RFQ for MultiFamily Housing appraisals competition 04-12-2010 Part 3 of 4.doc

RFQ-10-005 Multi-Family Housing appraisals for USDA Rural Development Page 29 of 29

Appraisals which conclude the “Market Value of the fee simple estate, as conventional or unrestricted, subject to short term leases” for each property listed below:

LOT #1

Madisonville Apartments - 60-unit family property (30 1BRs and 30 2BRs)

1300 Eastside Drive

Madisonville, KY 42431

LOT #2

Rosedale Court – 40 unit family property (10 1BRs, 18 2BRs, and 12 3BRs) with Section 8

45 Rosedale Court

Dawson Springs, KY 42408

LOT #3

Calvert City Apartments – 60 unit family property (30 1BRs and 30 2BRs)

533 Cedar Street

Calvert City, KY 42029

Additional building specific information can be obtained from the Owner Representative, Joe Ouellette, AIMCO Capital, 2300 Clarendon Boulevard, Suite 200, Arlington, VA 22201, (703) 243-9194, joseph.ouellette@aimco.com or from the RD Area Office in Madisonville, KY, (270) 821-4430

SECTION A

QUOTATION PREPARATION INSTRUCTIONS

A.1 PRICE QUOTATION FORMAT

Insert your quoted prices on page #1 (Standard Form 18) in blocks 11.e and 11.f..

The contractor’s price quotation shall be presented as the entire price to perform each multifamily housing appraisal. All labor, material, travel costs, equipment use, etc. shall be included in the unit price quoted to perform the multifamily housing appraisals described in this Request for Quotation (RFQ). Your quotation is due at the place and by the time specified in block 11.b. of the Standard Form 18 (Page #1 of this RFQ).

A.2 TECHNICAL QUOTATION

Competitors should provide as a part of their quotation a separate technical quotation. The technical quotation should be included to show your qualifications for, and the ability to perform the Appraisals specified in this Request for Quotations. You may also include information regarding your past performance in providing these services for USDA Rural Development, Kentucky State Office, as well as other public or private clients. Your technical quotation should specifically address your direct experience in conducting multifamily housing appraisals including your experience with subsidized housing. Also include a list and full contact information of your 5 most recent customers of such same and/or most similar appraisals.

Also provide a copy of your certificate as a “Certified General” appraiser by the Kentucky Real Estate Appraisers Board.

Quotations without a technical quotation or an insufficient technical quotation will be at a severe disadvantage in the Government’s competitive source selection, A.3 The quoter must complete all certifications and representations in section D entitled REPRESENTATIONS AND CERTIFICATIONS. Specific “fill-ins” are required in the following sections:

D-3. 52.219-1 Small Business Program Representations

D-4. 52.222-22 Previous Contracts and Compliance Reports D-5. 52.222-25 Affirmative Action Compliance D-6. 52.225-20 Prohibition on Conducting Restricted Business Operations in Sudan—Certification

D-7. 52.204-8 Annual Representations and Certifications D-8. 52.212-3 Offeror Representations and Certifications—Commercial Items

D.9. Completed CCR/ORCA Registration Confirmation Form and contact information

D.10. Completed FFIS Vendor Code Request Form (does not need to be completed if your firm possesses a valid and current USDA VID# and you are not making any changes to the information.

A.4 The “SPECIFICATIONS” are shown in Section C beginning on page 4.

A.5 Your completed Quotation is due at the date and time and at the place specified on Page 1. Include the following:

· completed blocks 13, 14, 15 & 16 of the Request for Quotation Form (SF18), and sign and return the form,

- completed Representations D1, D2, D3, D4, D5, D6, D7, D8, D9 AND D10,

· completed price quotation pages 23 AND 24 showing your quoted price for each county that you wish to service.

Note that purchase orders are issued on a case by case basis. Issuance of purchase orders to multiple contractors is anticipated.

· a completed “CCR/ORCA Registration Confirmation Form and Contact Information” specifying the dates active dates of your CCR and ORCA registration and your contact information,

· a “FFIS Vendor Code Request” form if you do not have a Vendor Identification Number (VID) or if you are making any changes to your information, SECTION B

EVALUATION FACTORS FOR AWARD

B.1 This Request for Quotations is a 100% Small Business Set Aside. For purposes of this solicitation the NCIAS Code is 531320. The small business size standard is average annual receipts of $2 Million or less.

B.2 PRICE EVALUATION OF DISCOUNTS FOR PROMPT PAYMENT:

The Government will consider no price evaluation benefit to quotations including a discount for prompt payment. The Government will, however, take any prompt payment discounts which the vendor quotes, and to which the Government is entitled. Prompt payment discounts are not required to be quoted.

