3.9_PWS_Draft.pdf

Performance Work Statement (PWS)

3.9 Asset Management Services

Vision Statement

1 General Information

1.1 Introduction

1.2 Background

1.3 Constraints

1.4 Description of Services

1.5 Non-Personal Services

1.6 Period of Performance

1.7 Place of Performance

1.8 Hours of Operation

1.9 Special Qualifications

1.10 Post Award/Kickoff Conference

1.11 Status Meetings

1.12 Contractor Travel

1.13 Transition In

1.14 Transition Out

2 Definitions and Acronyms

2.1 Definitions

2.2 Acronyms

3 Government-Furnished Property and Services

3.1 Government Services

3.2 Facilities

3.3 Equipment

3.4 Materials

3.5 Quality Assurance (QA)

4 Contractor-Furnished Items and Services

4.1 Facilities

4.2 Equipment

4.3 Material

4.4 Contractor Responsibilities

4.5 Contractor Personnel

4.6 Identification of Contractor Employees

4.7 Quality Control

4.7.1 Quality Control Plan

5 Specific Tasks

5.1 GENERAL REQUIREMENTS

5.2 SPECIFIC REQUIREMENTS

5.3 Reserved - Already have a PRS section in ARRT

5.4 REQUIRED REPORTS

6 Deliverables

6.1 Quality Control Plan

6.2 Acceptance Criteria

7 Performance Requirements Summary

8 Related Documents

Performance Work Statement (PWS)

3.9 Asset Management Services

Vision Statement

The purpose of this performance based contract is to obtain marketing and sales services for

HUDs REO properties.

HUD has identified five primary objectives for its Asset Managers. They are to ensure that:

1. Properties are accurately and competitively valued.

2. Sales achieve the highest net return.

3. Holding time is minimized.

4. Sales create owner-occupant opportunities.

5. Closing proceeds are properly accounted for and delivered to HUD in a timely manner.

1 General Information

1.1 Introduction

The U.S. Department of Housing and Urban Development (HUD) / office of Single Family is seeking contractor support to provide marketing and sales services for HUD's Real Estate

Owned (REO) properties.

1.2 Background

This Performance Work Statement (PWS) describes the services required to assist the United

States Department of Housing and Urban Development (HUD) with marketing support associated with its Real-Estate Owned (REO) portfolio.

The Federal Housing Administration (FHA), an organizational unit within HUD, administers the single-family mortgage insurance program. FHA insures approved lenders against the risk of loss on loans they finance for the purchase, and in some instances rehabilitation, of single-family homes. In the event of a default on an FHA insured loan, the lender acquires title to the property by foreclosure, a deed-in-lieu of foreclosure, or other acquisition method, files a claim for insurance benefits and conveys the property to HUD. As a result of acquisitions through the mortgage insurance program and other programs, HUD has a need to manage and sell a sizable inventory of single-family homes in a manner that promotes home ownership, preserves communities, and maximizes return to the FHA insurance funds. HUD is the largest single seller of real estate in the US. In fiscal years 2013, the Department sold 112,162 single-family homes.

HUD administers the REO disposition program through four Homeownership Centers (HOC) located in: Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California (see Attachment A1 Homeownership Center Geographic Areas). Each HOC is responsible for a designated geographic area. This competition will be for 6 areas 3S, 4S, 5S, 6S, 4D and 5D.

Since 1999, HUD has been outsourcing the disposition of its REO inventory to Management and Marketing (M&M) Contractors. This acquisition is part of the third generation of M&M services (M&M III). To ensure the continued success of its disposition program and to further capitalize on the private sectors disposition expertise, in 2007, HUD conducted extensive market research on industry best practices surrounding the REO asset disposition process to structure the third generation of the contracting program, herein after referred to as M&M III.

Based on a history of market research results from M&M III, HUD has continued to develop a disposition structure for the management and marketing of REO inventory that will streamline its operations, capitalize on the expertise of its potential Contractors, and provide flexibility to meet changing market conditions in the real estate owned (REO) industry.

The key elements of the disposition structure include:

Centralization of mortgagee compliance functions under a Mortgagee Compliance Manager

(MCM) responsible for pre- and post-property conveyance activity including approval of claims for payment, title reviews, and inspection reviews.

Separation of marketing functions (Asset Managers) from property management functions (Field

Service Managers).

1.3 Constraints

The services identified in this PWS will adhere to the rules, regulations, laws, standards, and conventions identified by HUD as well as within the Federal Government. Constraints include the following:

1. INFORMATION SYSTEMS

The Contractor shall use the systems made available by HUD to perform on-going disposition activities as a source of data for the performance of this contract. These systems include all

HUD provided systems that are used by Contractors engaged in the disposition of HUDs REO portfolio, including any systems used by the MCM, SSC, AM and FSM Contractors. The HUD provided systems are as follows:

A. SINGLE FAMILY INSURANCE SYSTEM (SFIS)

The Single Family Insurance System (SFIS) is HUDs primary system of record for insurance and claim payment status of all FHA insured single family loans. SFIS also includes the Single

Family Insurance Claims Subsystem, A43C.

