PWS_-_DRAFT_-_FBO_-_6.15.15.pdf

SECTION C – PERFORMANCE WORK STATEMENT

C-1 GENERAL INFORMATION

1.1 General: The Department of Housing and Urban Development (HUD)/Office of Asset Management and Portfolio Oversight (OAMPO) is seeking contractor support to provide Mortgage Loan Servicing (MLS) for Conventional, Mark-to-Market (M2M) / DEMO Notes; Property Disposition Portfolio Services; Risk Sharing and Direct Loan Services; as well as Accounting Services for all HUD-Held notes.

The work performed under this performance work statement (PWS) encompasses a broad but integrated set of functions for HUD-Held notes and properties. MLS is a high priority and critical to the successful performance of mortgage loan servicing functions.

MLS for mortgage and property servicing entails not only financial aspects of the HUD- Held first, second and subordinate notes, mortgage portfolios and properties, but also requires response to a wide variety of incoming inquiries from HUD personnel, borrowers, auditors, billing agents, vendors, attorneys and local taxing authorities.

The transactions in this program involve not only the financial management of the assets owned by the Department and managed under Federal legislation, regulation and HUD’s program directives, but also responsiveness to local laws. Servicing the asset involves much more than just the application of collections. It also involves the protection of the government’s ability to collect what is owed by establishing accurate, consistent, reliable and timely records along with monitoring, analyzing and reporting results. The data and analysis from these activities are provided to a number of offices throughout the Department to report on the assets’ financial results and the performance of the programs that HUD administers. These data elements enable HUD to carryout important evaluations of program costs and solvency of the FHA insurance funds.

1.2 Background: HUD insures multifamily mortgages under a variety of Federal Housing Administration (FHA) programs. The Department assumes the role of mortgagee or lender when the borrower defaults on the loan. Defaulted loans become HUD-Held loans under certain circumstances that include:

(1) the borrower defaults and the FHA-insured mortgagee assigns the mortgage to HUD by filing a claim for insurance benefits;

(2) a current mortgage is assigned to HUD by the mortgagee pursuant to 221(g)(4) of the National Housing Act;

(3) when a purchase money mortgagee is taken back by HUD to finance the sale of the property owned by HUD;

(4) when an FHA-insured loan is backed by the Federal Financial Bank (FFB) a direct loan issued to a Housing Finance Agency under the 542(b) or 542(c) Risk Share Program; or

(5) an FHA-insured or HUD-Held first mortgage is restructured under the “Mark-to- Market” (or “DEMO”) program which results in one or more new subordinate HUD-Held mortgages are originated.

Collectively, this portfolio is referred to as the HUD-Held portfolio. HUD also manages multifamily properties as Mortgagee-in-possession (MIP) or owner and relocates tenants from substandard multifamily properties. Accounting services are needed to support and track all property management and relocation financial transactions.

HUD utilizes a Minority Bank Program designed to invest excess cash from the projects’ Reserve for Replacement account into the minority banks in an effort to earn interest on these funds. Currently, there are 8 small, minority banks participating in this program managing approximately $35 million.

1.2.1 Risk Share Program and Direct Loans: The legal authority of the Housing and Community Development Act of 1992, Section 542, allows HUD to provide a form of Federal credit enhancement for multifamily projects through a risk-sharing partnership with a state or local Housing Finance Agency (HFA), or with a Qualified Participating Entity (QPE), such as Fannie Mae, Freddie Mac.

Section 542(c) enables HUD, State, and local HFAs to provide new risk-sharing arrangements to help those agencies provide more insurance and credit for multifamily loans. Section 542(c) provides credit enhancement for mortgages of multifamily housing projects whose loans are underwritten, processed, serviced, and disposed of by HFAs. HUD and the HFA share in the risk of the mortgage.

Under Section 542(b), HUD provides insurance on multifamily housing projects whose mortgage loans are originated, underwritten, serviced, and disposed of by QPEs and/or approved lenders. Section 542(b) encourages the development and preservation of affordable housing. HUD's mortgage credit enhancements are used to support the underwriting and production strengths of Fannie Mae, Freddie Mac, qualified Federal, State, and local public financial and housing institutions.

