THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Friday, February 21, 1997 TAG: 9702210824
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 67 lines
Score one for the little guy.
The General Accounting Office decided that Virginia Beach-based Tidewater Homes Realty Inc. had been treated unfairly in the bidding process for a Housing and Urban Development management contract.
The ruling, made in early January, means that Tidewater Homes' proposal to manage, repair and sell residential properties repossessed by HUD will be reconsidered. That contract had been awarded to a firm in Arizona.
Tidewater Homes has previously held management contracts for HUD properties on the Peninsula and South Hampton Roads.
HUD underwrites property financed by Federal Housing Administration loans, usually for first-time home buyers. If those buyers default on their FHA loans, HUD takes possession of the property. These HUD-owned properties are then managed and maintained by a real estate company until they are purchased.
The GAO's decision is significant because the federal agency sides with only 15 percent of those filing grievances over federal bidding and procurement processes, said James A. Spangenberg, a lawyer in GAO's general counsel office. Approximately 2,400 protests are filed with GAO annually, he said. Tidewater Homes was one of the few whose complaints were deemed legitimate.
``The enormity of the decision is incredible,'' said Ken Rapp, principal broker of Tidewater Homes. ``It's kind of rare that somebody like us gets to beat up on the government.''
In September, Tidewater Homes Realty Inc. and several other local firms were outraged when HUD awarded a management contract for Virginia Beach properties to Citiwest, a real estate firm in Tucson. The Arizona firm didn't even hold a proper Virginia real estate broker license, considered a prerequisite, at the time of the contract's award.
Tidewater Homes contested the decision and demanded an explanation.
GAO sided with Tidewater Homes. HUD's Philadelphia office, which handles contracting, must respond by the end of February to GAO's recommendation that the agency reevaluate competitive proposals.
HUD said it will comply.
``We're going to have a new panel and a new evaluation,'' said Alan Ruscoe, a HUD contracting specialist in Philadelphia. He said it would take place over several months.
Rapp credited U.S. Sen. John Warner, U.S. Sen. Charles Robb, U.S. Rep. Owen Pickett and the Tidewater Association of Realtors for their assistance.
``We thank them for bringing the matter to the front of its agenda with HUD,'' Rapp said.
The GAO decided that Tidewater Homes' best and final offer was $1,233 a unit compared to Citiwest's higher unit price of $1,317. Although Citiwest's proposal was higher, HUD deemed it the more attractive offer, based on its scoring process.
``I was disappointed to see they weren't being even-handed,'' GAO's Spangenberg said of HUD. ILLUSTRATION: Graphic
WHAT HAPPENED: Last year, a Virginia Beach-based realty company
was outraged to lose a Housing and Urban Development management
contract to a firm in Arizona. It filed a complaint with the General
Accounting Office.
THE RULING: The GAO ruled in favor of the Beach realty company,
saying it had been treated unfairly in the bidding process. As a
result, its proposal allowing it to deal with properties repossessed
by HUD will be reconsidered.
ABOUT 2,400 PROTESTS OF HUD'S RULINGS ARE FILED WITH THE GAO
ANNUALLY.