RFP_FPI_020415cbdwm2_v3.doc

SOLICITATION, OFFER AND AWARD

1. THIS CONTRACT IS A RATED ORDER

UNDER DPAS (15 CFR 700)

RATING

PAGE OF

2. CONTRACT NO.

3. SOLICITATION NO.

AG-31ME-S-15-0006

4. TYPE OF SOLICITATION

X

NEGOTIATED (RFP)

5. DATE ISSUED

02/18/2015

6. REQUISITION/PURCHASE NO.

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

USDA, RURAL DEVELOPMENT

PROCUREMENT MANAGEMENT DIVISION

1400 INDEPENDENCE AVE., SW

WASHINGTON, DC 20250

Gregory Nance Contract Specialist

Approved as to Form and Legality: _____________________________

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

SOLICITATION

9. Sealed offers in original and 2 copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if handcarried, in the depository located in 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.

10. FOR INFORMATION

CALL:

A. NAME

Gregory Nance

B. TELEPHONE (NO COLLECT CALLS)

AREA CODE NUMBER: EXT:

202-692-0033

C. E-MAIL ADDRESS

gregory.nance@wdc.usda.gov

11. TABLE OF CONTENTS

(x)

DESCRIPTION

(x)

DESCRIPTION

X

REPRESENTATIONS, CERTIFICATIONS, AND

OFFER (Must be fully completed by offeror)

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

12. In compliance with the above, the undersigned agrees, if this offer is accepted within period is inserted 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 designated point(s), within the time specified in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT

(See Section I, Clause No. 52-232-8)

10 CALENDAR DAYS

20 CALENDAR DAYS

30 CALENDAR DAYS

CODE

FACILITY

16. NAME AND ADDRESS OF PERSON AUTHORIZED TO SIGN OFFER

15B. TELEPHONE NO.

AREA CODE NUMBER EXT.

15C. CHECK IF REMITTANCE ADDRESS

SUCH ADDRESS IN SCHEDULE.

17. SIGNATURE

18. OFFER DATE

AWARD (To be completed by Government)

19. ACCEPTED AS TO ITEMS NUMBERED

20. AMOUNT

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

21. ACCOUNTING AND APPROPRIATION

23. SUBMIT INVOICES TO ADDRESS SHOWN IN

(4 copies unless otherwise specified)

ITEM

26. NAME OF CONTRACTING OFFICER (Type or print)

27. UNITED STATES OF AMERICA

(Signature of Contracting Officer)

28. AWARD DATE

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

AUTHORIZED FOR LOCAL REPRODUCTION

STANDARD FORM 33 (REV. 9-97)

PREVIOUS EDITION IS UNUSABLE

Prescribed by GSA

FAR (48 CFR) 53.214©

B.1 General

USDA RD will conduct this acquisition using FAR Part 15 and FAR Part 12 of the Federal Acquisition Regulation. If you are interested in this acquisition, you may participate by submitting your response in accordance with the following instructions. Submission shall be electronic via email.

Prospective Contractor’s are required to immediately notify Gregory Nance at Gregory.Nance@wdc.usda.gov of their intent to submit a proposal. Negative responses are not required. Contractor’s are required to submit both a written Technical Proposal and a separate Price Proposal for the purposes of assuring that the prospective Contractor is fully cognizant of the scope of this contract and has the capability to complete all Statement of Work (SOW) requirements.

Contractor’s are to provide a total solution. Contractor’s may propose appropriate insurance coverage of their own or Contractor’s may team with another Contractor to propose a blended solution.

If you have questions regarding this requirement, please submit your inquiries/questions immediately via email but no later than Thursday, March 5 , 2015 at 12:00 pm EST to Gregory Nance at Gregory.Nance@wdc.usda.gov.

Please be advised that the Government reserves the right to transmit/post those questions and answers of a common interest to all prospective Contractor’s. Answers to questions will be shared to all contractor’s positively responsive to this solicitation. Award will be based upon overall best value to the Government.

All potential offeror’s are cautioned to strictly adhere to the provisions of this RFP regarding conflicts of interest. Any such matters must be brought to the attention of the Contracting Officer at or before the time proposals are due. Please be advised that if an actual or potential personal or organizational conflict exists between your firm and RD that cannot be resolved, avoided, or mitigated to the satisfaction of USDA RD then your firm shall not be considered eligible for an award.

All Contractor’s shall adhere to the following proposal instructions (Section L) and submit their proposals with the completed SF 33 Cover Page. Contractor’s shall represent that their responses are valid for a period of no-less-than 60 days from the due date for submission.

The technical proposal shall not exceed 30 pages and do not include the key personnel resumes or past performance data. There is no page limit for price proposals. A page is defined as one side of an 8 ½” x 11” sheet of white, un-textured paper, single-spaced, with at least one inch margins on all sides, using type not smaller than 12 characters per linear inch or be smaller than twelve (12) point, with no more than six (6) lines per vertical inch. The written Technical and Price proposals shall be provided electronically via email to Gregory Nance at Gregory.Nance@wdc.usda.gov by 5:00 pm EST on Friday, March 20, 2015.

