Sol_86544A19R00003.pdf

86544A19R00003

SOLICITATION, OFFER AND AWARD

4. TYPE OF SOLICITATION2. CONTRACT NUMBER 3. SOLICITATION NUMBER

7. ISSUED BY CODE 8. ADDRESS OFFER TO (If other than Item 7)

ORDER UNDER DPAS (15 CFR 700)

6. REQUISITION/PURCHASE NUMBER

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

NEGOTIATED (RFP)

SEALED BID (IFB)

5. DATE ISSUED

1. THIS CONTRACT IS A RATED RATING PAGE OF PAGES

1 184

C. E-MAIL ADDRESS

EXT.NUMBERAREA CODE

B. TELEPHONE (NO COLLECT CALLS)A. NAME

10. FOR

INFORMATION

CALL:

CAUTION: LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation.

(Date)(Hour) local timeuntildepository located in copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if hand carried, in the

SOLICITATION

9. Sealed offers in original and

PART IV - REPRESENTATIONS AND INSTRUCTIONS

OTHER STATEMENTS OF OFFERORS

EVALUATION FACTORS FOR AWARD

INSTRS., CONDS., AND NOTICES TO OFFERORS

REPRESENTATIONS, CERTIFICATIONS AND

LIST OF ATTACHMENTS

CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

I

J

K

L

M SPECIAL CONTRACT REQUIREMENTS

CONTRACT ADMINISTRATION DATA

DELIVERIES OR PERFORMANCE

INSPECTION AND ACCEPTANCE

PACKAGING AND MARKING

DESCRIPTION/SPECS./WORK STATEMENT

SUPPLIES OR SERVICES AND PRICES/COSTS

SOLICITATION/CONTRACT FORM

PART II - CONTRACT CLAUSESPART I - THE SCHEDULE

H

G

F

E

D

C

B

A

SEC. DESCRIPTION PAGE(S) (X) DESCRIPTION SEC. (X)

11. TABLE OF CONTENTS

18. OFFER DATE17. SIGNATURE

SUCH ADDRESS IN SCHEDULE.

IS DIFFERENT FROM ABOVE - ENTER

15C. CHECK IF REMITTANCE ADDRESS

EXT.NUMBERAREA CODE

15B. TELEPHONE NUMBER

(Type or print)AND

ADDRESS

OF

OFFEROR

CODE FACILITY

16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER15A. NAME

DATEAMENDMENT NO.DATEAMENDMENT NO.

and related documents numbered and dated):

amendments to the SOLICITATION for offerors

(The offeror acknowledges receipt of

14. ACKNOWLEDGEMENT OF AMENDMENTS

CALENDAR DAYS (%)30 CALENDAR DAYS (%)20 CALENDAR DAYS (%)10 CALENDAR DAYS (%)

(See Section I, Clause No. 52.232.8)

13. DISCOUNT FOR PROMPT PAYMENT

designated point(s), within the time specified in the schedule.

by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the

NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.

OFFER (Must be fully completed by offeror)

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official written notice.

28. AWARD DATE

(Signature of Contracting Officer)

27. UNITED STATES OF AMERICA

25. PAYMENT WILL BE MADE BY

26. NAME OF CONTRACTING OFFICER (Type or print)

CODE 24. ADMINISTERED BY (If other than Item 7)

ITEM

(4 copies unless otherwise specified)

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

41 U.S.C. 253 (c) ( 10 U.S.C. 2304 (c) (

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:

21. ACCOUNTING AND APPROPRIATION20. AMOUNT19. ACCEPTED AS TO ITEMS NUMBERED

AWARD (To be completed by government)

CODE

06/17/2019 X

HUD-NFSA

US DEPARTMENT OF HUD

OFFICE OF THE CHIEF PROCUREMENT

OFFICER

40 MARIETTA STREET

14TH FLOOR

ATLANTA GA 30303-2806

1400 ET 07/16/2019

LEWIS E BOGGAN

LEWIS.BOGGAN@HUD.GOV

X

X

X

X

X

X

X

X

X

X

X

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X

PAGE(S)

LEWIS E. BOGGAN

AUTHORIZED FOR LOCAL REPRODUCTION

Previous edition is unusable

STANDARD FORM 33 (Rev. 9-97)

Prescribed by GSA - FAR (48 CFR) 53.214(c)

12. In compliance with the above, the undersigned agrees, if this offer is accepted within _____0_________ calendar days (60 calendar days unless a different period is inserted

ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

NAME OF OFFEROR OR CONTRACTOR

2 184

CONTINUATION SHEET

REFERENCE NO. OF DOCUMENT BEING CONTINUED PAGE OF

86544A19R00003

(A) (B) (C) (D) (E) (F)

Invoice Approver/COR: FOBBS, MELISSA Inv

Approver/COR Backup1: BOGGAN, LEWIS

0001 Asset Manager 3.9 Base Year

0002 Asset Manager 3.9 Option Year 1

(Option Line Item)

Period of Performance: 06/01/2020 to 05/31/2021

0003 Asset Manager 3.9 Option Year 2

(Option Line Item)

Period of Performance: 06/01/2021 to 05/31/2022

0004 Asset Manager 3.9 Option Year 3

(Option Line Item)

Period of Performance: 06/01/2022 to 05/31/2023

0005 Asset Manager 3.9 Option Year 4

(Option Line Item)

