Attachment_2_-_QASP_Surveillance_Plan.pdf

Quality Assurance Surveillance Plan (QASP) Loan Underwriting Services

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1 Vision

1 INTRODUCTION

1.1 Purpose

1.2 Performance Management Approach

1.3 Performance Management Strategy

2 ROLES AND RESPONSIBILITIES

2.1 The Contracting Officer

2.2 The Government Technical Representative

3 IDENTIFICATION OF REQUIRED PERFORMANCE STANDARDS/QUALITY

LEVELS

4 METHODOLOGIES TO MONITOR PERFORMANCE

4.1 Surveillance Techniques

4.2 Customer Feedback

4.3 Acceptable Quality Levels

5 QUALITY ASSURANCE DOCUMENTATION

5.1 The Performance Management Feedback Loop

5.2 Monitoring Forms

6 ANALYSIS OF QUALITY ASSURANCE ASSESSEMENT

6.1 Determining Performance

6.2 Reporting

6.3 Reviews and Resolution

6.4 Surveillance Matrix

Appendix 1 - Surveillance Matrix Appendix 2 - Corrective Action Report (CAR) Appendix 3 - Customer Complaint Record Appendix 4 - Performance Assessment Report (PAR)

Quality Assurance Surveillance Plan (QASP)

Loan Underwriting Services

1 Vision

1 INTRODUCTION

This Quality Assurance Surveillance Plan (QASP) is pursuant to the requirements listed in the performance work statement (PWS) titled, "Loan Underwriting Services". This plan sets forth the procedures and guidelines the Department of Housing and Urban Development (HUD) will use in ensuring the required performance standards or services levels are achieved by the contractor.

1.1 Purpose

1.1.1 The purpose of the QASP is to describe the systematic methods used to monitor performance and to identify the required documentation and the resources to be employed. The QASP provides a means for evaluating whether the Contractor is meeting the performance standards/quality levels identified in the PWS and the Contractor's Quality Control Plan (QCP), and to ensure that the Government pays only for the level of services received.

1.1.2 This QASP defines the roles and responsibilities of all members of the Integrated Project Team (IPT), identifies the performance objectives, defines the methodologies used to monitor and evaluate the Contractor's performance, describes quality assurance documentation requirements, and describes the analysis of quality assurance monitoring results.

1.2 Performance Management Approach

1.2.1 The PWS structures the acquisition around "what service or quality level is required, as opposed to "how the contractor should perform the work (i.e., results, not compliance). This QASP will define the performance management approach taken by HUD to monitor and manage the contractor's performance to ensure the expected outcomes or performance objectives communicated in the PWS are achieved.

Performance management rests on developing a capability to review and analyze information generated through performance assessment. The ability to make decisions based on the analysis of performance data is the cornerstone of performance management; this analysis yields information that indicates whether expected outcomes for the project are being achieved by the contractor.

1.2.2 Performance management represents a significant shift from the more traditional quality assurance (QA) concepts in several ways. Performance management focuses on assessing whether outcomes are being achieved and to what extent. This approach migrates away from scrutiny of compliance with the processes and practices used to achieve the outcome. A performance-based approach enables the contractor to play a large role in how the work is performed, as long as the proposed processes are within the stated constraints. The only exceptions to process reviews are those required by law (federal, state, and local) and compelling business situations, such as safety and health. A "results" focus provides the contractor flexibility to continuously improve and innovate over the course of the contract as long as the critical outcomes expected are being achieved and/or the desired performance levels are being met.

1.3 Performance Management Strategy

1.3.1 The contractor is responsible for the quality of all work performed. The contractor measures that quality through the contractor's own quality control (QC) program. QC is work output, not workers, and therefore includes all work performed under this contract regardless of whether the work is performed by contractor employees or by subcontractors. The contractor's QCP will set forth the staffing and procedures for self-inspecting the quality, timeliness, responsiveness, customer satisfaction, and other performance requirements in the PWS. The contractor will develop and implement a performance management system with processes to assess and report its performance to the designated government representative. The contractor's QCP will set forth the staffing and procedures for self-inspecting the quality, timeliness, responsiveness, customer satisfaction, and other performance requirements in the PWS. This QASP enables the government to take advantage of the contractor's QC program.

1.3.2 The government representative(s) will monitor performance and review performance reports furnished by the contractor to determine how the contractor is performing against communicated performance objectives. The contractor will be responsible for making required changes in processes and practices to ensure performance is managed effectively.