B.2 Type of Contract The United States Department of Agriculture (USDA) Rural Development (RD) is issuing this competitive RFP to solicit competitive proposals for the purpose of entering into a Firm-Fixed Price (FFP) contract.

B.3

Base and Option Periods

The term is a base period of one year and four one-year Option Periods.

Base Period = Date of Award (DOA) to 12 Months after DOA

Option Period I = 12 Months after DOA to 24 Months after DOA

Option Period II = 24 Months after DOA to 36 Months after DOA

Option Period III = 36 Months after DOA to 48 Months after DOA

Option Period IV = 48 Months after DOA to 60 Months after DOA

The above option periods are based on date of contract award.

B.4 Funding

USDA RD is not liable for costs incurred until such time as the Contractor is awarded the Contract, and the Contract is funded by the Contracting Officer.

B.5 Line Items and Prices

B.5.1 Monthly Recurring Fixed Prices

The offeror is to include pricing for the CLINS. Please see and fill in pricing in Section B-6.

B.5.2 Contract Line Item Numbers (CLINS)

The CLIN structure is designed to provide consistency during the entire contract period of performance. The following tables define the CLIN structure for each Period of Performance.

Section B – 6 Supplies Or Services And Prices/Costs Base Year (TBD) Contract Line Item Numbers (CLINS)

Single Family Housing

Multi-Family Housing

Option Year 1 (TBD) Contract Line Item Numbers (CLINS)

Single Family Housing

Multi-Family Housing

Option Year 2 (TBD) Contract Line Item Numbers (CLINS)

Single Family Housing

Multi-Family Housing

Option Year 3 (TBD) Contract Line Item Numbers (CLINS)

Single Family Housing

Multi-Family Housing

Option Year 4 (TBD) Contract Line Item Numbers (CLINS)

Single Family Housing

Multi-Family Housing

Section C - Description/Specification/Work Statement

STATEMENT OF WORK

USDA Rural Development

Lender Placed Insurance Services

Section C1.

Introduction and Overview The United States Department of Agriculture, Rural Development (hereby referred to as USDA RD or Agency) provides support and services that improve the quality of life in rural communities.

Section C1.1 Background

The Government (USDA, RD) provides loans to low and moderate income applicants located in rural geographic areas to assist them in obtaining single/guaranteed/multi-family housing through various programs. As of September 30, 2014, the Government had approximately 310,000 Direct Single Family Housing loans that represent just over 248,000 borrowers; Section 502 Direct Single Family Housing loans; Direct Program is approximately 94% escrow and are generally secured by first mortgages on modest dwellings located on non-farm tracts of one acre or less. The Single Family Housing Direct loans are located in each of the 50 states and U.S. territories that include Puerto Rico, and the US Virgin Islands. Since multiple loans may exist on a single property, an escrow account shall only be established on the primary loan. Approximately 8,000 new single family loans are originated per year.

Rural Development (RD) currently processes all loan originations through state offices and approximately 700 field offices. The Centralized Servicing Center (CSC), located in St. Louis, Missouri provides support to the field offices for loan originations and is responsible for most servicing functions. Currently the Single Family Direct loan program is approximately ninety-four (94) percent escrow and the Hazard and Flood Compliance Section tracks one hundred (100) percent of the customers that are required to maintain a homeowner's, windstorm or flood insurance policy. (If re-categorization of types of coverage is brought on due to insurance company realignment of lines of business, our needs shall change in accordance with the change).

As of September, 1, 2014, USDA RD had 14,771 Multi-Family Housing (MFH) projects with total units encompassing approximately 434,000 and total loans of 24,292. Currently these loans are not escrowed. USDA RD Multi-Family Housing programs provide a number of finance options to developers of low-income community housing.

Section C1.2.

Overview

The U.S. Department of Agriculture (USDA) RD utilizes lender-placed insurance to protect the Government’s loan portfolio assets. The USDA RD intends to continue lender-placed insurance through contractor provided services nationwide including the U.S. Territories of Puerto Rico and US Virgin Islands. This service is provided for the purpose of:

1. Obtaining lender placed fire and extended coverage insurance to include fire, windstorm, flood, hurricanes, natural disasters, sink hole, vacancy, vandalism, hail, for Government borrowers (single family housing, multi-family, condominium, and mobile homes) who have either failed to maintain adequate coverage on their property, or are subject to cancellation or non-renewal by their current insurance carrier;

2. Notifying Government borrowers of the intent to place lender placed insurance prior to actual placement;

3. Providing access to the contractor's system through direct on-line access;

4. Providing an on-line history of insurance transactions based on critical changes in insurance data received in the daily transmission;

5. Providing claims management on lender placed properties;

6.

