REIS_Approved_JOFOC.pdf

Control # 18-27

Justification for Other Than Full and Open Competition

U.S. Department or Housing and Urban Development

Office of the Chief Procurement Officer

PART I - PROGRAM OFFICE RECOMMENDATION

recommend the use ol other than full and open competition for the acquisition of [describe services or supplies]

REIS Market Dt On-Line SubsCriotion Negoti5tlons should be conducted with the following source(s) Jy [provide names, addresses and points at contact; continue on separate sheets as needed]: , ies s,,lc.. i ue F .N.V.NYlQG4 ZIZI2t-I132.2

The esUmated cost of this acqutsWon Is: s 1.101.989.00 The statuary esception which aliows this use of other than Ml and open competition is (select one]:

Only one responsible source and no other supplies or services will satisfy agency requirements -41 USC 3304 (a)(1) (see FAR 6.302-1)

1 Unusual and competing urgency -41 USC 3304 (a)t2) (see FAR 6.302-2)

Industrial mobilization, engineering, developmental or research capability; ocesped services -41 USC 3304 (a)(3) (see FAR 8.302-3)

[] Authorized or required by statute -41 USC 3304 (e)f5) (see FAR 6.302.5) fl Public Interest (NOTE: reoulres Secretarial anoreval and Conaresslonal NotilicatIon) -41 USC 3304 (a)(7) (see FAR 6.302-7)

(II A description ci the circumstances that support the use of the above statutory authority Is attached and included as Exhibit I to this Justification.

Program Otfice Certification. I certify that the infurrnalion contained In this Justification Is accurate and complete to the best my knowledge and belief.

Head of Program Office tnamel Jlti&Name of Office:

Brian 0. Montgorne r,t &stant Secr ty for Housing, FHA-Commissloner, H

Signature: —. — or additional Information contact:

, ——7 &___— ,.._—.....__-—-—— ?7f ‘-/<iV loyd Royal, Jr. x3891

ART 2 - CONT ING OFFICER REVIE ND CERTIFICATION

Provide additionaljustification and comments here. Continue on back as needed.

Contracting Officer CertificatIon.

I certify that the information conIained In this justification is accurate and complete a the best of my knawiedge and belief.

Name: Slgnature: Date:

Carmen Calloway r 9/12/2018 Previous edition unusable Page 1 ot2 fomi HUD-24012 (0712011)

PARTS - OTHER APPROVALS

Up to $700,000 - Contracting Officer

Name Title

Signature Date

$700,000 to $13500000 - Competition Advocate

Title k,c’r1 Eop4t..l-r Mv’üti-4 Date

3 .ig $13500000 to $68,00C000 - Heed of the Contracting Acttvfty

Name Title

Signature Date

Over $68,000,000 - Senior Procurement Executive

Name Title gature f Date

Additionat Contracting Officer juetificetion/commente from front tattacn additional pages ii neededi

Adciftionai Guidance for Completing the Justification (see HUD Handbook 2210.3. Chapter 4)

PART 2- ContractIng Officer Review end Certification

PART I - Program Office Recommendation Besides any information provided to support the program offices justification, the

The supporlirrg documentation in the Exhibit 1 must describe: Contracting Officer shai provide.

. The naiure of the proposed acquisition that requires other than

• Documented results of any Federal Business Opportuiiy notices or full and open competition explanaUon of why no notice was published.

• The urtique quatifications of any proposed sole source; and A statement of actions the Depariment may take to remove barriers to

• The market research conducted (see FAR Part 10) and the • competition for subsequent acquisitions of simiiar services I supplies; and A determination that the anticipated cost I price Is fair and reasonabie results or the reason(s) wiry market research was not conducted. (See FAR Subpart 6.3 for further guidance.)