B.3 BEST VALUE REQUEST FOR QUOTATION

This is a Best Value Request for Quotation. The Government will make awards to those vendors which the Government determines to offer the best value to the Government, price and other factors included. However, price is the most important consideration. In addition to considering price and past performance, the Government will consider the Quoter’s technical quotation including technical qualifications, relevant experience, and past performance in terms of timeliness, thoroughness, and completeness of work previously done for USDA Rural Development and/or other clients and other relevant past performance factors in selecting vendors for award, and the administrative cost of making multiple payments to contractors who price their quotations on the basis of multiple payments.

B.4 This acquisition is being conducted under Federal Acquisition Regulation (FAR) Part 13.

B.5 AWARD BY LOT

Selection for award will be by individual lot for each of the 3 appraisals. If your quotation if on an “all or none” basis, or predicated on award of multiple items, so specify in your quotation. Discounted prices for multiple lots are acceptable.

B.6 52.212-2 Evaluation—Commercial Items (Jan 1999)

(a) The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price and other factors considered. The following factors shall be used to evaluate offers:

Past performance of same or very similar types of appraisals

Price

Technical and past performance, when combined, are more important than price.

(End of provision)

SECTION C

SPECIFICATIONS

USDA, RURAL DEVELOPMENT, KENTUCKY STATE OFFICE

SPECIFICATIONS - MULTIFAMILY HOUSING APPRAISALS

STANDARD STATEMENT OF WORK (SOW) FOR MULTI-FAMILY HOUSING CONTRACT APPRAISALS

Background: USDA Rural Development provides loans to eligible applicants for multi- family housing properties. In support of this program, Rural Development requires the services of qualified persons or firms to provide appraisals of subsidized Multi-Family Housing properties. All appraisals must be in compliance with the current edition of the Uniform Standards of Professional Appraisal Practice (USPAP) and Rural Housing Service (RHS) Multi-Family Housing appraisal requirements (supplemental standards), which are set forth in the Statement of Work (SOW), 7 CFR 3560, subpart P, and Chapter 7 of the RHS HB-1-3560. The appraiser should note that there are other agencies within Rural Development with different appraisal needs and requirements.

Professional Qualifications: All Agency Multi-Family Housing appraisals must be written by a State Certified General Appraiser, certified in the State in which the subject property is located. The appraiser must have the specialized knowledge and experience necessary to be competent to appraise subsidized housing. The appraiser must understand the housing programs, value types and definitions, real and intangible property rights, use restrictions, pertinent tax considerations, and methods for valuation of various types of favorable financing involved in the appraisal of subsidized housing.

Request for Quote (RFQ): The RFQ will be used to request proposals from appraisers and will contain basic property information, services requested, special requirements, and any additional information the appraiser will need to bid appropriately. It is the appraiser's responsibility to understand the scope of the assignment and its requirements.

Contract for Appraisal Services (CAS): Once the appraiser has been selected to complete the assignment, a Rural Development representative will provide a CAS. The CAS form will contain the same information as the RFQ but will also include Rural Development and property contacts as well as the agreed upon fee and due date. Rural Development will also inform the appraiser if he/she has not been awarded the assignment. The required number of copies of the appraisal may vary, and the appraiser must pay attention to the number specified on the CAS, as well as the specific delivery instructions. The CAS will specify to whom the reports are to be addressed and where the reports and invoice should be delivered.

Subcontracting: The appraiser engaged by Rural Development or a qualified employee or associate of the appraiser, must perform the appraisal and must not subcontract it, or any part of it, to another person without written consent of the Rural Development Contracting Officer. The appraisal must be signed by a Certified General appraiser of the firm submitting the quotation.

Post Award Conference: The appraiser must contact the Contracting Officer's Representative (COR), identified in the CAS, to schedule a post-award telephone conference. The COR will discuss appraisal requirements with the appraiser and answer questions about the assignment. Furthermore, the COR will be the appraiser's contact with the Agency during the course of the assignment. Again, it is the appraiser's responsibility to understand the scope of the appraisal and its requirements.

Client: The appraiser must understand and agree that USDA Rural Development is the appraiser's client, and all reports must be addressed to USDA Rural Development (and any other intended user specified by the Agency). Any questions related to the form or substance of the assignment will be directed to the COR and will not be directed to the property owner.

Property Contact: The appraiser should call the property contact, identified in the CAS, for gaining access to the property and in most cases for procuring property specific data relevant to the assignment. Appraisal fees or turnaround times should not be discussed with the property contact. The appraiser must notify the COR immediately if any of the following occurs: 1) the appraiser cannot gain adequate access to the property, 2) the appraiser does not receive essential property information in a timely manner, 3) the appraiser has previously appraised or is in the process of appraising the property, 4) the appraiser has any other potential conflict of interest with respect to the assignment.

