Response_to_Questions.pdf

3.9 Asset Management

Solicitation #866544A19R00003

Questions and Answers

Question Submission Format (Use consecutive numbering per each Section Title and include the specific Section referenced, title, and page number for each question submitted):

SOLICITATION SECTION TITLE

Section A: Solicitation / contract form.

1. Page 2: The solicitation states that Option Year 1 will begin on 6/1/2020, what date does

HUD anticipate for the award/start date of the base year?

Answer:

HUD anticipate an award early October 2019. The Startup phase will commence thereafter.

2. Attachment A4: Allowable Pass-Through Expenses

Appraisal Fee – The actual cost (up to a maximum of $400 for areas 4D, 5D; $500 for area 3P; $425 for areas 3S, 4S, 5S and $550 for area 6S) for the first appraisal (included in establishing the list price).

Conflicts w/ B.4

Appraisal Fee – The actual cost (up to a maximum of $450 for areas 1D, 2D, 4D, 5D;

$450 for area 1P, 3P, 4P and 5P; $450 for areas 3S, 4S, 5S and 6S; $450 for areas 3A, 4A, 5A, 6A,7A and 8A) for the first appraisal.

Answer:

The attachment will be updated; the correct amounts are stated in B.4. See Amendment

0005.

3. Attachment A15 The pricing model indicates various inventory growth rates for each option year. Will HUD please provide the basis for the identified increases and/or decreases in inventory?

The quantity estimates used in the pricing spreadsheet are based on FHA pre-foreclosures, existing foreclosures, and future projections, with some allowance for escalation.

4. Asset Manager 3.9 Base Year - What is the targeted Base Year state date?

See answer above in question number 1

5. This is only an estimate. The Government is assuming a twelve (12) month base period for resulting awards. The Government reserves the right to adjust quantities based on the actual award date.

Answer:

The base period could be less than 12 twelve months. See Section B.3 of the solicitation.

6. Will HUD offer an “Industry Day” to help small business offerors understand this solicitation and how best to write an acceptable proposal and make a responsible bid?

Answer:

HUD conducted an industry in September 2018.

7. B.2. There is no mention of Alabama, Mississippi, or the District of Columbia.

a. Are these deliberately omitted? Answer: Solicitation will be revised to add these areas.

b. Will HUD issue a revision to the RFP? Answer: Yes

8. B.4, Page 4 and Section L.

Please describe how an offeror bidding on three (3) contract areas in one HOC should distinguish each one of the three (3) areas and its state(s) from the others. Detailing geographic, legal, volume, pricing, and other differences for multiple areas in just ONE proposal becomes challenging, given the page limitations in Section L.

Is there a place in the proposal to describe distinctions between areas?

How an offeror distinguishes the areas in the proposal is a business decision for the offeror.

9. B.4, Page 4 and Section L.

It is understood that only one contract area in each HOC will be awarded to a single offeror. If an offeror writes one proposal for a HOC’s total number of areas, may the offeror propose the same Key Personnel for each of the contract areas in a given HOC?

Answer:

There is no requirement to propose key personnel before award. See Sections H.3 and

H.4 of the solicitation for key personnel. For each area awarded different key personnel will be required.

10. Section B.2, page 3 – states that the services are being solicited for eleven areas. However, if you refer to page 13, Section 1.2, last full line on page that states “This competition will be for four areas 4D/5D, 3S/5S, 4S/6S and 3P.” Is this solicitation for the 11 areas or just the four areas?

The solicitation is for 18 areas, however there will be 11 awards. Some awards cover multiple geographic areas. See Amendment 0005.

11. Section B.3, page 3 – This states that the base period is assumed to be a twelve (12) period for resulting awards. However, the period of performance is left blank in Section A. Based on the period of performance stated in Section A for options years, wouldn’t the base period be

6/1/2019-5/31/2020 if it is for 12 months?

Answer: The base period will be from award through May 31, 2020.

a. Since some of the base period would have already passed will the base period be less than 12 months.?

Answer: Yes, See previous answer.

b. At Section 1.6 on page 55, it references a base of twelve months again. Need clarification of the actual base period of performance.

Answer: The base period will be from award through May 31, 2020.

12. Page 2: The solicitation states that Option Year 1 will begin on 6/1/2020, what date does

HUD anticipate for the award/start date of the base year? Answer: See question number 1.

Section C: Description/specifications/statement of work.

13 1.2 Background, Page 13 lists only four (4) contract areas.

How will HUD address the differences this presents in contrast to the eleven (11) areas referenced in the solicitation?

Answer: The solicitation is nationwide which consist of 18 contracts areas. 11 contracts will be awarded. Some awards cover multiple geographic areas. See

Amendment 0005.

14. 1.3.2.1, Page 17.

a. How much time after the AM submits the official forms to the COR will HUD require to issue C-numbers to AM contractor employees?

HUD cannot guarantee the amount of time necessary to issue C- numbers.

Contractors are required to submit the names of key personnel and 2 personnel for the AM 1, AM 2, AM 3 and AM 4 for each contract no later than 5 business days after award.

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

Answer: No.

15. 1.3.6, Page 19 and 1.3.30.1, Page 47.

a. Is the Buyer Select Closing Agent provision and the requirement to complete

A12 now applicable in every state under AM-3.9?