B. FHA CONNECTION

The FHA Connection is an Internet based system through which Mortgagees report the status of insured loans. Additionally, the FHA Connection allows HUD to post information of interest to

Mortgagees. The Contractor may have to access this information to meet the requirements of the PWS.

C. P260 "or its replacement system

P260 is an Internet based system that will serve as the primary system of record for all REO case management transactions. This system will assign each HUD-owned property for

Contractors to track the disposition activity from conveyance to sale. This system integrates data from SFIS, FHA Connection, and SAMS Accounting. The contractor must use P260 or its replacement. There is no additional fee for access made available by the government, but additional access may be made available through the P260 contractor or its replacement system.

D. SINGLE FAMILY ACQUIRED ASSET MANAGEMENT SYSTEM (SAMS)

The Single Family Acquired Asset Management System (SAMS) is HUDs primary system of record for tracking financial and accounting data for properties acquired by HUD.

E. COST ESTIMATING SOFTWARE

Cost Estimating software is a commercial-off-the-shelf (COTS) software which provides one-to-four-unit single family residential property repair and preservation (maintenance) cost estimations.

2. ACCESS TO HUD INFORMATION SYSTEMS

Contractor employees (including Subcontractors) who will need to have access to HUD information systems must undergo a background investigation. See Clause HUDAR 2452.239-

70.

A. SECURITY ACCESS

Due to the sensitivity of property and contractor profile data, access to HUD systems shall be limited to individuals based upon their specific duties and the security of the system. As a condition of obtaining access, Contractor employees requiring access to HUD systems shall submit to the COR an original and one copy of completed Standard Form 85P, Questionnaire for Public Trust Positions, Optional Form 306 and FD-258 Finger Print Chart. Contractor staff may be required to provide other background information as deemed appropriate for the requested security access level. HUD may grant, deny, or revoke an individuals access rights to a HUD system based upon the results of the security background check of the individual. The

Contractor shall provide written notification to the COR no later than one (1) business day after termination or resignation of any employee granted HUD systems access or when there is no longer a need for access to HUD systems by any Contractor employee. The Contractor shall maintain an up-to-date list that identifies contract employees with access to each of the information systems described in Section 3.1 and the justification for each employees level of access. The Contractor shall not provide access to individuals until HUD provides written authorization.

B. SYSTEMS ACCESS AUTHORIZATION

Subject to any necessary security clearances, HUD will grant the Contractor authorization to access the HUD information systems, described in Section 3.1.

3. CONTRACTOR PROVIDED GOODS AND SERVICES

A. GENERAL

Except as otherwise expressly provided in this PWS, the Contractor shall provide everything required to perform the services under a contract based on this PWS. The Contractor is responsible for knowing what items to furnish without specific mention.

B. CONTRACTOR EXPENSES

All costs of performance under a contract based on this PWS are at the expense of the

Contractor unless otherwise specifically identified in this contract.

C. INTERFACE EQUIPMENT AND SOFTWARE

To provide capability for direct data entry and data review from the designated HUD systems, the Contractor shall provide equipment that meets the minimum requirements discussed in this section.

All personal computer configurations shall be in accordance with HUDs minimum personal computer system configurations in effect at the time of contract award. Also, all parties will ensure compatibility with the HUD network.

If such configurations change during the term of this contract, HUD will notify the Contractor by letter of subsequent configurations and the effective date of any such change.

High Speed Internet Service is required.

1.4 Description of Services

The Contractor shall analyze market and property conditions and develop a marketing strategy for the pricing and disposition of each property. The Contractor is required to list, market, select the best offer, execute sale documents, oversee the closing process, and ensure that sale proceeds are delivered to HUD in a timely manner. Although the PWS prescribes certain requirements for making decisions about how best to dispose of each property, the Contractor has extensive ability to influence HUDs net return per property. The Contractor shall properly exercise its authority to sell properties in a manner that is consistent with the requirements of the PWS, achieves the greatest net return to the government, and minimizes holding time.

Section 5.1 details requirements general to all of the objectives of this PWS. Section 5.2 contains specific requirements relative to the purposes and objectives discussed in Section 1.6.

The tasks under this PWS, whenever necessary, have been described as outcomes and the

Contractor may determine the most efficient method for accomplishing the task. Some tasks are prescribed in part by regulation and legislation and specific process steps have been identified.

1.5 Non-Personal Services

The Government will neither supervise Contractor employees nor control the method by which the Contractor performs the required tasks. Under no circumstances shall the Government assign tasks to, or prepare work schedules for, individual Contractor employees. It shall be the responsibility of the Contractor to manage its employees and to guard against any actions that are of the nature of personal services, or give the perception of personal services.

If the Contractor believes that any actions constitute, or are perceived to constitute personal services, it shall be the Contractor's responsibility to notify the Contracting Officer (CO) immediately. These services shall not be used to perform work of a policy, decision making, or management nature, i.e. inherently Government functions. All decisions relative to programs supported by the Contactor shall be the sole responsibility of the Government.

