HUD's $92.6M contract for single-family REO marketing and management awarded to Pyramid Real Estate Services

Contract Overview

Contract Amount: $92,613,215 ($92.6M)

Contractor: Pyramid Real Estate Services Limited Liability Company

Awarding Agency: Department of Housing and Urban Development

Start Date: 2004-08-01

End Date: 2013-09-13

Contract Duration: 3,330 days

Daily Burn Rate: $27.8K/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: TULSA, TULSA County, OKLAHOMA, 74135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $92.6 million to PYRAMID REAL ESTATE SERVICES LIMITED LIABILITY COMPANY for work described as: SINGLE FAMILY REO MARKETING & MANAGEMENT Key points: 1. Contract duration of 10 years suggests a long-term need for these services. 2. The contract was awarded under full and open competition, indicating a broad market solicitation. 3. The firm-fixed-price contract type shifts performance risk to the contractor. 4. The contract was awarded by the Department of Housing and Urban Development (HUD). 5. The North American Industry Classification System (NAICS) code 531110 points to lessors of residential buildings and dwellings. 6. The contract was awarded in Oklahoma, suggesting a specific geographic focus for services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The total value of $92.6 million over approximately 10 years averages to about $9.26 million annually. This figure needs to be assessed against the volume and type of properties managed and the specific services rendered (marketing, management, disposition). Without detailed service level agreements or performance outcomes, it's difficult to definitively assess value for money. However, the duration suggests a sustained need and potentially a competitive pricing structure over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 6 bids indicates a reasonable level of interest from the market. A competitive process like this generally allows for price discovery and encourages contractors to offer competitive pricing to win the award. The number of bidders suggests that the market for these services is sufficiently robust to support competition.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure services at the best possible price. Full and open competition increases the likelihood that the government is not overpaying for the services rendered.

Public Impact

The primary beneficiaries are individuals and families seeking to purchase or rent foreclosed single-family homes managed under this contract. The contract supports the marketing and management of Real Estate Owned (REO) properties for HUD. Services are geographically focused within Oklahoma, impacting local real estate markets and communities. The contract likely supports local economies through property maintenance, marketing efforts, and potentially sales-related activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) could lead to complacency or reduced innovation if not actively managed.
Reliance on a single contractor for a decade may limit opportunities for newer, potentially more efficient service providers.
The firm-fixed-price nature requires careful monitoring to ensure contractor performance meets expectations without scope creep.

Positive Signals

Full and open competition suggests a healthy market and potential for competitive pricing.
The firm-fixed-price contract type aligns incentives by placing performance risk on the contractor.
A long-term contract can provide stability and predictability for both the government and the contractor, potentially leading to more efficient operations.

Sector Analysis

The contract falls within the real estate services sector, specifically focusing on the management and disposition of foreclosed residential properties (REO). This is a niche within the broader real estate and property management industry. HUD's role in managing REO properties is crucial for stabilizing housing markets after foreclosures. Comparable spending benchmarks would typically involve analyzing other government contracts for similar REO management services across different regions or agencies, considering factors like property volume, condition, and market dynamics.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). While the prime contractor is Pyramid Real Estate Services LLC, there is no explicit information on subcontracting plans or performance related to small businesses. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks to engage small businesses for ancillary services or if the contract's scope is such that it primarily requires large-scale operational capabilities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Housing and Urban Development (HUD). Specific oversight mechanisms would likely include contract performance reviews, financial audits, and adherence to service level agreements. Accountability measures would be tied to the firm-fixed-price contract terms, with potential penalties or remedies for non-performance. Transparency is generally facilitated through contract award databases and public reporting, though detailed operational oversight specifics are often internal.

Related Government Programs

HUD Single Family Mortgage Insurance Programs
Government National Mortgage Association (Ginnie Mae)
Federal Housing Administration (FHA) Single Family Programs
Troubled Asset Relief Program (TARP) - related to housing market stabilization

Risk Flags

Long contract duration
Potential for market changes over contract life
Need for ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $92.6 million to PYRAMID REAL ESTATE SERVICES LIMITED LIABILITY COMPANY. SINGLE FAMILY REO MARKETING & MANAGEMENT

Who is the contractor on this award?

