Sources_Sought.docx

Sources Sought Property Disposition Appraisal Services

Introduction

Purpose: The U.S. Department of Housing and Urban Development (HUD) Office of Property Disposition Division (PDD) is seeking is seeking information that will assist in procurement of contractor support to provide Multifamily and Health Care Facilities appraisal services. The period of performance shall be for one base period of 12 months and four 12-month option periods. The services to be performed under this contract shall be performed at the property assigned per task order. This contract is Nationwide covering the entire United States including Alaska, Hawaii, The Caribbean (Puerto Rico and U.S. Virgin Islands).

Background: Appraisals completed for the purpose of the Property Disposition Division (PDD) are for defaulted assets and the difficult properties such as nursing homes, assisted living facilities, group homes, and properties that are so deteriorated there isn't comparable properties in the area. PD requires the appraiser to provide an as-is appraisal meaning as the property sits with no rehab and an appraisal as if the property was fully rehabbed. In most cases, the appraisal will be based on the current condition of the subject property and status as an income producing property. Unlike an appraisal completed for the Section 223(f) program, the value determination will not be made subject to repairs.

Description of Services:

1. Multifamily Appraisal- The Contractor shall submit State License certificate for the state in which the subject property is located.

1.1 The Contractor shall ensure content of report is consistent with USPAP Standards Rule 2.

a. Does my report clearly and accurately set forth the appraisal in a manner that is not misleading?

b. Does my report contain sufficient information to enable the intended users of the appraisal to understand the report properly?

c. Does my report clearly and accurately disclose any extraordinary assumption, hypothetical condition, or limiting condition that directly affects the appraisal and have I indicated its impact on value?

d. Does my report prominently state which report option I have used?

e. Does my report state the identity of the client and any intended users?

f. Does my report state the intended use?

g. Does my report provide sufficient information based on the report option to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment?

h. Is the real property interest appraised clearly stated?

i. Does my report state the purpose of the appraisal, including the type and definition of value and its source?

j. Is the effective date of the appraisal and the date of the report clearly stated?

k. Have I provided sufficient information based on the report option to clearly and accurately disclose to the client and any intended users of the appraisal the scope of work used to develop the appraisal?

l. Does my report state all assumptions, hypothetical conditions and limiting conditions that affected the analyses, opinions, and conclusions?

m. Does my report provide enough information based on the report option to properly explain the information analyzed, the appraisal procedures followed and the reasoning that supports the

n. analyses, opinions, and conclusions?

o. Have I stated the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and when the purpose of the assignment is market value, have I provided sufficient information based on the report option to support the rationale for my opinion of the highest and best use of the real estate?

p. Have I explained any permitted departures from specific requirements of Standard One and the reason for excluding any of the usual valuation approaches?

q. Have I included a signed certification in accordance with standard Rule 2-3?

1.2 General Standards. The actual textbook standards should be in accordance with applicable textbooks as published by the Appraisal Institute, as supplemented by the guidance in this document.

a. Client/Intended User. In cases where the Department directly engages the appraiser, the Client shall be identified as the U. S. Department of Housing and Urban Development. In cases where a contractor is employed by the Department to obtain appraisal services, the Client shall be identified as the name of the contractor, with HUD identified as the intended user.

b. Effective Date. appraisals must have an effective date within 15 calendar days before the date of submission to the Department. HUD defines the effective date as the most current date that the appraiser inspected the subject, and comparables and developed estimates of rents and expenses. The Department recognizes that occasionally there may be situations where the Inspection Date and Effective Date may differ due to the availability of more current market information. This should be noted in the appraisal report. If there are any questions, the Multifamily Production Regional office should be consulted.

c. Brevity. The appraisal report should be clear and concise. The appraiser should reference in the body of the report conclusions derived by the analysis of large tables of data and the actual data should be included as an addendum. Verbatim quotations of large portions of published national and regional reports should be avoided. Appraisals must be submitted as an electronic searchable PDF file. Copies submitted for review and acceptance must be completely legible with color photographs.

d. Complex or Unusual Appraisal Assignments. When an appraisal assignment involves a subject with property rights issues or other unusual circumstances, appraisers must be sure to comply with USPAP Standards Rule 1-1(a), "In developing a real property appraisal, an appraiser must be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal. When these issues occur, the the appraiser through the contractor (if identified) should consult with the Regional Multifamily Center before appraisal assignment begins.