Yes; unless prohibited by statute.

b. Is an AM contractor’s ownership of a title company that currently processes

HUD REO closings a conflict of interest?

Yes. An affiliated, subsidiary or any firm/entity with significant influence as defined by AICPA is deemed to have a conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of

HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment Plan is at the sole discretion of

HUD.

c. After the award, may that title company, a separate business entity, continue to be selected by HUD buyers to close transactions, assuming of course that there is no practice of “steering” to that title company by the AM or its LLBs?

No. An affiliated, subsidiary or any firm/entity with significant influence as the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of

HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of

16. 1.3.6, Page 19.

a. An offeror who owns a franchised brokerage business that is now serving as an LLB is awarded an AM-3.9 contract. In that case, is the offeror/awardee in an organizational conflict of interest position?

Yes. An affiliated, subsidiary or any firm/entity with significant influence as the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of

HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment Plan is at the sole discretion of

HUD.

b. After the award, may that brokerage owned by the AM continue to list HUD homes?

Answer:

No. An affiliated, subsidiary or any firm/entity with significant influence as defined by AICPA is deemed to have a conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of

HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment Plan is at the sole discretion of

HUD.

c. After the award, may that brokerage owned by the AM continue to sell HUD homes?

Answer:

No. An affiliated, subsidiary or any firm/entity with significant influence as defined by AICPA is deemed to have a conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of

HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of

d. Are other franchise owners under the same national franchise brand, but not directly associated with the new AM contractor, in any conflict of interest to list

HUD homes?

Yes, this is deemed a conflict of interest. An affiliated, subsidiary or any firm/entity with significant influence as defined by AICPA is deemed to have a conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment

Plan is at the sole discretion of HUD.

e. Are other franchise owners under the same national franchise brand, but not directly associated with the new AM contractor, in any conflict of interest to sell

HUD homes?

conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest

f. An offeror who owns a mortgage lending business that makes FHA loans is awarded an AM-3.9 contract. Is there an organizational conflict of interest?

conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest

g. May that mortgage company continue to make FHA-insured loans, assuming of course that there is no practice of “steering” to that lender by the AM or its LLBs?

No. this is deemed a conflict of interest. An affiliated, subsidiary or any conflicted of interest. The AM must notify the Selling Agent of the conflict and request that the buyer select another settlement agent. The AM is prohibited from ratifying a contract on behalf of HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment

Plan is at the sole discretion of HUD.

17. 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?

Documents must be signed in compliance with statues (State and Federal). When permitted and available, purchase documents are signed electronically

18. 1.3.12, and 1.3.13, Page 23.

a. What is the difference between a BPO and a CMA?

A Broker Price Opinion may include value adjustments to account for differences in physical and locational characteristics and may be considered more thorough in comparison to a comparative market analysis. A BPO for purposes of the contract is an independent third party that does not have a Conflict of Interest. An affiliated, subsidiary or any firm/entity with significant influence as defined by

AICPA is deemed to have a conflicted of interest. The AM must notify the Selling

Agent of the conflict and request that the buyer select another settlement agent.

The AM is prohibited from ratifying a contract on behalf of HUD with a conflict of interest. As a condition of accepting the contract, the awardee must relinquish all conflicts of interest within 30 days of ratification of the AM contract. An acceptable Relinquishment Plan is at the sole discretion of HUD.

b. Under what circumstances, if any, may a HUD REO be priced and listed without the

AM first obtaining an appraisal?

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.

See sections 1.3.11, 1.3.16. and 5.3.5

c. May the AM provide the buyer or the buyer’s FHA lender a copy of the appraisal from the property’s case file?

The intended user of the appraisal is HUD, and the intended use is to determine

HUD’s listing price. The AM may provide the REO ordered appraisal if approved by the COR for non-competitive sales (e.g. ACA, GNND, Nonprofit Discount

Sales Program). The buyer’s lender must obtain their own appraisal for purposes of financing the property.

19. 1.3.15, Page 24.

Will HUD provide a list of current Revitalization Areas in each state?

Answer: HUD Revitalization areas are available online at HUD.gov

20. 1.3.16, Page 25.

Will HUD provide a list of current Asset Control Area agreements in each state

Answer: A list will not be provided; however, the AM will have access to ACA

Areas.

21. 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 is ultimately responsible for determining the bid thresholds. 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?

Yes, asset-by-asset basis. 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.

22. 1.3.19, Page 26.

a. Does the requirement that the LLB “have only one primary place of business” mean that listing assignments cannot be made to brokers who have agents in rural areas who work from their home offices in those remote locations?

Unless otherwise approved by the COR, the real estate professional must be within reasonable proximity to the listed property, generally defined as within 30 miles of subject property. See section 1.3.19. Exceptions to this policy are generally granted for properties in nonmetropolitan areas.

b. Will the LLBs be allowed to contact the FSM directly if an access issue (e.g., damaged or blocked doors) or sudden change to property condition that warrants immediate attention (e.g., recent storm damage) or some such occurrence that affects the marketability of the asset is discovered as the LLB visits the property to inspect or show?

