3.76_Q_and_A_5.25.18.pdf

QUESTIONS 3.76 ASSET MANAGER SOLICITATION- 86544B-18R-00001

1) Section L.6, Page 166 – Limitation on Number of Contract Awards within HOC

Jurisdiction - One AM Contractor has 3 active AM regions and another one has 2 active

AM regions in the Atlanta HOC jurisdiction.

• Are these AM Contractors restricted from submitting a proposal for this solicitation?

Answer: These AM contractors are permitted to submit a proposal for this solicitation; however, they would be prohibited from receiving an award under this solicitation per Section L.6.

2) Section B.4, Page 5 - Pass-Through Expenses, 4th bullet:

• What specific “Other Expenses” are to be authorized in advance?

Answer: Other expenses refers to any other Expenses that are paid by the Contractor to close unreconciled or unmatched sales transactions. These other expenses must be approved in advance by the COR and will be billed as pass-through expenses as authorized by the COR.

3) Section B.4, Page 7 - CLIN 3A51/3A52: HOA/Property Tax amounts are determined outside of HUD’s control.

• What occurs if amount exceeds Lot annual allotment?

Answer: HUD will ensure funding for any exceeded amounts, provided such amounts were the actual amounts paid by the contractor to close sales transactions and were approved in advance by the COR in accordance with Section B.4.

• How is this to be tracked/monitored if these are part of the HUD-1 and reduces the net to HUD amount?

Answer: Anything taken out on the HUD-1 settlement statement will be tracked via P260 and will not come out of the CLIN. The Contractor will be required to obtain prior COR approval to be placed on the HUD-1. However, if there are no penalties, interest or attorney fees, no COR approval is required to include the cost on the settlement statement.

4) Please provide previous bid amount for Solicitation Number: 86544B18R00001 M&M

3.76 Asset Management Services.

Answer: This is the first time that this solicitation has been issued and no previous bid amount exists. The previous contract award posted for area 3A can be found in the archives of the Federal Business Opportunities website at:

https://www.fbo.gov/index?s=opportunity&mode=form&id=06cf2dd1efee 706c0101e116c710ec72&tab=core&_cview=1

5) Page 2 – Why is this contract only 2 years in length? The startup costs are quite high for these contracts, and to only provide the successful offeror a two-year contract seems punitive.

Answer: See amendment 00007. This solicitation is for a base period, plus one option period to coincide with the needs of the agency and keep this contract in line with the period of performance of existing 3.7 Asset Management contracts.

6) Why is this solicitation not set aside for small business?

Answer: This solicitation is being procured on an unrestricted basis, based on HUD’s internal market research.

7) Was this area set-aside for small businesses the last time it was awarded?

Answer: Yes.

8) How many small businesses submitted proposals?

Answer: The Government does not release this information.

9) Was a sources sought sent out for 3.76?

Answer: No. A presolicitation synopsis was posted Dec 11, 2017.

10) Please describe the response of the sources sought and why it is going as unrestricted?

Answer: No sources sought information was posted. A presolicitation synopsis was posted Dec 11, 2017. This solicitation is being procured on an unrestricted basis based on HUD’s internal market research.

11) Is 3.76 a subset of the 3.7 solicitation?

Answer: No. 3.76 is a re-competition of an area previously awarded under AM 3.7.

12) Is the contract materially the same as the 3.7 solicitation?

Answer: The 3.7 and 3.76 solicitation are both for the Asset Management Services and are thus similar, however, all potential contracts stand alone.

13) Are your quantities for bidding accurate? They seem kind of high at 2,364 assets.

Answer: See revised pricing spreadsheet included with Amendment 00006. The estimate is based on historical volume for 3A and future inventory projections. Please note: Historical volumes are not a guarantee of future assignments.

14) What are the monthly and yearly historical quantities for 2016 and 2017 when 3.7 started up until 2 months ago? Both assignments and closings.

Answer: For calendar year 2016, 3A had 2,872 acquisitions and 3,304 sales. For calendar year 2017, 3A had 1,676 acquisitions and 1,891 sales. HUD will not provide historical quantities on a monthly basis. Please note historical volumes are not a guarantee of future assignments.

15) The first year quantity says 2,364 assets? Can we expect this is accurate?

Answer: See answer to #13.

16) This contract is supposed to start June 1. Since it is already March, do you expect it will really be awarded within weeks and both ramp up and start up done in 90 days so that the new contractor receives assets on June 1, or do you expect to delay and not have assets assigned until a later date?

