3.9 Q and A's Amend 0015.pdf

3.9 AM Solicitation 86544A19R00003 Amendment 0015 Question &

Answers

1. I see that the Solicitation now has an updated set of documents posted but I wanted to see, generally, what the Agency has decided to do with this procurement? Upon first look they don’t appear to diverge from the original documents. My wife nearly divorced me after the three weeks of all-nighters put into crafting our firm's response so i’m glad to see the wheels are back in motion. If we submitted previously, need we resubmit, or will the existing Offerors be considered without further submission?

Answer: The changes are outlined in Amendment 0009 and Amendment 0015. All offerors that submitted proposals for this solicitation previously must resubmit a new proposal.

2. We were reviewing the updated solicitation and noted that there are two different dates for questions. May 5, 2020 per Amendment 9 and May 11, 2020 per Conformed Copy of RFP. Can you tell us which one is correct for the question due date?

Answer: Amendment 0010 clarified that the submission date for questions to May 05, 2020.

3. Has the contract been filled for area 6A?

Answer: Contract area 6A is part of solicitation 86544A19R000043 with a proposal due date of May 27, 2020. Awards have not been made.

4. I am a former HUD listing broker and am inquiring if and when the asset management contract for

Florida (8a) is up for renewal. I understand Sage Acquisitions is the current asset manager for Florida.

Answer: Contract area 8A is part of solicitation 86544A19R000043 with a proposal due date of May 27, 2020. Awards have not been made.

General.

5. Republishing this RFP as 100% total small business set-aside for all eleven areas is both appropriate, given the 20-year history of the M&M program, and sincerely appreciated by qualified small business owners. Will HUD aggressively guard against making any awards to firms that are evidently engaged in

“ostensible subcontracting” situations? In other words, will HUD diligently scrutinize teaming agreements proposed by large businesses (especially incumbent AMs) who propose as a subcontractor to a small business, thereby avoiding size standard protests (that cost time and money) against improper large/small partnering agreements?

Answer: Proposal shall be evaluated in accordance with the evaluation criteria included in Section “M” of the solicitation and in accordance with applicable laws and regulations.

Part I - The Schedule

Section B.4: Pricing.

Attachment 15, Pricing Spreadsheets

6. The first section of the spreadsheets is labeled Base Year Period - Firm Fixed Price (duration 7 months) with an estimated number of appraisals, say 950, as an example. The second section is labeled Option

Period One - Firm Fixed Price (duration 12 months), but the estimated number of appraisals is lower, say

630. Why would fewer appraisals be required in 7 months than in 12?

Answer:

The number of appraisals estimated for the base period includes transition properties.

7. Does HUD have a “reasonable pricing” range from its own knowledge of prior AM contractors’ bids and their performance history?

Answer: The pricing for current and previous Asset Manager contracts are proprietary . Each potential bidder for an AM 3.9 contract area is required to be knowledgeable about its market and cost associated with providing the service pursuant to the solicitation.

8. Will HUD eliminate from further evaluation those proposals that offer pricing that is unreasonably low?

Answer: HUD is not conducting Price Realism. Proposals shall be evaluated in accordance with the evaluation criteria stated in section “M” of the solicitation.

Section C: Descriptiton/specifications/statement of work.

9. 1.3.2.1, Page 17.

a. How much time after the AM submits the official forms does HUD require to process them and issue C-numbers to AM contractor employees?

Answer: Provided that accurate and complete official forms are submitted to HUD within 5 days of contract award, HUD will make every effort to process C-numbers within 30 days.

b. Will HUD provide temporary access to facilitate use of P260 to avoid delaying initiation of the ramp-up period?

Answer: No

10. 1.3.8, Page 21.

Does HUD still require blue-ink original signatures on the documents in the HUD-9548 package, even when ESIGN is acceptable to all the parties and allowable within the state?

Answer: Documents must be signed in compliance with statutes. Thus documents may be signed electronically if permitted by State law.

11. 1.3.12, and 1.3.13, Page 23.

a. In HUD’s usage of the terms, what is the difference between a BPO and a CMA?

Answer: A CMA is generally a price evaluation on a property performed by a listing agent. A BPO is generally a price evaluation that is not an appraisal performed by an independent third party.

b. Under what circumstances, if any, may an initial list price for HUD REO be established and marketing begin by the AM without first obtaining an appraisal?

Answer: Unless authorized by the Contractor Officer Representative or the Contracting Officer, the initial list price cannot be established without obtaining an FHA appraisal .

12. 1.3.15, Page 24. Will HUD provide a list of current Revitalization Areas in each state?

Answer: HUD will not provide the current list of Revitalization Areas as the census tracts change frequently. Historically, REO properties in Revitalization Areas consist of less than 5% of acquisitions.

Information is available on HUD.gov

13. 1.3.16, Page 25. Will HUD provide a list of current Asset Control Area agreements in each state?

Answer:

HUD will not provide a list of ACA Agreements in each state. However, historically less than 1% of its REO inventory is eligible for the ACA program.

14. 1.3.17, Page 25.

a. Will the COR guide the new 3.9-AM contractors concerning what HUD regards as acceptable practice to establish bid thresholds, i.e., what “HUD’s guidelines” are for this decision?

Answer: The Contractor shall determine for each property listed on a competitive basis an acceptable bid threshold. The COR approves the threshold as part of the marketing plan and/or with request for listing price adjustments.

b. Must bid thresholds be established on an asset-by-asset basis, or may the AM devise and employ a formula that is not disclosed to the public?