Providing check printing services for disbursements to insurance vendors for non-Electronic Data Interface (EDI) automated insurance payees, taxing authorities and borrowers; and

7. The contractor shall obtain immediate coverage for the portfolio during transition and development phases.

Data supported tasks shall be completed through daily electronic exchange of loan and insurance data between the contractor and the Government.

Section C2.

Objective The Government as an entity expects, with the assistance of the selected lender placed insurance contractor, to achieve the following goals:

1. Comply with Public Law 100-242. This law requires USDA RD to establish and maintain escrow accounts for real estate taxes and insurance premiums for Single Family Housing (SFH) borrowers; as well as all applicable state and federal laws. Once a law has been changed it shall be implemented by the vendor within 30 business days.

2. Comply with the National Flood Insurance Reform Act of 1994 by implementing the mandatory flood insurance purchase requirements. If a property is determined to be in a Special Flood Hazard Area (SFHA) by a flood zone determination, the borrower shall be required to carry a flood insurance policy for the life of the loan;

3. Comply with Dodd-Frank Wall Street Reform and Consumer Protection Act (CFPB) of 2010.

4.

Establish consistent procedures for the internal processing of insurance documents and implement a cost effective method for the tracking of renewals, endorsements and/or cancellations on escrowed and non-escrowed accounts;

5. Establish lender placed claims tracking; and 6.

Establish and maintain written consistent procedures. Revise procedures based on process flow reviews and best practices.

Section C3.

Prospective Contractor Size and Proven Expertise The Contractor shall be national in scope since it shall be supporting a USDA RD portfolio that is located in all 50 states as well as U.S territories. The contractor shall meet the following minimum qualifications and is expected to maintain them throughout the life of the contract and shall be subject to verification. If contactors are unable to meet the minimum qualifications, they are encouraged to partner with other vendors through contractual relationships to meet the following servicing criteria:

1. Ability to obtain coverage from licensed carriers in all 50 states, Puerto Rico and the US Virgin Islands

2. Have a minimum of five (5) years’ experience in the Lender Placed Insurance Industry;

3. Service or have serviced more than one client with a minimum of 200,000 customers;

4. Exceed $5 billion dollars in coverage written for a variety of customers;

5. Maintain insurance contracts with carriers that meet the minimum rating criteria;

6. Service more than one client with MortgageServ using the standard or custom lender placed program; and

7. Brokers and Vendors shall be in good standing with the Insurance Commission of the states in which they do business, or the appropriate regulatory agency for the US Virgin Islands and Puerto Rico.

Section C4.

Lender Placed History

USDA RD has compiled and maintains evidence of the customer's homeowner's insurance and flood policy, if applicable, on the MortgageServ system. USDA RD is responsible for non-escrow updates, payment of escrowed renewals, endorsement processing, and cancellation processing of incoming insurance documents. All research, refund processing and claim monitoring is also performed within the Hazard and Flood Compliance Section of CSC.

As of December 31, 2014:

Number of homeowner's policies

201,758

Total coverage amount

$30,271,582,506 Average coverage amount

$134,582 Average premium amount

$816

Number of lender placed fire policies

23,174

$1,945,717,919

$83,961.25

$726

Number of flood policies

3,687

$307,792,274

$83,480

$501 Number of Windstorm Only Policies*

1,775 Total Coverage Amount

$37,531,316 Average Coverage Amount

$46,392 Average Premium Amount

$653 Number of Lender Placed Fire Policies

(Multi-Family Housing)

Total Coverage Amount

$23,435,760

Average Coverage Amount

$755,922

Average Premium Amount

$8,999 Number of lender placed flood policies

$37,531,316

$46,392

$653

Condominiums identified

(based on coverage type 24)

Mobile homes identified

1,330 (based on coverage type 25) *Note: There are no Windstorm Only Policies lender placed at this time.

Section C5.

Tasks Requirement(s)

The Contractor shall be responsible for:

1. Obtaining the requisite Fire and Extended coverage (windstorm, hurricane, hail, natural disasters, sinkhole, vandalism, and vacancy) policy for any borrower who has an expired, canceled, non-renewed, lapse in coverage, et al homeowner's insurance policy.

a. If THE GOVERNMENT holds an escrow account for the loan and the insurance is coded as such, the contractor shall obtain a lender placed policy until the Government’s interest in the property is satisfied or the borrower purchases new coverage.

b. If THE GOVERNMENT does not hold an escrow account, the contractor shall obtain a lender placed policy if the Section 502 Direct Single Family Housing loan has a current principal balance that exceeds $7,500, or a Section 504-Loan Grant Program for repairs with an original principal balance greater than $15,000 but with a current principal balance greater than $7,500 (this includes all loans associated with the property address).

c. The fire and extended coverage policy shall insure the building (single family, multi-family, condominium and mobile home) structures from damage caused by fire, windstorm, hurricanes, natural disasters, sink hole, and vandalism. This coverage shall cover all structures on the property. The lender placed fire and extended coverage policy shall not cover personal liability or personal contents maintained either in or around the structure. The coverage shall include a Replacement Cost Guarantee clause, when the last known coverage amount is utilized with the exception of mobile homes which shall be replacement cost. The fire and extended coverage policy shall be issued for the amount of the last known coverage.

d. Deductibles greater than $1,500 for this coverage must be accompanied by a justification and approved by the Government

e. If the contract is not renewed or terminated, all policies shall remain in force until renewal and all claims shall be honored, unless policy cancellation is justified by underwriting regulations and sufficient notice (30 days) has been communicated.

