SALEM, Ore. – The Oregon Department of Housing and Community Services isn’t the only agency facing budget cuts. What’s unusual is the reason for its 14 looming layoffs.

The state agency oversees affordable housing and it just lost out on a lucrative federal contract. You may be surprised by who had the winning bid.

I’m standing outside Capitol Plaza. It’s a tan, seven story apartment block near downtown Salem.

Everyone who lives here has to qualify for a federally subsidized housing program known as Section 8. It’s someone’s job to make sure that they are qualified… and that the Capitol Plaza is a safe place to live.

For the past decade, that job has belonged to the Oregon Department of Housing and Community Services. Makes sense, right? An Oregon agency monitoring Oregon housing.

But starting in October, the job of overseeing Capitol Plaza and more than 270 locations like it in Oregon will be in the hands of… wait for it… the Bremerton Housing Authority.

You know, Bremerton… the 27th largest city… in Washington.

“I think there are other housing authorities that would like to do this. But it’s a competition,” says Kurt Weist, the Bremerton agency’s executive director.

The Seattle suburb’s housing authority monitors all the Section 8 apartment complexes in the state of Washington. It’s also developed a cottage industry of doing that job in far-flung places. Hawaii. Nebraska.

And soon, Oregon.

So why does the federal Department of Housing and Urban Development give these contracts to Bremerton?

Tom Cusack is the retired field director for HUD’s Oregon office. He says for the most part there’s no reason why oversight of HUD apartments can’t be done from a distance… even from out-of-state.

“A substantial part of the work involves desk work,” Cusack explains. “And so that desk work literally could be performed almost any place in the United States.”

Oregon officials don’t dispute that. What they are disputing is the methodology that HUD used when it awarded the new contract to Bremerton. So much so that they’ve filed a bid protest with HUD and may even sue.

“Our position on this is that fundamentally, the process was flawed,” says Rick Crager, the acting director of the Oregon Housing and Community Services Department.

Now, you might think price would be an obvious factor in any bidding contest. But Crager says HUD never told Oregon and other bidders that price was a big deal. He says his agency’s bid was focused on other factors like capability and technical approach.

“The pricing that we put in, that we bid on this contract, reflects that,” he says. “It’s quality.”

Crager says losing the contract is a $4.2 million hit for the agency. He says at least 14 people will lose their jobs.

HUD’s rejection of Oregon’s bid noted that Bremerton actually scored higher than Oregon in other performance categories in addition to offering to do it for less money.

And HUD spokesman Brian Sullivan says it should have been obvious that price would be a key factor when it came time to award the contract.

“We had industry conversations constantly, early and often,” he says. “And it was no secret that we were looking to cut costs.”

Sullivan says HUD will save taxpayers $100 million dollars a year nationwide after the most recent round of contract renewals.

Meanwhile, Bremerton’s Kurt Weist says he’s not sure yet whether his housing inspectors will travel to Oregon or whether he’ll hire Oregon-based inspectors. But he says the thousands of people who live in the Section 8 apartment complexes in Oregon have nothing to worry about.

“It should no impact on them.”

Weist says any profit his agency earns from the Section 8 contracts is used to bolster local housing projects in Bremerton.

Weist may be smiling about winning the Oregon bid, but there’s an ironic twist to this story: In the same round of bidding, the Bremerton Housing Authority lost the contract to oversee Section 8 apartment complexes in the state of Washington.

Who’d it lose out to? The housing authority of Wisconsin.

On the Web:

Oregon Department of Housing and Community Services:

http://www.ohcs.oregon.gov/

Oregon Section 8 property list:

http://www.ohcs.oregon.gov/OHCS/APMD/docs/Section_8_property_list_monitored.pdf

Bremerton Housing Authority:

http://www.bremertonhousing.org/

Oregon Housing Blog:

http://oregonhousing.blogspot.com/

Copyright 2011 Northwest News Network

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