Period of Performance: 06/01/2023 to 05/31/2024

OPTIONAL FORM 336 (4-86)

Sponsored by GSA

FAR (48 CFR) 53.110

NSN 7540-01-152-8067

Page | 3

PART I – THE SCHEDULE

SECTION B – SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 CONTRACT DEFINITION – INDEFINITE DELIVERY/INDEFINITE QUANTITY

This is a performance-based, single award Indefinite Delivery/ Indefinite Quantity contract as defined in Section 16.504 of the Federal Acquisition Regulation (FAR) and in Section I, FAR Clause 52.216-22. Services provided by the contractor under this contract shall be secured by the issuance of task orders (for services). Orders shall be placed in accordance with the following clauses: FAR 52.216-19, Order Limitations; and with [] Delivery Ordering Procedures, or [X] Task Ordering Procedures, HUDAR 2452.216-78, Ordering Procedures. The contract minimum and maximum quantities available for order are specified in HUDAR 2452.216-76, Minimum and Maximum Quantities and Amounts for Order.

B.2 SERVICES

The services required in this RFP are being solicited on a 100% Total Small Business Set-aside basis for eleven areas; 1D, 2D,4D/5D, 3S/5S, 4S/6S, 1P/4P, 3P, 5P, 3A/4A, 5A/8A and 6A/7A for Asset Manager (AM) Services utilizing NAICS code 531390, Other Activities Related to Real Estate, with an established Small Business size standard of $7.5M in average annual revenues. (see Section K).

The selected Offeror(s) will serve as the Asset Manager (AM) contractor(s) in accordance with the Performance Work Statement (PWS) for the geographic areas identified above.

B.3 PERFORMANCE PERIOD

The resulting contracts will have a base performance period up to 12 months, plus four (4) one-year option periods. The length of the contract, including the option periods, shall not exceed 60 (sixty) months (exclusive of the possible 6 months, or shorter, extension under FAR Clause 52.217-8) from either the effective date or date of contract award, whichever is later.

This is only an estimate. The Government is assuming a twelve

(12) month base period for resulting awards. The Government reserves the right to adjust quantities based on the actual award date.

B.4 PRICING

The selected Offeror to support the Office of Single Family Asset

Page | 4

Management Division, in accordance with the PWS, Section C, will be paid the Fixed Unit-Rate listed in the Section B Price Schedule for each of the CLINS identified. Invoicing and voucher submission shall be in accordance with Section G.

Offerors shall submit one proposal for any or all of the solicited Homeownership Geographic Contract Areas identified in the solicitation. Proposals must cover all Contract Line Items (CLINS) within a Contract Area. Offerors proposing multiple contract areas must submit a single proposal, as specified in Section L. If an Offeror proposes multiple contract areas, each area will be evaluated based on its own merit. See L.7, Limitation on Number of Contract Awards within HOC Jurisdiction.

Marketing Fee:

The selected AM Offeror’s Marketing Fee is paid on a percentage fee basis. The fee is paid for completion of requirements in the PWS and includes those requirements specifically identified in Sections 1.3 and 5 such as the three required inspections, listing broker fees (excludes listing broker commission), and overseeing the closing process. The fee is calculated as a percent of the Net Offer amount.

Non-ACA Marketing Fee CLINs

CLIN 0001 This is the per property percentage paid for each property that has sold, closed and reconciled within the first 90 days of assignment and the sales price is, at a minimum, 95% of the initial list price.

Both requirements must be met for the selected Offeror to earn this higher fee.

CLIN 0002 This is the per property percentage paid for each property that has sold, closed and reconciled within the first 90 days of assignment and the sale price accepted is less than 95% of the initial list price or the property has sold and closed on the 91st day or later of assignment and the sale price accepted is at any percentage relative to initial list price.

Example of how the non-ACA marketing fee is calculated:

Net Offer Amount x marketing percentage = non-ACA marketing fee

ACA Marketing Fee

CLIN 0003 This is the property percentage paid to the selected Offerors for facilitating the sale of a property

Page | 5 sold to an ACA participant. The fee paid is a fixed percentage of the amount equal to 50% of the appraised value of the property.

Example of how the ACA marketing fee is calculated:

Appraised Value x .50 x marketing percentage = ACA marketing fee

Contracting Officer’s Representative (COR) Directed Inspections

COR Directed Inspections are defined as COR directed inspections and fees for conducting the special inspections requested by COR.

This fee does not include the selected AM Offeror’s required marketing inspections: 1) Initial, 2) Prior to List, and 3) Ready to Close. These required marketing inspections are included in the marketing percentage fee. The COR Directed Inspections CLIN covers inspections beyond those required to market the property and are specifically directed by the COR.

Pass-Through Expenses

All costs to complete the requirements of the PWS are included in the CLIN fee (marketing percentage or unit price) unless specified as a reimbursement. The following costs will be reimbursed to the selected Offeror for the actual costs incurred.

These expenses cannot include any profit or fee, and these pass-through expenses are NTE and will be evaluated as such.

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.

Record Retention, Exit File Delivery – The actual cost of shipping files and for the boxes for record will be reimbursed by HUD. See Section D.3.

Post Closing Complaints – Actual amounts paid by the contractor to resolve post-closing complaints when approved in advance by the COR.

Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the COR - Actual amounts paid by the contractor to close unreconciled or unmatched sales transactions will be reimbursed by HUD when approved in advance by the COR and other pass-through expenses authorized by HUD.