2. Obtain the requisite Flood coverage for any borrower that has an expired flood insurance policy and a corresponding FEMA flood zone determination that warrants the policy requirement.

a. If the Government holds an escrow account for the loan and the insurance is coded as such, the contractor shall obtain a lender placed policy until the Government's interest in the property is satisfied or the customer provides a new policy.

b. If USDA RD does not hold an escrow account, the contractor shall obtain a lender placed policy if the 502 loan has a current principal balance that exceeds $5,000 or a 504 loan with an original principal balance or current principal balance greater than $5,000.

c. The lender placed flood policy shall cover all structures on the property. The lender placed flood policy shall not cover personal liability or personal contents maintained either in or around the structure. The flood policy shall be issued for the last known coverage unless the amount exceeds the maximum allowed under FEMA regulation.

d. Deductibles greater than $1,500 for this coverage must be accompanied by a justification and approved by the Government

e. If the contract is not renewed or terminated, all policies shall remain in force until renewal and all claims shall be honored, unless policy cancellation is justified by underwriting regulations and the due process notification (30 Days) is issued.

3. Obtain the requisite mobile home insurance policy for any borrower that has an expired insurance policy or until the borrower provides a new policy.

a. This policy shall cover all structures on the property but shall not cover personal liability or personal contents maintained either in or around the structure.

b. This coverage shall be considered replacement value as defined as coverage that restores the building to its pre-loss condition.

c. All policies initially placed shall have a current principal balance over $7,500.

d. The coverage shall be issued for the last known coverage amount.

e. Deductibles greater than $1,500 for this coverage must be accompanied by a justification and approved by the Government

f. For properties reported as vacant to USDA RD, the deductible shall not exceed fifteen hundred dollars ($1,500).

g. If the contract is not renewed or terminated, all policies shall remain in force until renewal, unless policy cancellation is justified by underwriting regulations and sufficient notice (30 Days) has been communicated.

4. Obtain a windstorm insurance policy for any borrower that has an exclusion in the borrower’s homeowner insurance policy and does not provide a windstorm policy.

a. This policy shall cover all structures on the property but shall not cover personal liability or personal contents maintained either in or around the structure.

b. This coverage shall be considered replacement value as defined as coverage that restores the building to its pre-loss condition.

c. All policies placed shall have a current principal balance over $7,500.

d. The coverage shall be issued for the last known coverage amount.

e. Deductibles greater than $1,500 for this coverage must be accompanied by a justification and approved by the Government

f. For properties reported as vacant to USDA RD, the deductible shall not exceed fifteen hundred dollars ($1,500).

g. If the contract is not renewed or terminated, all policies shall remain in force until renewal, unless policy cancellation is justified by underwriting regulations and sufficient notice (30 days) has been communicated.

5. Obtain coverage.

a. The contractor shall provide an Automatic Coverage Endorsement (ACE) for the entire loan portfolio regardless of when it is discovered that a lapse or cancellation has occurred.

b. If a loss has occurred prior to discovery of the lapse or cancellation, the contractor shall honor the Government’s claim.

c. The contractor shall obtain coverage that is paid annually.

d. Any uninsured or underinsured loss due to error shall be covered by the contractor under the policy.

6. Obtain check printing services

a. Disburse payment to insurance vendors for non-EDI automated insurance payees and taxing authorities for approximately 25,000 checks per month.

b. The government shall supply daily check disbursement data files with payee, dollar amount of check, check number and other payee information (i.e., policy number, etc.) to display on check.

c. The contractor shall provide the bank account the checks shall be drawn against, check stock with USDA - RD logo and address, personnel to print, mail, cancel and stop payment of checks as directed by USDA RD staff. USDA RD shall supply a wire transfer each morning for the total of each check disbursement data file that was transmitted to contractor.

d. Checks will be printed on appropriate check stock, in correct amount and to correct payee.

e. The contractor shall maintain a secured environment for check stock

f. The contractor shall provide a report of check usage in sequential order and identification of voided and destroyed checks with detailed explanation daily.

7. Provide a conversion cost in the event there is a vendor change such as completion of the contract.

NOTE: Award of this contract does not guarantee the Contractor any minimum number of accounts during the term of this contract, although an estimate of the number of accounts in each category is provided on page 12 of this SOW.

Section C6.

Placement of Coverage

The Government shall provide a daily transmission that identifies Government loans that have experienced a lapse in coverage, experienced a cancellation in coverage, or instances in which the borrower failed to provide evidence of a current homeowner's, flood, mobile home, condominium, hurricane, or windstorm and/or hail insurance policy. The contractor shall immediately obtain coverage for all properties included in these transmissions as of the lapse or cancellation date.