The cost estimate must include alt costs of the proposed acquisition, The Contracting Officer signing the certification shat be the same individual who e.g options, systems life costs, eic. The total writ determine the witi sign the proposed acquisition action which is the subject of this justification approval level needed (see 3 below)

FAR Subpart 6.3 descnbes the statutory excepttons, their applicability PART 3 - Other Approvals The Contracting Officer shah obtain the approval for the dollar vatue ranges and limitations on their use.

indicated.

Head of the Program Office means:

. For all Headquarters acquisitions: the cognizant Assistant if any person required to sign In these blocks disapproves IN justification.

Secretary or designee. he/she shaD return Ii to the requesting activity with a written determinelton.

• For field acquisitions: the program office director (e.g., Director, Multifamily Housing) within the Slate or Area Office. The requesting activity may obtain the name of the Contracting Activity Competilton Advocate’ from the cognizant contracting office.

The Head of Contracitng ActMty is defined at Subpart 2402.1 of the HUD Acquisition Reguietlon (48 CFR Chapter 24). The cognizant contracting office may also provide the name of this individual.

Revious editIon unusabte Page 2 f 2 form HUO-24012 (0712011)

Justification for Other Than Full & Open Competition

The Department of Housing and Urban Development tHUD) makes this Justification and Approval (J&A) for Other Than Full and Open Competition orders pursuant to Federal Acquisition Regulation (FAR) 6.302-1 - Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

1. Identification of Agency and Contracting Activity Client Agency:

The Officer of the Chief Procurement Officer (OCPO) on behalf of The Office of the Chief Information Officer and Office of Housing, Federal Housing Administration (FHA) will be responsible for this action located in HUD HQ, Washington DC.

2. Nature andlor Description of Action Being Approved

The Office of the Chief Information Officer and the Office of Housing is requesting approval of a sole source contract to REIS Services LLC to provide online subscription database access for up to forty (40) users for the Office of Risk Management and Regulatory Affairs (ORMRA).

This is a new Fixed Price contract with a base period of twelve (12) months and four (4) twelve

(12) month option periods.

3. A Description of Supplies/Services Required to Meet Agency’s Needs

The purpose of this contract is to provide assistance to the Office of Single Family Housing for on-line database access for up to 40 users to a number of large up-to-date multifamily housing rents and occupancy levels updated at least annually in primary, secondary and tertiary metropolitan markets. The data is used as an industry standard and to date is the nation’s leading institutional lenders and equity investors to extract data on thousands of market reports used by U.S. Government real estate professional. The scope, ease of use and comprehensive data provided by REIS, Inc. is the only subscription that meets the minimum requirements.

Specifically, REIS meets the FHA requirements as follows:

a. Market coverage: REIS has over 275 markets while the others each have less than half of that.

b. Depth of Markets: REIS covers all property sizes. A few known vendors in the marketplace such as Axiometrics will not cover properties smaller than 100 units typically and Pierce-Eislen won’t cover the number of properties in the same markets REIS covers.

c. Inventory: Overall, REIS captures a larger and deeper footprint, surveying 3 to 4 times as much inventory as the others.

d. New Construction: REIS actively surveys new construction. Combined with their deep trend data, REIS can effectively forecast forward five (5) years.

e. Sales Transactions: REIS actively captures sales transactions which allow REIS to provide market trends including cap rates and forecasted cap rates. No other company is able to provide that to HUD and it has been used previously and is necessary for the feeds into On-Line Property Integrated Information Suite (OPUS).

The estimated value of this acquisition is $1,101,989.00 with an expected period of performance of September 30, 2018 through September 29, 2023.

4. Statutory Authority Permitting Other than Full and Open Competition

The statutory authority permitting the sole source of services is 41 USC 3304(a)(1) as implemented by FAR 6.302-1, Only One Responsible Source.

5. Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Requires Use of the Authority Cited

What makes REIS unique is they provide custom files called shape files that allow HUD the ability to map our geocoded properties across the country in order to see out entire insured and non-insured multifamily portfolio at the region, market, and sub-market level. Typically, what we see with vendors is we are able to login and see their proprietary data one market at a time through their web user interface which is good for research on a particular market to check underwriting assumptions as an example. What is missing from other sources is being able to see our portfolio in it’s entirely mapped using the custom share files that are provided to us on a quarterly basis. REIS has also recently added custom statistics on the affordable market segment which is not seen with other vendors. These files allow us to produce customized web reports through our Business Intelligence tool.

A. Why does HUD need this information?

Market analysis is one of the pillars of (income property) Multifamily loan underwriting, and of continuous loan and portfolio performance surveillance. The other risk assessment pillars of loan underwriting and asset management are borrower credit and rental property management experience, property historical financial performance, and property physical condition review.

Market data are essential to forming a cohesive assessment of not just how well an apartment building secures the viability of a single HUD- insured multifamily mortgage but contribute significantly to the assessment of how viable are the streams of net operating income needed to service entire clusters of HUD-insured mortgages located in a particular area or market in the country.

REIS Market information include current, historical, and projected data for apartment rents, vacancy rates, concessions, rent change, construction completions, absorption rates, demolitions, condo-to-apartment conversions, vacant stock, occupied stock, etc.

These data enable HUD analysts to formulate conclusions about current, historical, and future net operating income . Sound, defensible net operating income conclusions and projections are the critical input into debt serv ice coverage capacity and property valuation assessments.

Knowledge of debt service capacity, valuation, and, thus, of mortgage viability itself enable HUB managers to approve or disapprove loan applications, or for existing mortgages, to get ahead of potential defaults and claims by instituting pro-active asset management interventions and corrective action plans.

Knowledge of market performance also contributes to the formulation of appropriate credit policy, such as the placement of moratoria on new construction loans in markets that are already overbuilt, facing unit hyper-supply, and therefore, on the verge of a likely correctionlrecession.

To summarize, market data, such as are provided by REIS, are a necessary component to the successful fulfillment of HUD’s credit risk management goals and mission as pertain to is Multifamily Housing portfolio.

B. Who uses/requires this information at HUD and what is the impact of not having this service?

REIS market data are utilized by:

• Multifamily Loan Underwriters

• Multifamily Asset Managers

• Multifamily Housing Credit Policy Managers

• Office of Risk Management and Regulatory Affairs Analysts, Managers, and Contractors

• Rental Assistance Demonstration (RAD) Analysts and Managers

The impacts of losing the REIS data service are as follows:

• HUB analysts will be significantly impeded in formulating conclusions about current, historical, and future net operating income. Analysts will thus be impeded in performing debt serv ice coverage capacity and property valuation assessments.

• HUD loan underwriters will not be able to validate future occupancy and net operating income assumptions submitted by borrowers, thus, the integrity of the Multifamily underwriting and loan decisioning processes will be compromised.

• Without solid knowledge of ongoing as well projected debt service capacity as affected by market performance, asset managers will be significantly impeded in preventing defaults and claims because they will be hampered in instituting pro-active asset management interventions and effective corrective action plans.

• Without knowledge of ongoing and future market performance, credit policy managers will be impeded in formulating appropriate credit policy, such as the placement of moratoria on new construction loans in markets that are already overbuilt, facing unit hyper-supply, and therefore, on the verge of a likely correctionlrecession.

To summarize, without comprehensive market data, such as are provided by REIS, HUD will be impeded in executing effectively on its default prevention, loss mitigation, and overall credit risk management goals and mission as pertain to is Multifamily Housing portfolio.

C. From the data that is pulled from these reports, what does HUD do with that data.

REIS Market information data and reports include current, historical, and projected data for apartment rents, vacancy rates, concessions, rent change, construction completions, absorption rates, demolitions, condo-to-apartment conversions, vacant stock, occupied stock, etc.

These data are used as follows:

• HUD analysts, in general, and across different program offices, use REIS market data to formulate conclusions about current, historical, and future net operating income. Sound, defensible net operating income conclusions and projections are the critical input into debt serv ice coverage capacity and property valuation assessments.