Confidentiality: The appraiser must keep all information and materials furnished by Rural Development, the owner, and/or property contact regarding the subject property confidential, as required by USPAP and the Gramm-Leach-Bliley Act. The appraiser may use such information only in connection with performance of the assignment. The appraiser must agree to prevent the unauthorized disclosure, misuse, or alteration of the confidential information. Any information obtained through public sources is not considered confidential information. Disregard of this privacy requirement will be cause for immediate debarment as a contractor for the federal government.

Nondiscrimination: All appraisals of Section 515 Rural Rental Housing or Section 514/516 Farm Labor Housing properties must comply with the Fair Housing Amendments Act of 1988. According to the Act, it is unlawful for an appraiser to use factors that are discriminatory on the basis of race, color, religion, sex, disability, familial status, or national origin in the sale, rental, leasing, or financing of housing.

Assumptions, Hypothetical Conditions, and Limiting Conditions: All extraordinary assumptions, hypothetical conditions, and limiting conditions must be clearly described in a single location near the beginning of the report and in appropriate sections of the appraisal. In addition, extraordinary assumptions and hypothetical conditions must be restated wherever the appraiser opines to the final value(s). Extraordinary assumptions and hypothetical conditions also must be discussed with and agreed to by the COR prior to completion of the report. General assumptions and limiting conditions that reduce the normal scope of appraisal due diligence are not allowed.

Potential Environmental Hazards: The appraiser must note any suspected environmental hazards, including issues external to the property that could adversely impact the property's value. Examples of environmental hazards would include damaged asbestos-containing building materials, underground storage tanks, chemical leaks, spills, or staining of ground surfaces, or on-site waste disposal such as sludge, oil, paints, or chemical residues. If the appraiser observes any suspected environmental hazards, he/she must notify the COR immediately and refrain from finalizing aspects of the appraisal that could be impacted until resolution of the issue or until instructed otherwise.

Americans with Disabilities Act (ADA): Appraisers must be familiar with the general provisions of the ADA because subsidized housing is a property type that is likely to be affected. The appraiser must consider what impact (if any) noncompliance with the ADA has on the value of the subject property. Any impact on value must be supported by market evidence.

Appraisal Report Formats: The appraisal type (complete or limited), report type (self-contained, summary, or restricted use), and report format (narrative or form) will be set forth in Rural Development's authorizing Contract for Appraisal Services (CAS). Narrative formats are preferred for most Multi-Family Housing appraisals, with the level of detail dependent on the scope of work and the requested appraisal type and report type. Form reports completed on Form RD 1922-7, Appraisal Report for Multi-Unit Housing, FNMA Form 1050, FHLMC Form 71A, or the Uniform Commercial Industrial Appraisal Report (UCIAR) are generally acceptable, as long as they are modified to meet USPAP and Agency requirements and are agreed upon in advance.

Approaches to Value: The approaches to value (Cost Approach, Sales Comparison Approach, and Income Approach) that are to be included in the appraisal depend on the specific assignment and will be specified in the CAS. When the purpose of the appraisal is to conclude market value, all three approaches to value must be included as part of a Complete Appraisal. When the purpose of the appraisal is to conclude market value, subject to restricted rents, the Cost Approach and the Income Approach must be included, but the Sales Comparison Approach is typically not applicable and may be excluded. When the purpose of the appraisal is to conclude value-in-use of an on-farm labor housing project, only the Cost Approach is applicable, and the other two approaches are excluded. For some assignments, an approach to value that is typically applicable may not be applicable. When this is the case, the appraiser, upon receiving the RFQ, must discuss this issue with the COR so that the CAS will correctly specify the approaches to value that will be included in the report. If, during the course of the assignment, the appraiser determines that an approach is not applicable, he/she must obtain the approval of the COR to exclude the approach from the report, and the CAS must be modified.

Value Types: The types of value (e.g., market value or market value, subject to restricted rents or insurable value) to be reported, including values of various types of favorable financing, will be specified in the CAS.

Complete Appraisal Requirements: All RHS Complete Appraisals must comply with the following unless the CAS requires otherwise:

1) All appraisal reports must comply with the current edition of USPAP. Specifically, all reports must include the following items required by Standards 1 and 2 of USPAP:

• Identification of the appraisal type and report type,

• Identification of the client and any other intended users of the appraisal,

• Identification of the intended use of the appraisal,

• Description of the subject real estate,

• Identification of the real property interest (property rights) appraised,

• Identification of the purpose of the appraisal,

• Identification and definition(s) of the value type(s) reported,

• Identification of the effective date(s) of the appraisal and the date of the report,

• Description of the scope of work used to develop the appraisal,

• Disclosure of all assumptions, hypothetical conditions, and limiting conditions that directly affect the appraisal,

• Description of the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions,

• Description of the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and (for market value) an analysis of the highest and best use of the real estate,

• Disclosure of any permitted departures from specific requirements of Standard 1 of USPAP and the reason for excluding any of the usual valuation approaches,

• A signed certification in accordance with USPAP Standards Rule 2-3.