Answer: An acceptable bid threshold is determined for each property based on the offeror’s approved Comprehensive Marketing Plan and/or with request for listing price adjustments.

15. 1.3.19, Page 26.

With now-prevalent remote, virtual, and work-from-home guidance for health reasons, will HUD waive the requirement that the LLB “have only one primary place of business” from which the listing is serviced, especially in areas where face-to-face business is less advisable?

Answer: The requirement that the LLB have one primary place of business does not prevent the

LLB employees from teleworking on services that are telework eligible.

16. 1.3.24, Page 28.

Previously, HUD set the LLB commission at exactly 3% of the final sales price and the selling brokers’ (SB) commission as “up to” 3%, which the SB could voluntarily adjust downward if they wished to improve the net to HUD and their chances to win the bid.

a. Is HUD planning to change those commission amounts, and if so, what “level of service” differences would determine the percentage of maximum and minimum commission?

Answer: HUD’s maximum commission for Listing and Selling Brokers is 3% each. At

HUD sole discretion, HUD may reduce the Commission for the Listing Broker and or

Selling Broker when the Commission based on the list price is expected to exceed

$6,000.

For properties listed greater than 90 days and the property goes to auction, the maximum commission is 1% to the Listing Broker and 1% to the Selling Broker, if applicable.

b. Is HUD willing to allow the AM, with COR approval, to change commission percentages based on individual brokers’ performance scorecards?

Answer: HUD’s maximum commission for Listing and Selling Brokers is 3%. For properties listed greater than 90 days and the property goes to auction, the maximum commission is 1% to the Listing Broker.

17. 1.3.24.1, Page 28.

Will HUD pay a minimum fee to the AM on Hard-to-Sell properties or on Dollar ($) homes, and if yes, what amount will HUD pay?

Answer: No. CLIN fee is based on net sale price.

18. 1.3.25.1, Page 29.

All HUD homes, with very rare exceptions, if any, have been conveyed vacant in the past. Does

HUD intend to change this policy?

Answer: No. Historically less than one percent of HUD REO properties are conveyed with occupants.

19. 1.3.25.2.4, Page 34.

To what extent does HUD currently participate in the First Look program?

Answer: HUD’s First Look Program for REO properties is currently inactive. The inclusion of REO properties in the First Look Program is dependent on the reactivation of the Neighborhood

Stabilization Program (NSP).

20. 1.3.29.4, Page 46.

a. Does HUD require the AM to document and hold a back-up offer on every sale?

Answer: No.

b. If yes, for how long?

Answer: If a back-up offer is received, it is valid until time of closing.

c. Is there a “Back-Up Offer Addendum” that HUD has created for this purpose?

Answer: No.

21. 1.8, Page 56.

Some contract areas cover two time zones. May the AM in those areas set its hours of operation based on its office location time zone, or is the HOC headquarters the only acceptable time zone?

Answer: Hours of operation shall correspond to the awarded Homeownership Center (HOC) time zone.

22. 4.6, Page 70.

Does the AM need to plan on “occupying collocated space with their Government program customer”?

Answer: All work shall be performed off-site and not at Government facilities.

23. 4.7.1, Page 71.

Will the COR make the HUD QASP processes and procedures available to the AMs for guidance?

Answer: No. The QASP is an internal document.

24. H.3. Key Personnel, Page 102.

The CM, PM, and QCM are to be named at the time of contract award.

a. Should these individuals be identified by name in the unredacted proposal, or are they only identified to HUD, with resumes, after award?

Answer: See section L.6 which requires all references to company names, logos, or identifying characteristics (to include employee names) to be redacted.

b. If HUD wants them named in the proposal, where should the names be included? Section

Answer: L.6 states that the unredacted proposal may contain company names, logos.

c. Are the alternates also named only at contract award, or are they to be named in the proposal?

Answer: Alternates for CM, PM, and QCM roles are identified at time of award. The contractor shall submit resumes 1 calendar day after award.

Section L: Instructions, conditions, and notices to offerors or respondents.

25. L. 7. Page 161. What criteria has HUD used to determine that one small business can reasonably execute two contract areas within the same HOC (excluding Santa Ana), rather than being limited to one award per HOC, as in the former iteration of this RFP?

Answer: This decision was made based on Market Research conducted by the Agency and changes in inventory.

26. Volume II Past Performance, Page 168-172.

Relevancy Chart, Page 169.

In this era of low REO, any offeror that cites “Very Relevant” volume level since 2017 most likely had a

HUD AM contract, and that would cause the contractor to grow beyond the NAICS small business size standard. Is the rating of “Neutral Confidence” how HUD addresses this situation to enable qualified small businesses to compete?

Answer: No. “Relevancy” is not limited to work on HUD contracts. Offerors without recent, relevant past performance (by the prime contractor or subcontractors when there is significant subcontracting) receive a neutral rating in accordance with the FAR and the solicitation.

27. Active small real estate firms have operated successfully by adapting to the low REO volumes during the most recent three years, emphasizing other lines of business; however, in prior years, many have handled much higher volumes. Would HUD consider allowing references and relevant experience from years prior to 2017?

Answer: Proposals will be evaluated in accordance with the criteria stated in Section “M” of the proposal.

Section M: Evaluation factors for award.

