HUD awards $58.4M for single-family REO marketing and management to AFR & ASSOCIATES INC

Contract Overview

Contract Amount: $58,439,421 ($58.4M)

Contractor: AFR & Associates Inc

Awarding Agency: Department of Housing and Urban Development

Start Date: 2004-08-01

End Date: 2006-12-15

Contract Duration: 866 days

Daily Burn Rate: $67.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SINGLE FAMILY REO MARKETING & MANAGEMENT

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30303

State: Georgia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $58.4 million to AFR & ASSOCIATES INC for work described as: SINGLE FAMILY REO MARKETING & MANAGEMENT Key points: 1. Contract value of $58.4 million over approximately 2 years suggests a significant scope of services. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The fixed-price contract type may offer cost certainty for the government, shifting performance risk to the contractor. 4. The North American Industry Classification System (NAICS) code 531110 points to services related to residential property leasing and management. 5. The contract's duration of 866 days (approx. 2.3 years) is typical for services requiring sustained operational support. 6. The award to AFR & ASSOCIATES INC. represents a substantial commitment to a single entity for these services.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more granular data on the specific services provided and the number of properties managed. However, a total value of $58.4 million over roughly two years indicates a substantial investment. Without comparable contract data for similar REO marketing and management services, it is difficult to definitively assess if this represents excellent or questionable value. The firm fixed-price nature suggests the government sought predictable costs, but the overall value proposition hinges on the effectiveness of the services delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. The presence of 6 bids indicates a degree of competition. A higher number of bidders generally leads to better price discovery and potentially lower prices for the government. The fact that six bids were received suggests that the market for these services is sufficiently robust to attract multiple interested parties.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a competitive environment that can drive down costs and improve service quality.

Public Impact

The primary beneficiaries are likely homeowners facing foreclosure and the Department of Housing and Urban Development (HUD), which needs efficient management of Real Estate Owned (REO) properties. The services delivered include marketing and managing single-family residential properties that have been acquired by HUD through foreclosure. The contract's geographic scope is indicated as Georgia (ST: GA, SN: GEORGIA), suggesting a focus on managing HUD-owned properties within that state. This contract supports the housing market by facilitating the sale or disposition of distressed properties, potentially stabilizing neighborhoods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if property management needs are underestimated.
Risk of inconsistent service quality across different properties or regions within Georgia.
Dependence on a single contractor may limit flexibility in adapting to changing market conditions.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a potentially competitive market for these services.
Award to a single entity can streamline management and oversight for HUD.

Sector Analysis

The contract falls within the real estate services sector, specifically focusing on the management and marketing of distressed residential properties (REO). This niche within the broader real estate market is often influenced by economic cycles and housing market conditions. Comparable spending benchmarks would typically be found by analyzing other government contracts for REO management services, particularly those issued by agencies like HUD or the Federal Housing Administration (FHA). The market size for such services can fluctuate significantly based on foreclosure rates.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). Therefore, the primary contractor, AFR & ASSOCIATES INC., is likely a larger entity. There is no explicit information regarding subcontracting plans for small businesses. The absence of a small business set-aside means that opportunities for small businesses to participate in this contract would depend on the prime contractor's subcontracting strategy, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily be managed by the contracting officers and program managers within the Department of Housing and Urban Development (HUD). Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency would be facilitated through contract award databases and potentially through public reporting requirements mandated by HUD. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HUD Single Family Housing Programs
FHA Loss Mitigation Programs
Government-Owned Real Estate Management
Property Disposition Services

Risk Flags

Potential for cost overruns if property conditions are worse than anticipated.
Risk of prolonged property holding times impacting disposition goals.
Dependence on local market conditions in Georgia for successful sales.
Contractor performance variability could affect property values and sale timelines.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $58.4 million to AFR & ASSOCIATES INC. SINGLE FAMILY REO MARKETING & MANAGEMENT

Who is the contractor on this award?

The obligated recipient is AFR & ASSOCIATES 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 $58.4 million.

What is the period of performance?

Start: 2004-08-01. End: 2006-12-15.

What is the track record of AFR & ASSOCIATES INC. in managing government real estate contracts?

Assessing the track record of AFR & ASSOCIATES INC. requires a review of their past performance on similar federal contracts. This would involve examining contract histories, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented disputes or awards. Without access to this specific performance data, it's challenging to definitively gauge their reliability and effectiveness in managing HUD's REO properties. A thorough analysis would look for consistent on-time delivery, adherence to budget, quality of service, and responsiveness to government requirements across their contract portfolio.

How does the awarded amount compare to similar REO marketing and management contracts?

Direct comparison of the $58.4 million award to similar contracts is difficult without knowing the exact scope, duration, and number of properties managed. However, the contract's duration of approximately 2.3 years suggests an average annual value of around $25.4 million. This figure can be used as a rough benchmark. To provide a more precise comparison, one would need to identify contracts with similar service requirements (marketing, property preservation, sales support) and geographic focus, ideally from the same agency (HUD) or other federal entities managing REO portfolios. Factors like market conditions and property types (e.g., single-family homes vs. multi-unit) also heavily influence contract values.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators for this contract would likely focus on the efficiency and effectiveness of REO property management and disposition. Common KPIs include: time-on-market for properties, sales price relative to appraised value, property preservation standards adherence (e.g., maintaining curb appeal, preventing vandalism), cost per property managed, and successful completion of marketing campaigns. HUD would establish specific metrics within the contract's Statement of Work (SOW) to track AFR & ASSOCIATES INC.'s performance. Regular reporting against these KPIs would be crucial for oversight and ensuring value for taxpayer money.

What is the historical spending pattern for HUD's REO marketing and management services?

Analyzing HUD's historical spending on REO marketing and management services would reveal trends in demand and contractor engagement. This involves examining contract awards over several fiscal years, noting fluctuations in total spending and the number of contracts awarded. Spending patterns are often correlated with economic conditions, particularly foreclosure rates. Periods of high unemployment or economic downturns typically lead to increased foreclosures and, consequently, higher spending on REO management. Understanding these historical patterns helps in forecasting future needs and assessing the current contract's value in context.

What are the potential risks associated with a firm fixed-price contract for REO management?

While firm fixed-price contracts offer cost certainty, they can introduce risks for the contractor if unforeseen issues arise. For REO management, these risks could include: unexpected property damage requiring costly repairs, prolonged market downturns delaying sales and increasing holding costs, or changes in local regulations impacting marketing or sales processes. If the contractor underestimates these costs, they may struggle to maintain profitability or deliver the full scope of services. Conversely, if the government's needs are underestimated in the contract scope, they might not receive the full value expected. Effective risk mitigation involves thorough initial assessments and clear contract terms.

How does the geographic focus on Georgia impact the contract's overall value and management?

Focusing the contract on Georgia (ST: GA, SN: GEORGIA) allows for potentially more efficient management and oversight by concentrating resources within a defined region. This geographic limitation can lead to economies of scale for the contractor in terms of local marketing efforts, property inspection teams, and established relationships with local real estate agents and vendors. However, it also means that if HUD has significant REO holdings in other states, separate contracts would be required, potentially leading to a less centralized approach. The value is derived from specialized knowledge of the Georgia real estate market and streamlined operations within that state.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Lessors of Real Estate › Lessors of Residential Buildings and Dwellings

Product/Service Code: RESEARCH AND DEVELOPMENT › Commerce and Housing Credit R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 34 PEACHTREE STREET SUITE 2100, ATLANTA, GA, 90

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $58,439,421

Exercised Options: $58,439,421

Current Obligation: $58,439,421

Timeline