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B.5 GEOGRAPHIC AREAS:

Homeownership Center Contract Areas: For CLINS xx01 through xx55 the xx will be replaced with the applicable Contract Area(s) at the time of award based on Attachment A15-Pricing Spreadsheet.

CLINs xx21-xx55 are Pass Through Expenses, and the Annual Not to Exceed amounts are provided by contract area in Attachment A15- Pricing Spreadsheet.

Contract Line Item (CLIN)

SERVICE

REQUIREMENT

ESTIMATED

QUANTITY

UNIT

OF

ISSUE

FIXED

UNIT

RATE

TOTAL

ESTIMATED

ANNUAL

PRICE

CLIN xx11 COR Directed Inspections –

Base Year Each

CLIN xx12 COR Directed Inspections – Each

Contract Line Item (CLIN) Task Order Period Marketing Fee

Marketing Fee Percentage

Base Period

Option Year 1

Option Year 2

Option Year 3

Option Year 4

CLIN xx01: non-ACA Property has sold and closed within 90 days of assignment and sale price is, at a minimum, 95% of initial list price CLIN xx02: non-ACA Property has sold and closed within 90 days of assignment, but sale price is less than 95% of initial list or property sold and closed on day 91 or later of assignment at any sale price relative to initial price CLIN xx03: ACA Property

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Option Year 1

CLIN xx13 COR Directed Inspections – Option Year 2

Each

CLIN xx14 COR Directed Inspections – Option Year 3

Each

CLIN xx15 COR Directed Inspections – Option Year 4

Each

Total Estimated Price $

Pass Through Expenses (Section J, Attachment A4):

Contract Line Item (CLIN)

Service Requirement Estimated Quantity

Unit of Issue

Annual Not to Exceed Amount

CLIN xx21 Appraisal Fee 1 LOT

CLIN xx22 Appraisal Fee 1 LOT

CLIN xx23 Appraisal Fee 1 LOT

CLIN xx24 Appraisal Fee 1 LOT

CLIN xx25 Appraisal Fee 1 LOT

Contract Line Item

(CLIN)

Service Requirement Estimated Quantity

Unit of Issue

Annual Not to Exceed Amount

CLIN xx31 Record Retention/File Delivery

1 LOT

CLIN xx32 Record Retention/File Delivery

1 LOT

CLIN xx33 Record Retention/File Delivery

1 LOT

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CLIN xx34 Record Retention/File Delivery

1 LOT

CLIN xx35 Record Retention/File Delivery

1 LOT

Contract Line Item

(CLIN)

Service Requirement Estimated Qty

Unit of Issue

Annual Not to Exceed Amount

CLIN xx41 Post Closing Complaints

1 LOT

CLIN xx42 Post Closing Complaints

1 LOT

CLIN xx43 Post Closing Complaints

1 LOT

CLIN xx44 Post Closing Complaints

1 LOT

CLIN xx45 Post Closing Complaints

1 LOT

Contract Line Item

(CLIN)

Service Requirement Estimated Qty

Unit of Issue

Annual Not to Exceed Amount

CLIN xx51 Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the

COR

1 LOT

CLIN xx52 Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the

COR

1 LOT

CLIN xx53 Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the

COR

1 LOT

CLIN xx54 Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the

COR

1 LOT

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CLIN xx55 Negative Sales, HOA, Property Taxes and Other Expenses Authorized by the

COR

1 LOT

B.6 ORDERING

Written Task Orders for this service contract will be issued within each performance year. The Contracting Officer is the only authorized ordering official who can negotiate or change any pricing or terms/conditions of this contract.

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Section C Performance Work Statement (PWS)

3.9 Asset Manager

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Vision Statement

1 General Information

1.1 Introduction

1.2 Background

1.3 Constraints

1.4 Description of Services

1.5 Non-Personal Services

1.6 Period of Performance

1.7 Place of Performance

1.8 Hours of Operation

1.9 Special Qualifications

1.10 Post Award/Kickoff Conference

1.11 Status Meetings

1.12 Contractor Travel

1.13 Transition In

2 Definitions and Acronyms

2.1 Definitions

2.2 Acronyms

3 Government-Furnished Property and Services

3.1 Government Services

3.2 Facilities

3.3 Equipment

3.4 Materials

3.5 Quality Assurance (QA)

4 Contractor-Furnished Items and Services

4.1 Facilities

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4.2 Equipment

4.3 Material

4.4 Contractor Responsibilities

4.5 Contractor Personnel

4.6 Identification of Contractor Employees

4.7 Quality Control

4.7.1 Quality Control Plan

5 Specific Tasks

5.1 Transition In

5.2 Marketing and Sales

5.3 Inspections

5.4 Data Updates

5.5 Customer Service

5.6 Required Reports

5.7 Training

5.8 Transition Out

6 Deliverables

6.1 Quality Control Plan

6.2 Acceptance Criteria

7 Performance Requirements Summary

8 Related Documents

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3.9 ASSET MANAGER

Vision Statement

The vision of this requirement is to obtain contractor support for Asset Management services for the U.S. Department of Housing and Urban Development/Real Estate Owned (REO) Division. By obtaining these services HUD will ensure:

1. Properties are accurately and competitively valued.

2. Sales achieve the highest net return.

3. Holding time is minimized.

4. Sales create owner-occupant opportunities.

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

1 GENERAL INFORMATION

1.1 INTRODUCTION

The U.S. Department of Housing and Urban Development (HUD)/Office of Single Family Asset Management Division is seeking contractor support to provide Asset Management services for HUD's Real Estate Owned properties. Services shall include, marketing and sales, inspection services, data updates, customer service, reports, and training.