28. Evaluation Factors Performance Confidence Assessment, Page 177.

When evaluating an offeror’s complete proposal, the “Part I Technical Proposal and Past Performance” is of equal value to the “Part II Business Proposal and Pricing.”

a. How does the TEP approach its “process to determine the best value to Government under a Past Performance/Price Trade-Off evaluation methodology” when an offeror has a

“Neutral” for past performance rating?

Answer: Best value will be determined in accordance with the evaluation criteria stated in section “M”.

b. If two offerors for the same contract area have acceptable technical proposals and identical pricing, with one having a “Somewhat Relevant” past performance and the other a

“Neutral” past performance, which one would receive the award?

Answer: Best value determination will be made by using the Past Performance Trade-off criteria in accordance with Section “M” of the solicitation.

c. Last year at this time, many respondents asked clients for references and surveys, which were then submitted to HUD. May we update those and use them without requesting the same things from our clients, who are often not able to comply easily or timely?

Answer: Offerors who already submitted a proposal are required to resubmit a new proposal in accordance with amendments 0009, 0010, 0011, 0012, 0013, 0014, and 0015 of the solicitation. Amendment 0015 changes the relevancy period to four- years immediately prior to submission of the amended proposal due date.

29. The evaluation process follows steps for LPTA with a combination of Best Value. Please confirm it is not the government's intent to solicit as LPTA.

Answer: The evaluation criteria is identified in Section “M” of the solicitation as Past Performance Trade-Off not LPTA.

30. Will all past performance references submitted at the time of the initial solicitation still be considered valid, if the timeline has since expired?

Answer: If an offeror submitted a previous proposal they are required to resubmit a proposal in accordance with amendments 0009, 0010, 0011, 0012, 0013, 0014, and 0015 of the solicitation.

31. There are a few days in between the submission due date and the anticipated start date for new awards. Does the government intend on maintaining this timeline?

Answer: This question is not clear. There is no reference to an anticipated start date for new awards.

32. Will the government consider electronic files for record retention, as all files are already loaded into P260?

Answer: The Asset Manager is required to keep an electronic copy of all documents as prescribed by the

COR.

33. Given the current economic climate and unemployment rates and potential for foreclosure, what is the basis for the government decreasing inventory minimums vs. increasing?

Answer:

In general, historical volumes are the basis of inventory levels utilized to assess offerors. Market conditions will determine the volume of REO acquisitions. Each AM is required to be knowledgeable about its market in prevailing trends, which will impact its ability to sell REO properties timely.

34. In section “L.6 Instructions to Offerors” it is stated that “Email proposals will not be accepted under this solicitation.”.

We noticed this as we were working on this extremely important opportunity and we wanted to ask if this was the definitive truth (that electronic submissions will not be considered). If that is so, I wanted to kindly ask if you could make a small exception and allow us to submit our response electronically.

While we respect your guidelines, due to COVID-19, our entire staff is working remotely. That said, mailing the proposal physically will require more than one staff member and likely break the social distancing rules that we have been adhering to (per the CDC recommendation).

Answer: See amendment 0015, Section L.6 regarding electronic submission of proposals.

35. Part I – B.2 reads:

“The NAICS code is 531390, Other Activities Related to Real Estate, with an established Small Business size standard of $7.5M in average annual revenues. (see Section K).”

Question:

The Electronic Code of Federal Regulations, current as of 04/29/2020, lists the Small Business size standard for the NAICS code of 531390 as $8.0M in average annual revenue. Per the Small Business Administration’s Table of Small Business Size Standards, this Size Standard for NAICS code 531390 became effective on 08/19/19. Will Part I – B.2 of this solicitation, released 04/27/20, be updated to reflect the current Size Standard as of its release?

Answer: Yes, effective August 19, 2019, the size standard for 531390-Other Activities Related to Real Estate increased to $8.0M

Section C: Description/specifications/statement of work.

36. Section 1.3.2.1 Security Access, page 17:

a. How long does it take to get a security clearance?

Answer: Provided that accurate and complete official forms are submitted to HUD within 5 days of contract award, HUD will make every effort to process C-numbers within 30 days.

b. Will 100% of security clearances (C-numbers) be approved prior to the transition and acquisition of properties?

Answer: Provided that accurate and complete official forms are submitted to HUD within 5 days of contract award, HUD will make every effort to process C-numbers within 30 days.

37. Section 1.3.11 New Appraisals and Report, page 23:

a. If the Contractor determines that the appraisal is off target, either due to market area knowledge, large variance of BPO or other sources, can the Contractor request COR approval to order a 2nd appraisal as a pass thru expense prior to initial listing?

Answer: HUD will not reimburse for a second appraisal without prior approval by the

COR.

b. Does the COR have to be notified and approve all initial appraisals prior to ordering if the fee is above the maximum permitted in the contract?

Answer: Yes

c. Does COR approval require three appraisal quotes if the cost for the initial appraisal is above the maximum permitted in the contract?

Answer: Yes

d. Will the COR approve reimbursement of Appraisal actual cost beyond the stated maximum with less than three appraisal quotes in remote areas with no or minimal FHA appraiser coverage?

Answer: The AM contract requires the AM to order an FHA appraisal. On an exception basis the COR may authorize a property to be listed using one or more alternative value tools if an FHA appraisal is cost prohibitive, cannot be obtained timely, etc.

e. If COR approval is too restrictive then this will slow down the listing process and cost contractor’s hundreds of thousands of dollars that are not reimbursed. Will the COR appraisal approval delay be taken into account on the Contractor’s Days to List requirement on the AM Scorecard?