Answer: See amendment 00007 for revised period of performance. HUD anticipates the transition schedule listed in the PWS. The transition in schedule is currently 45 days.

17) Are you going to modify and amend the solicitation to have us bid for a shorter time period like if assets don’t start until July or August or later? In other words, if the first year is not a full year, you have put that in solicitations previously and had it bid that way.

Answer: See answer to #16.

18) When do you project the post award conference will be held?

Answer: Per Section 1.10 of the PWS, the Government intends to convene a Post Award Conference with the Contractor within ten business days after contract award.

19) In Sec. L, Part II, page 172, you request a signed NOI to subcontract. So does this mean we need to put a subcontract in for every listing broker we are going to use and every appraiser? Please clarify as the LB are defined as a sub on page 114, but we would have a short amount of time during this solicitation being open to get all of those subcontracts signed and copied into proposal. What is the expectation?

Answer: While the Listing Brokers and Appraisers meet the contractual definition of subcontractors, no separate Notice of Intent (NOI) commitments are required for the Listing Brokers and Appraisers. The subcontract relationships between the Asset Manager and Listing Broker and Asset Manager and Appraiser are contractually mandated with the roles and responsibilities specified in the PWS.

20) If we didn’t have a copy of every single sub’s contract with us, would we be eliminated from consideration?

Answer: See amendment 00007. The offeror should provide a copy of each subcontract agreement in the business proposal Volume II where the offeror plans to have a subcontracting arrangement that is not contractually mandated (excluding listing brokers and appraisers).

21) Attachment A13: 3.76_Attach-A13_Pricing_Spreadsheet: The HUD estimates provided in Attachment A13 vary greatly from the actual numbers for calendar year 2017, most especially for the actual numbers during the last 6 months of 2017. The variance is more than 37% which can greatly affect pricing.

Answer: See revised pricing spreadsheet included with Amendment 00006. The estimate is based on historical volume for 3A and future inventory projections. Please note: Historical volumes are not a guarantee of future assignments.

A) Will HUD provide the number of actual monthly closings for July 2017 to December

2017?

Answer: July 2017 – December 2017 = 717 closings. Please note historical volumes are not a guarantee of future assignments.

22) Section C.1.3.3, Page 15 – Re-Delegation of Authority:

• Will the Re-delegation of Authority as it appears on HUD’s webpage be updated/published in the Federal Register?

Answer: Yes, 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.

• Should outside parties questioning the Contractor’s Re-delegated Authority be referred to the HUD webpage or the Federal Register?

Answer: Referral to the website is authorized. However, HUD staff will return an executed letter to the contractor on verification that the Federal register will be updated.

23) Section C.1.3.6, Page 17 Conflicts of Interest, D. Excluded Purchasers and Lessors:

• If a listing broker’s real estate company has more than one office, are agents/brokers (and their family members) in the other offices prohibited from purchasing HUD homes?

Answer: Yes.

• If so, how is this monitored, especially if each office has a different NAID number?

Answer: The offeror is required to train and monitor its Listing Brokers and require the Listing Brokers to adhere to the COI requirement.

24) Section C.1.3.14, Page 21 Insurability - 2nd paragraph:

• Should lender deem property not needing repair escrow after advertisement of insurability indicated a repair escrow was necessary, what requirements should lender/buyer meet in order to proceed with sale?

Answer: The purchaser’s lender is required to obtain a new appraisal. Unless HUD classifies the REO as uninsurable, the lender’s appraisal is the basis of the loan.

• Does any lender determinations of insurability affect future advertisement of insurability should a particular buyer not be able to close?

Answer: No. HUDhomestore discloses that the purchaser’s lender is required to order an appraisal to support the financing of the REO property.

25) Section C.1.3.16, Page 22 Initial List Price: The initial list price shall be determined and property listed not later than three (3) business days after appraisal is received.

• How will this be tracked by HUD?

Answer: This will be tracked in HUD’s case management system (P260) along with monitoring by the COR.

• Will there be exceptions for FSM delays with health and safety issues or properties in “Not Ready to Show Condition”?

Answer: Yes.

• If corrections to the appraisal are needed that prevent the Contractor from listing the property within this time frame, will that have a negative effect on the Contractor’s performance scorecard?