2) All reports must include an executive summary.

3) All reports must include a legal description of the subject property.

4) All reports must include photographs of the interior and exterior of the subject property and of the exterior of all rent comparables and sales comparables.

5) All reports must include the following maps, showing the location of the subject:

• Regional map

• City map

• Flood plain map

• Land Sales map

• Sales Comparables map

• Rent Comparables map

6) All reports must include the following exhibits of the subject property:

• Survey

• Site plan

• Floor plans

7) All analyses within the Income Approach must be well supported. When the assignment is to conclude market value, subject to restricted rents, the subject's 3-year operating history should typically be used as the primary data source to project the subject's other income, vacancy, and operating expenses. A set of expense comparables should be compiled from recent operating statements for similar restricted properties within the subject's housing program. This data can be obtained from Rural Development and used to support these projections. All expense analyses must include a tabulated set of expense comparables and should also include supporting information from an expense survey done by RHS or a State or local housing authority, if available. The capitalization rate selected for the subject must be derived from the most recent sales of similar properties in the local (or nearest similar) conventional apartment market. Support for this overall rate should be provided using other accepted methods such as the band-of-investment technique, the debt coverage ratio formula, and regional investment criteria surveys. If the pro forma income, vacancy, expenses, or capitalization rate is not adequately supported, the Rural Development Review Appraiser will require the contract appraiser to make revisions that provide the necessary support before the appraisal can be accepted.

8) Any method that includes the use of note rate rent as Potential Gross Income (PGI) in the Income Approach pro forma to derive a value equal to the sum of the market value, subject to restricted rents, plus the value of the interest credit subsidy is not acceptable appraisal practice. Appraisers must not use this procedure in Agency Multi-Family Housing appraisals.

9) All reports must conclude the market rents for the subject's units. A market rent adjustment grid showing quantitative adjustments in specific percentages or dollar amounts must be included and be well supported. When the assignment is to conclude market value, subject to restricted rents, the report must state whether the base rate (restricted) rents are less than, equal to, or higher than market rents. Market rents must be estimated to determine if the subject's base rate rents are attainable without RA. Base rate rents must not be higher than market rents, unless an exception is made, according to the policy of Conventional Rents for Comparable Units (CRCU).

10) All reports must include an estimate of the remaining economic life of the subject.

11) All appraisals of existing properties must include a discussion of deferred maintenance at the subject property. Items of deferred maintenance must be listed, and the cost to cure each item must be estimated, with support provided. The final value must be calculated by subtracting the total cost estimated to cure all deferred maintenance from the value indicated as if no deferred maintenance existed.

12) When favorable financing is involved, the appraisal report must contain a narrative identifying each source of financing. The amount and terms of each type of favorable financing must be described, and each type of favorable financing must be valued separately from the market value, subject to restricted rents, of the property. Valuation of “interest credit subsidy” from Section 514/515 loans should be consistent with Attachment 7-H.

13) When the assignment is to conclude market value, subject to restricted rents, the subject's operating statements for the preceding three full years and the proposed budget for the current year must be used in the expense analysis and included in the addenda of the report, if available.

14) Appraisals of properties with proposed rehabilitation must include Form RD 1924-13, Estimate and Certificate of Actual Cost, in the addenda.

15) A copy of the CAS must be included in the addenda of the appraisal report.

Review of Appraisal: Appraisal reports are subject to review by Rural Development. Appraisers must be prepared to discuss their analyses, opinions, and conclusions and provide additional written support, clarification, and/or corrected appraisal pages if requested.

Accountability: The engaged appraiser must inspect the subject property and be prepared to discuss the appraisal report. A staff appraiser or associate may participate in the appraisal assignment but must either sign the report or be identified, by name, as having provided significant professional assistance in the appraiser's certification. If a staff appraiser or associate wrote the majority of the report, that staff appraiser or associate may be present during any discussion of the assignment. However, it is the engaged contract appraiser whose work product has been identified as acceptable by Rural Development, and that appraiser must sign the report and be accountable for it.

Defense of Appraisal: The Agency may require the appraiser to defend the appraisal in court or in Rural Development's appeals process. This would constitute a consulting assignment that would be contracted separately from the original appraisal assignment.