Section C7.

Binding Coverage

The Contractor's notification to the customer shall be at least weekly when the new exposures are identified in the transmissions from the Government.

1.

These loans shall be placed on an automatic binder for a minimum of seventy (70) calendar days for fire (single family, multi-family, mobile home, and condominium), hurricane, or windstorm and hail policies and a maximum of sixty (60) calendar days for flood policies.

2.

These loans shall be fully covered through the contractor.

3.

During this binder period, the account shall not be charged with a premium and a separate binder fee shall not be assessed.

4.

If a borrower provides a policy within the binder period, they shall not be charged for lapse in coverage if the policy does not go back to the original effective date of the binder.

5.

Upon expiration of this binder period (See Section 7 Item 1) the contractor shall ensure a policy is issued.

6.

Lapses in coverage shall be paid only when a full premium has been disbursed by CSC and the borrower provides a policy that does not date back to the effective date of the lender placed policy (this policy shall be effective the date of the lapse of coverage date).

7.

The premium shall be calculated from the effective date of the policy and the policy shall remain in effect for a twelve (12) month period. A pro-rated premium shall be refunded applicable with customer provided coverage.

Section C8.

Borrower Notification

During the forty-five (45) for Flood or seventy (70) day for the Hazard binder period, the contractor shall be required to execute a series of notifications.

1. These notifications shall be in the form of letters and/or telephone calls. Notifications shall be issued to the borrower advising of the lapse in coverage and the possibility of the government placing coverage to protect the interest in the secured property.

2.

The Government requires the contractor to issue notifications to the borrowers that are in compliance with 12 CFR 1024.37 sections (a) through (h) which include three (3) notification letters for all coverage and dwelling types except flood policies which require two (2) notification letters. Contractor shall comply with all future modifications to existing regulations and any newly established regulations affecting borrower notifications.

4. Letter templates shall be approved by the Government prior to production. All letters shall be translated in Spanish on the reverse side of the document.

5. Letters shall be on USDA RD letter head and contain the Customer Service phone number, fax number, and mortgagee clause.

6. Outbound letters shall be stored by the contractor in an automated means with retrieval at the account level.

7. Mailing lists and/or any other data shall not be used by the contractor or any other third party for any other purpose other than specifically contracted. Sale of the data is strictly prohibited.

7. All call centers, utilized to service the government portfolio, shall be located within the United States.

Section C9.

Payment of Premium

The premiums for the lender placed coverage shall be specific to the programs covered in Section 5 (Task Requirements), and the premiums paid by the Government on behalf of their borrowers shall follow a recognized regional rate with the exception of Florida, Louisiana, Texas, Puerto Rico, and the US Virgin Islands. Premium rates shall not exceed established State rate caps.

1. The Government shall not require receipt of commission nor shall it seek reimbursement for any effort put forth in securing coverage for the property. In absence of a commission structure, cost savings by the Contractor shall be applied to premium reductions.

2. Upon issuance of a lender placed policy, the Contractor shall provide to the Government, via electronic transmission, a file listing each account that has reached the maximum number of days in the binder cycle before payment is required. Transmission shall be processed utilizing the custom program written by MortgageServ for the Government that USDA RD has to approve.

3. Contractor shall provide the Government with a weekly reconciliation report of funds received and disbursed and non-disbursed items.

Section C9.1 Premium Calculation

Annual Daily Rates:

1. Annual rate / 365 = Daily Rate (round to 5 decimal places)

Premiums

1. Insured Value + Foreclosure & Demolition (F&D) (if applicable) = Total Insured Value

2. Total Insured Value /100 = Billing Amount

3. Billing Amount x Daily rate per $100 = Daily premium (round to 2 decimal places)

4. Daily premium x Number of days = Premium

Section C9.2 Premium Refunds

Refunds shall be processed in the following manner:

1. All refunds shall be payable to the Government and shall be refunded directly to the Government by Electronic Funds Transfer.

2. All refunds of premiums shall be remitted to the Government within three (3) business days of the receipt of the lender placed policy termination. The contractor shall supply a balanced termination and refund report generated by MortgageServ. Delays in remitting payments to the Government shall be considered a breach of the contract and could result in penalties and/or cause for termination of the contract for default.

3. Refunds shall be calculated as follows:

a. If a premium has been paid to the contractor and the borrower tenders a policy after the effective date of the lender placed policy, the contractor shall return the unused/ pro-rated portion of the premium to the Government.

b. Premiums shall be pro-rated utilizing a straight line method and a 365 calendar day year.

c. The refund calculation, assuming an annual premium of $365, would represent an earned premium of one dollar per day. If the date of cancellation is one hundred calendar days after the effective date of the policy, the refund would be $265.

