Title
Authorization to Award Contract for Management and Operation of City’s Section 8 Housing Choice Voucher Program (Ordinance S-44361)
Description
Request authorization for the City Manager, or his designee, to award and enter into a contract with Quadel Consulting and Training (Quadel) for an estimated $35 million over the life of the 10-year contract for the administration of the management and operation of the City’s Section 8 Housing Choice Voucher (HCV) Program. Further request authorization for the City Controller to disburse funds over the life of the contract.
Additionally request authorization for the City Controller to disburse up to $550 million in Housing Assistance Payments (HAP) funding that the Housing Department receives from the U.S. Department of Housing and Urban Development (HUD), to Quadel Consulting and Training, as pass-through payments to the landlords of the Section 8 program over the life of the contract. There is no impact to the General Fund.
Report
Summary
On Oct. 4, 2017, City Council authorized staff to issue a Request for Proposals (RFP) to contract out management of the Section 8 HCV Program to a private firm experienced in HUD regulations and program requirements.
Section 8 is HUD's largest program providing housing assistance to very low income individuals and families, the elderly, and disabled. The Housing Department, which serves as the Public Housing Authority for the City of Phoenix, has been administering the Section 8 program since 1978. The Section 8 program is a rental subsidy: Section 8 voucher holders pay 30 percent of their adjusted gross income toward rent, and the Housing Department directly pays private landlords the balance of the rent via HAP. In addition, HUD pays the Housing Department Section 8 Administrative fees to fund the operating costs of administering the program including staff salaries and overhead costs. Years of federal proration of Administrative fees have resulted in annual deficits that have depleted the Housing Department's reserves.
Due to the continued reduction of Administrative fees from the federal government, it was determined that to maintain local control and sustain the Section 8 HCV Program, the Housing Department would utilize a vendor to administer all operations and accounting while maintaining minimal City staff to manage contract and financial compliance. Quadel will administer the program for a percentage of the total Program Administrative fees received annually from HUD, and will also be responsible for making HAP of up to $550 million directly to landlords over the maximum 10 years of the contract. All Section 8 funding for HAP and Program Administrative fees will continue to be received by the Housing Department from HUD, and the Housing Department will pass the funding through to Quadel.
The Housing Department's Section 8 Program has 34 authorized full-time employees (FTEs), 13 of which are vacant. Temporary agency staff are currently utilized to offset the vacant positions. The Housing and Human Resources departments continue to work closely with staff and their respective bargaining units to reassign and place existing staff. The Housing Department will also require Quadel to interview all staff who are interested in employment with their organization.
Procurement Information
The RFP was issued in accordance with Phoenix City Code § 43-14 for Competitive Sealed Proposals on Oct. 13, 2017.
Three proposals were received. An evaluation panel, comprised of City staff from the Housing, Finance and Human Services departments, and the Housing Director from the City of Tucson, was convened to review the proposals. The panel evaluated all three proposals, including modifications made by each firm in their Best and Final Offers. The awarded scores were as follows:
- Quadel Consulting and Training, LLC: 826
- CVR Associates, Inc.: 796
- Nan McKay and Associates, Inc.: 783
Based on these scores, the evaluation panel recommended that the City award the Section 8 HCV Program contract to Quadel. The Housing Department concurs with the evaluation panel's decision and recommends awarding the Section 8 HCV Program contract to Quadel as the best value to the City based on the evaluation criteria.
Contract Term
The contract shall be effective for a period of five years, with options to renew for an additional five years in five, one-year increments.
Financial Impact
There is no impact to the General Fund. Funding is provided by HUD for all Section 8 HCV Program Administrative fees and HAP paid to landlords.
Concurrence/Previous Council Action
This item was heard at the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on Feb. 20, 2018, and approval was recommended by a vote of 3-0. On Oct., 4, 2017, City Council authorized the Housing Department to issue an RFP to contract out management of the Section 8 HCV Program to a private firm experienced in HUD regulations and program requirements.
Location
Quadel will manage the Section 8 HCV program at 830 E. Jefferson St., which is the current Section 8 office location.
Council District: Citywide
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Housing Department.