1.6 Period of Performance

The resulting contracts will have a base performance period of twelve months, plus four (4) one year option periods. The length of the contract, including the option periods, shall not exceed

56 (fifty-six) months (exclusive of the possible 6 months, or shorter, extension under FAR

Clause 52.217-8) from either the effective date or date of contract award, whichever is later.

This is only an estimate. The Government is assuming a twelve (12) month base period for resulting awards, however the actual base period will be from the award date to May 31st, 2XXX. The Government reserves the right to adjust quantities based on the actual award date.

Performance under the 6 contract areas are anticipated to begin directly after contract award.

However, depending upon available ceiling under the existing AM contracts, it is possible that the effective date for some contract areas may be pushed out until later in FY 20XX.

1.7 Place of Performance

The services to be performed under this contract shall be performed at Contractor Facility.

OR

The Contractor shall maintain a fully staffed and equipped office within the existing boundaries of the awarded HOC jurisdiction. The Contractor shall maintain the physical property files referenced in Section 5.1.1.6 in that office. Any changes or exceptions in the location of performance must be approved in advance by the COR and may not impact customer service.

All key personnel must be located in that office with full direct authority over all critical operations of the work required.

1.8 Hours of Operation

The Contractor shall maintain regular office hours for the HOC contract area eight (8) hours a day during the standard work week, and include on-call emergency response within a specified time frame as discussed in Section 5.1.3.2 below.

1.9 Special Qualifications

The Contractor is responsible for ensuring all employees possess and maintain current security awareness certification during the execution of this contract.

1.10 Post Award/Kickoff Conference

The Contractor shall attend any post award conference convened by the contracting activity or contract administration office in accordance with FAR Subpart 42.5. The Government intends to convene a Post Award Conference with the Contractor within ten business days after contract award. The Contracting Officer will notify the Contractor of the specific date, location, and agenda within five business days after contract award.

1.11 Status Meetings

The Contracting Officer, Contracting Officer Representative (COR) and other Government personnel, as appropriate may meet periodically with the Contractor to also review Contractor performance, requirement status, etc. At these meetings, the Contracting Officer will apprise the Contractor of how the Government views the Contractor's performance or progress of the requirement. The Contractor will apprise the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings shall be at no additional cost to the Government. Post Award Conference and subsequent meetings may be held via teleconference.

1.12 Contractor Travel

The Contractor shall be responsible for travel and lodging expenses incurred by its staff attending any HUD function.

1.13 Transition In

To ensure a smooth transfer of marketing and sales responsibilities from the existing M&M

Contractors (s), herein after called "Former Contractors, to the AM Contractor, HUD has provided for a Transition Period. The transition consists of two distinct phases: 1) Start-up and

Ramp-up. The Ramp-up phase of the transition is the case assignment phase and will not begin until the AM Contractors have access to HUD systems.

START UP Day 1 through Day 30

The Start-up phase will run from the effective date of the contract through the 30th calendar day unless otherwise extended by the Contracting Officer. During the Start-up phase, the AM

Contractor shall: establish or adapt its physical infrastructure; retain qualified staff and subcontract support; develop or obtain necessary hardware, software, Internet applications and information technology; and submit all required security clearance forms and applications required to gain access to HUD systems. The Contractor shall also attend post award conferences and meeting with HUD staff, attend HUD provided training; provide training to its workforce to enable them to provide required services under this PWS; obtain all required, licenses, permits, bonds and legal permissions required to transact business within the awarded geographic area; develop and implement quality control programs; and be ready to assume contract responsibilities on the 31st day following the effective date of the contract, or the first day following the end of the startup period if it is extended beyond the 30th day.

CONTRACTOR RESPONSIBILITIES DURING START-UP

Post Award Conference Within the first week following the effective date of the contract, the

COR will notify the Contractor of the date and location of the post award conference. The

Contractor and key staff shall attend the post award conference. Contractor orientation as set forth in Section 6.1.1.7 will be provided at the post award conference.

Quality Control, Contingency, and Comprehensive Marketing Plans (collectively, the Plans)

Within ten (10) calendar days after the post award conference, the Contractor shall submit a

Quality Control Plan (QCP), a Contingency Plan (CP), and a comprehensive Marketing Plan

(MP). The COR will review and acknowledge receipt of the plans within fifteen (14) calendar days of receipt. Upon receipt of comments from the COR, the Contractor shall update the plans and submit to the COR a revised QCP, CP and MP incorporating all comments within 7 business days. The QCP, CP and MP will be revised as circumstances dictate, to reflect necessary changes throughout the term of the contract. Prior to implementing changes, the

COR must receive all changes to the plans in writing for review, comment and approval. The

Contractor shall maintain the QCP, CP and MP throughout the contract term.

Office Space No later than the fifth (5th) business day following the effective date of the contract, the Contractor shall secure any and all office space required under Section 5.1.2 and notify the COR via electronic transmission of the address.

Systems Security No later than the fifth (5th) calendar day after the effective date of the contract, the Contractors System Security Administrator (SSA), shall obtain the necessary forms from the designated HUD Security Administrator for each staff person who will need access to

HUD systems. The SSA shall arrange for completion of the forms and shall transmit the completed forms to HUDs Security Administrator no later than the fifteenth (15th) calendar day after the contract award date.