5. Premium refunds shall not be netted against new premiums.

6. The refunds shall be tracked, processed and paid separately for ease of reconciliation.

7. The contractor shall provide a monthly loan level detail report of premium refunds. Report shall include the Government account number, policy number, borrower name, refund amount and the number of earned premium days.

Section C10.

Termination of Lender Placed Coverage

1. The Government has the right to terminate any policy placed on a given property without prior notice to the contractor.

2. Terminations shall occur when the Government has received appropriate proof of insurance (such as insurance binder) or the debt has been satisfied.

3. Termination of coverage shall occur only at the request of the Government.

4. Terminations shall occur either by electronic transmission, by telephone notification from authorized government, or by written notification.

5. Terminations shall be effective immediately upon notification, or an earlier effective date can be utilized if the Government staff deems this action to be appropriate.

Section C11.

Lender Placed Policy Renewal

All premiums shall be issued for a period of one year (twelve months) from the effective date of coverage.

1. The Government requires the contractor to issue notifications to the borrowers which are in compliance with 12 CFR 1024.37 sections (e) through (h). Contractor shall comply with all future modifications to existing regulations and any newly established regulations affecting customer notifications.

Section C12.

Loss Claims

The lender placed policy shall be a master policy to cover the Government’s interest with a certificate issued under the Government’s name.

1. If a loss occurs, the loss claim drafts shall be issued in the name of the Government only and forwarded with the adjuster's worksheet directly to the Government.

2. Contractor shall store borrower correspondence in an electronic format with retrieval at the account level, accessible to the Government.

3. The contractor shall provide a consistent and exclusive contact for the Government claim processors.

4. Contractor shall utilize adjusting firms that have proven track records to ensure consistency and fairness in the processing of lender placed insurance claims. The Government reserves the right to review qualifications of any Adjustor and approve the use of an alternate adjuster should the Government deem the Adjustor is not qualified.

Section C12.1 Payment of Loss Claims

The contractor shall provide a Loss Draft Service for all loss claims related to lender placed insurance.

1. Contractor shall complete property inspection, Adjusters Work Sheet, and issue loss draft payable to the Government within thirty (30) calendar days except claims in Federal declared disaster areas which shall be handled on a case by case basis.

2. Contractor shall provide a monthly report for all claims in process more than thirty (30) days indicating reason for delay.

3. Claim negotiations shall be between the borrower and contractor. The Government shall only become involved when requested by the borrower, contractor or in special cases.

4. If borrower fails to cooperate with contractor or provide access to their premises, contractor shall notify the Government. The Government shall assist in communications with the borrower to resolve any issue.

Section C12.2 Government Filing of Claims

The Government shall file claims directly with the contractor in instances of customer neglect, or when bankruptcy or foreclosure proceedings are in progress.

1. The Government shall have the right to submit supplemental property loss claims when access to the property prevented a full assessment of the damage.

2. The contractor shall not impose a time limit for filing a loss claim that is less than 365 days from the Government’s receipt of notification of potential loss.

Section C13. Reports – Contractor to provide Reports in Electronic Media format

1. Lender Placed Loss Claims Tracking report

a. Contractor shall provide a monthly report to the Government detailing claims in process more than thirty (30) days, indicating reason for delay and aging of the claims.

b. Contractor shall provide a quarterly report to the Government detailing claims paid during the quarter.

c. Contractor shall provide a semi-annual report to the Government detailing borrowers who have filed more than one claim since inception of the contract.

d. Contractor shall provide an annual report to the Government for the twelve (12) month period beginning October 1 of each year through September 30 of the subsequent year. Reports to include:

i. Account Number

ii. Borrower Name

iii. Property Address

iv. Type of Loss

v. Date of Loss

vi. Amount of Loss

These reports shall provide the total amount of claims paid during the year, and the total amount of premiums collected on an account level. Within thirty (30) calendar days after the delivery of the annual report, the contractor and the Government staff shall meet to review the prior year’s results.

Contractor shall attend quarterly update meetings via teleconference with the Government to review results within 2 weeks of quarter end.

Contractor shall attend bi-annual update meetings with the government in person to review results within 2 week of quarter end. Bi-annual meeting shall serve as required quarterly meeting for that time period. Expenses for meetings shall be the sole responsibility of the Contractor.

2. Lender placed coverage concentration across the United States

a. Contractor shall provide a quarterly report to RD on the concentration of lender placed coverage as required in Section 5 Task Requirements.

3. Trends analysis of lender placed repeat offenders.

4. Report of specific account level lender placed repeat offenders.

5. Quarterly Loss Ratio reports.

6. Contractor shall provide dashboard reporting of agreed upon indicators.

7. The Government retains the option to request additional reports as needed.

Section C14 Electronic Access to Loss Claims Tracking

The Government shall have on-line access to the contractor’s Loss Claim Tracking System. Data available should include claims in progress, status of the loss check, amount and check number, and detailed historical information.

Section C15.

Confidentiality of Agency Records

Contractor shall comply with all confidentialty requirements as outlined in Attachment 9 entitled Customer and Government Information Confidentiality Agreement.