1.2 BACKGROUND

The Federal Housing Administration (FHA), an organizational unit within HUD, administers the single-family mortgage insurance program.

FHA insures approved lenders against the risk of loss on loans they finance for the purchase, and in some instance’s rehabilitation, of single-family homes. In the event of a default on an FHA insured loan, the lender acquires title to the property by foreclosure, a deed-in-lieu of foreclosure, or other acquisition method, files a claim for insurance benefits and conveys the property to HUD. As a result of acquisitions through the mortgage insurance program and other programs, HUD has a need to manage and sell a sizable inventory of single-family homes in a manner that promotes home ownership, preserves communities, and maximizes return to the FHA insurance funds. HUD is the largest single seller of real estate in the US. In fiscal year 2016 and beginning of fiscal year 2017, the Department sold 28,822 single-family homes in these areas.

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

Page | 14 shall be contracted to market and sell HUD Owned Properties within the geographic areas identified in Attachment A1.

Since 1999, HUD has been outsourcing the disposition of its REO inventory to Management and Marketing (M&M) Contractors. This acquisition is part of the third generation of M&M services (M&M III).

To ensure the continued success of its disposition program and to further capitalize on the private sectors disposition expertise, in 2007, HUD conducted extensive market research on industry best practices surrounding the REO asset disposition process to structure the third generation of the contracting program, herein after referred to as M&M III.

M&M III consists of the following major processes: (1) Pre-Conveyance Activity; (2) Conveyance Activity; (3) Claim Review Activity; (4) Management Activity; (5) Marketing Activity; (6) Closing Activity; and

(7) Oversight Monitoring.

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

Centralization of mortgagee compliance functions under a Mortgagee Compliance Manager (MCM) responsible for pre- and post-property conveyance activity including approval of claims for payment, title reviews, and inspection reviews.

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

This requirement will require interaction with existing and future HUD Contractors, homebuyers, investors, the real estate industry, nonprofit housing and advocacy organizations, Federal, state and local governments and HUD staff. It will also be affected by changes in regulation, legislation, or housing policy initiatives identified by the White House or the HUD Secretary. The Contractor shall be aware of, and incorporate in its operating procedures, any and all changes to applicable legislation, regulation and policy. The Contractor shall inform the Contracting Officer’s Representative (COR) no later than thirty (30) days from the effective date of any change in regulation, legislation, or housing policy initiative that impacts contract performance.

There will be a Contracting Officer (CO) and a Contracting Officer’s Representative (COR) for each contract area listed. The contracts will be administered from the respective program areas and the Atlanta

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Contracting Operations Branch, Atlanta, Georgia. The program area administration will be as follows:

MCM (Mortgagee Compliance Manager) – National Servicing Center (NSC), Oklahoma City, OK

AM (Asset Manager) – Designated Homeownership Centers FSM (Field Service Manager) – Designated Homeownership Centers

1.3 CONSTRAINTS

The services identified in this Performance Work Statement (PWS) will adhere to the rules, regulations, laws, standards, and conventions identified by HUD as well as within the Federal Government.

Constraints include the following:

1.3.1 INFORMATION SYSTEMS

The Contractor shall use the systems made available by HUD to perform on-going disposition activities as a source of data for the performance of this contract. These systems include all HUD provided systems that are used by Contractors engaged in the disposition of HUDs REO portfolio, including any systems used by the Mortgagee Compliance Manager (MCM), Support Services Contractor (SSC), Asset Manager (AM) and Field Service Manager (FSM) Contractors. The HUD provided systems are as follows:

1.3.1.1 Single Family Insurance System (SFIS)

The Single-Family Insurance System (SFIS) is HUDs primary system of record for insurance and claim payment status of all FHA insured single family loans. SFIS also includes the Single-Family Insurance Claims Subsystem, A43C.

1.3.1.2 FHA Connection

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

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

1.3.1.3 Single Family Acquired Asset Management System (SAMS)

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

1.3.1.4 P260 or Its Replacement System

P260 is an Internet based system that will serve as the primary system

Page | 16 of record for all REO case management transactions. This system will assign each HUD-owned property for Contractors to track the disposition activity from conveyance to sale. This system integrates data from SFIS, FHA Connection, and SAMS Accounting. The contractor must use P260 or its replacement. There is no additional fee for access made available by the government, but additional access may be made available through the P260 contractor or its replacement system.

1.3.1.5 Cost Estimating Software

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

1.3.1.6 Information to Satisfy Program Inquiries

HUD intends to capture all relevant and applicable property data directly in P260. However, there may be property information that is in the Contractors case files and not in P260. From time to time, the COR or Contracting Officer may request such information to satisfy program inquiries from Federal and non-federal agencies, entities, and individuals. When requested by the COR or Contracting Officer, the Contractor shall provide the requested information. The request from the COR or CO will specify the required format, content, distribution, and due date.