Answer: Unless there is an immediate threat to safety or the soundness of the property, the LLB’s primary contact is the Asset Manager.

23. 1.3.21, Page 27.

What does HUD regard as an acceptable “alternative means for Spanish speakers to obtain information about HUD-home sales”?

At a minimum, the AM should have an employee who is fluent in Spanish both orally and in writing.

24. 1.3.24, Page 27.

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. In AM-3.9, is HUD allowing the AM, with COR approval, to change those pre-set percentages?

Answer: No, 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. If yes, what are the limitations, if any, to the changes that may be made to the

LLBs’ and to the SBs’ commission percentages?

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.

25. 1.3.24.1, Page 28.

Does HUD pay a minimum fee to the AM on Hard-to-Sell properties or on Dollar ($) homes?

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

26. 1.3.25.1, Page 28.

All HUD homes, with very rare exceptions, if any, have been conveyed vacant in the past. Does HUD intend to change this policy?

Historically, over 95% of HUD REO properties are conveyed vacant. However, the AM contracts permits properties to be conveyed occupied per PWS section

1.3.25.1

27. 1.3.25.2.4, Page 33.

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

Currently, the First Look Program applies to recipients with NSP funds. There have been no recipients that have received NSP funds in the past two years.

28. 1.3.29, Page 44.

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

i. If yes, for how long?

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

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

29. 1.8, Page 56.

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

Answer: The Contractor shall maintain regular office hours (between 8:00 am – 4:00

pm) consistent with consistent with the awarded HOC jurisdiction time zone. 8 hours a day during the standard work week, and include on -call emergency response.

30. 1.13.1.1.2, Page 57.

Are there page limitations and/or templates HUD prefers for the QCP, CP, and MP?

Answer:

As per the section L.8 of the solicitation, there are page limitations for the draft QCP, CP and MP. There are no templates and/or page limitations for the final QCP, CP, and MP approved by the COR.

There are no templates. Information regarding what those Plans must address is found in the RFP Sections 1.13.1.1.2; 4.7.1, 5.2.3; and L.8

31. 4.6, Page 70.

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

32. 4.7.1, Page 71.

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

Answer: No, the Performance Requirements Summary is provided in the solicitation.

33. Section 1.3.9, page 22: The Contractor financial reporting is on a calendar year basis ending 12/31. Since the contract period of performance for the base period is less than 12 months and does not meet the “annual” requirement of 12 months. Would HUD be willing to remove the audited financial requirement for the calendar year ending 12/31/2019?

Answer: No, The Contractor is required to provide audited financial statements in accordance with the HUD Consolidated Audit Guide no later than 90 days after the contractor’s fiscal year end.

34. Section 1.3.10, page 22: In Attachment A10, Performance and Payment Bond, the original contract price definition states that this price is “the price payable for the specified minimum quantity”. Is this the $1,000,000 guaranteed minimum amount provided for each contract area?

Answer: Yes. If yes, then the Performance Bond is valued $500,000 and the Payment Bond is valued at $500,000, totaling $1,000,000?

Answer: Yes

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

Answer: See clause 52.228-16 and Clause 2452.216-76 of the solicitation.

36. Section 1.3.10, page 22: 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: HUD is entrusting the Contractors with the care of valuable property; thus, the bonding requirement is to ensure the fulfillment of the contractor’s obligation under the contract.

37. Section 1.3.10, page 22: Relating to the Payment Bond, please provide an example of a payment issue that bond would be required for in the AM 3.9 SOW.

Answer HUD is entrusting the Contractors with the care of valuable property; thus the bonding requirement is to ensure the fulfillment of the contractor’s obligation under the contract.

38. Section 1.3.10, page 22: Since the AM Contractor is reimbursed for payments made to the appraisers and has no other independent contractors, is there any real risk of payment default? What is the reason a contractor needs a payment bond on a contract where there is no payment risk?

Answer: See previous answer and PWS Section 1.3.10

39. Section 1.3.24, page 27: Sales commissions for Selling Brokers shall be determined by HUD and will be comparable to averages for the area.

a. How and when will HUD determine the commission structure for each area?

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.

b. Does this mean that commission amount can change per state or is this referring to contract areas? The AM will be advised of the commission structure prior to contract award. HUD reserves the right to revise the commission structure at any point.

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.

40. Section 1.3.24, page 27: Sales commissions for Listing Brokers shall also be determined by HUD and may vary depending on the level of service provided to HUD and established in the Contractors Comprehensive Marketing Plan. How will HUD determine and measure the value assigned for Listing Broker sales commissions?

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.

41. Section 1.3.24, page 27: For properties listed greater than 90 days, and the property goes to auction, HUD will pay a maximum commission of 1% to the Listing Broker.

a. Would HUD provide the historical data on the amount of properties that have been sold at auction?

Answer:

Offerors are expected to know their market. Properties with appraised values of

$25,000 or less or that have been in inventory for more than 90 days are eligible for auction.

b. What is HUD’s procedure for selecting properties for auction?

Answer:

Criteria is provided to the AM when auctions are used as a marketing tool. In general, Properties with appraised values of $25,000 or less or that have been in inventory for more than 90 days are eligible for auction.

c. If a property is sold at auction, how is the marketing fee for the contractor calculated?