Answer: Delays outside the responsibility of the contractor may be taken into consideration by the COR.

38. Section 1.3.16 Initial List Price, page 25:

a. Is the AM required to obtain an appraisal on every property, or can the AM list the property using a combination of two other valuation tools?

Answer:

The AM contract requires the AM to order an FHA appraisal. On an exception basis the COR may authorize a property to be listed using one or more alternative value tools if an FHA appraisal is cost prohibitive, cannot be obtained timely, etc.

b. If the AM is allowed to list with a combination of two other valuation tools without an appraisal, how will the requirement to list the property within three business days of receipt of the appraisal be applied? Will the receipt date of the other valuation tools be the measure for when the property is listed?

Answer:

If a determination is made by the COR not to obtain an appraisal, the AM is permitted three business days after receipt of the alternative valuation tools to upload in the case management system.

c. Will P260 be enhanced to track the new requirement which states that the property initial list price must be entered in P260 within 3 business days of the appraisal received date?

Answer:

Until P260 is updated the COR will provide guidance on how to upload initial list price information into P260.

d. Is the metric based on the received date (submission to P260 by the appraiser)? What if an appraisal is rejected due to needing corrections and the final, correct appraisal is not approved until later? Was the intent to be the appraisal approval date?

Answer:

The Initial List Price metric is based on no later than three (3) business days after appraisal is received.

e. If the Contractor lists the property above appraised value and the property does not have bid activity, can the Contractor reduce the price back to the appraised value upon AM discretion or is COR approval required?

Answer:

The Contractor may reduce the price or change the terms of sale based on the reanalysis provided the changed sales terms are consistent with the PWS, 24 CFR Part 291 and other applicable HUD guidance.

39. Section 1.3.18 Marketing Reanalysis, page 26:

a. It appears that in order to conduct a Market Reanalysis, the Contractor must have a current BPO. Can the Contractor interpret that a 30 day BPO by the Listing Broker OR a 120 day BPO by a 3rd party agent is sufficient?

Answer: A BPO that is ordered at least 30 days from the date of the appraisal performed by the listing broker or a third-party agent, approved by the COR, is sufficient to support a market re-analysis. The re-analysis, at a minimum, should include a current BPO, the number of days the properties were listed, number of bids received, percentage of bid prices to list prices, range of bids, and an analysis of the previous bids received.

b. The PWS states that the Contractor can determine if the property should continue on Exclusive or Extended period. Please clarify if the Exclusive Bid Period has ended if the AM has the ability to extend the Exclusive Bid Period. Will P260 be able to accommodate this? It does not currently allow this.

Answer: No. The contractor does not have ability to extend the Exclusive Bid Period.

40. Section 1.3.19 Use of Listing Brokers, page 26-27:

a. Does the Contractor need to submit a WON prior to the 90 days to obtain COR approval to extend the assignment

Answer: COR approval is required and should be completed through submission of a

WON.

b. If so, and the WON is submitted prior to the 90th day but has not been approved, can the Contractor continue listing the property with the existing Listing Broker or does the Contractor need to pull the property off market until the WON is reviewed?

Answer: Yes, the Contractor may continue to list the property with the existing Listing Broker until COR approval has been received.

c. If the WON is still open after the 90 days and a bid is accepted after the 90 days, does the Listing Broker receive a commission?

Answer: Yes, the existing Listing Broker would receive the commission if they were the Listing Broker at the time of bid acceptance. The WON request for a new Listing Broker should be cancelled if you received an acceptable bid for the existing Listing Broker.

d. Please clarify if the Contractor must request approval to extend the 90 days from the step 6 date or if it is the AM Assignment date?

Answer: The Contractor will receive COR approval 90 Days from the initial step 6 date with the Listing Broker.

e. If the metric is counting by the Assignment date, will the AM be required to log/assign the Listing Broker in P260 upon initial assignment? Currently, P260 does not allow assignment of a Listing Broker until the disposition is created.

Answer: The metric does not count by the assignment date.

f. If the 90 day listing period begins counting based on the step 6 list date, does P260 account for days that the property was offered to Lottery, when the Listing Broker does not typically list the property in the MLS due to restrictions on purchaser type?

Answer: The Lottery Period does not count towards the time the property is listed in step 6.

g. P260 recently updated to track the FSM routine inspections and if they are completed timely. Will this be applied to the Contractor’s routine inspections?

Answer: P260 FSM tracking requirements do not affect the AM Contractor. P260 has AM tracking mechanisms in place to ensure the initial, prior to list, and ready to close inspections are completed timely.

41. Section 1.3.25.2.2 Discount Sales to Qualified Nonprofits and Government Entities, page 31:

Please provide the correct link as the Nonprofits Roster link provided is not valid.

Answer: This weblink allows you to search for HUD approved nonprofit organizations using various selection criteria.: https://entp.hud.gov/idapp/html/f17npdata.cfm

42. Section 1.3.25.2.3.B Selection of Winning Bidder, page 33: Currently, P260 automatically awards a winning bid, not the Contractor. Will the Contractor now be responsible for selecting the winning bidder?

Answer: P260 ranks bids based on the Net Bid Amount (net return to HUD). Once ranked the AM selects the winning bidder based on the ranking provided by P260.