Payment of Services: Late delivery of any report may result in liquidated damages. Lacking specific arrangements in writing to the contrary, Rural Development may impose a penalty equal to the lesser of 5% of the appraisal fee per day, or $100 per day, for each calendar day beyond the scheduled due date. The late fee penalty is based on the calendar days between the due date and the date the appraisal report is received by Rural Development. If delivery of the report is 30 days past due, the appraisal engagement is cancelable by Rural Development, and the appraiser's right to all fees associated with the assignment may be forfeited.

APPRAISAL INFORMATION SHEET (EXAMPLE),

ATTACHMENT TO SOW

Appraisal Type: Complete

Report Type: Summary

Appraisal Format: Narrative

Client: Dave Beveridge, Contract Program Manager, USDA Rural Development

USDA Rural Development Contact: Beveridge, Contract Program Manager, USDA Rural Development; Phone: 859-224-7332

Intended Users of Appraisal: USDA Rural Development

Intended Use of Appraisal: To establish value to be in developing an incentive offer to the borrower in accordance with program regulations on prepayment

Purpose of Appraisal: To submit supported opinions of the required value(s), in conformity with USPAP and the appraisal policy of USDA Rural Development

Property Type: USDA Rural Development Section 515 Rural Rental Housing complex

Property Status: Existing

Property Interest Appraised: Fee Simple Value Types Required: The following values are required:

• Market Value of the fee simple estate, as conventional or unrestricted, subject to short term leases Number of Copies: 2

Mail Reports to: David R. Beveridge

Contracting Officer (1 copy)

USDA Rural Development

771 Corporate Drive, Suite 200 Lexington, KY 40503

Paul Higgins (1 copy)

Multifamily Housing Program Director

USDA Rural Development

771 Corporate Drive, Suite 200 Lexington, KY 40503

The COR under this purchase order will be:

Paul Higgins

Multifamily Housing Program Director

USDA Rural Development

771 Corporate Drive, Suite 200 Lexington, KY 40503

Telephone 859-224-7357

The COR may not make any changes to any of the provisions of the purchase order. Changes to the purchase order can only be made by one of the contracting officers at the USDA Rural Development, Kentucky State Office. Presently, the only contracting officers are David R. Beveridge, Robert D. Christopher, and Linda D. Wolfe.

C.2 TIME OF DELIVERY

Delivery of a complete and accurate appraisal shall be within 30 days after issuance of purchase order.

C3. INSPECTION AND ACCEPTANCE

Inspection and acceptance will be at the USDA, KY RD State Office. Inspection is normally limited to determining compliance with the requirements stated in the purchase order and the Statement of Work.

C.4. INVOICING

All payments under this Purchase Order will be made under the Prompt Payment Act. (See Clause 52.232-1.) The contractor shall not be entitled for any payment for services not rendered, including anticipatory profits, overheads, personnel costs, or any and all similar costs.

C.5. RETURNED INVOICES

Invoices are returned for:

1. Failing to cite a the proper Purchase Order Number

2. Having other payment discrepancies.

Resolution and correction will require the contractor to contact the Contracting Officer.

C.6. ADMINISTRATION

The purchase order will be administered by:

Contracting Officer

USDA Rural Development

771 Corporate Drive, Suite 200

Lexington, KY 40503

The contractor will make deliveries to and will deliver their invoice to the above address.

C.7. FAR 52.212-4 Contract Terms and Conditions—Commercial Items (Mar 2009)

(a) Inspection/Acceptance. The Contractor shall only tender for acceptance those items that conform to the requirements of this contract. The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance. The Government may require repair or replacement of nonconforming supplies or reperformance of nonconforming services at no increase in contract price. If repair/replacement or reperformance will not correct the defects or is not possible, the Government may seek an equitable price reduction or adequate consideration for acceptance of nonconforming supplies or services. The Government must exercise its post-acceptance rights—

(1) Within a reasonable time after the defect was discovered or should have been discovered; and

(2) Before any substantial change occurs in the condition of the item, unless the change is due to the defect in the item.

(b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a result of performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency in accordance with the Assignment of Claims Act (31 U.S.C. 3727). However, when a third party makes payment (e.g., use of the Governmentwide commercial purchase card), the Contractor may not assign its rights to receive payment under this contract.

(c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties.

(d) Disputes. This contract is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613). Failure of the parties to this contract to reach agreement on any request for equitable adjustment, claim, appeal or action arising under or relating to this contract shall be a dispute to be resolved in accordance with the clause at FAR 52.233-1, Disputes, which is incorporated herein by reference. The Contractor shall proceed diligently with performance of this contract, pending final resolution of any dispute arising under the contract.

