HUD spent $136.6M on single-family REO marketing and management over 6 years

Contract Overview

Contract Amount: $136,639,076 ($136.6M)

Contractor: Southwest Alliance of Asset Managers D5, LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2004-08-01

End Date: 2010-04-30

Contract Duration: 2,098 days

Daily Burn Rate: $65.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Other

Official Description: SINGLE FAMILY REO MARKETING & MANAGEMENT

Place of Performance

Location: ADDISON, DALLAS County, TEXAS, 75001

State: Texas Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $136.6 million to SOUTHWEST ALLIANCE OF ASSET MANAGERS D5, LLC for work described as: SINGLE FAMILY REO MARKETING & MANAGEMENT Key points: 1. The contract provided essential services for managing foreclosed single-family homes. 2. The duration of the contract suggests a need for consistent property management. 3. The geographic scope covered Texas, indicating a regional focus for REO services. 4. The contract was awarded through full and open competition, suggesting a robust bidding process. 5. The total value indicates significant investment in managing distressed properties.

Value Assessment

Rating: fair

The total award of $136.6 million over approximately six years for single-family REO marketing and management services appears substantial. Benchmarking this against similar contracts is challenging without more specific service details and market data for the period. However, the sheer scale of the award suggests a significant volume of properties managed. The value-for-money assessment would depend heavily on the efficiency of the management services provided and the success in marketing and selling the properties.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The fact that it was competed openly suggests that the agency sought to leverage market competition to obtain the best value. The number of bidders (16) is a positive sign of robust competition, which typically leads to more competitive pricing and better service offerings.

Taxpayer Impact: Taxpayers likely benefited from competitive pricing and a wider pool of qualified service providers due to the full and open competition.

Public Impact

Homeowners in distressed situations may have indirectly benefited from efficient management of foreclosed properties. The services delivered included marketing and management of single-family Real Estate Owned (REO) properties. The geographic impact was primarily within Texas, affecting local real estate markets and communities. The contract supported the housing market by facilitating the disposition of foreclosed assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency or reduced innovation if not actively managed.
The substantial dollar amount raises questions about cost-efficiency and whether all funds were optimally utilized.
Reliance on a single large contract for a critical function like REO management might pose risks if the contractor underperforms.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent procurement process.
A significant number of bidders (16) suggests a healthy market for these services.
The contract's duration implies a sustained need and potentially a successful track record in fulfilling requirements.

Sector Analysis

The contract falls within the real estate services sector, specifically focusing on the management and disposition of foreclosed properties (REO). This is a critical function for government agencies like HUD, which manage large portfolios of distressed assets. The market for REO services is influenced by economic cycles, housing market conditions, and regulatory environments. Comparable spending would involve other government contracts for property management and real estate disposition services, particularly those managed by agencies like Fannie Mae and Freddie Mac.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses were likely not direct recipients of the prime contract award. However, the large prime contract may have offered subcontracting opportunities for smaller firms specializing in specific aspects of property management, marketing, or maintenance within Texas.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Department of Housing and Urban Development (HUD). As a large contract, it would likely be subject to regular performance reviews, financial audits, and compliance checks. The contract's duration and value suggest that HUD's program offices and contracting officers would have maintained active oversight to ensure services met contractual requirements and taxpayer interests. Inspector General involvement would be possible for investigations into fraud, waste, or abuse.

Related Government Programs

HUD Single Family Housing Programs
Government Sponsored Enterprise (GSE) REO Management
Distressed Property Management Services
Real Estate Asset Disposition

Risk Flags

Lack of detailed performance metrics
Limited insight into cost-effectiveness per property
Absence of data on contract modifications

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $136.6 million to SOUTHWEST ALLIANCE OF ASSET MANAGERS D5, LLC. SINGLE FAMILY REO MARKETING & MANAGEMENT

Who is the contractor on this award?

The obligated recipient is SOUTHWEST ALLIANCE OF ASSET MANAGERS D5, LLC.

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 $136.6 million.

What is the period of performance?

Start: 2004-08-01. End: 2010-04-30.

What was the contractor's track record prior to this award?

Information regarding the specific track record of SOUTHWEST ALLIANCE OF ASSET MANAGERS D5, LLC prior to this award is not detailed in the provided data. However, the fact that they were awarded a contract of this magnitude through full and open competition suggests they met the qualifications and demonstrated capability required by HUD. A deeper dive into the contractor's history, including past performance on similar government or private sector contracts, would be necessary for a comprehensive assessment of their reliability and expertise in REO marketing and management.

How does the total contract value compare to the number of properties managed?

The provided data does not specify the number of properties managed under this contract. The total award of $136.6 million over approximately 2,098 days (about 6 years) averages to roughly $65,128 per day. Without knowing the volume of single-family REO properties handled, it's impossible to determine a meaningful per-property cost or compare it to industry benchmarks. A comprehensive analysis would require data on the average number of properties under management at any given time and the total number of properties processed throughout the contract's life.

What were the key performance indicators (KPIs) and service level agreements (SLAs) for this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, REO management contracts would include metrics related to property preservation timelines, marketing duration, time-on-market for sales, occupancy rates, and cost control. The effectiveness of the contractor would be measured against these predefined standards. HUD would have established these KPIs and SLAs to ensure efficient and cost-effective management and disposition of foreclosed assets, and their adherence would be a critical factor in assessing contract performance.

What was the average duration a property remained under management?

The provided data does not specify the average duration a property remained under management. The contract duration of 2,098 days (approximately 6 years) reflects the overall period for which the services were contracted, not the individual lifecycle of each foreclosed property. The time a single property spends in the REO pipeline can vary significantly based on market conditions, property condition, and local real estate dynamics. Understanding this average duration is crucial for assessing the efficiency of the marketing and sales process.

Were there any contract modifications or change orders that significantly altered the scope or cost?

The provided data does not detail any contract modifications or change orders. For a contract of this duration and value, it is common to have modifications for various reasons, such as adjustments to scope, funding increases or decreases, or changes in regulatory requirements. The absence of this information in the summary data means a full understanding of the contract's evolution and final cost drivers is not possible without accessing the contract's official modification history.

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

Offers Received: 16

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

Contractor Details

Address: 5040 ADDISON CIRCLE SUITE 400, ADDISON, TX, 90

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

Financial Breakdown

Contract Ceiling: $136,639,076

Exercised Options: $136,639,076

Current Obligation: $136,639,076

Contract Characteristics

Cost or Pricing Data: NO

Timeline