HUD awards $23M loan servicing contract to Novad Management Consulting LLC
Contract Overview
Contract Amount: $23,039,215 ($23.0M)
Contractor: Novad Management Consulting LLC
Awarding Agency: Department of Housing and Urban Development
Start Date: 2018-09-26
End Date: 2019-08-17
Contract Duration: 325 days
Daily Burn Rate: $70.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: NATIONAL SERVICING CENTER LOAN SERVICING
Place of Performance
Location: HYATTSVILLE, PRINCE GEORGES County, MARYLAND, 20785
State: Maryland Government Spending
Plain-Language Summary
Department of Housing and Urban Development obligated $23.0 million to NOVAD MANAGEMENT CONSULTING LLC for work described as: NATIONAL SERVICING CENTER LOAN SERVICING Key points: 1. Contract value of $23M for loan servicing. 2. Sole-source award to Novad Management Consulting LLC. 3. Potential risk due to lack of competition. 4. Sector: Other Activities Related to Credit Intermediation.
Value Assessment
Rating: fair
The contract value of $23M for loan servicing appears reasonable given the scope. However, without competitive bidding, it's difficult to definitively assess if this represents the best value for taxpayers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no competition. This limits price discovery and may result in a higher cost than if multiple vendors had competed.
Taxpayer Impact: The lack of competition raises concerns about potential overspending, impacting taxpayer funds.
Public Impact
Citizens rely on HUD for housing services, making efficient contract management crucial. Loan servicing directly impacts borrowers' financial stability. Transparency in sole-source contracts is vital for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
Positive Signals
- Contract awarded to a single vendor for a specific service.
- Fixed price contract can help control costs if priced appropriately.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation,' a sector focused on financial services. Benchmarks for loan servicing contracts can vary widely based on volume and complexity.
Small Business Impact
The data indicates this contract was not awarded to small businesses, which could be an area for improvement in future contracting opportunities.
Oversight & Accountability
Oversight is needed to ensure Novad Management Consulting LLC is performing effectively and that the pricing remains fair despite the sole-source nature of the award.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Housing and Urban Development Contracting
- Department of Housing and Urban Development Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for overpayment
- Limited transparency on pricing justification
Tags
other-activities-related-to-credit-inter, department-of-housing-and-urban-developm, md, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Housing and Urban Development awarded $23.0 million to NOVAD MANAGEMENT CONSULTING LLC. NATIONAL SERVICING CENTER LOAN SERVICING
Who is the contractor on this award?
The obligated recipient is NOVAD MANAGEMENT CONSULTING 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 $23.0 million.
What is the period of performance?
Start: 2018-09-26. End: 2019-08-17.
What is the justification for the sole-source award, and how does HUD ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities or circumstances. HUD should have documented reasons for not competing this contract. To ensure fair pricing, they likely rely on historical data, market research, or independent cost estimates to validate Novad's proposed costs. Regular performance reviews and audits are also critical to monitor value.
What are the risks associated with a sole-source contract for loan servicing?
The primary risk of a sole-source contract is the potential for paying a premium due to the absence of competitive pressure. This can lead to inefficient use of taxpayer funds. Additionally, it limits the government's ability to benefit from innovation or better service offerings that might come from a competitive bidding process. Vendor lock-in is also a concern.
How does this contract contribute to the overall effectiveness of HUD's housing programs?
Effective loan servicing is fundamental to the success of HUD's housing programs. It ensures that borrowers are managed appropriately, payments are processed accurately, and program compliance is maintained. A well-executed servicing contract can prevent defaults, support borrowers in distress, and ultimately contribute to the stability and accessibility of housing.
Industry Classification
NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Other Activities Related to Credit Intermediation
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 86548B18R00005
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8181 PROFESSIONAL PL STE 208, LANDOVER, MD, 20785
Business Categories: Black American Owned Business, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,039,215
Exercised Options: $23,039,215
Current Obligation: $23,039,215
Actual Outlays: $291,378
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2018-09-26
Current End Date: 2019-08-17
Potential End Date: 2019-08-17 00:00:00
Last Modified: 2025-09-24
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