(e) Definitions. The clause at FAR 52.202-1, Definitions, is incorporated herein by reference.

(f) Excusable delays. The Contractor shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of the Contractor and without its fault or negligence such as, acts of God or the public enemy, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. The Contractor shall notify the Contracting Officer in writing as soon as it is reasonably possible after the commencement of any excusable delay, setting forth the full particulars in connection therewith, shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Contracting Officer of the cessation of such occurrence.

(g) Invoice.

(1) The Contractor shall submit an original invoice and three copies (or electronic invoice, if authorized) to the address designated in the contract to receive invoices. An invoice must include—

(i) Name and address of the Contractor;

(ii) Invoice date and number;

(iii) Contract number, contract line item number and, if applicable, the order number;

(iv) Description, quantity, unit of measure, unit price and extended price of the items delivered;

(v) Shipping number and date of shipment, including the bill of lading number and weight of shipment if shipped on Government bill of lading;

(vi) Terms of any discount for prompt payment offered;

(vii) Name and address of official to whom payment is to be sent;

(viii) Name, title, and phone number of person to notify in event of defective invoice; and

(ix) Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice only if required elsewhere in this contract.

(x) Electronic funds transfer (EFT) banking information.

(A) The Contractor shall include EFT banking information on the invoice only if required elsewhere in this contract.

(B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a proper invoice, the Contractor shall have submitted correct EFT banking information in accordance with the applicable solicitation provision, contract clause (e.g., 52.232-33, Payment by Electronic Funds Transfer—Central Contractor Registration, or 52.232-34, Payment by Electronic Funds Transfer—Other Than Central Contractor Registration), or applicable agency procedures.

(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.

(2) Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office of Management and Budget (OMB) prompt payment regulations at 5 CFR Part 1315.

(h) Patent indemnity. The Contractor shall indemnify the Government and its officers, employees and agents against liability, including costs, for actual or alleged direct or contributory infringement of, or inducement to infringe, any United States or foreign patent, trademark or copyright, arising out of the performance of this contract, provided the Contractor is reasonably notified of such claims and proceedings.

(i) Payment.—

(1) Items accepted. Payment shall be made for items accepted by the Government that have been delivered to the delivery destinations set forth in this contract.

(2) Prompt payment. The Government will make payment in accordance with the Prompt Payment Act (31 U.S.C. 3903) and prompt payment regulations at 5 CFR Part 1315.

(3) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see 52.212-5(b) for the appropriate EFT clause.

(4) Discount. In connection with any discount offered for early payment, time shall be computed from the date of the invoice. For the purpose of computing the discount earned, payment shall be considered to have been made on the date which appears on the payment check or the specified payment date if an electronic funds transfer payment is made.

(5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall—

(i) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—

(A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);

(B) Affected contract number and delivery order number, if applicable;

(C) Affected contract line item or subline item, if applicable; and

(D) Contractor point of contact.

(ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

(6) Interest.

(i) All amounts that become payable by the Contractor to the Government under this contract shall bear simple interest from the date due until paid unless paid within 30 days of becoming due. The interest rate shall be the interest rate established by the Secretary of the Treasury as provided in Section 611 of the Contract Disputes Act of 1978 (Public Law 95-563), which is applicable to the period in which the amount becomes due, as provided in (i)(6)(v) of this clause, and then at the rate applicable for each six-month period as fixed by the Secretary until the amount is paid.

(ii) The Government may issue a demand for payment to the Contractor upon finding a debt is due under the contract.

(iii) Final decisions. The Contracting Officer will issue a final decision as required by 33.211 if—

(A) The Contracting Officer and the Contractor are unable to reach agreement on the existence or amount of a debt within 30 days;

(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within the timeline specified in the demand for payment unless the amounts were not repaid because the Contractor has requested an installment payment agreement; or

(C) The Contractor requests a deferment of collection on a debt previously demanded by the Contracting Officer (see 32.607-2).

(iv) If a demand for payment was previously issued for the debt, the demand for payment included in the final decision shall identify the same due date as the original demand for payment.

(v) Amounts shall be due at the earliest of the following dates:

(A) The date fixed under this contract.

(B) The date of the first written demand for payment, including any demand for payment resulting from a default termination.

(vi) The interest charge shall be computed for the actual number of calendar days involved beginning on the due date and ending on—

(A) The date on which the designated office receives payment from the Contractor;

(B) The date of issuance of a Government check to the Contractor from which an amount otherwise payable has been withheld as a credit against the contract debt; or

(C) The date on which an amount withheld and applied to the contract debt would otherwise have become payable to the Contractor.

(vii) The interest charge made under this clause may be reduced under the procedures prescribed in 32.608-2 of the Federal Acquisition Regulation in effect on the date of this contract.