Performance Bond and Payment Bond

The Contractor shall deliver to the CO a performance bond and a payment bond or acceptable alternative in an amount and timeframe as required by Attachment A10.

Phone Service

No later than the tenth (10th) business day following the effective date of the contract, the

Contractor shall contract for phone service and notify the COR via electronic transmission of the phone number(s).

Orientation Within thirty (30) days of the effective date of the contract, the Contractor shall attend the HUD-provided orientation described in Section 6.1.2.3. The orientation will be held at

HUD-designated locations. HUD reserves the right to limit the number of trainees who may attend. The Contractor is required to train those members of its workforce that do not attend

HUD provided orientation, as well as new employees as they are hired, to enable them to provide required services under this PWS.

Facilities, Staffing and Equipment

No later than the fifteenth (15th) calendar day after the effective date of the contract, the

Contractor shall notify the COR in writing that it has adequate facilities, staff, subcontract support, equipment and supplies to perform all of the tasks required under the PWS and shall provide a final list of key staff, office locations, address and phone numbers and emergency contact information to the COR.

Transition Coordination

The Contractor shall meet with the COR and the Former Contractor and cooperate in good faith to develop a detailed protocol for transfer of ongoing marketing contract activities in order to ensure a continuity of service to external customers. Specific procedures will be mutually agreed upon for transition of the bidding process from P260.

HUD RESPONSIBILITIES DURING START-UP

System Security Clearances/Access HUD will assist Contractor staff in gaining the necessary security clearances in accordance with the systems security access in section 3.2.1 and 3.2.2.

By the 5th calendar day after award of contract, the Contractor shall obtain the necessary forms from the designated HUD Security Administrator for each staff person who will need access to

HUD systems. The forms must be completed and submitted to the HUD Security Administrator by the 15th day following award of the contract. If the contractor was a previous M&M 3.0 or 3.5

Asset Manager, the assumption is that some of their existing staff will maintain existing PIV clearances. HUD will process the forms to provide new Contractor employees with security clearances to gain systems access by the sixty-first (61st) day. Contractor must have system access to begin the Ramp-up phase of the transition.

Review of Contractors Plans No later than fourteen (14) calendar days after receipt of the

Contractors Contingency, Quality Control, and comprehensive Marketing Plans, the COR will review these plans, provide comments to the Contractor and indicate whether HUD accepts or rejects each Plan. The Contractor shall incorporate HUD comments, or rewrite if unacceptable, into the Plans and issue revised Plans within seven (7) calendar days after receipt of the CORs comments. The Contractor shall satisfy the requirements of HUD for acceptance of each Plan.

These requirements include consistency with the Plans presented as part of the Contractors proposal and HUDs regulatory and statutory authorities.

Orientation

HUDs COR will notify the Contractor of the time and location of HUD provided training and the number of participants that the Contractor may send. HUD will determine the nature, timing, and extent of the orientation sessions.

Policy and Process

This training will include an overview of HUD and the policies and procedures related to marketing and sales, including but not limited to: lead based paint requirements; direct and discounted sale policies; determining property location within revitalization areas; interaction with other HUD Contractors; quality assurance and compliance monitoring activities; and

Contractor invoicing procedures.

Systems Training HUD will provide training to Contractor staff on the use of HUD systems identified in Section 3.1.

RAMP-UP (Day 31 through Day 106)

The Ramp-up phase is the case assignment phase of the transition. It will run from the 31st day of the effective date of the contract through the 106th day and will not exceed the timeframes established herein or as set forth by the Contracting Officer. HUD reserves the right to shorten this phase of the transition by assigning cases earlier than prescribed in the established timeframes described below.

The Ramp-up phase shall begin at the end of the AM Contractors Start-up phase or on the thirty-first (31st) calendar day after the effective AM Contractors contract date unless otherwise extended by the Contracting Officer. The AM Contractor must have systems access at the end of the Start-up phase to begin the Ramp-up phase of the transition. The Ramp-up phase shall run for 75 calendar days unless shortened by HUD. Case assignment will begin on day 31, or the first day following the end of the startup period. Case assignments will be made via P260.

During the Ramp-up phase, the AM Contractor shall be in receipt of unsold inventory and pending sales contract case files from the Former Contractors. Once an assignment has been made in P260, the AM Contractor shall not wait for a case file to begin to perform their marketing duties as outlined in the PWS. Within ten (10) business days after receipt of case files, the AM Contractor shall input into P260 relevant property information received from the

Former Contractors that is not in P260 and is needed to fulfill the marketing requirements of the

PWS. For example, for sale pending inventory transferred, the Contractor shall scan work orders, most recent appraisal, the sales contract, addendums, disclosures, extension or cancellation notices, and, when available the HUD 1 Settlement Statement if these are not already in P260. The Contractor shall follow the requirements of input into P260 of any property information and documents that result from the Contractors marketing of the property. The AM

Contractor shall assume responsibility for specific contract tasks in the order described below.