Marketing fee is based on agreement between the AM and the Auction Company and must be approved the COR.

d. Is the contractor able to choose if a property goes to auction?

Criteria will be provided by HUD.

e. Is there already an auction company that is currently being used by HUD?

Answer:

No. Each AM enters into an agreement with the auction company. HUD approves the fee structure.

f. Are there one or more auction companies used in each contract area?

Typically, no.

g. Is the contractor able to choose the auction company?

Answer:

Yes. Conflict of Interest requirements apply. The auction company must be independent. Each AM enters into an agreement with the auction company. HUD approves the fee structure.

h. Will HUD share the marketing plan of the auction company with the contractor?

Answer:

Each AM enters into an agreement with the auction company. HUD approves the fee structure.

42. Section 1.3.24, page 27: Does HUD select properties from the AM inventory to include in bulk sales to investors?

Answer:

Currently there are no bulk sales to investors. The AM in consultation with the COR determines properties eligible for auction sales. There is no requirement in the contract that prohibits HUD from selling bulk sale of properties to any entity.

43. Section 1.3.25.2.3 Lottery Period, page 31: B. Selection of Winning Bidder – Is the contractor responsible for a random drawing of lots? Is this done through HUD Home Store?

Answer:

P260 ranks bids based on net return to HUD. This is usually the basis for the AM identifying and selecting the winner bidder.

44. Section 1.3.25.2.4 First Look, page 33: Are the two business days that an eligible FIRST

LOOK properties held from marketing counted toward the days to List requirement for performance evaluation?

Answer:

Yes; however, the First Look Program applies to recipients with NSP funds. There have been no recipients that have received NSP funds in the past two years.

45. Section 1.7, page 55: Place of performance is mandated to be in the awarded HOC jurisdiction. With the advancement of technology and Cloud based platforms, contract operations can be located anywhere and not impact customer service. Would HUD consider removing this requirement and allow Contractors the ability to make decisions on where to locate its office?

No, the office needs to be within the HOC jurisdiction as denoted in the Performance

Work Statement.

46. Section 4.5, page 70: HUD requires the same number of Key Personnel for a contract with 625 properties or 3800 properties. If the contractor has complete discretion to provide the services to HUD, does HUD permit the contractor to adjust its manager and staff levels based on the volume of the inventory?

Answer:

No, the Contractor is required to provide a Contract Manager, Project Manager, QC

Manager and qualifying alternates regardless of volume as denoted in the Performance

Work Statement. The Contractor shall maintain staff levels sufficient to ensure the services provide to HUD are maintain.

47. Section 5.2.1.1 Asset Management Scorecard, page 72: Would HUD explain how the % are calculated for:

a. Marketing Strategy Promotes Sales to Actual Owner Occupants – Is this based on properties under contract, or properties that closed in a calendar month?

# 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠 𝑠𝑜𝑙𝑑 𝑡𝑜 𝑜𝑤𝑛𝑒𝑟 𝑜𝑐𝑐𝑢𝑝𝑎𝑛𝑡𝑠

# 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠 𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜 𝑠𝑡𝑒𝑝 9 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑 𝑤𝑖𝑡ℎ 𝑎𝑛 𝑖𝑛𝑠𝑢𝑟𝑎𝑏𝑙𝑒 𝑖𝑛𝑖𝑡𝑖𝑎𝑙 𝑑𝑖𝑠𝑝𝑜𝑠𝑖𝑡𝑖𝑜𝑛

b. Average Days to Close – Is this from Step 8 date to Step 9 date or Step 10 Date?

∑(𝑆𝑒𝑡𝑡𝑙𝑒𝑚𝑒𝑛𝑡 𝐷𝑎𝑡𝑒 − 𝐹𝑖𝑟𝑠𝑡 𝑆𝑡𝑒𝑝 8 𝐷𝑎𝑡𝑒)

# 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠 𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜 𝑠𝑡𝑒𝑝 9 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑

c. Average Days to List – Does a Not in Ready to Show condition or work order to the FSM affect the Days to List count?

Answer:

𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑆𝑡𝑒𝑝 6 𝑑𝑎𝑡𝑒 − 𝑆𝑡𝑒𝑝 1𝑐 𝑑𝑎𝑡𝑒 − 𝑑𝑎𝑦𝑠 𝐻𝑂𝑀 − 𝑑𝑎𝑦𝑠 𝑡𝑜 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑒 𝑁𝑅𝑇𝑆 𝑊𝑂𝑁

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠 𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜 𝑆𝑡𝑒𝑝 6 (𝑖𝑛𝑖𝑡𝑖𝑎𝑙) 𝑑𝑢𝑟𝑖𝑛𝑔 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑

d. Average Days on Market – How is this calculated? From closings? Or active inventory?

Answer:

𝑇𝑜𝑡𝑎𝑙 𝐷𝑎𝑦𝑠 𝐿𝑖𝑠𝑡𝑒𝑑

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠 𝑝𝑟𝑜𝑚𝑜𝑡𝑒𝑑 𝑡𝑜 𝑆𝑡𝑒𝑝 9 𝑑𝑢𝑟𝑖𝑛𝑔 𝑟𝑒𝑝𝑜𝑟𝑡𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑

48. Section 5.3.5.1 New Appraisals and Report, page 76: Are new appraisals ordered only if requested and approved by COR?