2 ROLES AND RESPONSIBILITIES

The following personnel shall oversee and coordinate surveillance activities.

2.1 The Contracting Officer

The contracting officer (CO) is responsible for monitoring contract compliance, contract administration, and cost control and for resolving any differences between the observations documented by the Contracting Officer Representative (COR) and the contractor. The CO will designate one full-time COR as the government authority for performance management. The number of additional representatives serving as technical inspectors depends on the complexity of the services measured, as well as the contractor's performance, and must be identified and designated by the CO.

2.2 The Government Technical Representative

The Contracting Officer Representative (COR) and the Subordinate COR are designated in writing by the CO to act as his or her authorized representative to assist in administering a contract. COR and the Subordinate COR limitations are contained in the written appointment letter. The COR and the Subordinate COR are responsible for technical administration of the project and ensures proper government surveillance of the contractor's performance. The COR and the Subordinate COR are not empowered to make any contractual commitments or to authorize any contractual changes on the governments behalf. Any changes that the contractor deems may affect contract price, terms, or conditions shall be referred to the CO for action. The COR and the Subordinate COR will have the responsibility for completing QA monitoring forms used to document the inspection and evaluation of the contractor's work performance.

Government surveillance may occur under the inspection of services clause for any service relating to the contract.

3 IDENTIFICATION OF REQUIRED PERFORMANCE STANDARDS/QUALITY

LEVELS

The required performance standards and/or quality levels are included in the PWS and in Appendix 1, " Surveillance Matrix". If the contractor meets the required service or performance level, it will be paid the monthly amount agreed on in the contract.

4 METHODOLOGIES TO MONITOR PERFORMANCE

4.1 Surveillance Techniques

In an effort to minimize the performance management burden, simplified surveillance methods shall be used by the government to evaluate contractor performance when appropriate. The primary methods of surveillance are:

Random monitoring, which shall be performed by the COR or designated inspector.

100% Inspection Each month, the COR and Subordinate COR, shall review the generated documentation and enter summary results into the Surveillance Activity Checklist.

Periodic Inspection - The COR typically performs the periodic inspection monthly.

4.2 Customer Feedback

The contractor is expected to establish and maintain professional communication between its employees and customers. The primary objective of this communication is customer satisfaction. Customer satisfaction is the most significant external indicator of the success and effectiveness of all services provided and can be measured through customer complaints.

Performance management drives the contractor to be customer focused through initially and internally addressing customer complaints and investigating the issues and/or problems, but the customer always has the option to communicate complaints to the CO and/or COR, as opposed to the contractor.

Customer complaints, to be considered valid, must set forth clearly and in writing the detailed nature of the complaint, must be signed, and must be forwarded to the COR.

Customer feedback may also be obtained either from the results of formal customer satisfaction surveys or from random customer complaints.

4.3 Acceptable Quality Levels

The acceptable quality levels (AQLs) included in Appendix 1, Surveillance Matrix, for contractor performance are structured to allow the contractor to manage how the work is performed. For certain critical activities such as those involving loan due diligence, the desired performance level is established at 100 percent.

5 QUALITY ASSURANCE DOCUMENTATION

5.1 The Performance Management Feedback Loop

The performance management feedback loop begins with the communication of expected outcomes. Performance standards are expressed in the PWS and are assessed using the performance monitoring techniques shown in Appendix 1.

5.2 Monitoring Forms

The Government's QA surveillance, accomplished by the COR, may be reported using the following monitoring forms: Appendix 2 - "Corrective Action Report (CAR)", Appendix 3 - "Customer Complaint Record", and Appendix 4 "Performance Assessment Report" (PAR). The forms, when completed, will document the Government's assessment of the Contractor's performance under the contract to ensure that the required results are being achieved. The COR will retain a copy of all completed QA surveillance forms.

6 ANALYSIS OF QUALITY ASSURANCE ASSESSEMENT

6.1 Determining Performance

The Government will use the monitoring methods cited to determine whether the performance standards/service levels/AQLs have been met. If the Contractor has not met the minimum requirements, it may be asked to develop a corrective action plan to show how and by what date it intends to bring performance up to the required levels.

6.2 Reporting

At the end of each month, the COR and Subordinate COR will prepare a written report for the CO summarizing the overall results of the quality assurance surveillance of the contractor's performance. This written report, which includes the contractors submitted monthly report and the completed quality assurance monitoring forms (Appendix 2 and Appendix 4), will become part of the QA documentation. It will enable the government to demonstrate whether the contractor is meeting the stated objectives and/or performance standards, including cost/technical/scheduling objectives.

