RD_NDMS_INDUSTRY_DAY_QUESTIONS_AND_ANSWER_October_18.pdf

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RD NDMS INDUSTRY DAY QUESTIONS AND ANSWER October 18, 2018

No. QUESTIONS

ANSWERS

1 Will we get a copy of this slideshow?

Yes

2 Is the USDA's plan to further centralize all 50 states under this new contract and RFP or is that still TBD?

To centralize remaining states current administration would like to see that the next year they are taking steps to right now to look at the path and make that happen and we are working on that and it is ‐‐ all I have to say about that.

3 You mentioned no transcript, but will slides be available?

YES

4 Does the law firm have to have an office in each state?

No however Rural Development will require approval on all legal counsel handling cases.

5 Does this include VPR and fcl registration services?

Yes it would. We are looking for a holistic solution.

6 What about HOA identification and payments?

There are loans with HOA fees. We will expect these fees to be handled in any agreement we enter.

7 If an associate at the law firm is licensed in a state will that suffice or does the owner of the law firm have to be barred in each state?

Again I think that's something we will have to probably answer at a later date. Definitely be clarified and there will be more coming on that question.

8 Who is the current vendor that is providing preservation services today for your portfolio?

I'm not at liberty to say at this time.

9 Can the Master Servicer subcontract out or is it expected that all these services be under one roof?

I can honestly say in my experience of knowing what's going on in the private sector there is a limited number of companies that probably could do this under one roof and even that with the other one true rough would be parent child companies sister companies maybe one corporate roof I would anticipate this is an integrator is what we are looking for and I would imagine they would be capable of managing whatever they have to oversee and they will be held accountable for the overseeing and management of whatever it is so I would think it would be safe to say that it could be multiple companies multiple function subcontractors how that would work.

10 Cash for keys offered?

We currently are in a interagency agreement with VA on our REO management I will get into in a second where they offer cash for keys success with that and it is not for regulatory statute that allows us to do this . We are looking at trying

Page | 2 to figure out a way to do it but right now other than a pilot, we would not be able to do it. I cannot say we will do it but I think we will look at any best practices industrywide and any vendor we go with, we hope would be bringing a lot of those best practices with them.

11 After initial property preservation & property is listed for sale; does property presentation stay on to maintain property until settlement?

Yes. On those that not quite as easy but yes it would be what we would anticipate

12 What is the anticipated value of this contract?

I don't have that at this time.

13 Can/ will an auction strategy be used?

Are there limitations as to who can purchase property?

Relatives/Acquaintances of previous owners. Other purchasing entities? LLC?

We are discussing an auction strategy on the existing portfolio so yes we hope so on both the foreclosure and any REO properties.

14 Will there be a “deal and limit” before going to auction?

I don't have those answers yet. We are now starting to look at the auction process so I can't really answer that at this time.

15 Are there limitations as to who can purchase property?

Relatives/Acquaintances of previous owners. Other purchasing entities? LLC?

We have no limitations in the statute so no, we have sold properties to parents of kids, they buy back for their children type of thing, as far as LLC, I don't know.

I'm sure we have LLCs that our buyers and once deem non-program we can sell them best value to the government.

16 Will USDA consider setting this opportunity aside for small business if it can be demonstrated that a small business can facilitate all needed services?

We are in the market research planning phase.

Trying to find out who, what industry has out there and who can meet our needs.

17 When do you anticipate release of the RFP?

We anticipate spring 2019, a “draft RFP” for industry’s comments.

18 Is the intent to source one aggregated contract which will cover all of the services discussed today or is the USDA considering three separate contracts which will allow bidders to focus on the individual contract that is best aligned with each suppliers core competency?

As was indicated we are looking for at this time doing market research to see if we can find a single integrator for this requirement; and depends on what our market research comes up.