The FFB is a unit within the Treasury Department that focuses on reducing the cost of federally-assisted borrowing. The FFB Risk Share program is an inter-agency partnership between HUD, FFB and the Housing Development Corporations (HDC) to develop a Ginnie Mae like financing execution for HFAs that would be budget neutral and require no Congressional action. Specifically, the FFB would provide funding for multifamily mortgage loans insured by FHA under its Risk Sharing programs. FFB would not securitize the mortgages; rather, FFB would purchase certificates or securities backed by the FHA-insured mortgages. The funding is currently referred to as a FFB Direct Loan.

The proposed program would not change the basic structure of Risk Sharing; it would only substitute FFB as the funding source. The HDC would originate and service the loans and share in any losses. Meanwhile, FHA would be liable to FFB for any claim payments of the mortgage insurance. Generally, the program will have the same risks to the GI/SRI fund that are associated with the traditional risk share program.

1.2.2 Property Disposition Division: The Property Disposition Division is in charge of the sale of HUD-Held and HUD-Owned properties, management of MIP and HUD- Owned properties and the relocation of tenants when required. Relocation is completed through a separate contract, but accounting processes will be covered under this PWS.

The current portfolio consists of approximately 5,000 units.

1.2.3 Current Environment: HUD services approximately 2500 HUD-Held Notes, of which approximately 1300 are billed annually under the Mark-to-Market/DEMO (M2M) program. Approximately 900 notes in the M2M/DEMO are subordinate notes and do not require payment until satisfaction of the senior position M2M/DEMO note.

Approximately 70 are pre-payments of claim notes (PPC) which have terms similar to the Mark-to-market notes. There are also approximately 200 conventional notes that are billed monthly.

Note trends within this collective portfolio vary. Currently, the portfolio consists of approximately 2500 notes. For the fiscal year 2014 and into 2015, the Department is servicing approximately 2400 notes. The portfolio can vary depending on the number of new assignments which will add notes to the portfolio and payoff and/or fully amortized notes which will reduce the number of notes in the portfolio.

1.3 Objective: The objective of this requirement is to obtain contractor support to provide note servicing for a variety of notes held within the HUD-Held Portfolio. By obtaining these services, HUD will be in a position to use more innovative technology and methodology in an effort to improve the way the Department does business.

1.4 Constraints: The services identified in this PWS will adhere to the rules, regulations, laws, standards and conventions identified by HUD as well as within the Federal Government. Constraints include the list of regulations below. With changing and new regulations being issued, this list is not all inclusive of future regulations and guidance which may be issued. The contractor is responsible for adhering to new regulations and guidances as they are implemented.

Document

Number

TITLE

Released Mandatory

Advisory

44 USC

§3541 et seq.

Federal Information Security Management Act (FISMA, supersedes the Computer Security Act of 1987)

2002 M

44 USC

§3601 et seq.

E-Government Act of 2002 2002 M

TITLE

Released Mandatory

Advisory

Pub. L. 101-

576, 31 USC

§501 et seq.

Chief Financial Officers Act of 1990 http://www.fda.gov/oc/reform/cfoagmra2/cfoagmra.htm

1990 M

Pub. L. 93-

344, 2 USC

§661

Federal Credit Reform Act of 1990 http://www.fms.treas.gov/ussgl/creditreform/fcratoc.html

1990 M

Pub. L. 97-

255, 31 USC

§3512

Federal Managers’ Financial Integrity Act (FMFIA) http://www.whitehouse.gov/omb/financial/fmfia1982.html

1982 M

Pub. L. 103-

62, 31 USC

Government Performance and Results Act (GPRA) http://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m.html

1993 M

Pub. L. 103-

356, 31 USC

Federal Financial Management Act of 1994 http://www.whitehouse.gov/omb/financial/fm_systems.html

1994 M

Pub. L. 104-

208, 31 USC

Federal Financial Management Improvement Act of 1996 http://www.whitehouse.gov/omb/financial/fm_systems.html

1996 M

Pub. L. 104-

106, 40 USC

§1401 et seq.