1.3.1.7 Systems Security Administrator

The Contractor shall designate a Systems Security Administrator (SSA) no later than ten (10) calendar days of the effective date of the contract and provide this information to the COR within this timeframe. SSA must complete the mandatory HUD’s specialized on-line security training course designed for this position. The SSA shall use forms provided by HUD to initiate requests for user access to HUD IT systems and to request access modifications and deletions. The Contractor shall certify, not later than twenty (20) business days from the effective date of the contract, that all staff has received instruction in system security issues and are familiar with the contents of the current version of HUD Handbook 2400.25 Rev. 2, Information Security Program. Additionally, this certification must be made within seven (7) calendar days for any new hires. The SSA will also be subject to HUD’s IT General Controls and Monitoring of Contractors security policy. The SSA shall conduct annual security-self assessments and content will be subject to verification by facility inspections to ensure compliance with all HUD’s IT security policies.

1.3.2 ACCESS TO HUD INFORMATION SYSTEMS

Contractor employees (including Subcontractors) who will need to have

Page | 17 access to HUD information systems must undergo a background investigation. See Clause HUDAR 2452.239-70.

1.3.2.1 Security Access

Due to the sensitivity of data, access to HUD systems shall be limited to individuals based upon their specific duties and the security of the system. As a condition of obtaining access, Contractor employees requiring access to HUD systems shall submit to the COR an original and one copy of completed Standard Form 85P, Questionnaire for Public Trust Positions, Optional Form 306 and FD-258 Finger Print Chart.

Contractor staff may be required to provide other background information as deemed appropriate for the requested security access level. HUD may grant, deny, or revoke an individual’s access rights to a HUD system based upon the results of the security background check of the individual. The Contractor shall provide written notification to the COR no later than one (1) business day after termination or resignation of any employee granted HUD systems access or when there is no longer a need for access to HUD systems by any Contractor employee. The Contractor shall maintain an up-to-date list that identifies contract employees with access to each of the information systems described in Section 3.1.1 and the justification for each employee’s level of access. The Contractor shall not provide access to individuals until HUD provides written authorization.

1.3.2.1.1 Information Security

Neither the Contractor, nor any of its employees or affiliates, shall disclose or cause to be disseminated any information relating to the services hereunder to any person not entitled to receive it. Failure to safeguard any sensitive information that may come to the Contractor or any person under his/her control in connection with work under this PWS, may subject the Contractor or its agents or employees to civil and criminal liability or termination for default.

1.3.2.1.2 Freedom of Information Act

The Contractor shall be familiar with the Freedom of Information Act (FOIA) (Title 5 U.S.C. Section 552) and the Privacy Act (5 U.S.C.

Subsection 552a) and will assist HUD in responding to requests for information. The Contractor shall forward all requests for information that are subject to FOIA or the Privacy Act to their COR within two (2) business days. In the case of a FOIA request that involves costs to the requestor, the Contractor shall provide a cost breakdown to the COR.

1.3.2.1.3 Litigation

The Contractor shall not represent that it is authorized to accept service of process on behalf of HUD. If the Contractor receives any

Page | 18 pleading naming HUD as a party, the Contractor shall provide the COR or other designated HUD representative with a copy of such pleading no later than one (1) business day after receipt of the pleading.

1.3.3 REDELEGATION OF AUTHORITY

Authority to execute documents on behalf of the Secretary of HUD will be delegated to specific individuals identified by the Contractor and approved in writing by the HOC Director with appropriate jurisdiction, subject to a Re-delegation of Authority (RDOA) executed on behalf of the Secretary by the Assistant Secretary for Housing, Federal Housing Commissioner. To provide public notice of the re-delegation, HUD will publish the RDOA in the Federal Register. Additionally, HUD will maintain a web page on which a copy of the RDOA and the names of authorized individuals will be listed. HUD staff will continually update the web page as RDOAs are added and deleted. Only those individuals whose names appear on the website are authorized to execute documents on behalf of the Secretary of HUD.

Within five (5) business days of receipt of a request of the COR, the Contractor shall provide a spreadsheet that identifies those employees who require the RDOA, including their job title and social security number. Following receipt of the spreadsheet, HUD staff will draft a letter of delegation; forward the executed letter with a copy of the Federal Register Notice to the Contractor and post the names on the website.

The Contractor shall notify HUD in writing within two (2) business days of termination, departure, death, or reassignment of any individual who has been granted a RDOA, and will take every measure necessary to ensure that unauthorized persons do not utilize the RDOA.

Should it be necessary to add individuals to the re-delegation, the Contractor shall provide written notice to the COR. Upon receipt of an amended re-delegation letter and concurrent with posting the individuals name on the website, the RDOA will be effective.

RDOAs expire only upon revocation by HUD or at expiration/termination of the contract. It is not necessary to reissue RDOAs annually as contract options are exercised; however, from time to time the COR may require that the Contractor validate that the individuals to whom RDOA has been granted are still functioning in this capacity.

1.3.4 COMPLIANCE WITH LEGISLATIVE, REGULATORY AND POLICY REQUIREMENTS

The Contractor shall comply with all Federal, state or local laws or regulations pertaining to the activities described in this PWS. When local laws and regulations conflict with HUD requirements, the Contractor shall notify the COR and the Contracting Officer.

1.3.5 HUD’S APPROVAL AND ACCEPTANCE RIGHTS

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1.3.5.1 Written Approval

In general, the appropriate HUD office will provide electronic approval of Contractors requests through the HUD systems. Where approvals are not provided through the system, the COR will provide approval in writing unless otherwise stated in this PWS. Unless the PWS specifically authorizes oral communications, the Contractor acknowledges that oral communications do not constitute approval, consent or authorization and if it proceeds without written or electronic approval, it accepts the risk of proceeding.

