's just one data point in HUD's overall procurement history for such services.

Were there any identified risks or challenges associated with this contract, either during solicitation or performance?

The provided data does not explicitly list risks or challenges encountered during the solicitation or performance phases of this contract. However, general risks inherent in loan brokerage contracts include market fluctuations affecting real estate and lending, changes in regulatory environments (e.g., housing finance reforms), potential for fraud, and the need for robust compliance. Given the firm fixed-price structure and the competitive award, the primary risk for the government would be ensuring the contractor met all performance obligations. For the contractor, risks would include managing operational costs within the fixed price and navigating the complexities of the mortgage market.

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: $33,449,320

Exercised Options: $24,478,512

Current Obligation: $24,478,512

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS23F0033V

IDV Type: FSS

Timeline