""Field Asset Services"":http://www.fieldassets.com/ (FAS) has decided to transition out of a large property services agreement with a government sponsored entity (GSE), ""FirstService Corporation"":http://www.firstservice.com/ announced in a release Thursday.[IMAGE]
The agreement was first awarded in 2008 and was reset earlier this year, but ""with a significantly increased scope in a very competitive environment,"" according to the release.
The company stated that it attempted to provide services based on the revisions, but decided it could not profit while maintaining an acceptable quality standard.[COLUMN_BREAK]
""We made the difficult decision to transition out of this contract in our Property Services division when it became clear it was not profitable,"" said Jay S. Hennick, founder and CEO of FirstService Corporation. ""Since winning this assignment back in 2008, our team consistently exceeded quality and service standards and was rewarded with increased volumes and share over the years. However, as market conditions changed and foreclosure volumes declined, the scope of the services expected increased without commensurate compensation.""
The current annual run rate of revenues generated by the agreement is approximately $100 million, which is a 30 percent decline from the previous year.
Hennick added that the company is exiting a relationship representative of about 4 percent of its revenues. However, the company expects net earnings to be positively impacted going forward.
An agreement was reached to transition out of the contract as early as August 1, 2012.
Additional details not included in the release such as the name of the GSE could not be revealed due to strict confidentiality regarding FAS's work with clients, a company spokesperson said.
FAS is a unit of FirstService Corporation's Property Services division.