The obligated recipient is PYRAMID REAL ESTATE SERVICES LIMITED LIABILITY COMPANY.

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 $92.6 million.

What is the period of performance?

Start: 2004-08-01. End: 2013-09-13.

What was the specific scope of services provided under this contract for REO marketing and management?

The contract encompassed the marketing and management of single-family Residential Real Estate Owned (REO) properties for the Department of Housing and Urban Development (HUD). This typically includes services such as property preservation (maintenance, repairs, securing the property), property valuation, marketing the properties for sale, facilitating showings, managing offers, and coordinating the closing process. The goal is to efficiently manage and dispose of foreclosed properties to minimize losses for HUD and stabilize local housing markets. The exact deliverables and performance standards would have been detailed in the contract's Statement of Work (SOW).

How does the $92.6 million total contract value compare to similar REO management contracts awarded by HUD or other federal agencies?

Direct comparison of the $92.6 million total contract value is difficult without knowing the specific volume, geographic scope, and condition of the properties managed. However, over its approximately 10-year duration, this contract represents an average annual expenditure of roughly $9.26 million. Federal REO management contracts can vary significantly in size. Larger contracts might manage thousands of properties across multiple states, while smaller ones could focus on a single region or a smaller portfolio. To benchmark effectively, one would need to compare the cost per property managed, cost per service provided (e.g., per preservation work order), and the overall disposition time against similar contracts awarded during the same period.

What were the key performance indicators (KPIs) used to evaluate the contractor's performance?

While the specific KPIs are not detailed in the provided data, typical performance indicators for REO marketing and management contracts include: time to secure and preserve properties, time to list properties for sale after acquisition, average days on market (DOM) for sold properties, percentage of asking price achieved at sale, number of successful sales, property preservation compliance rates (e.g., maintaining utilities, lawn care, securing against vandalism), and accuracy of financial reporting. HUD would have monitored these metrics to ensure the contractor was meeting contractual obligations and achieving program goals efficiently.

What is the significance of the contract being awarded under 'Full and Open Competition' with 6 bidders?

Awarding the contract under 'Full and Open Competition' signifies that HUD solicited bids from all interested and capable sources, maximizing the pool of potential offerors. The fact that 6 bids were received suggests a healthy level of competition within the market for REO management services. This competitive environment generally leads to better pricing, improved service quality, and greater innovation as contractors vie for the award. It also provides assurance to taxpayers that the government sought the best value available in the marketplace, rather than limiting options through set-asides or other restrictions.

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

Historical spending patterns for HUD's REO management services would likely show fluctuations tied to economic cycles, particularly the rate of mortgage defaults and foreclosures. During periods of economic downturn or housing market crises (e.g., 2008 financial crisis), foreclosure rates surge, leading to an increased need for REO management and higher spending in this area. Conversely, during stable or growing economic periods, foreclosure rates tend to decrease, potentially reducing the volume of REO properties and associated contract spending. This specific $92.6M contract, spanning from 2004 to 2013, captures a period that includes the lead-up to and aftermath of the 2008 housing crisis, suggesting it likely experienced periods of high demand.

What risks are associated with a 10-year contract duration for REO management?

A 10-year contract duration presents several potential risks. Firstly, market conditions and property management best practices can evolve significantly over a decade, potentially making the contractor's methods outdated if not actively updated. Secondly, long-term contracts can sometimes lead to complacency on the part of the contractor, reducing the incentive to innovate or optimize processes. Thirdly, the government's needs might change over such a long period, requiring modifications or potentially making the contract less aligned with current objectives. Finally, if the contractor's performance is subpar, the government is locked into a lengthy relationship, making it difficult and potentially costly to switch providers.

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: 745 W NEW ORLEANS, BROKEN ARROW, OK, 01

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

Financial Breakdown

Contract Ceiling: $108,789,946

Exercised Options: $108,789,946

Current Obligation: $92,613,215

Timeline