HUD is the regulatory enforcement agency identified in the Confidentiality Rule of USPAP. Appraisers will be required to present their entire work file and fully disclose the identity and source of confidential information should the Department determine a review of the appraisers work file is in order. (Note that, per USPAP, disclosure to enforcement agencies does not constitute a violation of the Confidentiality Rule.)

e. Occupancy Percentage. The occupancy used in the valuation of properties for Property Disposition must be based on the occupancy that is prevalent for the subjects area, be thoroughly supported by analysis of market data and take into account the historical performance of the subject. The appraiser should ignore unsustainable market conditions and short-term spikes in the occupancy rate due to seasonal changes and short-term demand for specialized employment, e.g. disaster relief workers.

f. Inspection of the Subject and Comparables. The primary appraiser designated by the lender and accepted by HUD must physically inspect the subject (both exterior and interior) and all of the Comparables used as part of the analysis. The primary appraiser must also sign the Certification within the appraisal report and the supporting HUD forms.

g. The primary appraiser must inspect at least one of each bedroom/unit type. The total number of units inspected must equal or exceed 5% of the total number of units for projects of up to 200-units, or 4% of the total number of units for projects greater than 200-units. If the characteristics and/or condition of the subject indicate that a higher level of inspection is necessary, it is the appraiser's responsibility to expand the scope of the work may be necessitated by the observations made by the primary appraiser during the inspection of the subject. This is especially important where the improvements are high-rise structures and individual units within the building demonstrate varying degrees of light and view qualities. If there are hazardous conditions or other factors that preclude a thorough inspection of the interior, the appraiser must clearly indicate these circumstances in the appraisal report.

h. For large projects exceeding 500 units, the Department may permit a lesser percentage but reasonable number of units to be inspected by the appraiser. In addition, the appraiser may employ assistants to inspect individual units so as to encourage a thorough inspection. The names and qualifications of these assistants must be disclosed in the appraisal report. The assistants are not required to sign the report.

i. The primary appraiser must inspect all of the Comparables used in deriving and estimate of value, including land Comparables (if applicable), improved Comparables sales, expense Comparables and rental Comparables. The appraiser must verify the condition of the Comparables with management or other personnel familiar with the project whose contact information must be documented in the appraisal report.

j. Required Appraisal Report Exhibits. Photographs (subject, and all comparables including rentals), regional map, location map, satellite scans (if available from Google, Bing, etc.), flood hazard map, survey (if available), floor plans (for each type of unit being offered - if available), site plan, zoning map, tax map, land sales comparable map, rental comparable map, and improved sales comparable map are required with all submissions.

k. Highest and Best Use (HBU) Analysis. As previously discussed an HBU must be completed in all cases. Unless otherwise directed, the subject will be appraised based on its HBU.

l. Market Analysis Requirements for Multifamily Appraisals. The appraisal must also contain, depending on the complexity of the project and prevailing market conditions, a Level B or C Market Analysis of the local market with an emphasis on multifamily housing so as to determine the ability of an existing project to continue usage as multifamily housing.

2. Health Care Appraisals- The Contractor shall submit documentation for appraiser and appraiser firm

2.1 The Contractor shall format and present clearly and accurately for health care appraisal.

The appraisal must be clearly and accurately set forth in a manner that is not misleading. The appraisal must contain enough information to enable the OHP to properly understand the appraisal. The appraisal must clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions utilized in the appraisal process. The development of the appraisal must comply with USPAP Standards Rule 1, the Scope of Work Rule and assignment conditions outlined in this document.

The appraisal report must be prepared in a narrative format, comply with USPAP Standards Rule 2, and contain all of the information necessary to easily understand the appraisers reasoning.

The appraiser must provide to HUD a signed electronic version of the appraisal report.

2.2 The Contractor shall assure content of report is consistent with PDD Requirements.

a. Include a transmittal letter and cover page.

b. State all extraordinary assumptions and hypothetical conditions and state that their use might have affected the assignment results. Unlike an appraisal completed for the Section 223(f) program, the value determination will not be made subject to repairs.

c. Include a clear and accurate description of the "Appraisal Process including the appraisal methodologies applied, approaches used, and the reasoning that supports the analyses, opinions and conclusions. Exclusion of the Sales Comparison Approach, Cost Approach, or Income Approach must be explained.

d. Clearly state the client, intended users (i.e., HUD and its representatives), and the intended use of the appraisal. When HUD directly engages the appraiser, the client shall be identified as HUD. If a contractor is employed by HUD to obtain appraisal services, the client shall be identified as the name of the contractor, with HUD identified as the intended user.

e. Identify the property including the physical and economic property characteristics relevant to the assignment.

f. State the real property interest(s) appraised (fee simple estate and/or identified easements or other encumbrances).

g. As the value is for disposition of the business enterprise, the purpose of the appraisal is to estimate the Market Value of the Total Assets of the Business (MVTAB) as described in The Healthcare Mortgage Insurance Program Handbook (4232.1) Section 232 of the National Housing Act Office of Residential Care Facilities Chapter 5 - Appraisals and Market Studies Section 5.3 D. There are times when the highest and best use would indicate that the value is based only the real estate, and no value will be attributed to the business.

