On August 16, 2013, HUD awarded the latest manufactured housing program monitoring contract to the same entity that has served as the monitoring contractor since the beginning of federal regulation in 1976.  The award of the new contract should quickly put to rest concerns within the industry regarding possible shortages of manufactured home certification labels stemming from the lapse of the previous monitoring contract on July 26, 2013.  However, an award to the same contractor that has held that position for nearly 40 years should raise a red flag for all federal program stakeholders and the Government Accountability Office (GAO) in its ongoing investigation of the program.

Specifically, the history of bid solicitations for the monitoring contract is one of little or no competition, resulting in de facto sole-source awards to the same contractor, while skirting the safeguards normally required for such contracts. Typically, these bidding processes have been structured to discourage new bidders by requiring “experience” that is unique to the existing contractor.  At the same time, the decisive contract “award factors” have consistently been designed to make experience more important than bid price, thus assuring an award to the existing contractor even when other bidders have submitted lower-priced proposals.  In this most recent contract solicitation, a competing bid was, in fact, submitted by a highly-qualified national engineering firm.  Consequently, HUD did have a clear choice in this case between the new blood and fresh ideas that the program (as a housing program) sorely needs, and the same rigid, revenue-driven approach with its endless paperwork, red-tape, record-keeping and multi-layered inspections that has been in place for four decades – and chose to preserve a status quo that has seen in-plant regulation (and regulatory costs) expand even as industry production levels have fallen to historic lows.

Most importantly, though, this step is just the latest HUD action designed to undercut the 2000 law and its purpose of ensuring the status of the federal program as a full-fledged “housing” program.  Together with HUD actions to: (1) needlessly expand in-plant regulation; (2) downgrade the status of the program by relegating it to the office of “risk management;” (3) downgrade the role, independence and functionality of the Manufactured Housing Consensus Committee (MHCC); (4) ignore manufactured homes as an affordable housing resource in its 2010-2015 Strategic Plan; and (5) convert the appointed non-career administrator position to career status – all are a consequence of HUD’s failure and refusal to appoint a non-career program administrator, as required by the 2000 law, for nearly ten years.  Indeed, it is noteworthy that in the immediate aftermath of the enactment of the 2000 law, when the program did have a non-career administrator, implementation of that law appeared to be on the correct path.  It is only in the time since the lapse of that position from appointed non-career status that the program has been once again relegated to second-class status at HUD… and the industry and homebuyers wonder why it is so difficult to obtain consumer financing for their HUD Code homes.

All of the above matters — in addition to others — will be thoroughly updated for discussion and further decisions at the upcoming MHARR Board of Directors meeting.