43. Section 1.3.25.2.4 First Look, page 34: Is the First look program still available to NSP grantees? If so, can you provide information for the First look website?

Answer: HUD’s First Look Program for REO properties is currently inactive. The inclusion of REO properties in the First Look Program is dependent on the reactivation of the Neighborhood

Stabilization Program (NSP).

44. Section 1.3.25.4 $1 Home Sale, page 37: Is the $1 Home sale offered for all properties that have been offered for sale for 180 days and are not under a sales contract? This appears to be different than HUD Handbook 4000.1 $1 Home sale guidance?

Answer: A property that has been in inventory for 180 days is eligible for the Dollar Home Program. This does not prohibit the property for being sold under another sales programs (e.g.

competitive).

45. Section 1.3.25.5 Asset Control Area (ACA) Program, page 37: What percentage of each contract area does HUD estimate to be eligible for ACA program?

Answer: Historically, less than 2% of properties in each contract area are sold pursuant to the ACA Program. Currently, four ACA Programs are receiving REO properties, which are in Baltimore, MD;

Rochester, NY; and two in Utah.

46. Section 1.3.25.5.F Value of Re-appraisal, page 39:

a. Will the Contractor be paid out of HUD-1 settlement proceeds or is a transmittal required to be submitted if the ACA participant will be charged the cost of the appraisal as a buyer’s expense at closing?

Answer: The Contractor will be paid via transmittal. ACA appraisals are obtained at HUD’s expense and it is a transmittal reimbursement.

b. Why would the Contractor bear the cost of the second appraisal if the deviation in value of the second appraisal is more than twenty percent (20%)? Isn’t the Contractor required to select FHA appraisers from HUD’s approved FHA appraiser roster? If the two unbiased FHA Appraiser opinion of value contradicts, then how would the Contractor have any control/influence over the value?

Answer: The ACA participant might challenge the appraisal within 10 days of the assignment. The ACA participant would pay for this second appraisal at closing if the second appraisal is within 20 % of the original appraisal valuation.

If it is outside of the 20%, then the AM will be approved to be reimbursed for the second appraisal.

47. Section 1.3.27 Environmental Compliance, page 40: In some contract areas, there are underground oil tanks which need to be removed and soil contamination remediated. Will the Contractor be able to place these properties in HOM status automatically, so it does not count against the scorecard, since this is out of the Contractor’s control? There have been experiences where there is delayed approval to place in Step 3 which impacted the Contractor negatively.

Answer: These properties are usually placed in HOM status unless the home has an active sales contract. If the property has an active sales contract and the buyer wants to move forward with the sale, then the property will remain in Step 8. The buyer should be contacted and needs to understand the repair of the oil tank will delay the sale.

48. Section 1.3.27.2 Properties built prior to 1978, page 40: Is there a specific timeframe for the Contractor to generate the LBP inspection WON in P260?

Answer: The AM Contractor shall initiate the work order for LBP inspections within one (1) business day of contract ratification (step 8).

49. Section 1.3.27.6 Mold, page 42: This section states “the contractor shall not execute any sales contract that does not include mold disclosure“ and also states this data will be provided by FSM on the HPIR. If the disclosure is not attached or included in the HPIR, will an NRTS work order be required? If the disclosure is not included, this will delay the listing. Will the AM be allowed to submit a scorecard exclusion due to FSM delay in providing the disclosure?

Answer: The Mold Disclosure is a Form, currently, HUD-9548-E, which should be included with the Sale Contract when executed. If the FSM’s mold disclosure will delay the listing, then the AM should submit a Not Ready to List WON not a Not Ready to Show WON.

50. Section 1.3.28.B Termites and Wood Destroying Organisms, page 44:

Please provide the correct link as the TPZ link provided is not valid.

Answer: There is no active TPZ link, See Amendment 0015 that revises Section 1.3.28.B

Termites and Wood Destroying Organisms.

51. Section 1.3.29.6 Acceptance of Contracts, page 46:

a. What about cases where buyer is unable to utilize e-signature?

Answer: E-signatures are required if offered by HUD. If e-signature is not possible, the COR shall be notified for approval of an alternate signature.

b. Also, if an executed contract requires corrections, how will this affect the 3 business day requirement to ratify?

Answer: The 3 day timeframe includes the corrections on the sales contract. If an executed contract needs corrections, it is no longer executable until the corrections have been received. P260 should contain notes concerning the AM’s actions to obtain those corrections to obtain the 3 business day requirement.

c. Will P260 be updated to allow the Contractor to process e-signatures for auction properties?

Answer: Yes

52. Section 1.3.30.1.A Sale Assignments, page 50:

Please clarify or provide details regarding how the Contractor or Listing Broker may be required to represent HUD at settlement.

Answer: Contract states: At certain times and in accordance with HUDs directions, the

AM Contractor or Listing Broker may be required to represent HUD at settlement. For unforeseen or very rare circumstances HUD may require seller representation at closing to eliminate or reduce possible liability. This may occur during such instances where the selling agent is unable to attend or when directed by HUD; due to anticipated high risk concerns.

53. Section 1.3.30.3 Contract Extensions, page 51: How will buyer delay extensions impact scorecard requirements for days to close?

Answer: The AM is not penalized for buyer delay extensions as long as they are for an approved reason. P260 should included needed documentation for Contract extensions.