Answer: Yes, the Offeror is required to have a Quality Control Plan that monitors the performance of the appraiser which should aid them in timely corrections of the appraisal and future tracking of individual appraisers.

26) Section C.1.3.19, Page 24 Use of Listing Brokers - 2nd paragraph:

• If the Listing Broker provides Property Management Services that the FSM is currently responsible for, how will the Listing Broker be reimbursed for these services?

Answer: If the offeror so chooses to have the Listing Broker perform any type of services, other than the MLS portion, HUD would not reimburse for these services. If the AM finds a property management deficiency/issue/repair that needs to be corrected by the FSM, the AM should issue a WON in P260.

• What types of services are allowed as pass-through or require COR approval in advance?

Answer: All expenses that are not explicitly outlined in the PWS/contract. See Attachment A4.

27) Section C.1.3.28, Page 40 Termites and Wood Destroying Organisms - Illinois is located in Termite Infestation Probability Zone #2 (TIP Zone 2 – “MODERATE to

HEAVY”)

• Do all FHA sales require WDO inspections upon contract ratification?

Answer: No, all FHA sales do not require a WDO inspection. If state law requires that the WDO inspection is a Seller responsibility, then AM should obtain the WDO inspection prior to listing the REO property.

28) Section C.1.3.30.4, Page 49 Homeowners Association Fees, Dues, Ground Rents and Non-Tax Assessments:

• This section does not address HOA Paid Assessment Letter fees, are these considered a pass-through expense or require COR approval in advance?

Answer: HOA Paid Assessment Letters are considered NON-routine expenses, require COR approval, and are a pass-through expense.

• Are payments of late fees that are Mortgagee or HUD responsibility considered a pass-through expense or require COR approval in advance?

Answer: All such late fees require COR approval in advance for payment.

29) Section C.1.3.30.4, Page 50 A. Paying Taxes, Assessments, Fees, HOA Dues, or any Lienable Bill at Settlement - paragraph 1-2:

• Several Illinois cities/municipalities require final utility bill payment in person/cash when not being paid from a licensed closing agent, how will these be handled by the FSM?

Answer: When the situation occurs, our FSM is coordinating through the AM and the Buyer Select Closing Agent (BSCA). The FSM works with the BSCA and sends payment to the BSCA, who ensures that the municipality is paid prior to closing.

30) Section C.1.3.30.4, Page 50 A. Paying Taxes, Assessments, Fees, HOA Dues, or any

Lienable Bill at Settlement -paragraph 5:

• What is the Contractor’s responsibility should MCM reject the Administrative Remedy Request WON after closing takes place?

Answer: The Contractor should coordinate with its COR. The COR for the AM contract will coordinate with the COR for the MCM to obtain a final resolution.

31) Section C.5.3.2, Page 77 Prior to List:

• If the “Prior to List” inspection identifies Health & Safety WONs that are needed (or have been issued but not yet resolved) that cause delays in a property being listed within three

(3) days of appraisal receipt, will those delays count against the Contractor on its performance scorecard?

Answer: No. However, the Contractor must request a scorecard exclusion so that the AM is not penalized for not listing timely.

32) Section C.5.4.2, Page 78/79 Work Order Notifications:

• Will written COR approval be required via email in addition to the required use of the P260 Work Notification modular?

Answer: Yes. There will be an email response as well as a WON issued from P260.

33) Section C. 5.3.5, Page 78 Appraisal: A reasonable proximity requirement is defined for listing brokers as a 30-mile radius.

• Are there similar reasonable proximity guidelines for appraisers?

Answer: No, the FHA approved appraiser will advise if they are not able to complete an appraisal due to the distance to the property.

34) Section G.3, Page 96, Invoicing Procedures - Pass through Costs:

• Will the Contractor be reimbursed for expenses that are unique to the region, such as Unincorporated Cook County registration and pre-listing inspections required by the Villages?

Answer: The Contractor should consult with the COR and request a pass-through, if the expense is unique for the region and is not explicitly outlined in the contract/PWS.

35) Section H.11, Page 117, Lien Release:

• Are mechanic liens to be referred to MCM for pre-acquisition lien filings?

Answer: Yes.

• Are mechanic liens to be referred to FSM for post-acquisition lien filings?

Answer: The AM should investigate the reasons for the lien and coordinate the resolution with their COR. A mechanic’s lien caused by the FSM will not be reimbursed by HUD.

• Is the Contractor required to handle post-acquisition mechanic’s liens as pass-through expenses and be reimbursed by HUD or require COR approval in advance?