Ramp-up Schedule 31st Day

On the thirty- first (31st) calendar day after the effective date of the contract or at the end of the startup period if extended by the CO beyond the 30th day, the Contractor shall begin performance of marketing and sales services for all new acquisitions in accordance with this

PWS.

Assignments of New Acquisitions

The Contractor shall be assigned new acquisitions for the awarded geographic area and continue to receive new acquisitions in this area. Assignments will be made via P260. The

Contractor shall market these properties in accordance with the requirements of this PWS.

61st Day Assignment of Unsold Inventory

On the sixty-first (61st) calendar day after the effective date of the contract, the Contractor shall be assigned, via P260 all unsold inventory in its awarded geographic area. The Contractor shall also receive by overnight delivery all case files for unsold inventory from the Former Contractor.

Once assignment has been made in P260, the AM Contractor shall begin performance of all marketing and sales services related to unsold inventory. The Contractor shall not wait for a case files from the Former Contractor to begin to perform their marketing duties as outlined in the PWS.

1 Unsold Inventory P260 will assign all properties in the inventory that are not under contract for sale (Steps 1-7 of HUDs Disposition Process). The Former Contractor shall retain only those properties that are under sales contract (Pending Contracts). A case file will be provided for each property containing all applicable available documents including the Former Contractors inspections and copies of work orders, if any. The files will arrive via overnight delivery. Each box will include a file inventory pulled from SAMS, listing the FHA Case Number, property address and date the property was assigned to the Former Contractor.

Transfer of Pending Contracts

The Former Contractor retains custody of properties in their inventory that are under contract for sale as of the 60th day after the effective date of the AM contract. HUD reserves the right to begin assignment of these pending contracts to the AM Contractor beginning on the 61st day following award of the contract. Any pending contract that remains with the former contractor and has not closed by the 106th day after the effective date of the AM contract shall be assigned to the AM Contractor via P260 on the 107th day. A case file will be provided for each sale-pending property containing all available documents including sales contracts, title information, closing instructions and Form HUD-1 Settlement Statements, as applicable. The files will arrive via overnight delivery. Each box will include a file inventory, listing the FHA Case

Number, property address, purchaser name, sales price, closing date and Title Company.

Sales Closings

The AM Contractor shall give priority to pending sale cases transferred from the Former

Contractors to ensure that they close timely with the least possible disruption to the purchaser.

Pending sales transferred to the AM Contractor will be exempt from any PCR and Lead-based paint inspection, stabilization and clearance requirements that are not in its PWS. If the terms of any transferred pending sale would cause the AM Contractor to be non-compliant with any provision of this PWS, and the AM Contractor shall notify the COR in writing.

Following closing, the AM Contractor shall be entitled to its full marketing fee for transferred pending sale properties.

Terminated Sales

If, after transfer, a pending sale is terminated and the property is returned to the market for sale, the Contractor shall market and sell the property in accordance with Section 5.2.

1.14 Transition Out

Upon expiration or termination of this contract, new acquisitions shall be assigned to the new contractors beginning the first day following expiration or contract termination. To ensure a smooth transition out and continuity of services to external customers, Contractors shall cooperate in good faith for transfer and assignment of ongoing sales contract activities to new

Contractors. AM Contractors will not continue to receive new acquisitions upon expiration of their contract but shall follow an orderly approach to transfer property files and assignment of unsold inventory and properties with pending contracts to new Contractors. Contractors shall perform all duties assigned to "Former Contractors in Section 6.1 and 6.2, Transition-In. The transition out period for assignment of unsold pending contracts to new Contractors shall not exceed 75 calendar days. Prior to beginning a Transition Out, the Contracting Officer may provide the Contractor with specific detailed protocol for transfer of ongoing contract activities as may be required to facilitate a smooth transition. Note: No separate CLIN is provided and any cost should be included as part of the contractors proposed Marketing Fee.

2 Definitions and Acronyms

2.1 Definitions

Adverse Occupants - Occupants who are in possession of a HUD owned or Custodial property without the legal right to be there.

Administrative Contracting Office Staff After contract award-The HUD official authorized to execute and administer contractual documents based on this contract and who is also responsible for the day-to-day administration of this contract and delegating contract administration responsibilities to contracting staff and Contracting Officer Representatives.

Acquisition-The process through which a real property or mortgage note secured by a real property is conveyed to HUD. Properties and mortgage notes are conveyed (acquired) from a number of sources. See Acquisition Types, Section 2.3.

Affiliated Entity-(a) As to Contractor, any Entity (i) controlling, controlled by, or under common control with the Contractor, or (ii) whose Management Officials are an Immediate Family member of a Management Official of the Contractor; or (b) As to Subcontractor, any Entity (i) controlling, controlled by, or under common control with the Subcontractor, or (ii) whose

Management Officials are an Immediate Family member of a Management Official of the

Subcontractor, including any agent or broker, licensed under a listing broker, used to list HUD-owned properties; or (c) As to any other Entity, any Entity (i) controlling, controlled by, or under common control with the other Entity, or (ii) whose Management Officials are an Immediate

Family member of a Management Official of the other Entity.