Initial appraisals require no COR approval, Additional appraisals require COR approval.

49. Section 5.3.5.1 New Appraisals and Report, page 76: What is the “other than the appraisal that is used” referencing?

Answer:

This section refers to additional appraisals. “other than the appraisal that is used” is referencing original appraisal that set list price.

50. Section 5.4.5 Physical File Maintenance and Retention, page 77: At what point in the

Step History is the contractor required to establish the physical property file? Is this required at assignment or after the property has closed?

Answer: At assignment.

51. Section 5.4.3 Imaging, page 77: Requirement is that all documents are uploaded into

P260, are these the same documents that are maintained a physical file in Section 5.4.5, page

77?

Yes. Please also see 5.4.5 and H.12 2452.204-70 for further guidance.

52. Section 6.1 Quality Control Plan, page 81: The Contractor's QCP shall be delivered to the COR within 10 business days after contract award (or with the Contractor's proposal if it is an evaluation factor). Does this mean that if the QCP is included and accepted in the proposal, it will not need to be delivered to the COR within 10 business days?

Answer:

No. A Preliminary Quality Control Plan shall be submitted as part of the proposal. A separate (final) Quality Control Plan in accordance with PWS section 4.7.1 shall be delivered to the COR within 10 business days of award.

53. Will HUD please clarify the number of areas being solicited? In one section it states eleven and in Section C it states that this competition will be for four areas 4D/5D, 3S/5S, 4S/6S, and 3P.

Answer: See Answer to question 10.

54. 1.2 Background (page 14): Correction - This section states “This competition will be for four areas 4D/5D, 3S/5S, 4S/6S, and 3P.”

Answer: See Answer: to question 10.

55. 1.3.1.4 P260 or Its Replacement System (page 15): Is there a monthly cost limit to what the P260 contractor can charge an AM for additional access to P260? Can HUD provide additional information about these additional fees so they can be incorporated into the AM’s cost model?

P260 services that are part of HUD’s contract with Yardi are provided to AM contractors at no charge. There is no reason for the AM Contractors to purchase additional access per the contract requirement. Any additional access purchase is strictly between the P260 contractor and the AM contractor with no additional cost to HUD.

56. 1.3.2.1 Security Access (page 17): Will HUD be able to expedite security access processing following award or will the AM contractor need to ensure it obtains staff with current C-Numbers in order to have access to HUD’s system at contract start?

Answer: See Answer: to question 14.

57. 1.3.3 REDELEGATION OF AUTHORITY (page 18): Is security access required for an individual prior to be approved for re-delegation of authority to execute documents on

HUD’s behalf?

Answer: Yes.

58. 1.3.10 PERFORMANCE AND PAYMENT BOND (page 22): As this is an IDIQ contract, is the 50% performance and 50% payment bond based on the contract price estimate or the Guaranteed Minimum Amount?

Answer: Guaranteed Minimum Amount

59. 1.3.12 VALUATION SERVICES (page 23): Is there an estimated number of cases or percentage of contract area inventory in which the COR may request a broker price opinion

(BPO), Comparative Market Analysis (CMA), Automated Valuation Model (AVM), etc.)

from a third party serving the local community that is not the listing broker?

Answer:

No. However, prior COR approval is required for pass-thru expenses.

60. 1.3.12 VALUATION SERVICES (page 23): Is there a pass-through cap for BPOs, CMAs and AVMs requested by the COR from a third party that is not the listing broker?

Answer:

COR approval of pass through expense is required. See Schedule B NTE CLIN amount.

61. 1.3.16 INITIAL LIST PRICE (page 25): If the appraisal desk review determines erroneous or missing information that may affect the appraised value can the AM exceed the three (3) business day timeframe for listing if the appraiser’s corrections are not received?

Answer: Only if prior approval is granted by the COR.

62. 1.3.19 USE OF LISTING BROKERS (page 26): This section states “A Listing Broker can have only one primary place of business.”, however, the e-NAID system now allows for brokers to add multiple office addresses under one NAID. If a successful listing broker has offices in different cities within a contract area why are they restricted to only one primary place of business?

Unless otherwise approved by the COR, the real estate professional must be within reasonable proximity to the listed property, generally defined as within 30 miles.

Exceptions to this policy are generally granted for properties in nonmetropolitan areas.

63. 1.3.24 SALES COMMISSIONS (page 27): Currently HUD does not allow selling broker commissions for investor purchases where the selling agent (or family member of the agent) is the purchaser or the managing member of a purchasing company. This requires additional research by the AM prior to contract execution as well as bid cancellations and data fix requests, will this requirement continue under AM 3.9 and will it be added to the PWS?

Answer:

HUD does not allow selling broker commissions for investor purchases where the selling agent (or family member of the agent) is the purchaser or the managing member of a purchasing company. The AM must ensure compliance with this requirement.

64. 1.3.25.2.1 Good Neighbor Next Door (GNND) Program (page 29): Can HUD provide any historical data of GNND sales by contract area?