19 Does the Agency have specific property preservation repair guidelines, i.e. Fannie Mae allowables?

We don't. Not defined as a Fannie or Freddie because they are dealing with investors. Candidly we ‐‐ [ Indiscernible] we do have general policies we could share along the way when the timing is right --but I would say that we are looking for best practices but there aren't any real clear‐cut other than safe and sanitary. If you go to our statutory language is one of the first things it says that the Secretary shall sell these properties and maintain a decent safe and sanitary sale of a home type of thing so it's a very pervasive piece of requirement inside our statute

Page | 3 and so it is imperative that when we sell these homes in the future, that we will have to make sure that they are in good repair. Right now as I said we are under an IAA with the Veterans Administration and we are selling homes under a pilot which gives us the ability to not necessarily sidestep but to avoid some requirements that we are required to deal with inside our statutes and specifically when we sell a property not under the pilot and we have lead‐ based paint or some type of debatable matter as best as or whatever it may be we cannot sell that home without it being either abated or putting a restriction in the deed that they cannot land or cannot sell the property and/or rent the property until whatever the restriction is cleared. Tthey have to provide that to us before we will take the restriction out. And so that will still be applicable. . . Down the road we are sure.

20 Will USDA consider a unique approach that can reduce your backlog within a few weeks?

I think we will consider all approaches. The key here is we want to take the best that everyone has experienced and are basically saying that we know we are not the experts any longer and we need to best practice from the people that do this day in and day out and have been doing it and have a successful history of it. So yes we will take whatever we can

do. Next couple weeks I don't think we can do it in the next couple weeks if we wanted to but . . .

21 Can any comments be provided at this time if a GSA schedule will be utilized when the RFP is issued?

No. We are at the beginning of this requirement and performing market research . We are not really sure at this time what acquisition approach or strategy we will use. We are trying to find out from you, industry, who is out there; and once we do, it will be synopsized out to industry.

22 Are properties to be sold as-is or can buyers request repairs?

Usually it is not the by request to repair that can be sold as is on a nonprogram loan but on a program property we are required to repair it so that it is meeting the standard of decent safe and sanitary. If it is missing an HVAC system in Mississippi it needs an HVAC system given the heat;

and missing an HVAC system in Michigan Wisconsin maybe not so much.

23 Who can we share our previously developed USDA approach with that indicates these services can be performed by one vendor?

We have a capability statement that will be discussed at the end of the presentations.

24 We are a HUBZone Law Firm (for litigation/legal services) , with substantial subcontractor and teaming experience with

Basically we are opening this up now as day, one looking at what the industry has to offer, who's available what's available, and you'll be given an

Page | 4 real estate management firms. Will USDA consider such SB participation, as a set-aside and valuation factor?

opportunity as Carlene will wrap this up at some point and talk a bit about what you can do next to provide your capability statement to us. From there we will gather that information, synthesize it and make determinations of what acquisition strategy to pursue.

25 Would the Government consider alternate pricing strategies for services under any related procurement?

When you put your capability statement in and set forth your approach, what you have to bring to the table your innovation, your strategies, we will look at it review it, and come up with a strategy.

26 We had technical issues at the beginning of the webinar -could you answer where properties are concentrated?

Properties are concentrated throughout rural America. Generally, it is anything that is 35,000 population or less and rural in nature. The data on the powerpoint shows our current state breakdown.

Historically, loans are made within a 1 hour driving distance of a local Rural Development Field office.

27 - Digital Signature or Wet Signatures? Are both acceptable?

We are doing both right now we are in the early stages of digital for us because we've only recently transitioned to private attorneys. I would like to get to digital.

28 Has the Government considered minimum requirements related to demonstration of responsibility?

I think we are looking at everything. I read a statement earlier definitely looking for the best benefit to the government

29 Do you anticipate any changes in the claim filing process?

Not sure I understand. These are not guaranteed loans, so unless I misunderstand the conversation, these are direct lending so it should be a fee for service type.

30 We understand this is market research but any idea of timelines; RFP, Due Diligence, Award, etc.

Responded earlier that we anticipate a draft RFP by early spring 2019.

31. Will the Government allow alternate capability statements to be submitted or consider extending the page limit?

We can extend the page limit.

32 The RFI document requests a 10-page Capability Statement.

It also says to not include 'marketing documents'. May we include/imbed a copy of our standard 1-page C.S. in the 10-pages, or is this considered a marketing document?