1.3.5.2 Effect of Approval

Notwithstanding the rights of approval and acceptance reserved to HUD, the Contractor shall be solely and primarily responsible for the performance of every requirement in this PWS. Neither the reservation nor the exercise of HUDs approval or acceptance rights shall be deemed to relieve the Contractor from its responsibility or to create any liability by HUD to the Contractor or third parties, with respect to the performance of the PWS requirements.

1.3.5.3 Lien Releases

The Contractor shall not, in connection with any work done, or claimed to have been done, by or on behalf of the Contractor, create, place, or permit to be created or placed, or allow to remain any mechanics, laborers, or material man’s lien (collectively, a mechanics lien) against any property.

1.3.5.4 Written Notice

Except as otherwise provided herein, all references to delivery or receipt of written notice between the Contractor and Third Parties shall, subject to the listed exceptions, include notice delivered or received by electronic transmission. If HUD permits electronic transmissions between the Contractor and a Third Party other than HUD, the transmissions shall comply with any standards HUD issues.

1.3.6 CONFLICTS OF INTEREST

1.3.6.1 General Rule

The Contractor shall not engage in or permit any conflict of interest.

In addition to any other conflicts of interest prohibited under applicable law, each of the following situations shall constitute a conflict of interest.

A. Appraisals, Listings and BPOs

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The Contractor obtains appraisals or broker price opinions (BPOs) from itself, its Management Officials, Immediate Family members of its Management Officials, or its Affiliated Entities. The Contractor assigns a property listing to the same entity or an Immediate Family member of the entity supplying the appraisal.

B. Appraisal and BPO Reviews

The Contractor obtains the services of an Entity to review an appraisal or BPO when such Entity is an Affiliated Entity of the Entity that prepared the appraisal or BPO being reviewed.

C. Brokers

Subject to the "Exceptions of the General Rule" (see 1.3.7), the Contractor, Subcontractor, a Management Official of the Contractor or Subcontractor, an Immediate Family member of a Management Official of the Contractor or Subcontractor, or an Affiliated Entity of the Contractor or Subcontractor (a) represents the buyer of a HUD-Owned Property, (b) receives any portion of the brokers sales commission (including any authorized Selling Broker bonuses or incentives) paid by HUD upon the sale of a HUD-Owned Property, or (c) receives any form of payment, income, revenue, compensation, or anything else of value from the broker who procures a buyer for a HUD-Owned Property.

D. Excluded Purchasers and Lessors

Subject to the "Exceptions of the General Rule" (see 1.3.7), the Contractor, Subcontractor, a Management Official of the Contractor or Subcontractor, an Immediate Family member of a Management Official of the Contractor or Subcontractor, and Affiliated Entity of the Contractor or Subcontractor, and any other Entity under contract with HUD who prepared reports used as the basis for the List Price or acceptance of a bid, or a HUD employee who has involvement in the management and oversight of HUD-owned properties or HUDs M&M Contractors, or persons related to such a HUD employee by blood, law, or marriage, purchases or leases a HUD-Owned Property cannot purchase, or lease, a HUD REO property. This includes Listing Brokers and their agents/ employees. Real estate agents with no contractual relationship to listing broker, or if not related to listing broker, may purchase or lease the HUD REO property.

E. Pass-Through

The Contractor obtains from an Affiliated Entity of the Contractor a service for which pass-through reimbursement may be made.

F. Kick-backs, Rebates, Referral Fees

The Contractor, a Management Official of the Contractor, an Immediate

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Family member of a Management Official of the Contractor, or an Affiliated Entity of the Contractor directly or indirectly receives any form of payment, income, revenue, compensation, or anything else of value from any person or entity, other than HUD or the Contractor, for performance of the Contractors responsibilities under this PWS.

1.3.7 EXCEPTIONS TO GENERAL RULE

1.3.7.1 Listing Brokers

The prohibition in "Brokers" and "Excluded Purchasers and Lessors" (see 1.3.6.1 paragraph C and 1.3.6.1 paragraph D) shall not prohibit a listing broker who is a Subcontractor, Management Official of a Subcontractor, Immediate Family member of a Management Official of a Subcontractor, or Affiliated Entity of a Subcontractor, from receiving any portion of the brokers sales commission (including any authorized Selling Broker bonuses or incentives). The listing broker cannot be a Management Official of the Contractor, Immediate Family member of a Management Official of the Contractor, or Affiliated Entity of the Contractor. This includes auction companies acting as the listing broker.

1.3.7.2 Excluded Purchasers

The prohibition in “Brokers" and "Excluded Purchasers and Lessors" (see 1.3.6.1 paragraph C and 1.3.6.1 paragraph D) shall not prohibit a HUD employee who has no involvement in the management and oversight of HUD-owned properties or HUDs marketing and management Contractors, or a person related to a such a HUD employee by blood, law, or marriage from purchasing a HUD-Owned Property if he submits an original or fax copy of form HUD-50001, "HUD Employee/Relative Home Purchase Certification" signed by the Director of the Office of Single Family Asset Management. HUD reserves the right to establish a protocol whereby immediate family members of Listing Brokers and their agents may purchase a HUD home after a certain period of market exposure.

This exception if granted shall come from the REO Director level or above.