Section C16.

System Interfaces

The Government’s loan servicing system (LoanServ) resides on an IBM mainframe platform located in Kansas City, Missouri. The facility for the servicing of Government loans is in St. Louis, Missouri. Contractor shall build customized interfaces, at their own cost, with the LoanServ system. The core LoanServ platform for insurance is not utilized by the Government. All customized interfaces for input or output files shall be within LoanServ specifications.

Section C16.1 System Testing

Contractor shall provide technical support in the testing of any customized lender placed interfaces on MortgageServ.

1. The Government shall supply data for the contractor to create a database to be utilized during testing processes.

2. Results of interface tests shall be certified as acceptable by the Government within ten (10) calendar days prior to placement of loans under lender placed coverage.

Section C17.

Training

1. Contractor shall provide comprehensive on-site training for USDA RD Insurance Processors to process all lender placed reports generated by the contractor. Training shall consist of a minimum of two (2) sessions and a maximum of 4 sessions held at the Centralized Servicing Center in St Louis, Missouri.

a) Analyzing reports

b) Generating letters

c) Timing of reports and letters generated

d) Providing all necessary information regarding policy, rating system and restrictions of the policy.

2. Contractor shall provide on-site training to the Government’s lender placed insurance staff in the operation of the system interfaces. Contractor shall provide training for all phases of the lender placed process. Training shall consist of a minimum of two (2) sessions and a maximum of 4 sessions held at the CSC in St Louis, Missouri.

a) Connecting to the contractor's system

b) Screen navigation

c) Date update

d) Termination of lender placed policy

3. Contractor shall provide on-site training to the Government’s lender placed insurance staff in the reporting of insurance claims to the contractor, and usage of the contractors' on-line loss draft system. Training shall consist of a minimum of two (2) sessions and a maximum of 4 sessions held at CSC in St Louis, Missouri.

a) Gathering information from the customer to file the claim with the contractor

b) How to file the claim with the contractor

c) How to facilitate a claim on behalf of the borrower

d) How to navigate the contractor's on-line loss draft tracking system for claim information.

e) How to read the contractors Adjuster Worksheet

4.

Contractor shall provide on-site training to the Government’s lender placed insurance staff in any special and/or new processes, to include Train the Trainer sessions as necessary. Training shall consist of up to 4 sessions over the contract term held at the CSC in St. Louis, Missouri.

*Note: All required training materials shall be produced and provided by the contractor, The Contractor is responsible for ensuring that its staff is fully trained and qualified to perform assigned duties and responsibilities under this contract. If the Contractor provides technical staff with applicable certifications, the Contractor shall assure that its staff maintains such certifications throughout the life of the contract. The Contractor shall provide staffing with expertise that is current and shall ensure that its staff maintains a satisfactory level of knowledge and skills necessary to perform assigned tasks. Contractor staff shall not perform tasks they are not qualified to carry out.

Section C18.

Staff Assistance

Contractor shall provide an exclusive business liaison and customer service representative for the administration of the contract and service to the Government and its borrowers. Contractor shall identify the key personnel and designate their respective areas of responsibility for the Contract. The contractor shall not remove or divert any of the named "key personnel" from the contract unless the Contracting Officer (CO) and Contracting Officer's Technical Representative (COTR) consents. Replacement of key personnel without Government consent or failure to provide qualified key personnel who the Government can approve to replace departing key personnel can be cause for termination for default. Contractor shall provide the names, addresses, email address and telephone/fax numbers of the staff that shall be responsible for the ongoing resolution of claims, lender placed policy or billing issues, or general inquiries for each given geographic area of the United States. Contractor shall provide a toll free telephone number for the use by the Government staff and borrowers.

Section C19.

Transfer to Follow-On Contract

After expiration of this contract, if the contractor on the present contract is not selected for a follow-on contract, the Contractor shall honor any loss claims incurred prior to the expiration of this contract through each policy's renewal, and cooperate in the conversion of the files to the Contractor for the follow-on contract. This shall include but not be limited to the following:

1.

Attend periodic status meetings.

2.

Furnish written responses to outstanding issues or problems. Provide electronic transmission of all data related to Government loans in a format selected by the Government.

4.

Resolve and correct all identified issues surrounding loans with lender placed insurance.

5.

Provide interpretation of both system and loan level documentation.

Section C20.

Period of Performance

Base Period = Date of Award (DOA) to 12 Months after DOA

Option Period I = 12 Months after DOA to 24 Months after DOA

Option Period II = 24 Months after DOA to 36 Months after DOA

Option Period III = 36 Months after DOA to 48 Months after DOA

Option Period IV = 48 Months after DOA to 60 Months after DOA

Section C21.

Key Personnel The Government has designated the following positions as the Key Personnel positions for the overall effort.

1.

Business Liaison

2.

Project Manager

3.

Subject Matter Expert

4.