Answer: Mechanic’s Liens caused by the Contractor are to be resolved at the Contractor’s expense with no assistance provided by the COR. If the lien is not caused by the FSM, the Contractor should obtain COR approval in advance.

36) Page 5 – Pass thru expenses – What percentage of properties typically require HOA payments?

Answer: HUD is not able to provide a percentage of HOA properties. The Contractor should be knowledgeable about HOAs in its contract area and make an independent assessment when proposing its pricing. HOAs are pass thru expenses if paid prior to closing. The Contractor’s labor is part of its fixed-priced pricing.

37) Page 5 – Pass thru expenses – What percentage of properties typically require tax payments?

Answer: HUD is not able to provide a percentage of such properties. The Contractor should be knowledgeable about taxes in its contract area and make an independent assessment when proposing its pricing. Taxes are pass thru expenses if paid prior to closing. The Contractor’s labor is part of its fixed-priced pricing.

38) Page 10 – Vision statement – What is the current success rate of selling properties to owner occupants as opposed to investors or public entities?

Answer: In Area 3A, 52%, 54% and 55% of REO properties were sold to owner occupants in FY2015, FY2016 and FY2017 respectively. It should be noted that historical volumes are not a guarantee of future sales.

39) Page 10 – Vision Statement – What is the current percentage of ACA properties sold in 3A?

Answer: Currently less than 5% of the properties sold in area 3A are ACA properties. It should be noted that historical volumes are not a guarantee of future sales.

40) Page 13 – HUD systems – Will P260 be the software utilized under this contract, or will HUD be making a change? The reason for this question is a steep learning curve on each system, and a successful offeror would need to build the re-training costs into the pricing.

Answer: P260 is HUD’s current system of record.

41) Page 25 – HUD Bid site- Is the contractor permitted to utilize more than the 6 digital photographs required under this section? Marketing of the properties would improve if more than 6 pictures are permitted.

Answer: For properties listed at HUDHomestore.com, the Contractor is permitted to utilize the maximum number of photographs permitted by its Case Management System.

42) Page 28 - 1.3.25.2.2 Discount Sales to Qualified Nonprofits and Government Entities – What is the typical or average percentage of sales to the above entities per year in Illinois for the past three years?

Answer: For the past three years less than 5% of annual sales were to qualified Nonprofits and Government Entities in Area 3A. It should be noted that historical volumes are not a guarantee of future sales.

43) Page 74 - 5.2.1.1 Asset Management Scorecard – Are there any financial penalties for missing the posted targets per month?

Answer: See PWS. There are no liquidated damages assigned to this contract, resulting in financial penalties. However, the contractor’s scorecard and resultant rating could be impacted by missing the posted targets per month.

• If so, what is the nature of the penalty and is there an opportunity to complete work and still be paid for it?

Answer: There are no financial penalties such as liquidated damages in this solicitation. HUD’s Scorecard is a performance evaluation tool that is utilized to document contractor performance that will be included in the Contractor’s annual CPARS. HUD will not pay for work that has not been performed, inspected, and accepted in accordance with the terms and conditions of the resulting contract.

44) Does the AM actually pay the taxes as a pass through or is the tax bill processed and paid by another contractor that works for HUD? Please explain in detail.

Answer: The Asset Manager is responsible for all tax bills. There are different methods for processing the tax bills for payment. The offeror will consult with the COR about taxes during the processing of that assigned case.

45) How long does it typically take to get PIV clearances done and P260 access?

Answer: The length of PIV clearance depends on the completeness of the applications provided by the Contractor. HUD will make every effort to get at least three employees PIV access during the Start-up period.

46) What mechanisms are in place to help the contractor if we don’t have full access to P260 for all of our team by the start date?

Answer: HUD will make every effort to get at least three employees PIV access during the Start-up period after a complete application for an applicant has been received.

47) On page 82, you mention monthly training, can the subcontractors do this training?

Answer: Yes, the training can be done by the AM’s subcontractor.

48) Please confirm that on Pg. 114 you are defining listing brokers as subcontractors?

Answer: In addition to terms of the Listing Agreement between the AM and Listing Broker, the AM’s responsibilities for its Listing Broker is the same as it is for the AM’s other subcontractors. Therefore, the Listing Broker and its agents are subject to the conflict rules outlined in section H. 9 of the PWS/contract. But see Answers 19 and 20.