54. Section 1.3.30.4 Homeowners Association Fees, Dues, Ground Rents and Non-Tax Assessments, page 51-52:

a. Will HUD provide a letter to the Contractor giving authorization to obtain HOA account information? In previous experience, many HOAs will only release HOA information to the owner on record (HUD).

Answer: HUD will provide the AM with a Delegation of Authority document that can be presented to the HOA.

b. If the mortgagee is responsible for non-routine expenses up to 30 days after assignment and Contractor from 31 days after assignment to settlement or from 10 days after AM assignment if not assigned by day 20, will HUD be responsible for non-routine expenses from October 1 to October 5 in the example provided below?

i. For example, the property is conveyed to HUD on September 1, 2017. FSM via P260 indicates the property is in ready to show condition and the property is assigned to the AM on September 25, 2017 (day 25). Settlement date on property is November 18, 2017. The AM will not be reimbursed for non-routine expenses (i.e. attorney fees, penalties, interest, etc.) allocable from October 5, 2017 (day 35) to November 18, 2017; if applicable.

c. Please confirm the Contractor would only be responsible for non-routine expenses “incurred” after the grace period, i.e. HUD acquires a property on 9/1 and is assigned to Contractor on 9/5. Legal fees “incurred” for legal services from 9/1-9/5, but were assessed on 10/15.

Answer: The AM contractor would have to supply proof as to when the legal fees were incurred, the AM would be responsible for legal fees incurred after 9/5.

d. Will the Contractor be responsible for paying any utility bills assessed or not assessed by the HOA?

Answer: Yes if there is Utility bill that was for either a shared utility with other properties in HOA or if the HOA paid the bill for the property, then the AM is to pay that bill and seek reimbursement from HUD per the process laid out in the PWS.

e. Will all required routine and non routine HOA related fees, penalties, and interest asssessed be considered a pass through expense (i.e., monthly dues, special assessments, demand statements, land lease, transfer fees, capital contribution fees, collection fees, legal fees, key fees, etc.)? If so, are there any circumstances that would require WON approval?

Answer: Yes, these would be pass through expenses but each property may have a different scenario. If there are Penalties and interest as part of the bill, then a WON is required.

f. What if the HOA is unable to provide a monthly statement of fees due, will HUD accept other confirming information (email from HOA, CC&Rs, etc) from the HOA to approve for pass through reimbursement?

Answer: This will be handled on a case by case basis. In general this should be acceptable if the HOA can confirm in an email from the HOA that a fee is monthly or recurring.

g. What is the expected turnaround time for WON approval?

Answer: In general, unless there is an unforeseen issue, the expected turnaround time is 2 business days.

h. Please confirm if the Contractor will be required to pay the full HOA amount due or only the amount due after conveyance to HUD?

Answer:

The full HOA amount is due at conveyance and should be paid by the AM per the direction in PWS.

i. If the Contractor is to pay the full amount, can HUD please specify the notification requirements of the AM to the Mortgagee?

Answer: The AM should notify HUD and the Mortgagee of the HOA dues owed prior to conveyance via the Administrative Remedy Work Order Notification and attach documentation that identifies fees and timeframes.

j. If the Contractor is to only pay the amount due after conveyance, what steps will need to be taken if the Mortgagee does not pay the balance due before the property is ready to close?

Answer:

The AM should notify HUD and the Mortgagee of the HOA dues owed prior to conveyance via the Administrative Remedy Work Order Notification and attach documentation that identifies fees and timeframes.

k. What further action, if any, will the Contractor be responsible for taking if HOA dues or fees are determined to be the responsibility of the Mortgagee or FSM?

Answer:

The contractor will be required to have the appropriate Administrative Remedy WON/Demand with each paid bill on the transmittal.

l. What will be the grace period allotted to the Contractor to research and pay HOAs for transition properties at the start of the contract?

Answer:

There is no grace period. Any changes to the PWS regarding transition properties, will be approved and provided in writing by Contracting Officer.

55. Section 1.3.30.4.A Paying Taxes, Assessments, Fees, HOA Dues or any Lienable Bill at Settlement, page 52-53:

a. Will HUD allow blanket approval under a certain limit for penalties, interest, attorney fees, and other non-routine charges to be paid on the Settlement Statement?

Answer: No.

b. Under WON #2 “When the COR reviews these types of WON’s the documentation for the Administrative Remedy request should be attached to this WON…” please specify what is meant by “documentation”.

Answer:

Whatever documentation is needed to verify the mortgagees’ compliance with HUD Handbook 4000.1. The 27011A, invoice/bill, proof of payment, tax bills, are all good examples of documentation that can be used to verify this requirement.

56. Section 1.3.33.1 Initial Real Estate Taxes, page 55:

a. The PWS states “No later than 15 days after a property is assigned, the Contractor is to verify the mortgagees’ compliance with HUD Handbook 4000.1.”

b. Can HUD please confirm what method of verification (27011A, proof of payment, etc.) is required of the Contractor?

Answer:

Whatever documentation is needed to verify the mortgagees’ compliance with HUD Handbook 4000.1. The 27011A, proof of payment, tax bills, are all good examples of documentation that can be used to verify this requirement.

c. This sentence appears to be asking the Contractor to verify all of the mortgagees’ compliance to the Handbook. Please confirm that the Contractor is only to verify matters relating to property taxes as stated in the Handbook on page 712 and/or ML 2013-18 as follows:

Answer: Confirmed

d. The Handbook is 994 pages long, are there any other sections of the Handbook that HUD expects the Contractor to “verify” the mortgagee compliance since verifying the mortgagee compliance has customarily been the MCM’s responsibility?