h. Include a Scope of Work as required by USPAP. The Scope of Work should include the project identification, the extent of the appraiser’s inspection, the type and extent of data researched and the kind of analysis needed to arrive at opinions or conclusions.

i. State the date of report, date of site visit, effective date of value, and a reasonable exposure time. Appraisals must have an effective date within 90 calendar days before the date of submission to the HUD. Typically, the effective date will be the date that the appraiser last inspected the property. The Department recognizes that occasionally there may be situations where the Inspection Date and Effective Date may differ due to the availability of more current market information. This should be noted in the appraisal report. If there are any questions, ORCF should be consulted.

j. State the property’s use as of the effective date of value.

k. Document the support and rationale for the appraiser’s opinion of highest and best use.

l. Include a signed and dated certification of value.

m. Include a market analysis consistent with Healthcare Mortgage Insurance Program Handbook (4232.1) Section 232 of the National Housing Act Office of Residential Care Facilities Chapter 5 - Appraisals and Market Studies Section 5.3 Q. Truncated market studies are not acceptable.

n. The appraiser must inspect the interiors and exterior of all buildings and at a minimum inspect from the exterior and all of the rent comparables. An explanation is required when a complete inspection is not possible due safety and/or access issues.

o. The appraiser should inspect all of the sales comparables. When the sales are not inspected due to distance the appraiser must provide an explanation why the sales comparables were not inspected. If the reasoning set forth in the appraisal why the property was not inspected is unacceptable, it will be at the discretion of HUD if sales inspections will be required.

p. If relevant information is not available because of assignment conditions or that limit research opportunities (such as conditions that place limitations on inspection or information gathering) the appraiser must immediately contact CO. It will be at the discretion of CO to modify the assignment conditions, change the scope of work alter the required information or use an extraordinary assumption

HUD has identified the North American Classification System (NAICS) Code 531320 Offices of Real Estate Appraisers Business Standard is $7.5 million, Product and Service Codes R411 (SUPPORT- PROFESSIONAL: REAL PROPERTY APPRAISALS) Teaming arrangements and joint ventures will be considered for any subsequent procurement based on the Government's market research, provided that the prime contract is awarded to an applicable small business and that small businesses provide fifty percent or more of the support.

This Sources Sought is requesting for information from interested entities to provide the capability statement shall address, at a minimum, the following for the past three years:

1. Name and address of company and or companies (if there is a teaming arrangement or joint venture);

1. Technical expertise relevant to the requirement;

1. Technical approach relevant of the requirement (1 to 2 paragraphs);

1. Management approach relevant to the requirement (1 to 2 paragraph);

1. Corporate experience relevant to the requirement (1 to 2 paragraph);

1. Indicate if you are a small business or any other socio-economic categories that apply to your firm under the designated NAICS code;

1. Whether you have had unequal access to any information relevant to the acquisition that could provide an unfair competitive advantage;

1. Relevant past performance. Your capability statement needs to include a list of three customers (Government/non-Government) within the past three (3) years highlighting similar work in nature, scope, complexity, and difficulty and a brief description of the scope of work. Your submission for relevant past performance must include for each customer:

· Contract name;

· Contracting Agency or Department, POC and contact information;

· Yearly contract value (in $$);

· Whether your firm was the prime or a subcontractor;

· Period of performance;

· Description of work and how it relates to the requirements.

Interested firms responding to this market survey must provide a capability statement demonstrating their experience, skills and capability to fulfill the Governments requirements for the above. The capability statement shall be in sufficient enough detail, but not exceed 3 pages TOTAL, so that the Government can determine the experience and capability of your firm to provide the requirements above. Please specify one primary and one alternate Point of Contact (POC) within your firm, including telephone numbers and email addresses in case clarifications of your submission are needed.

Only electronic copies of capability statements will be accepted and should be emailed to: Christopher.S.Stuart@HUD.gov. The e-mail shall contain the following subject line: Response to Sources Sought Notice – Property Disposition Appraisal Services Requirement. The Government may use the responses received to determine whether to proceed with the acquisition as a set-aside, or in the absence of a least two small business responses to this notice, may determine to proceed with a full and open competition. This decision and whether to proceed with the acquisition is at the sole discretion of the Government.

Please respond to the below individual with your interest by March 18, 2019 at 1400 (2:00 pm) Mountain Time.

Contracting Office Address:

U.S. Department of Housing and Urban Development 1670 Broadway, 23rd Floor Denver, CO 80202-4801

Primary Point of Contact:

Christopher Stuart Contract Officer Christopher.S.Stuart@hud.gov Phone: (303) 672-5278