(j) Risk of loss. Unless the contract specifically provides otherwise, risk of loss or damage to the supplies provided under this contract shall remain with the Contractor until, and shall pass to the Government upon:

(1) Delivery of the supplies to a carrier, if transportation is f.o.b. origin; or

(2) Delivery of the supplies to the Government at the destination specified in the contract, if transportation is f.o.b. destination.

(k) Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.

(l) Termination for the Government’s convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been avoided.

(m) Termination for cause. The Government may terminate this contract, or any part hereof, for cause in the event of any default by the Contractor, or if the Contractor fails to comply with any contract terms and conditions, or fails to provide the Government, upon request, with adequate assurances of future performance. In the event of termination for cause, the Government shall not be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor shall be liable to the Government for any and all rights and remedies provided by law. If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience.

(n) Title. Unless specified elsewhere in this contract, title to items furnished under this contract shall pass to the Government upon acceptance, regardless of when or where the Government takes physical possession.

(o) Warranty. The Contractor warrants and implies that the items delivered hereunder are merchantable and fit for use for the particular purpose described in this contract.

(p) Limitation of liability. Except as otherwise provided by an express warranty, the Contractor will not be liable to the Government for consequential damages resulting from any defect or deficiencies in accepted items.

(q) Other compliances. The Contractor shall comply with all applicable Federal, State and local laws, executive orders, rules and regulations applicable to its performance under this contract.

(r) Compliance with laws unique to Government contracts. The Contractor agrees to comply with 31 U.S.C. 1352 relating to limitations on the use of appropriated funds to influence certain Federal contracts; 18 U.S.C. 431 relating to officials not to benefit; 40 U.S.C. 3701, et seq., Contract Work Hours and Safety Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409 relating to whistleblower protections; Section 1553 of the American Recovery and Reinvestment Act of 2009 relating to whistleblower protections for contracts funded under that Act; 49 U.S.C. 40118, Fly American; and 41 U.S.C. 423 relating to procurement integrity.

(s) Order of precedence. Any inconsistencies in this solicitation or contract shall be resolved by giving precedence in the following order:

(1) The schedule of supplies/services.

(2) The Assignments, Disputes, Payments, Invoice, Other Compliances, and Compliance with Laws Unique to Government Contracts paragraphs of this clause.

(3) The clause at 52.212-5.

(4) Addenda to this solicitation or contract, including any license agreements for computer software.

(5) Solicitation provisions if this is a solicitation.

(6) Other paragraphs of this clause.

(7) The Standard Form 1449.

(8) Other documents, exhibits, and attachments.

(9) The specification.

(t) Central Contractor Registration (CCR).

(1) Unless exempted by an addendum to this contract, the Contractor is responsible during performance and through final payment of any contract for the accuracy and completeness of the data within the CCR database, and for any liability resulting from the Government’s reliance on inaccurate or incomplete data. To remain registered in the CCR database after the initial registration, the Contractor is required to review and update on an annual basis from the date of initial registration or subsequent updates its information in the CCR database to ensure it is current, accurate and complete. Updating information in the CCR does not alter the terms and conditions of this contract and is not a substitute for a properly executed contractual document.

(2)(i) If a Contractor has legally changed its business name, “doing business as” name, or division name (whichever is shown on the contract), or has transferred the assets used in performing the contract, but has not completed the necessary requirements regarding novation and change-of-name agreements in FAR Subpart 42.12, the Contractor shall provide the responsible Contracting Officer a minimum of one business day’s written notification of its intention to (A) change the name in the CCR database; (B) comply with the requirements of Subpart 42.12; and (C) agree in writing to the timeline and procedures specified by the responsible Contracting Officer. The Contractor must provide with the notification sufficient documentation to support the legally changed name.

(ii) If the Contractor fails to comply with the requirements of paragraph (t)(2)(i) of this clause, or fails to perform the agreement at paragraph (t)(2)(i)(C) of this clause, and, in the absence of a properly executed novation or change-of-name agreement, the CCR information that shows the Contractor to be other than the Contractor indicated in the contract will be considered to be incorrect information within the meaning of the “Suspension of Payment” paragraph of the electronic funds transfer (EFT) clause of this contract.

(3) The Contractor shall not change the name or address for EFT payments or manual payments, as appropriate, in the CCR record to reflect an assignee for the purpose of assignment of claims (see Subpart 32.8, Assignment of Claims). Assignees shall be separately registered in the CCR database. Information provided to the Contractor’s CCR record that indicates payments, including those made by EFT, to an ultimate recipient other than that Contractor will be considered to be incorrect information within the meaning of the “Suspension of payment” paragraph of the EFT clause of this contract.