Information Technology Management Reform Act of 1996

(Clinger-Cohen Act)

1996 M

31 USC §

9101 ET

SEQ.

Government Corporation Control Act 1948 M

Pub. L. 101-

235, 12 USC

1709(f-16)

HUD Reform Act, amending the National Housing Act 1989 M

Pub. L. 105-

277, 44 USC

§3504

Government Paperwork Elimination Act http://www.whitehouse.gov/omb/fedreg/gpea2.html

1998 M

Pub. L. 105-

220, 29 USC

701 et seq.

Section 508 of the Rehabilitation Act of 1998 1998 M

Pub. L. 97-

365, 31 USC

§3301et seq

Debt Collection Act of 1982 1982 M

Pub. L. 104-

134, 31 USC

§3701 et seq.

Debt Collection Improvement Act of 1996 1996 M

Pub. L. 97-

177, 31 USC

§3901 et seq.

Prompt Payment Act 1990 M

Pub. L. 107-

300, 31 USC

§3321

Improper Payments Information Act of 2002 2002 M http://www.fda.gov/oc/reform/cfoagmra2/cfoagmra.htm http://www.fms.treas.gov/ussgl/creditreform/fcratoc.html http://www.whitehouse.gov/omb/financial/fmfia1982.html http://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m.html http://www.whitehouse.gov/omb/financial/fm_systems.html http://www.whitehouse.gov/omb/financial/fm_systems.html http://www.whitehouse.gov/omb/fedreg/gpea2.html

TITLE

Released Mandatory

Advisory

OMB

Circular A-

Preparation, Submission and Execution of the Budget http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Circular A-

11, Part 3

"Planning, Budgeting, and Acquisition of Capital Assets" http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Circular A-

Management Accountability and Control http://www.whitehouse.gov/omb/circulars/a127/a127.html

Latest version

M

OMB

Circular A-

OMB Circular A-125, Prompt Pay http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Circular A-

Policies and Standards for Financial Management Systems http://www.whitehouse.gov/omb/circulars/a127/a127.html

Latest version

M

OMB

Circular A-

"Security of Federal Automated Information Resources"

(Appendix III) http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Circular A-

Management of Federal Information Resources http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Circular A-

"Security of Federal Automated Information Resources"

(Appendix III) (see also 34 FR 6428) http://www.whitehouse.gov/omb/circulars/index.html

Latest version

M

OMB

Memorandu m 99-20

"Security of Federal Automated Information Resources" http://www.whitehouse.gov/omb/memoranda/index.html

1999 M

OMB

Memorandu m 06-15

“Safeguarding Personally identifiable Information” http://www.whitehouse.gov/omb/memoranda/index.html

2006 M

OMB

Memorandu m 06-16

“Protection of Sensitive Agency Information” http://www.whitehouse.gov/omb/memoranda/index.html

2006 M

OMB

Memorandu m 06-19

“Reporting Incidents Involving PII” http://www.whitehouse.gov/omb/memoranda/index.html

2006 M

OMB

Memorandu m 06-20

“Reporting Instructions for the Federal Information Security

Act and Agency Privacy Management” http://www.whitehouse.gov/omb/memoranda/index.html

2006 M

PDD-63 “Critical Infrastructure Protection,” Presidential Decision

Directive-63

1998 M

HSPD-12

“Policy for a Common Identification Standard for Federal

Employees and Contractors,” Home Security Presidential

Directive-12

2004 M http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/index.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/circulars/a127/a127.html http://www.whitehouse.gov/omb/memoranda/index.html http://www.whitehouse.gov/omb/memoranda/index.html http://www.whitehouse.gov/omb/memoranda/index.html http://www.whitehouse.gov/omb/memoranda/index.html http://www.whitehouse.gov/omb/memoranda/index.html