6.3 Reviews and Resolution

6.3.1 The COR may require the contractor's project manager, or a designated alternate, to meet with the CO and/or COR and other government IPT personnel as deemed necessary to discuss performance evaluation. The COR will define a frequency of in-depth reviews with the contractor, including appropriate self-assessments by the contractor; however, if the need arises, the contractor will meet with the COR and the

Alternate as often as required or per the contractor's request. The agenda of the reviews may include:

Monthly performance assessment data and trend analysis Issues and concerns of both parties Projected outlook for upcoming months and progress against expected trends, including a corrective action plan analysis Recommendations for improved efficiency and/or effectiveness Issues arising from the performance monitoring processes

6.3.2 The CO and COR must coordinate and communicate with the contractor to resolve issues and concerns regarding marginal or unacceptable performance.

6.3.3 The COR and contractor should jointly formulate tactical and long-term courses of action. Decisions regarding changes to metrics, thresholds, or service levels should be clearly documented. Changes to service levels, procedures, and metrics will be incorporated as a contract modification at the convenience of the CO.

6.4 Surveillance Matrix

The Surveillance Matrix (Appendix 1) is the list of performance objectives and standards that must be performed by the Contractor. This matrix details the method of surveillance the COR will use to validate and inspect these performance elements. Inspection of each element will be documented in the COR file.

Performance objectives define the desired outcomes. Performance standards define the level of service required under the contract to successfully meet the performance objective. The inspection methodology defines how, when, and what will be assessed in measuring performance. The Government performs surveillance, using this QASP, to determine the quality of the Contractor's performance as it relates to the performance element standards. The PRS should be used to form the foundation of the COR's inspection checklist.

In evaluating the quality of contractor’s performance, the following performance ratings may be used.

Performance Rating

Criteria

Excellent / Outstanding

Performance meets contractual requirements and exceeds many to the Government’s benefit. The contractual performance of the element or sub-element being assessed was accomplished with few minor problems for which corrective actions taken by the contractor was highly effective.

Very Good Performance meets contractual requirements and exceeds some to the Government’s benefit. The contractual performance of the element or sub-element being assessed was accomplished with some minor problems for which corrective actions taken by the contractor was effective.

Satisfactory Performance meets contractual requirements. The contractual performance of the element or sub-element contains some minor problems for which corrective actions taken by the contractor appear or were satisfactory.

Marginal Performance does not meet some contractual requirements.

The contractual performance of the element or sub-element being assessed reflects a serious problem for which the contractor has not yet identified corrective actions. The contractor’s proposed actions appear only marginally effective or were not fully implemented.

Unsatisfactory Performance does not meet most contractual requirements and recovery is not likely in a timely manner. The contractual performance of the element or sub-element contains a serious problem(s) for which the contractor’s corrective actions appear or were ineffective.

Appendix 1 - Surveillance Matrix

Statements Standards/AQLs Inspections Ratings 5.1 Loan Due Diligence

a) Review the loan application within fifteen (15) calendar days of loan assignment.

AQL: Zero Deviation

b) Enter the project data and status in HUDs IT systems i.e., DAP and/or iREMS within five (5) calendar days from loan assignment and ongoing throughout the loan processing.

AQL: Zero Deviation

c) Arrange the site visit/inspection of subject property with the MF HUD POC or the ORCF Workload Manager and ensure the completion of the Form HUD-4128 and the HEROS report within five (5) calendar days of loan assignment.

AQL: Zero Deviation

d) Prepare the Firm Commitment letter or rejection letter and forward to the MF HUD POC or ORCF Workload Manager within (15) calendar days of assignment.

AQL: Zero Deviation

e) Review HUDs Form 2530 of the borrower, management agent and/or principal within fifteen (15) calendar days of assignment.

What: Processed loan documents (refer to MAP or ORCFs loan application checklists).

How: Review draft loan package.

Frequency: once Who: MF HUD POC or Workload Manager Standard(s): Inspection applies to all standards

AQL: Zero Deviation

f) Review the application and complete the MAP Guide appendix, checklist and/or exhibits for the mortgage credit, appraisal, valuation, CNA eTool, environmental (HEROS) and any other third-party report within twenty (20) calendar days for 223(a7), thirty (30) calendar days for 223(f) and forty-five (45) calendar days for 221 (d)(4) of assignment.