Answer:

Historically mission programs (e.g. ACA, GNND, etc.) account for less than 5% of REO sales in a contract area. Past performance is no indication of future volumes.

65. 1.3.25.2.4 First Look (page 33): Can HUD provided the number of eligible Neighborhood

Stabilization Program (NSP) Grantees per contract area?

Answer:

Currently, the First Look Program applies to recipients with NSP funds. There have been no recipients that have received NSP funds in the past two years.

66. 1.3.25.2.4 First Look (page 33): If there is not an eligible NSP Grantee in the area is the

AM still required to provide the noncompetitive period of two (2) business days?

No. AM should go to next step of the property disposition process.

67. 1.3.33.1 Initial Real Estate Taxes (page 54): This section states “No later than 15 days after a property is assigned to HUD, the Contractor is to verify the mortgagee’s compliance with HUD Handbook 4000.1.”. However, the FSM contractor is assigned to the property initially and it may be more than 15 days after the property was assigned to HUD when the property is assigned to the AM, should this section refer to the AM assigned date rather than the date assigned to HUD?

Answer:

The section is revised to read “No later than 10 days after property is assigned to the

AM”. See Amendment 0005.

68. 1.3.33.1 Initial Real Estate Taxes (page 54): Please advise who is responsible for penalties and interest accrued under the previous contractor for transition-in properties.

Answer:

The prior contractor is responsible. The COR would need to be notified through an

Administrative Remedy.

69. 1.3.33.1 Initial Real Estate Taxes (page 54): Please advise who is responsible for non-penalty fees such as a Duplicate Tax Bill charges by a county when tax payments are made electronically.

Answer:

Overpayment of taxes are usually included in the Closing Disclosure Statement (formerly

HUD-1) and must be reviewed by the AM.

70. 1.13.1.1.2 Quality Control, Contingency, and Comprehensive Marketing Plans

(collectively, the Plans) (page 57): Please advise if The Plans are required to be submitted for each contract area separately when two contract areas are combined for one award.

Answer:

Quality Control Plan, Contingency Plan, and Comprehensive Marketing Plan must be submitted for each contract. The plans must address all contract areas in the contract.

Different approaches by be utilized for each area in the contract.

71. 4.5 CONTRACTOR PERSONNEL (page 70): Please advise if Key Personnel are required for each contract area separately when two contract areas are combined for one award (i.e. will 4S/6S require 6 key personnel or 12 key personnel).

Key personnel are applicable to the contract. Therefore 4S/6S must have one Contract

Manager, one Project Manager, and one Quality Control Manager.

72. 5.3.2 PRIOR TO LIST (page 75): This section states the ready to list inspection should be completed “No sooner than two (2) business days prior to the initial listing”. Please advise if this means the AM must wait two (2) business days to list the property after the Prior to List inspection is received.

No, the AM does not need to wait. The Prior to list inspection should only be completed no greater than 2 business day prior to the property being listed for sale. The purpose of this requirement is to ensure that the Prior to list inspection is done as close as possible in relation the date the property is listed to ensure that property is in ready to show condition at time of listing.

73. 5.3.4 COR DIRECTED INSPECTIONS (page 76): Can HUD provide any historical data on the number of COR directed inspections by contract area?

Answer:

Historically these are rare. COR directed inspections are usually required for disasters.

74. 5.3.5 APPRAISAL (page 76): Please advise if HUD will provide contact information for

FHA Roster Appraisers by contract area?

Answer: HUD can assist the AM contractor with information regarding the prior

Appraisers used in each geographical area.

75. 5.3.5.1 New Appraisals and Report (page 76): This section states, “Contractor shall order new appraisals” and “appraisal can only be ordered with COR approval”. Please advise if this means the contractor shall request COR approval to order new appraisals for all expired appraisals or if the contractor shall only order a new appraisal if directed to do so by the

COR.

Answer: Yes. The Contractor shall request COR approval prior to ordering a new appraisal.

76. 5.6.4 INFORMATION TO SATISFY PROGRAM INQUIRIES (page 80): This is the 4th item under section 5.6 REQUIRED REPORTS and states this is for asset information not in

P260 and may be requested “From time to time”. Please advise if this includes any reoccurring weekly reports for the COR or CO such as a days in step report, zero bids report etc. so the AM can gauge reporting requirements in addition to the QC Report, ACA Report and Annual Audited Financials.

Answer: Yes. This is information is need for a specific purpose by the CO or COR and only request on as needed and not as a weekly report.

77. B.4 Pricing – ACA Marketing Fee CLIN 0003 (page 5): Can HUD provide a list of contract areas that have active ACA areas?

The active areas are 1D, 3P, and 5P. Each contract permits ACA areas.

78. B.4 Pricing – Pass-Through Expenses (page 5): Would HUD consider removing the physical file requirement, Exit File Delivery, as all documents are uploaded into P260 and

HUD allows for contracts to be executed with electronic signatures?

Answer: Physical files are required. See 5.4.6 and H.12 2452.204-70

79. B.4 Pricing – Pass-Through Expenses (page 5): How is AM revenue calculated for negative net to HUD sales?

CLIN structure is based on net sale price.

80. How is the fee or % calculated/earned by the contractor for closing negative sales cases?

CLIN structure is based on net sale price.