TITLE

Released Mandatory

Advisory

OFFM Joint Financial Management Improvement Program, Core

Financial System Requirements www.jfmip.gov

February

M

OFFM Joint Financial Management Improvement Program, Guaranteed Loan System Requirements www.jfmip.gov

Mar 2000 M

OFFM Joint Financial Management Improvement Program, Direct

Loan System Requirements www.jfmip.gov

June 1999 M

JFMIP SR-

02-02

Acquisition/Financial System Interface Requirements June 2002 M

U.S. Government Chief Financial Officer’s (CFO) Council, Financial Management Systems Compliance Review Guide http://www.cfoc.gov/

Oct 1999 M

NIST

Special

Publication

800-12

"An Introduction to Computer Security: The NIST

Handbook"

Oct 1995 M

NIST

Special

Publication

800-14

"Generally Accepted Principles and Practices for Securing

Information Technology Systems"

Sep 1996 M

NIST

Special

Publication

800-18

"Guide for Developing Security Plans for Federal

Information Systems"

Feb 1996 A

NIST

Special

Publication

800-26

"Security Self-Assessment Guide for Information

Technology Systems"

Nov 2001 M

NIST

Special

Publication

800-26, Rev.

"Guide for Information System Assessments and Program

Reporting "

TBD A

NIST

Special

Publication

800-30

Rev.1

"Risk Management Guide for Information Technology

Systems"

Jul 2002 M

NIST

Special

Publication

800-34

"Contingency Planning Guide for Information Technology

Systems"

Jun 2002 M http://www.jfmip.gov/ http://www.jfmip.gov/ http://www.jfmip.gov/

TITLE

Released Mandatory

Advisory

NIST

Special

Publication

800-35

Rev.1

"Guide to Information Technology Security Services" Oct 2003 M

NIST

Special

Publication

800-37

Rev.1

"Guide for the Security Certification and Accreditation of

Federal Information Systems"

Feb 1996 M

NIST

Special

Publication

800-47

"Security Guide for Interconnecting Information Technology

Systems"

Aug 2002 A

NIST

Special

Publication

800-53

"Recommended Security Controls for Federal Information

Systems"

Feb 2005 A

NIST

Special

Publication

800-53, Rev.

"Recommended Security Controls for Federal Information

Systems" http://nvlpubs.nist.gov/nistpubs/SpecialPublication/NIST.SP.

800-53r4.pdf

Dec 2006 A

NIST

Special

Publication

800-55

"Security Metrics Guide for Information Technology

Systems"

Jul 2003 A

NIST

Special

Publication

800-60

"Guide for Mapping Types of Information and Information

Systems to Security Categories"

Jun 2004 A

NIST

Special

Publication

800-64

"Security Considerations in the Information System

Development Life Cycle"

Oct 2003 A

NIST

Special

Publication

800-65

"Integrating Security into the Capital Planning and

Investment Control Process"

Jan 2005 A

NIST Draft

Special

Publication

800-80

"Guide for Developing Performance Metrics for Information

Security"

TBD A

NIST Draft

Special

Publication

800-82

"Guide to Supervisory Control and Data Acquisition

(SCADA) and Industrial Control Systems Security"

TBD A

TITLE

Released Mandatory

Advisory

NIST

Special

Publication

800-84

"Guide to Test, Training and Exercise Programs for IT Plans and Capabilities"

Sep 2006 M

NIST

Special

Publication

800-100

"Information Security Handbook: A Guide for Managers” Oct 2006 A

US SGL United States Standard General Ledger http://www.fms.treas.gov

Fed-GAAP Federal-based GAAP Compliant Summary Transactions www.fasab.gov/concepts.htm

M

SF-224 Statement of Transactions Report www.fms.treas.gov

General

Accounting

Office, GAO-02-45

HUD MANAGEMENT: Progress Made on Management

Reforms, but Challenges Remain

October

A

GAO/AIMD

-00-33

"Information Security Risk Assessment Practices of Leading

Organizations"

Nov 1999 A

Federal Accounting Standards Advisory Board (FASAB)