Answer: The contactor should be familiar with the PWS and the entire Handbook.

e. If the Mortgagee is responsible for P&I allocable within 30 days after assignment to HUD and the Contractor is responsible for attorney fees, P&I allocable after day 31 of assignment to HUD to the settlement date, what if the property is not assigned timely to the Contractor? Will the Contractor receive a 10 day grace period for all properties not assigned by day 20, similar to HOAs? Why would the AM contractor be responsible for P&I after HUD acquisition day plus 31 if it is not in the AM inventory?

Answer: Any direction regarding unassigned properties, will be approved and provided in writing by the Contracting Officer. In accordance with the PWS, the AM contactor is responsible for Penalty and interest charges allocable after day 31 of assignment to HUD to the settlement date.

f. If the Contractor is to only pay the amount due after conveyance, what steps will need to be taken if the Mortgagee does not pay the balance due before the property is ready to close?

Answer:

The PWS require the AM verify if the Mortgagee has made payments to taxes and to make tax payments when the property is assigned if outstanding. (see questions above) If this done at time of assignment, then there should be no outstanding tax bills at closing that are the responsibility of the Mortgage. PWS requires the AM contractor to make tax payments if due during the AM assignment.

g. Supplemental/unsecured tax bills are generated after the sale of the HUD home due to increased assessed values. The county assessor will send the additional tax bill to HUD. In the past, the Contractor has processed these as a post-closing complaint. Since the bills generate after the sale, can you please confirm the Contractor will not be responsible for any penalties and interest assessed on these supplemental/unsecured tax bills?

Answer: These situations and cases would need to be reviewed on a case by case basis. These would be handled as a post closing.

57. Section 1.7 Place of Performance, page 57: If Contractor is utilizing a 3rd party QC vendor that is a company and not an individual, does the company need to operate within the HOC area?

Answer: The third- party vendor will be required to perform quality control work within the HOC area however, a QC company is not required to be located in the HOC area.

58. Section 1.8 Hours of Operation, page 57: Please confirm that the Contractor shall maintain regular office hours (between 8:00 am – 4:00 pm) consistent with the awarded HOC jurisdiction time zone. (It is not consistent with Key Personnel required hours (between 8:00 am – 4:30 pm) listed on page 73 in the solicitation.)

Answer: The office shall be open from 8:00 am – 4:30. Key personnel shall be available between the hours of 8:00 am to 4:30 and after hours to respond to emergency situations. See amendment 0015

59. Section 1.13.1.2.1 System Security Clearances/Access, page 61: If the Contractor is not a previous M&M 3.5 or 3.7 Asset Manager, or does not have employees with existing PIV clearances, will HUD provide security clearances sooner than the 61st day after contract award since the ramp-up schedule states Contractor must be ready to begin processing new acquisitions on the 31st day after the effective date of the contract, or will the start-up phase of the transition be extended to accommodate this?

Answer: The PIV process depends on the vendor submitting required documentation timely and the ability for individuals proposed to pass the background check. The estimated time frame is based on timely submission of information from the individuals and a clean background check.

60. Section 3.1.1.5 Cost Estimating Software, page 69-70: Is the Contractor required to utilize this software?

Answer: The government provides the system at no cost to the contractor. The contractor shall use the system to perform the on-going disposition activities and utilize this source of data for the performance of this contract.

61. Section 4.5 Contractor Personnel, page 72: If Contractor is awarded multiple contract areas, can an alternate be used in multiple contracts?

Answer: No

Do the alternates need to be 100% dedicated to one specific contract?

Answer: The alternate is 100% dedicated to the contract when acting on behalf of the primary Key Personnel propsed.

62. Sections 5.2.2 (#10 Monthly Appraiser Review and Appraisal Analysis), page 76 and 5.7 Training, page 83: These sections instruct the Contractor to provide appraiser training. AM Contractors have previously been specifically instructed NOT to train appraisers and to remove all training appraisal training materials. Will the Contractor now be required to train appraisers? Please provide guidance on what training is expected to be provided to appraisers.

Answer:

Contractors are not providing FHA appraiser training; rather, the contractor monitors and analyzes the quality of the appraisals received. The contractor is expected to perform quality control of appraisals and discuss concerns/issues with the appraisers.

63. Section 5.7 Training, page 83: Training of Buyer Select Closing entities usually occurs on an individualized, case-by-case basis. Please confirm that HUD is now requiring widespread training seminars for Buyer Select Closing entities.

Answer:

The contractor is required to conduct the level of training that would provide an adequate pool of eligible closing agents for purchasers to choose from and also reduce errors that may occur with your current pool of BSCA’s.

64. Section L.7 General Instructions, Volume II Past Performance, page 168:

i. Please confirm that if an Offeror is teaming/utilizing a subcontractor, the past performance of both the prime and subcontractor must be submitted if the subcontractor is performing more than 20% of the contract value.

Answer: If the offeror is proposing to subcontract (or use joint ventures/ partners, or other entities other than the prime contractor to perform) more than 20% of the contract value, the offeror shall submit a separate chart and narrative described for past performance above, for the proposed subcontractor(s).

j. “Offerors are not required to submit surveys for reference where past performance is available in the Past Performance Information Retrieval System.” Should the Offeror include a statement that the past performance is available in PPIRS to ensure the proposal evaluation team validates this and does not just assume it was omitted?