Think you just answered that.

33 Do you have any guidelines around vendor management fees?

We do not publish cost guidelines for the direct loan portfolio. We expect a vendor to provide customary and reasonable cost for any service provide. Rural Development recently solicited for legal services and referenced the FNMA legal cost as something we would consider reasonable.

34 Is there one standard contract or do you use state contracts with a standard addendum

35 Is a submission of a capability statement a requirement to be part of the RFP process due in Q1 2019

No.

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36 Do you anticipate a second Industry Day upon the release of the Draft RFP in the Spring of 2019?

37 Will the Government provide details regarding the related USDA IT infrastructure? Systems? Platforms? Related Applications? Other?

No, will be defined in draft RFP.

38 Will the RFP be open to people who are not present today or who do not send in the requested information?

Yes. The RFP will be posted fbo.gov and open to all able to do business with the government. Keep in mind, a new effort for Rural Development. We are actively engaging industry and looking for best practices.

39 Capability Statement - suggesting you will consider a greater page limit; when will we find out the new page limit?

New page limit will be posted to fbo.gov.

40 The first question is are one standard contract or do you state contract with standard addendum and clarification was/real estate contract?

We use one contract for all Real Estate sales.

41 Is there a requirement for the geographical location of the contractor's office(s)?

42 Can you provide a list of companies that are participating in this Industry Day conference call?

Yes. It will be posted to fbo.gov.

43 Will USDA provide a list of industry participants in this webinar?

Yes

44 Has it been determined the term of the service contract ?

45 Is the inventory strictly single family or are there vacant lots and/or multiple family properties involved (duplex and more units)?

No multifamily type these are all sale family all single‐family that some can consist of condos and some can be mobile homes, that are secure or supposed to be secured and wheels off of them on a foundation. Some of them can be a vacant lot depending on the fact that we may have taken the property back whatever reason we tore down or burned down some we do have some vacant lots but for the most part these are single‐family housing structures.

46 Are the pilot services referred to regarding VA going to be provided by VA, similar to cloud services that USDA provides to other agencies?

I'm going to freelance on this answer. Right now I mentioned we are under a pilot with VA . This pilot will end with VA. Our timeframe with VA contract goes to the end of next fiscal year September 2019. Once pilot ends the pilot function is going to end as well so we will go back to our required statutory mandate.

47 Will VA be considered as a potential vendor for the RFP?

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48 You mentioned USDA isn’t considering the GSA Schedule contract vehicle. Are you leaning to IDIQ? Or GWAC or MOBIS or OASIS? Where r u leaning?

We don't have an approach at this time.

49 When does the current property preservation contract end?

I don't recall off the top of my head.

50 Listing Agreement (do you use what is standard for that state or is there a master listing agreement)

On the centralized portfolio, we have outsourced this to VA. On the non Centralized portfolio, they may use both master listings or a local agent.

51 Does the portfolio include home equity conversion mortgages? If so, can you provide the current volume?

52 Is the current incumbent able to re-bid on this RFP?

There is no current incumbent.

53 Given the unique nature of this MSA concept, wouldn’t it make most sense to use IDIQ?

We are looking to industry to make recommendations, their known industry best practices for any approaches and give rationale appropriately.

54 What is the Mobile Home percentage of the existing REO Portfolio

Less than 1%.

55 Does the Government prefer to unify all services under an umbrella program even though you have demonstrated the uniqueness of each service line?

At this time, yes. This may change as we gather industry knowledge and capabilities.

Post Survey Report/Question

56 You mentioned that no decision is made on which contract vehicle you will be using. You did mention the BPA vehicle.

This vehicle is usually a 'fixed price' contract for a specific timeframe, as we understand it. We believe an IDIQ would give the government the most flexibility for the nature of this MSA's scope, coordination, and complexity.

We are in the initial planning stage of this procurement; market research and requirements building. As indicated in the RFI, in your CAP statement, you are encouraged to recommend and provide rationale for any acquisition strategy, contract type, socio-economic considerations, CLIN pricing structure

END OF QUESTIONS AND ANSWERS