Customer Service Representative

Any proposed changes to the Key Personnel shall be made by written notice to the Contracting Officer (CO). No changes to key personnel without Contracting Officer and Contracting Officer Technical Representative approval.

C21.1 Skill Category Requirements

The Contractor shall provide the skilled personnel including resumes of the Key Personnel necessary to successfully meet the government’s requirements. The government reserves the right to accept or reject personnel based on individual resumes and contract requirements. Further, the government reserves the right to review the resumes of any proposed individual for work under this contract. Should the continued assignment to this contract of any person in the Contractor's organization be deemed by the government to conflict with the interest of the government, the Contractor shall be required to remove that person from the assignment and replace him/her with an individual of comparable or better qualifications, approved by the COTR.

The Contractor and its employees shall conduct only business covered by this contract during periods paid for by the government and will not conduct any other business on government premises. Contractor personnel shall abide by the normal rules and regulations applicable to the government premises on which they work, including any applicable safety and security regulations.

C22

Annual Certifications

The Contractor shall submit an annual conflict of interest certification to the CO. In this certification, the Contractor shall certify annually that, to the best of the Contractor’s knowledge and belief, all actual or potential organizational conflicts of interest have been reported to the USDA/RD. In addition, in this annual certification, the Contractor shall certify that it has informed its personnel who perform work under USDA/RD contracts or relating to USDA/RD contracts of their obligation to report personal and organizational conflicts of interest to the Contractor. Such certification shall be signed by a senior executive of the company and submitted in accordance with instructions provided by the CO. As applicable, the initial certification shall cover the one-year period from the date of contract award, and all subsequent certifications shall cover successive annual periods thereafter, until expiration or termination of the contract. The certification shall be received by the CO no later than 45 days after the beginning of the certification period covered.

C23

Standards of Conduct and Restrictions

Contractor personnel shall not:

1. Conduct business not directly related to this contract on USDA/RD premises;

2. Use USDA/RD computer systems and/or other USDA/RD facilities for company or personal business; or

3. Recruit on USDA/RD premises or otherwise act to disrupt official USDA/RD business.

C23.1 Ownership of Data

During the course of this contract during the performance of some of the individual task orders, the Contractor shall create and maintain databases that are used in support of processing inquiries and contain information such as scripted responses, topical information entries, business rules, preformatted responses, personal information, transaction histories, and agency contacts. The Contractor shall also capture and store certain inquiry data in Contractor-provided and/or USDA/RD provided databases. All of this information is the property of the USDA/RD. At the conclusion of the contract and, or upon termination of this contract, all information resources developed in support of the contract, including any databases and associated formats and all tools, shall be turned over to the USDA/RD in their entirety. Should the contract terminate for any reason, the Contractor shall arrange for the timely transfer of such data records to the USDA/RD. The Contractor shall not keep any information resources, paper, or electronic copies of information after the completion or termination of the contract without the express written consent of the CO. If the software systems are not commercially available at that time, the Contractor shall sell or license the software to the USDA/RD at a mutually agreed upon price.

All working papers, documents, photocopies, computer data and any other information of any kind collected, generated or received by the Contractor in connection with the contract work are the property of the USDA/RD and shall be provided to it upon termination of the contract; i.e., the date on which final payment by the United States is made on the contract, or at such other time as may be requested by the CO.

C23.2 Contingencies

The Contractor shall ensure continuity of operations throughout the duration of this contract. The Contractor shall be responsible for maintaining continuity of support for all work under this contract. Contractor employment and staffing difficulties shall not be acceptable justification for failure to meet the requirements of the Statement of Work (SOW).

Upon request by the Contracting Officer, the Contractor shall submit a contingency plan to the COR for approval by the USDA/RD. The plan shall outline the Contractor’s response to operational problems and unusual events that may occur during the life of the contract and disrupt operations. For example, a structural fire, accident, terrorist attack, personnel strike, extended power failure, etc., may require the Contractor to proceed under altered work conditions at locations other than those originally established. The Contractor shall continue to provide the services required by the contract, as directed by the CO or COTR, for the duration of such an emergency situation.

C23.3

Removal of Contractor Personnel

The CO may require removal from work on the contract of those Contractor employees who he/she deems incompetent, careless, insubordinate, unsuitable or otherwise objectionable, or whose continued employment on the contract he/she deems contrary to the public interest or inconsistent with the best interests of the USDA/RD.

In the event that the performance of assigned Contractor personnel or any substitute(s) is determined by the USDA/RD to be unsatisfactory at any time during the life of the contract, the USDA/RD reserves the right to request and receive satisfactory personnel replacement within five (5) calendar days of receipt by the Contractor of written notification. To the extent permitted by law, the USDA/RD’s written notification shall include the reason for requesting replacement personnel.

C23.4

Customer and Government Information Confidentiality

The Government and the Government’s customers’ confidential information shall mean and refer to all tangible or intangible information and materials, in any form or medium, provided to or from the vendor.

The awardee shall:

1. Safeguard all customer and government data and information to strict standards of security and confidentiality.

2. Permit only…