MHARR, in a December 18, 2014 communication with the Administrator of the federal manufactured housing program (copy attached), has called for an immediate investigation of a recently-awarded HUD contract for manufactured housing dispute resolution (DR) services and the simultaneous suspension of activity under that contract – and a related subcontract – pending the completion of that investigation.
The contract in question, for federal dispute resolution services in “default” states (i.e., states without a state law-based dispute resolution program as authorized by section 623 of the Manufactured Housing Improvement Act of 2000) was awarded by the HUD Office of Manufactured Housing Programs to Savan Group, L.L.C. (Savan) of Arlington, Virginia. Savan, in turn, according to published reports, entered into a subcontract with the Institute for Building Technology and Safety (IBTS), which has served as HUD’s de facto sole-source “monitoring” contractor (under different corporate identities, albeit with the same personnel and management) since the inception of federal regulation in 1976. Savan, on its internet website, lists IBTS as a business “partner.”
On its face, this arrangement appears to be designed to circumvent section 620(b) of the 2000 reform law, which provides that the Secretary of HUD “shall ensure that separate and independent contractors are retained to carry out monitoring and inspection work and any other work that may be delegated to a contractor under this title.” (Emphasis added). As noted by MHARR in its communication with HUD: “if Savan itself had the requisite technical expertise and personnel to service the federal dispute resolution contract, there would be no … reason for a subcontract with IBTS. Conversely, if Savan lacks the requisite technical expertise and personnel to service the federal dispute resolution contract, there would be no reason to award the contract to Savan, other than as a means of circumventing section 620(b).” MHARR thus calls for the full public disclosure of all documents related to the solicitation and award of the main contract and the IBTS subcontract, as well as a complete investigation of the contracting process and the contracts themselves.
Full and proper HUD compliance with section 620(b) of the 2000 reform law is a matter of crucial importance for both HUD Code manufacturers and homebuyers, as the involvement of HUD’s de facto sole-source monitoring contractor in the federal dispute resolution system could irretrievably undermine the integrity, credibility and objectivity of the DR process. Among other things, the involvement of the entrenched monitoring contractor could expose manufacturers to systemic discrimination and bias in the DR process, based on the monitoring contractor’s revenue-driven role in HUD’s disputed program of expanded in-plant regulation and its 39-year track record of targeting manufacturers with highly subjective regulatory impositions and requirements. In fact, anticipating such a possible scenario and the resulting overlap between DR and other aspects of the HUD regulatory system, MHARR warned against – and strongly opposed — any such overlapping as an abuse of the DR system in its December 2005 comments on HUD’s then-pending DR proposed rule.