81. L.8 GENERAL INSTRUCTIONS - TECHNICAL APPROACH (169): Please advise if multiple workflow charts are acceptable to meet the requirements outlined in this section.

Yes; however, the Technical Approach shall not exceed 20 pages.

82. L.8 GENERAL INSTRUCTIONS - TECHNICAL APPROACH – QUALITY

CONTROL PLAN (page 170): The Technical Approach instructions includes the requirement “Offeror shall submit a plan to manage Listing Brokers, Appraisers, and

Appraisal Management Companies (AMC).” The QUALITY CONTROL PLAN instructions include “Preliminary QCP must also detail the processes and methods that will be utilized to identify and remedy poor performing Listing Brokers, Appraisers, AMCs”. Will HUD allow the Technical Proposal to reference QC and remedies detailed in the Quality Control Plan?

Answer: No, each factor is evaluated separately. see L.8 General Instructions of the solicitation.

83. L.8 GENERAL INSTRUCTIONS - TECHNICAL APPROACH – MARKETING PLAN

(page 170): Please clarify if HUD is requesting an individual 10-page marketing plan for each of the 18 proposed geographic areas (180 pages total). If not, please advise if there will be an increase in the number of pages allowed for the marketing plan in order to include specifics on each of the geographical areas.

Answer: No, The condensed Marketing Plan shall not exceed 15 pages regardless of the number of areas proposed. See Amendment 0005 to the solicitation.

84. 1.3.11 - Please define the situations the Contractor shall need to \ order a new/second appraisal and the frequency of COR directed re-orders. Will authorized new/second appraisals be allowable pass-through costs at define rates in SOL? Answer: Examples of when a new or second appraisal updated is required include: but are not limited to when there is a change in property condition and/or a change in market conditions.

Reimbursement for an new, second and/or updated appraisal will occur if pre-approved by the COR.

Unless directed otherwise by the COR or Contracting Officer, the contractor is required to order an initial appraisal to support the list price. This initial appraisal does not require

COR approval provided that the cost is at or below the maximum allowed. If the cost for the initial appraisal is above the maximum permitted in the contract, COR approval is required.

Upon expiration of the initial appraisal, the Asset Manager should not order a new/second or updated appraisal unless requested by the COR. New/second and/or updated appraisals requested by the COR are authorized.

Section G: Contract administration data.

85. G.3 INVOICING PROCEDURES - F. Fixed-Unit Rate Services – 2. Appraisal Fee

(page 93): This Section states “HUD will not reimburse for 2nd or updated appraisals.”, but

Section 5.3.5.1 states second appraisals can be ordered with COR approval. Please advise if

2nd appraisals will not be reimbursed when requested or approved by the COR?

Answer: If a second appraisals is requested by the COR or requested by the Contractor and approved by the COR; HUD will reimburse the offeror for that appraisal.

Section H: Special contract requirements.

86. H.4 Key Personnel Minimum Qualifications (page 101): This Section states “The contractor shall submit resumes for all Key Personnel 1 calendar day after contract award.”.

With the possibility of obtaining an award in each contract area this may require up to 24 resumes to be submitted within 1 day. Based on previous HUD AM contract award timeframes it is very possible that staff allocated to these positions at the time of proposal submission may no longer be available and new qualified key personnel will need to be put in place. Will HUD consider extending this timeframe to 15 calendar days to correspond with Section 1.13.1.1.8 Staffing and Equipment?

Answer: Key personnel are the key requirement to the success of the AM services; therefore, we will not extend the key personnel submission timeframe.

87. Contractors with current access to HUD systems be required to obtain PIV cards for any newly awarded AM contracts or upon renewal of individual C#’s? Please clarify.

Answer: See answer to question 14.

88. H.3. Key Personnel, Page 100.

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

a. Is there any place in the proposal where these individuals should be identified by name? Answer: No, Key personnel information is required after award. See H.4 Key

Personnel Minimum Qualifications.

b. If in the proposal, where should the names be included? Answer: See previous answer and L.6 Instructions to Offerors.

c. Are the alternates also named at contract award? Answer: Yes

d. When does HUD want the resumes of these individuals? Answer: After award, See

H.4 Key Personnel Minimum Qualifications.

Section J: List of attachments.

89) The historical inventory numbers (Attachment A16) provided by HUD are much lower in some areas than the HUD Pricing spreadsheet (Attachment A15). Can we ask why? Below is the comparison.

Monthly Acquisitions

80 65 33

31 29 40 68

Annual

Acquisitions

(Annualized per

Historical Inventory

Data received from

HUD)

3,977

Annual

Acquisitions per

Price Proposal

Excel Worksheet

1,133

5,990

1,505

Difference (169) (30) (2,013) (593) (469) (1,020) (142)

The inventory in the pricing spreadsheet (Attachment A15) is significantly greater than the actual inventory in two areas in which we are the current AM. If the inventory is overstated it could cause bidders to bid unrealistically low prices and then run into financial troubles after award. Will HUD consider revising the inventory numbers that have been provided in the pricing spreadsheet to more realistic numbers?

Answer: The quantity estimates used in the pricing spreadsheet are based on FHA pre-foreclosures, existing foreclosures, and future projections, with some allowance for escalation. The estimates are not based on current inventory. Historical Data will be updated and provided. See Amendment 0005.