• HUD underwriters use REIS market data to support the approval/disapproval of Multifamily loan applications

• HUD asset managers use REIS market data, along with current property financial information, and recent physical inspection results to get ahead of potential defaults and claims by instituting pro-active asset management interventions and corrective action plans.

Credit policy managers use market data to support the formulation of appropriate Multifamily credit policy, such as the placement of moratoria on new construction loans in markets that are already overbuilt, facing unit hyper-supply, and therefore, on the verge of a likely correctionlrecession.

U. What actions are taken after the data is reviewed?

• Debt service coverage, property valuation, and loan-to-value assessments are completed to support a broad variety of risk management scenarios

• Multifamily loan applications are approvedldisapproved

• Pro-active asset management interventions and corrective action plans are implemented to prevent potential defaults and claims

• Appropriate recommendations are made to HUD Multifamily program managers as to the adoption of any necessary or key credit policy changes or innovations

• A break in service would lead to the inability of the Office of Risk Management contractors to update the Online Property Integrated Information Suite (OPuS) with new market data. All reports in the market risk tab would be stale and obsolete.

• REIS provides Multifamily market data at the national, region, market, and sub-market levels on market vacancy, supply, inventory, and rent levels for class A, & BC Mf and affordable class property types both historically and with 5-year forecasts.

• The REIS data is used and reported on in a tool developed by ORMA contractors called the Property Review Template which is a tool that allows HUD field staff to interactively query the FHA MF portfolio within the OPIIS datamart and pull market and sub-market information on property comps both historically and using REIS’s proprietary 5-year forecasts

• REIS had recently added coverage for the affordable housing market which will allows for property level compatibles for a direct portion of the FHA insured MF multifamily portfolio

• The online portal at www.reis .com lets HUD staff log on to obtain information for loan reviews on property comps by entering a street city and state and getting similar apartments in the area for rent, sales, and construction comps across a myriad of different selection criteria

• The online portal allows HUD staff to pull transaction information on number of transactions, transaction volume, median sales price, mean cap rate, and 12 month rolling cap rate historically by market

• The online portal allows HUD staff to find out how much a property is worth using 3 possible values including a 10-year DCF, a direct cap value estimate, and sales comp comparison

• The online portal has a real estate news tab that has pertinent information on the multifamily market both nationally and at the local market of interest

• REIS provided custom quarterly files for HUD each quarter that allows our current contractor to upload into our OPUS DataMart and report on in 131 reports that are available for HUD staff in HQ and in the field on the MF insured portfolio by region, market, or submarket (procedures attached)

• The data included in the custom files provided to HUD include Inventory, Completions, Demolitions, Conversions, VacPercent, VacantStock, Occupied Stock, NetAbsorption, MarketRentDollars, Market Rent Percent Change, Effective Rent Dollars, Effective Rent Percent Change, Construction Absorption, Absorption Occupied Stock, Gross Rent Revenue

• REIS also provided macro national level statistics in the custom file provided to HUD including, Total Employment, Office Employment, Industry Employment, Households, Population, and Household Income at the national, regionally, market, and sub-market levels

REIS provides quarterly webinars from economist on staff on such topics as capital markets updates, and multifamily market updates and trends

6. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as Practicable, including whether a notice was or will be publicized as required by subpart 5.2

A Sources Sought Notice was posted to FBO on 11/22/2017 and closed on 12/4/2017 and rendered seven (7) results from the public which are listed below. On January 10, 2018, the Government posted a Notice of Intent to Sole Source on FBO with no response as required by subpart 5.2.

I REIS Services, LLC.