Statement 4 Managerial Cost Accounting Concepts and

Standards http://www.fasab.gov/concepts.htm

M

SAS-70 Statement of Auditing Standards (SAS) No. 70 developed by the American Institute of Certified Public Accountants

(AICPA)

M

HUD

Handbook

1325.01, REV-01

Privacy Act Handbook Sept 1995 M

HUD Enterprise Architecture Policy www.hud.gov/offices/cio/ea/index.cfm

Current version

M

HUD’s System Development Methodology (SDM) http://www.hud.gov/offices/cio/sdm/index.cfm

Current version

M

HUD Cost/Benefit Analysis Methodology, Volume I –

Methodology

Current version

M

HUD Cost/Benefit Analysis Methodology, Volume II –

Workbook

Current version

A

‘Project Leader Help Guide’ http://hudatwork.hud.gov/po/i/it/sd/guide/guide.cfm

Current version

A

Federal Housing Administration (FHA), Section of the

National Housing Act, in the U.S. Code at 12 USC 1701 et seq., M

Commercial GAAP Current

Version

M http://www.fms.treas.gov/ http://www.fasab.gov/concepts.htm http://www.fms.treas.gov/ http://www.hud.gov/offices/cio/ea/index.cfm http://www.hud.gov/offices/cio/sdm/index.cfm

TITLE

Released Mandatory

Advisory

HUD Code of Federal Regulations (CFR) Title 24 parts 200-

Current

Version

M

FHA Subsidiary Ledger (FHASL) Current

Version

M

OMB memorandum 11-32 “Accelerating Payments to Small

Businesses for Goods and Services”, Current

Version

M

31 U.S.C. §

Anti-Deficiency Act Current

Version

M

HUD Handbook 2400.6, ADP Security Policy Current

Version

IRS Publication 1075

Current

Version

M

PL 100-235 Computer Security Act of 1987 http://www.nist.gov/cfo/legislation/Public%20Law%20100-

235.pdf

Current

M

Records Management Handbook http://www.archives.gov/records-mgmt/handbook.

Current

1.4.1 System Requirements: The Contractor’s servicing system shall interface with the following integrated information management systems in production on ORACLE, Legacy or SYBASE infrastructure or platforms:

a ) FHA Subsidiary Ledger Interface (FHASL), which includes General Ledger Transactions, Cash Transactions, Commitments & Obligations, Daily Activities, and Transmission of financial data. FHASL supports all of the FHA’s mortgage insurance programs. This system interfaces with several other independent systems that support HUD programs.

b) Internal Revenue Service (IRS) Interface

c) Pay.gov (includes capability to upload to Treasury and download from Treasury)

d) CIR Interface - The lockbox servicers enter returned checks and rental receipts into the CIR database. This database provides users with an easy method of reconciling the daily deposit tickets and miscellaneous debit vouchers.

e) Treasury NTDO Disbursement System

g) Multifamily Warehouse Interface - HUD’s Multifamily Housing Data Warehouse is a single source of analytic data. The Warehouse contains project life cycle data pertinent to project operations that is retrieved monthly from source systems and stored in a database. Each month new data is loaded leaving the prior month's data accessible.

h) Online Property Integrated Information Suite (OPIIS) Data Mart Interface - OPIIS is a single source of analytic data. OPIIS contains project life cycle data pertinent to project operations that is retrieved bi-weekly from source systems and is stored in a data mart.

i) Integrated Real Estate Management System (iREMS) - iREMS is a single source of project level data and activity. Data is sent daily and includes, at a minimum, unpaid principal balance, last date of payment, and status.

j) Post-Closing Portfolio Manager (PCPM) Interface - Capacity to electronically transmit and receive data from the servicing system monthly.

k) Financial Data Mart Interface - A repository within the Financial Data Mart that contains information on all contracts that are tracked within the CFO’s accounting systems. Property management requirements are submitted to the Data Mart. The information relates to certain property management contracts that are tracked in HUD's Acquisition Management System by the CFO.