Asset Control Area (ACA) Program- a program for the disposition to eligible participants of

HUD-owned properties and future HUD acquisitions of properties and/or mortgage loans located within HUD designated revitalization areas.

Asset Manager- a HUD Contractor responsible for the marketing of HUD REO properties.

Blanket Approval- A pre-approved amount determined by the COR for recurring similar services.

Blanket Approval can be issued for specific Casualty Damage occurrences or for extended periods not to exceed one year, e.g., a predetermined amount for WDO inspections.

Broken Window- a pane of glass that has a visible opening that permits entry or exposure to the elements or which is so badly cracked as to constitute a hazard, e.g. a window with a crack that divides a single pane into more than two pieces or is loose when pressed upon.

Casualty Damage- is loss or harm to real or personal property that resulted from an accident, negligence and, or willful destruction, attributed to other than a Contractor, its employees or any affiliated Contractors, subcontractors or its employees, or an uncontrollable event such as fire, or some act of nature such as windstorm, snowstorm, or hurricane.

Contract Award Date- the date upon which HUD and the Contractor have both executed a contract based on this PWS.

Contract Effective Date- the date upon which the Contractor begins to perform work under the

PWS as identified in block 3 of form SF-1449.

Contracting Officer- the HUD official authorized to execute and administer a contract based on this PWS on behalf of HUD and includes any duly appointed successor or authorized representative.

Control as to any Entity- the power to direct or cause the direction of the management and policies of such Entity, whether through the ownership of voting securities, by contract, or otherwise. The term "Controlled shall have a correlative meaning.

Conveyance Condition- Properties that are conveyed free of surchargeable damage (see definition of surchargeable damage).

Cracked Window- a pane of glass that has no more than one crack and is still tight when pressed upon. A cracked window must have clear tape on both sides or it will be constituted as a Safety Hazard.

Custodial Property- a borrower owned property that serves as security for a secretary-held mortgage (including a HECM), which HUD, through the Contractor, has taken possession of following default and vacancy or abandonment. Custodial properties are assigned to the

Contractor by the case management system and are assigned to the Contractor with a clear title.

Daily Holding Cost- an estimated expense of HUD owned properties including taxes, interest and miscellaneous operating expenses.

Days- Unless otherwise specified in the Request for Quote (RFQ), all references to days means calendar days.

Deteriorated Paint- any interior or exterior painted surface that exhibits cracking, scaling, chipping, peeling, or loose paint.

Defective Service- a service or deliverable that does not meet the performance standard specified in the contract for a specific performance requirement.

Electronic Data Interchange (EDI) Software- application-to-application communication of data in standard format for business transactions, EDI is a set of standards for structuring information that is to be electronically exchanged between and within businesses, organizations.

Electronic Transmission- a message transmitted electronically in a format displayed on equipment, for example, a personal computer monitor or facsimile machine. The electronic media used to deliver electronic messages displayed on a personal computer monitor includes electronic mail or another method acceptable to HUD.

Emergency Contact Sign- a visible sign on the property that provides a toll free, 24-hour telephone number to report emergencies.

Entity- any individual, corporation, partnership, joint venture, limited liability company, trust, association.

FHA Connection- an Internet-based system that provides FHA business partners and

Contractors secure interaction with HUD mainframe systems to perform required reporting and research the origination and servicing history of FHA insured loans.

Field Service Manager- a HUD Contractor responsible for property management, maintenance, and preservation services.

Financial Control Manual- A manual that describes HUD-Single Family Housing Programs uniform policies and procedures for processing and approving contractor invoices related to the marketing and management of HUDs properties. It also describes the minimum documentary evidence required of each type of Payment Request Transmittal.

Government Technical Monitor (GTM)- a HUD employee who assists the COR in a limited area of expertise and who may be delegated some duties of the COR.

Contracting Officer Representative (COR)- a HUD employee who acts as the Contracting

Officers representative in all matters concerning the technical aspects of a contract. The COR is responsible for giving Contractors technical advice and guidance related to the work required by the contract. Moreover, the COR is the principal judge of a Contractors performance, including the quality and timeliness of services. May also be referred to as the Contracting

Officers Representative (COR).

Hard to Sell- "hard to sell properties are defined as: (a) vacant lots; (b) properties with very low market value relative to the surrounding market; (c) properties in remote areas not served by local real estate professionals; (d) properties with unusual features which may negatively impact a sale; and (e) properties which have been actively marketed (i.e., listed in accordance with their approved comprehensive marketing plan) for 4 months but have not sold.

Health and Safety Hazards- Any condition or situation at the property that exposes the government to abnormal risk, that presents a source of danger, which could cause an accident, or poses the threat of injury, harm to the public or property that must be corrected within one (1) day of discovery or notification.

Home Equity Conversion Mortgage (HECM)- a specialized mortgage product available only to senior citizens that allows them to receive cash payments from the equity in their home.