2 Jasper Steward, LLC dfb/a DENAMITA

3 Abbas Enterprise, LLC

4 AQ Global Solutions, LLC

5 Marvin Heymann & Associates

6 BMRBNB

7 Long & Associate, LLC

7. Contracting Officer determination that the Anticipated Cost t will be Fair and

Reasonable

The Contracting Officer (CO) will determined that the prices are fair and reasonable at the time of the sole source contract award by comparing pricing to previous contract awards fOr the same or similar services along with referring to the IGCE provided by the program office.

8. A Description of the Market Research Conducted (See FAR Part 10) and the results or a statement of the reason market research was not conducted

Market research was performed. The Sources Sought # APP-H-2018-005 was issued on FBO and received responses and capability statements from seven (7) vendors. Of the 7 vendors answering the sources sought notice, only one (1) provided the services required by the sources sought instructions which was REIS Services, LLC.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition

REIS provides custom files called shape files that allow HUD the ability to map our geocoded properties across the country in order to see out entire insured and non-insured multifamily portfolio at the region, market, and sub-market level. Typically, what we see with vendors is we are able to login and see their proprietary data one market at a time through their web user interface which is good for research on a particular market to check underwriting assumptions as an example. What is missing from other sources is being able to see our portfolio in it’s entirely mapped using the custom share files that are provided to us on a quarterly basis. REIS has also recently added custom statistics on the affordable market segment which is not seen with other vendors.

10. A Listing of the Sources, if any, that expressed, in writing, an interest in the acquisition

All interested sources below expressed an interest under the sources sought that was posted on November 22, 2017 in fBO that provided an opportunity to submit a capability statement that the Government reviewed

Vendor Name Location Point of Contact Socio-economic Capability Category

REIS Services, LLC. 1185 Ave of the Americas - John Newman, Account Manager, Large Business Provides Commercial 30th Floor, New York NY w 212.205.7237 I Property data that meets or 10036 c 973.901.2289 I exceeds the requirements of john.newman@reis.com the SOW.

Jasper Steward, LLC 15800 Pines Boulevard # Benjamin Stephenson — CEO 8(a), SDB Responded to sources dlb/a DENAMITA 300 Tel: 786-357-2770 sought— provides

Pembroke Pines, FL 33027 Email: bas@denamita.com management consulting services & Oftice cleaning service.

Abbas Enterprise, LLC 15533 North Pima Road # Sarkes Abbas — President SDWOB Responded to sources 305 Tel: 773-673-3570 sought — does not provide Scottsdale, AZ 85260 Tel: 480-648-9580 Commercial Property data

EMAIL: sabbas @abbecorp.com subscription.

AQ Global Solutions, 4519 S. Orange Blossom Geum Chau - Owner SDWOB Responded to sources LLC Trail Tel: 407-704-7866 sought — provides

Orlando, FL 32839 Email: icusa2020@gmail.com Toiletries, Cosmetics, and Perfumes.

Marvin Keymann & Would not give address info. Aaron Aabon — Director Large Business Responded to sources Associates “Stated they are not Tel: 513-706-8098 sought— provides a design interested”. Email: marvin@feedesignbuild.com and construction business.

BMRBNB Guest Suite Management Raymond Costello — Founder Small Business Responded to sources System tot Independent Tel: 843-813-8297 sought — provides Bed & Living Properties Email: rc@bmrbnr.com Breakfast services.

Long & Associate, LLC 5755 North Point Parkway, Marvin G. Long Large Business Responded to sources Suite 29 Alpharetta, GA Managing Partner sought — provides 30022 p. 678905.5095 Accounting and

m. 404.386.8364 Management consulting

f. 770.752.9700 services.

marvin.long@lacpallc.com

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required

A Sources Sought Notice was posted to FBO on 11/22/20 17 and closed on 12/4/20 17 and rendered seven (7) results from the public which are listed below. On January 10, 2018, the

Government posted a Notice of Intent to Sole Source on FBO with no response as required by subpart 5.2.

12. Contracting Officer Certification

The Contracting Officer certifies that the justification is accurate and complete to the best of her knowledge and belief. Also see the CO’s signature on HUD Form 24012.