(4) Offerors and Contractors may obtain information on registration and annual confirmation requirements via the internet at http://www.ccr.gov or by calling 1-888-227-2423 or 269-961-5757.

(End of clause)

Alternate I (Oct 2008). When a time-and-materials or labor-hour contract is contemplated, substitute the following paragraphs (a), (e), (i) and (l) for those in the basic clause.

(a) Inspection/Acceptance. (1) The Government has the right to inspect and test all materials furnished and services performed under this contract, to the extent practicable at all places and times, including the period of performance, and in any event before acceptance. The Government may also inspect the plant or plants of the Contractor or any subcontractor engaged in contract performance. The Government will perform inspections and tests in a manner that will not unduly delay the work.

(2) If the Government performs inspection or tests on the premises of the Contractor or a subcontractor, the Contractor shall furnish and shall require subcontractors to furnish all reasonable facilities and assistance for the safe and convenient performance of these duties.

(3) Unless otherwise specified in the contract, the Government will accept or reject services and materials at the place of delivery as promptly as practicable after delivery, and they will be presumed accepted 60 days after the date of delivery, unless accepted earlier.

(4) At any time during contract performance, but not later than 6 months (or such other time as may be specified in the contract) after acceptance of the services or materials last delivered under this contract, the Government may require the Contractor to replace or correct services or materials that at time of delivery failed to meet contract requirements. Except as otherwise specified in paragraph (a)(6) of this clause, the cost of replacement or correction shall be determined under paragraph (i) of this clause, but the “hourly rate” for labor hours incurred in the replacement or correction shall be reduced to exclude that portion of the rate attributable to profit. Unless otherwise specified below, the portion of the “hourly rate” attributable to profit shall be 10 percent. The Contractor shall not tender for acceptance materials and services required to be replaced or corrected without disclosing the former requirement for replacement or correction, and, when required, shall disclose the corrective action taken. [Insert portion of labor rate attributable to profit.]

(5)(i) If the Contractor fails to proceed with reasonable promptness to perform required replacement or correction, and if the replacement or correction can be performed within the ceiling price (or the ceiling price as increased by the Government), the Government may—

(A) By contract or otherwise, perform the replacement or correction, charge to the Contractor any increased cost, or deduct such increased cost from any amounts paid or due under this contract; or

(B) Terminate this contract for cause.

(ii) Failure to agree to the amount of increased cost to be charged to the Contractor shall be a dispute under the Disputes clause of the contract.

(6) Notwithstanding paragraphs (a)(4) and (5) above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor to comply with the requirements of this contract, if the failure is due to—

(i) Fraud, lack of good faith, or willful misconduct on the part of the Contractor's managerial personnel; or

(ii) The conduct of one or more of the Contractor’s employees selected or retained by the Contractor after any of the Contractor’s managerial personnel has reasonable grounds to believe that the employee is habitually careless or unqualified.

(7) This clause applies in the same manner and to the same extent to corrected or replacement materials or services as to materials and services originally delivered under this contract.

(8) The Contractor has no obligation or liability under this contract to correct or replace materials and services that at time of delivery do not meet contract requirements, except as provided in this clause or as may be otherwise specified in the contract.

(9) Unless otherwise specified in the contract, the Contractor's obligation to correct or replace Government-furnished property shall be governed by the clause pertaining to Government property.

(e) Definitions. (1) The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. As used in this clause—

(i) Direct materials means those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product or service.

(ii) Hourly rate means the rate(s) prescribed in the contract for payment for labor that meets the labor category qualifications of a labor category specified in the contract that are—

(A) Performed by the contractor;

(B) Performed by the subcontractors; or

(C) Transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

(iii) Materials means—

(A) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the contractor under a common control;

(B) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;

(C) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.);

(D) The following subcontracts for services which are specifically excluded from the hourly rate: [Insert any subcontracts for services to be excluded from the hourly rates prescribed in the schedule.]; and

(E) Indirect costs specifically provided for in this clause.

(iv) Subcontract means any contract, as defined in FAR Subpart 2.1, entered into with a subcontractor to furnish supplies or services for performance of the prime contract or a subcontract including transfers between divisions, subsidiaries, or affiliates of a contractor or subcontractor. It includes, but is not limited to, purchase orders, and changes and modifications to purchase orders.

(i) Payments. (1) Services accepted. Payment shall be made for services accepted by the Government that have been delivered to the delivery destination(s) set forth in this contract. The Government will pay the Contractor as follows upon the submission of commercial invoices approved by the Contracting Officer:

(i) Hourly rate.

(A) The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the contract by the number of direct labor hours performed. Fractional parts of an hour shall be payable on a prorated basis.

(B) The rates shall be paid for all labor performed on the contract…