HUDClips a web-based directory of all of HUDs official policies and directives including notices, Mortgagee Letters, Housing Notices, Handbooks, Code of Federal Regulations and US Codes

Titles 12 and 24. The Internet address for HUDs Client Information and Policy System

(HUDClips) is http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips

HUD-Owned Properties- Those properties that HUD owns by reason of payment of an insurance claim or another acquisition method. Unless otherwise indicated the term includes vacant land and occupied-conveyance properties. HUD-owned properties are also referred to as

HUD REO or HUD-homes.

Immediate Family- As to any person and whether by blood, law, or marriage, (i) his or her spouse or domestic partner, (ii) his or her children, siblings, or parents, or (iii) the spouses or domestic partners of his or her children, siblings, or parents.

Key Personnel- "Key Personnel are defined- as the Contract Manager, the Project Manager, and the Quality Control Manager/Third Party Quality Control Vendor.

Management Official- as to any Entity, its owner, partner, principal, shareholder, director, officer, employee, agent, representative, or any individual who directs its daily operations.

Minimum Property Requirements (MPR)- the minimum level of quality for existing single-family

1-4 unit properties to be considered technically acceptable for insurance under FHA Programs.

MPR can be found in HUD Handbook 4905.1 rev-1 and Mortgagee Letter 2005-48.

Minimum Property Standards (MPS)- a minimum quality level acceptable to HUD for new construction single-family 1-4 unit properties. MPS can be found in 24 CFR 200.926 through

200.926e and HUD Handbook 4910.1 Appendix K.

Mortgagee- an FHA approved mortgage loan holder, originator, or mortgage loan servicer.

Mortgagee is also referred to as "Lender.

Mortgagee Compliance Manager- the contractor responsible for performing a variety of pre- and post- property conveyance services on behalf of HUD.

Mortgagee Neglect for a mortgage insured on or after January 1, 1977, the failure by a

Mortgagee to inspect, or take reasonable action to preserve and protect a property until conveyance to the Secretary securing an FHA insured mortgage, as required by 24 CFR

203.377. Reasonable action includes initiating foreclosure within the required time frame pursuant to 24 CFR 203.355(b).

Non-Adverse Occupants- Occupants who are in possession of a HUD owned or Custodial property with a legal right to occupy, i.e. with HUD or MCM approval, or a lawful lessee.

Net Offer- an amount used to determine the winning bidder on competitive sales and to calculate the marketing fee for sales under certain sales methods. Net Offer is calculated by subtracting the dollar amounts of the financing and loan closing costs (that being paid by HUD) and brokers sales commission from the bid price. For discount sales, the amount of the sales discount is not subtracted from the bid price when calculating the Net Offer. For $1 Home sales, the Net Offer equals $1.

Non-Surchargeable Damage- damage to the property that is not the responsibility of the

Mortgagee because it was not caused by Mortgagee Neglect, fire, flood, earthquake, hurricane, tornado, or for condominiums, boiler explosions.

Notice of Acquisition- the notice provided to the Contractor that a property has been assigned to them. Generally, notice is conveyed through P260, however in some cases notice is delivered by the COR.

Occupied-Conveyance- a formal process through which a Mortgagee receives permission to convey an occupied property to HUD. The term may also be used as a noun to refer to a property conveyed in this manner.

P260- "P260 means the P260 system or its successor system, whichever is being used by HUD at the time.

Pass Through Expense- an actual, out of pocket expense incurred and paid by the Contractor that is not deemed a Contractors expense and which is identified by the Government as eligible for reimbursement.

Performance Evaluation- the COR/GTMs record of the Contractors performance under the contract.

Performance Requirement- the service level that separates acceptable performance from unacceptable performance of a task.

Performance Requirements Summary (PRS)- a listing of the performance requirements under the contract that the Government evaluates on a regular basis. Performance indicators, standards for these requirements, and surveillance methods will be used to determine if the

Contractor meets performance standards.

Performance Standard- the Contractors performance level on any deliverable as required by the

Performance Work Statement.

Personal Identification Verification (PIV)- a process for personnel identification and verification to gain user approval and access to HUDs computer systems.

Proposed Rule proposed changes to the regulations governing HUD policy as published in the

Federal Register.

Quality Assurance (QA)- actions by HUD or its designees to ensure that products or services provided by the Contractor are within the acceptable quality level for a given performance requirement.

Quality Control (QC)- actions taken by the Contractor to control the production of supplies and services to ensure that they conform to the performance requirements and standards. Quality control procedures are outlined in the Quality Control Plan (QCP) developed by the Contractor.

Random Sampling- a quality verification selection method wherein each object in a group has an equal chance of being selected.

Ready to Show Condition - A property is in Ready to Show Condition when it meets all the following requirements and must remain in Ready to Show Condition until the property closes and HUD is no longer responsible for its maintenance. Dwellings and structures must be free of debris, insect infestations, rodents, mammals and reptiles. Dwellings and structures must be free of all health and safety hazards and broken windows. Stairs and handrails must be secure and installed per local code and in a manner that conforms to the esthetics of the property;

exposed nails and hooks are removed; exposed gas lines are capped; exposed electrical wires are capped and any broken or missing outlet and switch covers in easily accessible areas are covered. All shelves, cabinets, counter tops, appliances, plumbing fixtures including but not limited to toilets, bathtubs and showers, all windows, window sills, thresholds, mirrors, shower doors must be clean and the house must be free of bad odors. All floors must be cleaned and carpets vacuumed. Upon COR direction, carpet and tack strip may be removed if condition impedes marketability. All graffiti, vulgarity and pornography must be covered in a professional manner.