90. 3.9_Section_J_Attachment_A1.pdf – Area Map & SOL PWS Page 166. Please define States in areas 4A and 6A. Page 166 of the PWS conflicts with the Area Map and confirm the areas are

100% set-asides for small business.

4D

(IA, NE,

SD, WI)

5D

(MN,

MT, ND,

WY)

3P

(CT, ME,

MA, NH,

NH, NY,

RI, VT)

3S

(AZ )

4S

(NV,

ID)

5S

(CA,

HI)

6S

(AK,

OR,

WA)

Answer: See Section L.7 for the states in each area. All areas are 100% set aside for small businesses with the exception of area 2D. Attachment A1 will be updated and provided.

91. A1 Geographic Map and A17 Historical REO Acquisitions.

In these attachments, the information relates to the mapped areas as they were set by

HUD prior to this solicitation, and the historical REO volume data reflects those same configurations of contract areas from that time. This is misleading to offerors making staffing and pricing decisions to include in AM-3.9 proposals.

a. Now that new areas have been configured with states combined differently than before, will HUD please break down the REO volume data state-by-state or by the new contract areas? Answer: See Attachment A17 Historical REO Acquisitions.

b. Will HUD issue an updated A1 for clarification? Answer: Yes

c. If not intentionally excluded, will HUD include AL, MS, and D.C. in new attachments and a revised RFP? Answer: Yes, See Amendment 0005

92. A15 Business Proposal Pricing (Excel) Spreadsheet.

The tabs refer to the prior contract areas individually, not to the combined areas as they are in this RFP. For example, there is not a tab for 3S/5S, but 3S and 5S are two separate tabs. Because an offeror must bid the combined areas, will HUD please revise A15?

Answer: Yes, See Amendment 0005 of the solicitation.

93. Attachment A15 (page 136): Refers to HUD AM 3.7. Answer: See Amendment 0005 to the solicitation.

94. Attachment A15 (page 136): The estimated quantities in Attachment A15 Pricing do not appear to reflect current asset assignments to date or the steady inventory decreases as shown in

Attachment 17 Historical REO Acquisitions. For example, in contract area 5S there was a 36% decrease from 2016 to 2017 and a 16% decrease from 2017 to 2018 but the estimated quantity for the base year shows a 9% increase. In the 3S inventory there was a 42% decrease from 2016 to 2017 and a 44% decrease from 2017 to 2018 but the estimated quantity for the base year shows a 1% increase.

a. Is HUD’s data showing an increase in inventory in late 2019 early 2020?

foreclosures, existing foreclosures, and future projections, with some allowance for escalation.

b. Can HUD provide the year to date REO acquisitions for FY 2019? Answer: Yes, see attachment A17.

95. Attachment A15 (page 136):

Area 2016 2017 % Diff 2018 % Diff Base Year Estimate

Diff

1P 3,438 1,725 50% 913 47% 754 17%

4P 3,745 2,379 36% 1,616 32% 1326 18%

3P 5,353 4,269 20% 3,480 18% 3029 13%

5P 6,011 4,571 24% 3,558 22% 2990 16%

1D 3,478 2,080 40% 1,481 29% 1366 8%

4D 1,974 1,022 48% 673 34% 546 19%

5D 1,458 800 45% 577 28% 520 10%

2D 7,578 4,921 35% 3,892 21% 3653 6%

3A 3,220 1,899 41% 1,386 27% 1236 11%

4A 3,563 2,069 42% 1,208 42% 1027 15%

5A 2,377 1,581 33% 1,018 36% 846 17%

8A 5,217 2,901 44% 2,065 29% 2041 1%

6A 4,704 2,675 43% 1,776 34% 1638 8%

7A 3,042 1,679 45% 800 52% 728 9%

3S 635 370 42% 206 44% 208 1%

5S 782 499 36% 418 16% 456 9%

4S 593 358 40% 166 54% 143 14%

6S 1,560 858 45% 563 34% 494 12%

The First Option Year shows a decreased inventory of 8% for all contract areas while Out Years

2, 3 and 4 all show a 10% increase in inventory for all contract areas. This results with the

Option Year 4 being above 2018 levels even though the REO inventory has been in steady decline since 2013 in all but two contract areas. What is the level of confidence does HUD have that there will be an REO inventory increase in the final three out years of HUD AM 3.9?

foreclosures, existing foreclosures, and future projections, with some allowance for escalation.

96. Relevancy Chart, Page 173.

Any offeror who could cite their experience as “Very Relevant” has handled volume during the most recent three (3) years that could only come from having a HUD AM contract. How will HUD address this inconsistency between its small business set-asides and its past performance requirements?

Answer: It is the offerors responsibility to determine what past performance reference to submit. Past Performance references are not solely based on experience from HUD, but can be from various sources such as other government agencies or the private sector. The final rating under performance confidence assessment will encompass the totality of the information provided.

97. Volume II Past Performance, Page 171-183.

Please consider the case of an offeror with extensive real estate experience performing at a high level as a broker/owner with 100 agents, managing 350 rental properties and 3,000

HOA units monthly, and with…