1.3.7.3 Notices

The Contractor shall immediately notify the COR of any actual or suspected conflict of interest or the attempted purchase or lease by any Entity under contract with HUD who prepared reports used as the basis for the List Price or to accept a bid.

1.3.8 ELECTRONIC DISCLOSURES, RECORDS AND SIGNATURES

With respect to Federal law, the Contractor shall comply with the Electronic Signatures in Global and National Commerce Act, 15 USC 7001-7006, (ESIGN), including the requirements to, prior to

Page | 22 electronically delivering information to a consumer, provide the consumer with certain disclosures and obtain the consumers consent to electronically receive information. The Contractor shall provide consumers with the option of requesting a paper copy of an electronic record and shall not charge any fee for such copy. The Contractor shall not use 15 USC 7001I (3) to evade compliance with 15 USC 7001I

(1) I (ii). With respect to State law, the Contractor shall comply with ESIGN or, if a State has enacted a statute, regulation, or other rule of law preempting ESIGN pursuant to 15 USC 7002, the State statute, regulation, or other rule of law governing the use or acceptance of electronic records or signatures. This section does not constitute consent by HUD to the use of electronic records as a substitute for paper records or the use of electronic signatures as a substitute for ink signatures.

1.3.9 ANNUAL AUDITED FINANCIAL STATEMENT REQUIRED

No later than ninety (90) calendar days after the Contractor’s fiscal year ends, the Contractor shall promptly furnish the Contracting Officer with audited, year-end financial statements (balance sheet also known as statement of financial position, income statement, statement of cash flow) for the most recent fiscal year prepared in accordance with generally accepted accounting principles and reporting practices.

1.3.10 PERFORMANCE AND PAYMENT BOND

HUD is entrusting the Contractor with the care of valuable government property. Therefore, for the protection of the Federal Government and persons supplying labor or materials for the work under this PWS, the Contractor shall furnish a performance bond and a payment bond, or the Contractor may furnish the alternatives to performance bond and payment bonds described in FAR 28.204. Examples of these alternatives include United States bonds or notes, certified or cashier’s checks, bank drafts, money orders, currency, or irrevocable letter of credit.

This bonding requirement and alternatives are more fully described in FAR Clause 52.228-16, Performance and Payment Bond Other Than Construction (NOV 2006) and Section J, Attachment A10.

1.3.11 NEW APPRAISALS AND REPORT

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.

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New/second and/or updated appraisals requested by the COR are authorized.

On an exception basis, the Asset Manager may request that the COR approve an updated or new/second appraisal to support a price adjustment. The Asset Manager will only be reimbursed for an updated or second appraisal if pre-approved by the COR.

All appraisals that are authorized in the contract or approved by the COR are pass through expenses.

1.3.12 VALUATION SERVICES

The Contractor must obtain Valuation Services (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 or listing agent when directed by the COR.

The cost for these services are eligible pass-thru expenses.

Valuation Services including but not limited to BPOs performed by the Listing Broker and/or Listing Agent do not require COR approval and are not eligible pass-thru expense. Additionally, BPOs and other valuation services performed/ordered by the Listing Broker and/or Listing Agent cannot be the sole basis for establishing the initial list price for a HUD REO property.

1.3.13 DISCLOSURE OF PROPERTY CONDITION

The Contractor shall through the HUD Property Inspection Report (HPIR) (Attachment A3), the Property Condition Report (PCR) section of the HPIR, the “Appraisal” Report (Section 5.3.5) and any other means, ensure that prior to execution of a sales contract, prospective purchasers have all available property condition information. The Contractor shall be liable for any costs incurred by the HUD as a result of the failure to disclose available information.

1.3.14 INSURABILITY

The FHA appraisal report will indicate if a property meets FHA Minimum Property Requirements (MPR), as defined in HUD Handbook 4000.1, for existing dwellings. With the exception of properties to be sold under the “Asset Control Area (ACA) Program" (see 1.3.25.5), the Contractor shall, in accordance with 24 CFR 291.100 I, advertise each property under one of the following programs: (1) Insurable if the appraisal indicates the property meets MPR, (2) Uninsurable if the appraisal indicates the property does not meet MPR, or if the property is located in a special flood hazard area in a community where flood insurance coverage under the National Flood Insurance Program is not available, or (3) Insurable with Repair Escrow if the appraisal indicates that a property would meet MPR if certain repairs (not to

Page | 24 exceed $10,000) are completed.

Purchasers seeking FHA-insured financing to buy properties advertised as insurable with repair escrow are required by 24 CFR 291.100 I (2) to establish and fund a repair escrow with their lender in an amount determined by the lender to be sufficient to pay for the repairs.

Notwithstanding any advertisement of the insurability of a property, pursuant to 24 CFR 203.255(b)(5) and as further described in HUD Handbook 4000.1, the originating FHA-approved lender is responsible for making the final determination whether a property meets MPR and, consequently, is eligible for FHA insurance. The insurability clause is subject to an appraisal ordered by the Mortgagee or subsequent guidance issued by HUD through regulations, Mortgagee Letters, and/or Housing Notices, etc. The Contractor shall adjust the disposition Insurability when conditions change after the appraisal. Examples of changes include but are not limited to repairs authorized by HUD, professional reports, inspections or bids supplementing the Appraisers determination, vandalism, theft or storm damage.

1.3.15 REVITALIZATION AREAS

Properties located in HUD designated revitalization areas may be sold at a discount under the programs described in "Direct/Discounted Sales" (see 1.3.25.2). To verify whether an individual property is or is not located within a revitalization area the Contractor shall use P260.

