HUD's $40M SF REO Management Contract Awarded to Cityside Management Corp for Louisiana Properties

Contract Overview

Contract Amount: $40,033,039 ($40.0M)

Contractor: Cityside Management Corp

Awarding Agency: Department of Housing and Urban Development

Start Date: 2004-08-01

End Date: 2010-01-31

Contract Duration: 2,009 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Other

Official Description: SF REO MANAGEMENT AND MARKETING D4 (AR,LA)

Place of Performance

Location: HAMMOND, TANGIPAHOA County, LOUISIANA, 70401

State: Louisiana Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $40.0 million to CITYSIDE MANAGEMENT CORP for work described as: SF REO MANAGEMENT AND MARKETING D4 (AR,LA) Key points: 1. Contract value of $40 million over its period of performance. 2. Awarded under full and open competition after exclusion of sources. 3. The contract duration spans from August 2004 to January 2010. 4. The North American Industry Classification System (NAICS) code is 531110 (Lessors of Residential Buildings and Dwellings). 5. The contract was awarded by the Department of Housing and Urban Development (HUD). 6. The primary place of performance is Louisiana (LA).

Value Assessment

Rating: fair

The contract value of $40 million over approximately 5.5 years suggests an average annual spend of around $7.3 million. Benchmarking this against similar REO management contracts is challenging without more specific service details. However, the duration and scope indicate a significant investment. The pricing structure and value for money would depend heavily on the specific services rendered, such as property maintenance, marketing, and sales, and how these costs compare to industry standards for managing distressed residential properties.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the competition was intended to be open, certain sources were excluded, potentially limiting the pool of bidders. The number of bidders is not explicitly stated, but the 'limited' competition type suggests it may not have been as broad as a standard full and open competition. This could impact price discovery and potentially lead to higher costs compared to a fully open process with maximum bidder participation.

Taxpayer Impact: The exclusion of certain sources, even in an otherwise open competition, may have reduced competitive pressure, potentially leading to less favorable pricing for taxpayers.

Public Impact

Benefits taxpayers by managing and marketing foreclosed properties to recover value. Ensures the maintenance and sale of residential dwellings, potentially stabilizing neighborhoods. Geographic impact is focused on Louisiana, where the properties are located. Supports the Department of Housing and Urban Development's mission to manage its real estate owned (REO) portfolio.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have reduced price discovery.
Exclusion of sources could indicate specific requirements or pre-qualification issues.
Contract duration of over 5 years might not reflect current market conditions or needs.

Positive Signals

Awarded under a competitive process, indicating some level of market vetting.
Managed a significant portfolio of distressed properties for HUD.
The contract aimed to mitigate losses on foreclosed assets.

Sector Analysis

The real estate services sector, particularly for government-owned or foreclosed properties, involves property management, marketing, and sales. This contract falls within the broader real estate services industry, which is substantial. HUD's REO management contracts are crucial for disposing of properties acquired through mortgage insurance defaults, aiming to minimize losses and maintain community standards. Comparable spending benchmarks would depend on the volume and condition of properties managed.

Small Business Impact

The provided data does not indicate any small business set-aside provisions (ss: false, sb: false). Therefore, this contract was not specifically targeted towards small businesses. There is no information on subcontracting plans or their impact on the small business ecosystem. The focus appears to be on larger entities capable of managing a significant portfolio of properties.

Oversight & Accountability

Oversight would typically be provided by the Department of Housing and Urban Development's program offices responsible for asset management. Accountability measures would be tied to performance metrics outlined in the contract, such as timely property disposition and adherence to maintenance standards. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply to potential fraud, waste, or abuse.

Related Government Programs

HUD REO Property Management
Government Real Estate Disposition
Residential Property Leasing and Management
Foreclosure and Default Servicing

Risk Flags

Limited competition due to source exclusion.
Potential for outdated pricing or service scope over a long contract duration.
Risk of property deterioration if maintenance is insufficient.
Lack of specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $40.0 million to CITYSIDE MANAGEMENT CORP. SF REO MANAGEMENT AND MARKETING D4 (AR,LA)

Who is the contractor on this award?

The obligated recipient is CITYSIDE MANAGEMENT CORP.

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 $40.0 million.

What is the period of performance?

Start: 2004-08-01. End: 2010-01-31.

What specific services were included under this $40 million contract for SF REO Management and Marketing?

The contract, 'SF REO MANAGEMENT AND MARKETING D4 (AR,LA)', awarded to Cityside Management Corp by HUD, likely encompassed a range of services related to the management and sale of Single Family Real Estate Owned (REO) properties. These services typically include property preservation (securing, inspecting, maintaining), marketing and advertising the properties for sale, facilitating showings, processing offers, and managing the closing process. Given the contract's duration and value, it suggests a substantial portfolio of properties requiring ongoing management and disposition efforts within Arkansas and Louisiana.

How does the $40 million contract value compare to other HUD REO management contracts?

Comparing the $40 million contract value requires context on the number of properties managed, their condition, and the specific services required. HUD awards numerous REO management contracts across different regions, varying significantly in size and duration. A $40 million contract over approximately 5.5 years (Aug 2004 - Jan 2010) represents a substantial commitment, averaging over $7 million annually. Without specific benchmarks for the volume of properties or the scope of services (e.g., standard vs. extensive repairs), a direct comparison is difficult. However, it indicates a significant operational scale for managing HUD's foreclosed assets in the specified states during that period.

What are the potential risks associated with a long-term contract (over 5 years) for REO management?

Long-term contracts for REO management carry several risks. Market conditions for real estate can change significantly over several years, potentially making the initial pricing or service scope outdated. Properties may deteriorate if maintenance is not consistently adequate, leading to increased costs or reduced sale value. Furthermore, a prolonged contract might stifle innovation or the adoption of more efficient management practices that could emerge over time. There's also a risk of contractor complacency or reduced performance due to a lack of ongoing competitive pressure, even if the initial award was competitive.

What was the historical spending pattern for HUD's REO management and marketing services around the time of this contract?

Historical spending on HUD's REO management and marketing services fluctuates based on economic conditions, particularly the rate of mortgage defaults and foreclosures. During the mid-2000s leading up to the 2007-2008 financial crisis, foreclosure rates began to rise, increasing the demand for REO management services. Contracts like this one, awarded in 2004 and extending into 2010, would have been part of HUD's efforts to manage a growing inventory of distressed properties. Spending in this category likely increased significantly in the years following this contract's award due to the housing market downturn.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the bidding process?

This contract type, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggests a nuanced approach to competition. It implies that the solicitation was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, 'after exclusion of sources' indicates that certain potential bidders were subsequently excluded from consideration. The reasons for exclusion could range from failure to meet specific pre-qualification criteria, technical requirements, or past performance issues. While it's more competitive than a sole-source award, the exclusion limits the number of actual bidders compared to a standard full and open competition, potentially impacting the breadth of price discovery.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 11

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Address: 22 GREELEY ST, SUITE #5, MERRIMACK, NH, 01

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,033,039

Exercised Options: $40,033,039

Current Obligation: $40,033,039

Contract Characteristics

Cost or Pricing Data: NO

Timeline