AQL: Zero Deviation

g) Prepare the required loan documents and exhibits for the Loan Committee approval within ten (10) calendar days of loan assignment.

AQL: Zero Deviation

Statements Standards/AQLs Inspections Ratings 5.2 Loan Closing

a) STD: For OMHP loans, coordinate the loan closing date with HUD's closing coordinator, lender's attorney and the OGC attorney assigned to the closing within five (5) calendar days after the fully executed firm commitment date.

For ORCF loans, coordinate the loan closing two (2) business days of closer assignment.

AQL: Zero Deviation

b) Complete HUD's closing punch-

What: A03 Loan closing documents (and completed in accordance with the Closing Guide or Handbook 4232.1) list, closing checklist, required forms and certifications, and obtain contact information for the lender's attorney and the OGC attorney assigned to the loan closing within ten (10) calendar days after the date of the fully executed Firm Commitment and draft closing documents.

AQL: Zero Deviation

c) Resolve any closing document deficiencies or corrections within ten

(10) calendar days of notification of deficiencies or corrections.

AQL: Zero Deviation

d) Prepare and process amendments, request for Firm Commitment extension, special conditions within ten (10) calendar days after request from lender.

AQL: Zero Deviation

e) Send the fully executed Firm Commitment to the assigned OGC attorney with the draft closing documents and obtain confirmation of delivery within ten (10) calendar days after the fully executed Firm Commitment and draft closing documents.

AQL: Zero Deviation

f) Obtain the payment receipts for the mortgage insurance premium (MIP), inspection fee and any other required fee payments at least three

(3) calendar days prior to loan closing date.

AQL: Zero Deviation

g) Prepare and generate from DAP Form HUD-290, "Closing Memorandum at least three (3) calendar days prior to the loan closing date.

AQL: Zero Deviation

h) Prepare the project's final loan closing documents, obtain signature from appropriate authorized signatory, obtain notarization on the necessary forms and send to the OGC attorney within one-hundred and twenty (120) calendar days from the date of the fully executed Firm Commitment.

AQL: Zero Deviation

i) On the closing day, obtain email confirmation from the OGC attorney that the loan closed.

AQL: No more than 24 hours after loan closing date.

Statements Standards/AQLs Inspections Ratings 5.3 Monitoring after Loan Closing/Post- Loan Closing Administration

a) Review the executed loan closing documents for completeness within seven (7) calendar days after the date of the loan closing.

AQL: Zero Deviation

b) Input the project data into the

What: Loan closing documents (completed in accordance with MAP or ORCFs guidelines) iREMS secure system within seven

(7) calendar days after date of the loan closing.

AQL: Zero Deviation

c) Obtain confirmation from the MF HUD POC or the ORCF Workload Manager that the executed loan closing documents and any supporting documentation have been received emailed to the within ten (10) days after closing date.

AQL: Zero Deviation

d) Provide confirmation email that the executed loan documents have been provided via USB external drive to the HUD Attorney and to HUD Headquarters Archives/Records Unit within seven

(7) calendar days after loan closing.

AQL: Zero Deviation

e) Provide confirmation email/documentation that Form HUD-290, "Closing Memorandum" has been electronically delivered to the "290 Mailbox within three (3) calendar days after final loan closing.

AQL: Zero Deviation

Statements Standards/AQLs Inspections Ratings 5.4 Regular Reports.

a) Provide a monthly report on the status of active, closed and post-

What: Monthly loan application status report closing/post-loan administration activity using Excel spreadsheet on the previous month activity that provides accurate information on the loans assigned to the contractor.

AQL: The 5th day of each the month with loan underwriting performance measures stated above.

b) Provide ad hoc reports using Microsoft Excel and/or Word.

AQL: Not to exceed one (1) per month and in accordance with the written request from the COR or Alternate COR.

Ad hoc reports Standard(s): Inspection applies to all standards

Statements Standards/AQLs Inspections Ratings 5.5 Transition Support Services 5.5.1 Transition In

a) Develop and provide information on transition-in duties such as but not limited to an excel spreadsheet containing key personnel that will perform the work, contractor personnel, titles, telephone numbers, email addresses and tour of duty hours and days, status of security clearance for each contractor personnel, PIVing and access to HUD Systems.

AQL: Not to exceed 30 calendar days after award date.

b) Attend a four (4) day classroom

What: Transition Plan training in HUD Headquarters, Washington, DC.

AQL: The project manager, underwriters and contractor personnel responsible for the performance of the work are required to attend.