All previous mortgagee servicing notices and signage must be removed. All light fixtures and ceiling fans must be clean and window coverings that do not add value to the property should be removed. Baseboards must be wiped clean and the house free of cobwebs. All repairs required to correct safety hazards and any approved repairs to be done prior to listing the property must be completed in order for the house to be in ready to show condition. The yard must be free of trash and debris; accumulated leaves and holes must be covered or filled. The grass must be cut and bushes trimmed in a professional manner. Limbs must be cut to a minimum 18 away from the roof and gutters must be free of visible debris and foliage. Snow must be removed from walkways and porches. Swimming pools must be properly secured and in accordance with local ordinance; wells, septic tanks, storm cellars and the like must be secured to protect the public. Safe access to all rooms must be provided at all times unless otherwise approved by the COR.

Real Estate Owned (REO)- an industry term used to describe properties acquired through foreclosure of a mortgage note, or deed of trust. Single-family properties owned by HUD may be referred to as HUD REO.

Reconveyance- the process of returning a property to a Mortgagee by recording a deed in

Mortgagees name and seeking reimbursement for claims paid plus expenses.

Revitalization Area- an area that has been designated by HUD as exhibiting some or all of the following characteristics: a high concentration of HUD homes, low income or low homeownership rates or any other criteria HUD designates. HUD homes within revitalization areas are eligible for discounted sales to certain purchasers.

Revitalization Area Locator (RAL)- a web-based geo-mapping tool that is HUDs official source for determining whether a property is located in a revitalization area.

Rework- corrective actions taken, or to be taken by the Contractor at its own expense and at no additional cost to the Government to rectify defects identified.

Secretary-Held Properties borrower owned properties that are the security for mortgage loans held and serviced by HUD either through assignment or origination. Vacant or abandoned secretary-held properties will become Custodial Properties.

Secured Properties- a property where all windows, doors and openings are locked, boarded

(where authorized), or otherwise secured to prevent unauthorized entrance by person or animal into any portion of the dwelling, including exterior entrances to crawl spaces, and any other structures on the property, e.g. garages and sheds.

Special Property Inspections (SPIs)- quality assurance inspections of HUD properties performed by HUD contract inspectors.

Subcontractor- a person or entity that enters into an oral or written contract or agreement with the Contractor to perform services, including a listing broker used by the Contractor to list HUD-owned properties.

Support Services Contractor (SSC)- Contractor responsible for the administration and financial support of the HUD REO Portfolio. The SSC is also responsible for performing financial transmittals, reconciliation of closings, and broker registration services on behalf of HUD.

Surchargeable Damage- damage to the property (1) by fire, flood, earthquake, hurricane, tornado, or, for condominiums, boiler explosion; or (2) for mortgages insured on or after January

1, 1977, damage caused by a Mortgagees failure, as required by 24 CFR 203.377, to inspect or take reasonable action to preserve and protect vacant or abandoned properties.

Targeted Sampling- use of risk based factors rather than random sampling to select properties, files or other subjects for quality assurance or quality control review.

Transition Period- a period of time following contract award when a new Contractor develops the infrastructure necessary to perform contractual responsibilities and when those contractual responsibilities are transferred from a Former Contractor (see Section 6) to a new Contractor.

Transmittal Standard form required under HUDs Financial Control Manual that Contractors must use to request payment of expenses associated with mortgagee compliance, management and the marketing of HUD-owned properties.

Utilities- gas, electricity and water/sewer services.

Contractor the individual, partnership, corporation or other entity, which is the party subject to the terms and conditions of this contract.

ACQUISITION TYPES

The vast majority of acquired properties are conveyed to HUD by a Servicing Lender

(Mortgagee) following foreclosure of an FHA insured mortgage and the filing of a claim for insurance benefits. HUD also acquires properties from a variety of other sources. The type of acquisition may impact the method by which the Contractor is informed of the new assignment and the scope of services required. A listing of possible acquisition sources follows.

Conveyance Foreclosures properties conveyed to HUD by a Mortgagee following foreclosure, or deed-in-lieu of foreclosure of an FHA insured mortgage, and the filing of a claim for insurance benefits.

Custodial Properties- properties secured by a Secretary-Held mortgage or HECM, which are in default and upon inspection by HUDs servicing Contractor determined to be vacant or abandoned. Title is not yet in HUDs name. Upon receipt of notification from the COR, the

Contractor shall take possession to protect and preserve the property until title is acquired.

Custodial properties are not marketable until foreclosure is completed and title is vested in the

Secretary of HUD. These properties will be assigned by the COR.

Foreclosed Secretary Held Mortgages…