1.3.15.1 Verify Revitalization Area Status

Prior to listing or offering any property for sale the Contractor shall use P260 to determine whether the property is or is not located within a designated revitalization area by entering the street address and zip code in the on-screen dialogue boxes. P260 will return a statement indicating that the address (a) is located in a Revitalization Area, (b) is not located in a Revitalization Area, or

(c) could not be identified. In the event that P260 is unable to identify the address the Contractor shall verify the correct spelling, number or address descriptor and retry the input. If further efforts to identify the property in P260 are unsuccessful, prior to listing the property for sale, the Contractor shall report the condition to the COR and await the CORs determination of the property’s status.

1.3.15.2 Contractor Responsibility

Pursuant to relevant HUD guidelines, the Contractor is responsible for ensuring that HUDs discount programs are properly administered. The Contractor shall reimburse HUD for any loss to HUD resulting from the discounted sale of an ineligible property, the discounted sale of a property to an ineligible purchaser (such as nonprofits that are not eligible to participate in HUD programs), or a sale at an

Page | 25 inappropriate discount level. HUDs loss shall equal the discount given for an ineligible property, the discount given to an ineligible purchaser or the amount of discount given in excess of the appropriate discount level.

1.3.16 INITIAL LIST PRICE

The Contractor shall establish and record in P260 an initial list price based on a combination of at least two valuation tools (i.e.

appraisal, BPO, AVM, etc.) as authorized by the COR and record in P260 an initial list price based on the valuation tools used as required by paragraph 24 CFR 291.100 (b) for all properties, except that of the sales price of properties offered under the “Asset Control Area Program” (see 1.3.25.5). The initial list price shall be determined, and the property listed not later than three (3) business days after appraisal is received.

1.3.17 ACCEPTABLE BID THRESHOLDS

The Contractor shall determine for each property listed on a competitive basis, an acceptable bid threshold in accordance with HUDs guidelines and in the manner described in the Contractors Comprehensive Marketing Plan. The Contractor shall record the acceptable threshold in P260. The Contractor shall not disclose to the public, either the acceptable bid threshold for a property or the Contractors formula for determining acceptable bid thresholds.

Properties are listed on a competitive basis during the "Exclusive Listing Period" (see 1.3.25.3.1) and "Extended Listing Period” (see 1.3.25.3.2).

1.3.18 MARKETING REANALYSIS

The Contractors Comprehensive Marketing Plan shall include a provision to reanalyze properties that fail to sell within forty-five (45) days from the Initial List date (24 CFR 291.205 (f)). When re-analyzing properties, the Contractor shall upload a summary of its re-analysis to P260. 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.

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. Price reductions shall be based on asset level market data. Predetermined price reduction schedules will not be used. Unless otherwise directed by the COR, when the reanalysis results in a change in the price or sale terms, the Contractor shall determine, based on their Comprehensive Marketing Plan, whether to offer the property on an Exclusive Listing basis or continue on the Extended Listing basis.

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All price reductions and changes in sale terms shall be documented in P260. The Contractor shall not disclose to the public its strategy for price reductions.

1.3.19 USE OF LISTING BROKERS

The Contractors listing broker agreements shall contain provisions where properties will be assigned and marketed with the listing broker for a period of ninety (90) calendar days. The list date (P260 step 6) shall commence the ninety (90) day period. For properties, not under contract after the 90-day period, upon COR approval, the Contractor may extend the assignment, reduce the listing broker commission (see 1.3.24), reassign the property to a new listing broker, or select an alternative disposition strategy (i.e., auction). If a property is reassigned, the original listing broker will not receive a commission payment from HUD. As the property owner, HUD, at its sole discretion, may require the Contractor to reassign the property to a new listing broker or implement an alternative disposition strategy.

The Contractor is required to utilize the services of local real estate professionals, whose primary place of business is within reasonable proximity to the listed property, including the use of small and small disadvantaged businesses, to list properties for sale.

Unless otherwise approved by the COR, reasonable proximity shall be defined as within 30 miles of the subject property. A Listing Broker can have only one primary place of business. The Contractor shall ensure listing brokers are vetted and registered, perform required inspections, and that properties are advertised on industry standard listing sites, including but not limited to MLS, and ensure listing brokers provide other customary services (i.e. Property inspections every 2 weeks; Monitor and document activity at property; coordinate with the AM, FSM, selling broker and buyers closing agent).

The Contractor shall ensure that listing brokers provide wide market exposure for HUD-Owned Properties and allow all brokers, regardless of their participation in a Multiple Listing Service, an equal opportunity to show and sell HUD-owned properties. The Contractor will update P260 identifying the listing broker and indicate how the property will be listed for sale. The Contractors Marketing and Quality Control Plans shall address how the Contractor intends to accomplish these requirements. The Contractor shall maintain an active list of Listing Brokers including the areas served which shall be made available to the COR upon written request. The Contractor shall maintain a scorecard system to assess the performance of Listing Brokers.

1.3.20 SIGNAGE AND ADVERTISING

The Contractor shall ensure that properties listed on a competitive basis are advertised in a manner that provides wide market exposure.

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The cost of all advertising, signage and Multiple Listing Services shall be the responsibility of the Contractor. Each property shall have a yard sign that is comparable to area standards unless prohibited by ordinance or HOA.