Answer: This is a business decision of each offeror.

Section M: Evaluation factors for award.

65. Section M, #3 Performance Confidence Assessment, page 172:

a. Please confirm the components of the past performance evaluation as this section states four components will be evaluated but five items are listed: “recency, relevancy, value, quality, and sufficiency.”

Answer: See amendment number 0015 that changes the components to recency, relevancy, and quality.

b. Please define “sufficiency” as recency, relevancy (including scope, value, and magnitude), and quality are all described in the bullets, but there is no corresponding description of sufficiency.

Answer: See amendment 0015 and question above.

Section B: Supplies of services and prices/costs.

66. B.1, page 3: FAR 52.216-22, Indefinite Quantity: How did HUD determine that an indefinite quantity, indefinite delivery contract type was appropriate for this procurement?

Answer: Contract type was determined based on the circumstances and the characteristics of the requirement in order to provide flexibility in acquiring the services.

67. Attachment A15: Are HUD’s estimated sale quantities for the base period and option periods supported by the Single-Family Insurance System (SFIS) projections of FHA insurance loan claims?

Answer: In general, historical volumes are the basis of inventory levels utilized to assess offerors. Market conditions will determine the volume of REO acquisitions. Each AM is required to be knowledgeable about its market in prevailing trends, which will impact its ability to sell

REO properties timely.

68. Attachment A15: How are sale quantities estimate?

Answer: In general, historical volumes are the basis of inventory levels utilized to assess offerors.

Market conditions will determine the volume of REO acquisitions. Each AM is required to be knowledgeable about its market in prevailing trends, which will impact its ability to sell REO properties timely.

69. Attachment A15: How is the “Average Bid Net $” estimated?

Answer: The average net bid amount is based on historically bids received during a twelve-month period during July 1, 2018 – December 31, 2019.

70. Attachment A15: HUD has provided estimated quantity for COR Directed Inspections. Per the solicitation (page 5), these are reimbursable costs. What is the reason HUD did not assign a “Not to exceed” Total Unit Price like the other reimbursable costs?

Answer: See Amendment 0015 which takes out COR Directed Inspections

71. Attachment A15: Tab 6A-7A, Area 7A, Option Period 2, Row 94, Estimated quantity = 17; Based on other estimated quantities, this looks to be an input error. What is the correct value?

Answer: The correct estimated quantity is 177.

72. Attachment A15: All Tabs, All Areas; The base period is noted with a duration of 7 months, but the estimated quantities for CLINS 01 & 02 are 33.3% higher than Option Period One with a duration of 12 months. Why are the estimated quantities higher for 7 months versus 12 months?

Answer: The base period includes transition properties

73. B.2 SERVICES – Pg.3 Changed all areas (1D, 2D, 4D/5D, 3S/5S, 4S/6S, 1P/4P, 3P, 5P, 3A/4A, 5A/8A, and 6A/7A) to be 100% total small business set-asides: Since the current solicitation has been amended and extended several times since 2017, was an updated Sources Sought and market research conducted to determine the current size standard and set asides for this solicitation?

Answer: Additional market research was conducted prior to posting of amendment 0009.

74. Pass-Through Expenses – Pg.5 Appraisal Fee for areas 2D and 4D changed from $450 to $400 – These two areas have some rural tendencies which make it difficult to find FHA roster appraisers. What market research was conducted to determine that this reduction in pass through expenses for only these two areas was appropriate?

Answer: The appraisal fee is up to a maximum of $400 for areas 2D and 4D.

75. Pass-Through Expenses – Pg. 5, Appraisal fees do not match Allowable Pass-Through Expenses, Attachment A4, which values are correct?

Answer: The appraisal fee is up to a maximum of $400 for areas 2D and 4D see Amendment

0015 that revises attachment A4.

Section C: Description/specifications/statement of work.

76. Section C, page 10: This is an unprecedented time for businesses operating under COVID-19 mandates. How has the government adapted the SOW to allow for additional timelines, costs, etc. to provide services under AM 3.9?

Answer:The solicitation contains a Performance Work Statement (PWS). Under the current environment, vendors have still been able to operate within the current timelines. They are complying with local ordinances and have adapted their business models accordingly,

77. 1.2 BACKGROUND Pg.14: This competition will be for eighteen areas that will result in eleven awards: 1D, 2D, 4D/5D, 3S/5S, 4S/6S,1P/4P, 3P, 5P, 3A/4A, 5A/8A, and 6A/7A: How was the pairing of each area determined?

Answer: The geographical regions were based on Agency needs and information gathered from conducting additional market research. Given the estimated volumes, should the 4 “S” areas be combined into one award? No

78. Section 1.3.10, page 22-23: Relating to the Performance and Payment Bond, how are the estimates derived?

Answer: The percentage is what has been determined by the Contracting Officer as adequate to protect the Government from loss.

79. Section 1.3.10, page 22-23: Relating to the Performance Bond, please provide an example of a performance issue that bond would be required for in the AM 3.9 SOW.

Answer: Performance bonds may be required for contracts exceeding the simplified acquisition threshold when necessary to protect the Government’s interest. Examples of situations that warrants a performance bond are

(1) Government property or funds are to be provided to the contractor for use in performing the contract or as partial compensation (as in retention of salvaged material).

(2) A contractor sells assets to…