5.5.2 Transition Out

a) Develop and provide a tracking report that provides but not limited to FHA project number, project name, activity dates, HUD MF POC or ORCF Workload Manager contact name and number, HUD attorney/counsel name and number, email address and/or SharePoint site address for verification that loans have been completely processed, underwritten or closed and uploaded to the appropriate SharePoint site or emailed in accordance to OMHP or ORCF guidelines.

AQL: Ninety (90) calendar days prior to contract base and option years expiration date in accordance with OMHP or ORCF guidelines.

b) Provide confirmation emails from the MF HUD MF POC or ORCF Workload Manager confirming processed, underwritten and/or closed loan documents have been uploaded to the appropriate

What: Transition Out Support Plan

SharePoint site or emailed.

AQL: Ninety (30) calendar days prior to contract expiration date.

c) Schedule a Transition-Out support meeting with the COR and/or government officials, incumbent key personnel that performed the work and representatives of the incoming/successor Contractor.

AQL: Thirty (30) calendar days prior expiration of contract/final option year.

Statements Standards/AQLs Inspections Ratings 5.6 Travel

a) Attend a four (4) day classroom training in HUD Headquarters, Washington, DC.

AQL: The project manager, underwriters and contractor personnel responsible for the performance of the work are required to attend. The contractor personnel are considered key personnel.

Appendix 2 - Corrective Action Report (CAR)

CORRECTIVE ACTION REPORT (CAR)

(If more space is needed, use reverse and identify by number)

1. CONTRACTOR 2. CONTRACT NUMBER 3. TYPE OF SERVICES

4. FUNCTIONAL AREA 5. SUSPENSE DATE 6. CONTROL NUMBER

7. DEFICIENCY MAJOR MINOR

FINDING:

FINDING IMPACT:

Please respond with a written corrective action plan that details the corrective action of the cited deficiency, the cause of the deficiency, and actions taken to prevent recurrence by Suspense Date in Block 5. If date was not entered in Block 5, the contractor is not required to provide a response.

8. QUALITY ASSURANCE PERSONNEL (COR)

TYPED NAME AND GRADE SIGNATURE AND DATE

9. ISSUING AUTHORITY

TYPED NAME AND GRADE SIGNATURE AND DATE

10. COR RESPONSE TO CONTRACTOR CORRECTIVE ACTION AND ACTION TAKEN TO PREVENT RECURRENCE

11. COR DETERMINATION

ACCEPTED REJECTED

12. CLOSE DATE

Appendix 3 - Customer Complaint Record

CUSTOMER COMPLAINT RECORD

DATE/TIME OF COMPLAINT

SOURCE OF COMPLAINT

ORGANIZATION BUILDING NUMBER INDIVIDUAL PHONE NUMBER

NATURE OF COMPLAINT

CONTRACT REFERENCE

VALIDATION

DATE/TIME CONTRACTOR INFORMED OF COMPLAINT

ACTION TAKEN BY CONTRACTOR

RECEIVED/VALIDATED BY

Appendix 4 - Performance Assessment Report (PAR)

PERFORMANCE ASSESSMENT REPORT (PAR)

(If more space is needed, use reverse and identify by number)

1. CONTRACT/TASK ORDER NUMBER 2. CONTRACTOR 3. TYPE OF SERVICES

4. QUALITY ASSURANCE PERSONNEL (COR) SIGNATURE AND DATE 5. COR PHONE 6. SUSPENSE DATE

I. PERFORMANCE

7. DEFICIENCY (CHECK ALL BOXES THAT APPLY)

NEW

REPEAT

NO DEFICIENCY NOTED

8. SERVICES SUMMARY or PWS PARAGRAPH ITEM REVIEWED

9. BRIEF DESCRIPTION OF DEFICIENCY (IF DEFICIENCY BOX WAS

CHECKED)

10. DETAILED PERFORMANCE ASSESSMENT

II. CONTRACTOR VALIDATION

11. CONTRACTOR REPRESENTATIVE CONCUR NON-

CONCUR

12. CORRECTIVE ACTION ESTIMATED COMPLETION DATE

13. CONTRACTOR REPRESENTATIVE CORRECTIVE ACTION AND PREVENTION OF RECURRENCE OR REASON FOR NON-

CONCURRENCE OF COR CITED DEFICIENCY

III. ACTION CORRECTED

14. CONCUR NON-CONCUR COR SIGNATURE AND DATE

15. COR REMARKS (REQUIRED)

6. CONTRACTOR REPRESENTATIVE REMARKS