l) Inventory of Automated Systems (IAS)

m) Service Desk Tracking System

n) Line of Credit Control System (LOCCS)

Electronic Line of Credit Control System (ELOCCS) - A web-enabled module in LOCCS, which allows authorized Contract Administrators (CA), or representatives, to access the Line of Credit Control System (LOCCS).

o) HUD Automated Release Tracking System (HARTS)

p) File Transfer Repository (FTR) - HUD's financial systems server.

q) HUD Metropolitan Area Network

1.4.2 Document Storage Requirements: Loan servicing documents and correspondence must be stored in a facility which meets National Archives and Records Administration (NARA) storage facility requirements and be certified by NARA to store Government records. Refer to 36 CFR 1228.222 through 1228.224.

1.4.3 Hosting Platform: Must be approved in the Federal Risk& Authorization Management Program (FEDRAMP) and Govcloud.

1.5 Description of Services: The Contractor shall perform all notes servicing tasks for all HUD-Held notes, accounting for the property disposition portfolio, and all accounting functions required to service the entire Multifamily HUD-Held Portfolio.

Tasks shall include the following:

Note Servicing which includes:

o Conventional Mortgage Notes o Risk-Share Program and Direct Loan Program o Mark-to-Market, DEMO and Prepayment of Claim Notes o Payments on M2M/DEMO/PPC Notes o Transfer of Physical Asset (TPA) Process with M2M/DEMO Notes o Help Desk and Training Support

Property Disposition Portfolio Services

Uniform Commercial Code (UCC) Tracking and Filing

Document Retention and Storage

Accounting Services

Audit, Internal Control, System Support

Detailed descriptions of all tasks are provided in Section 5 – Specific Tasks and Deliverables.

1.6. Non Personal Services: The Government will neither supervise Contractor employees nor control the method by which the Contractor performs the required tasks.

Under no circumstances shall the Government assign tasks to, or prepare work schedules for, individual Contractor employees. It shall be the responsibility of the Contractor to manage its employees and to guard against any actions that are of the nature of personal services, or give the perception of personal services. It the Contractor feels any action constitutes, or are perceived to constitute personal services, it shall be the Contractor’s responsibility to notify the Contracting Officer immediately.

These services shall not be used to perform work of a policy, decision making or management nature, i.e. inherently Government functions. All decisions relative to programs supported by the Contactor shall be the sole responsibility of the Government.

1.7 Period of Performance: The Period of Performance shall be for one (1) 12-month base year and four (4) 12-month option years.

Base Year: September 30, 2015 through September 29, 2016 Option Year 1: September 30, 2016 through September 29, 2017 Option Year 2: September 30, 2017 through September 29, 2018 Option Year 3: September 30, 2018 through September 29, 2019 Option Year 4: September 30, 2019 through September 29, 2020

1.8 Place of Performance: The services to be performed under this contract shall be performed at the Contractor’s facility.

1.9 Hours of Operation: The Contractor is responsible for providing system services between the hours of 7:00am – 9:00pm Monday thru Friday except Federal holiday or when the Government facility is closed due to local or national emergencies, administrative closing, or similar Government directed facility closings. The Government reserves the right to change hours of operation. Work outside these daily hours is prohibited without Contracting Officer approval. Government agencies will not be available during scheduled holidays, inclement weather, weekends, after duty hours.

The Contractor shall notify HUD in writing if the system is scheduled to be inaccessible to HUD due to a foreseeable cause. Once approved by the GTR/GTM, all users shall be notified electronically no later than 24 hours before the system is scheduled to be inaccessible.

The Contractor must at all times maintain an adequate workforce for the uninterrupted performance of all tasks defined within the Contract when the Government facility is not closed for the above reasons. When hiring personnel, the Contractor shall keep in mind that the stability and continuity of the workforce is essential.

1.10 Post Award/Kickoff Conference: The Contractor shall attend any post award conference convened by the contracting activity or contract administration office in accordance with FAR Subpart 42.5. The Government intends to convene a Post Award Conference with the Contractor within ten business days after contract award. The Contracting Officer will notify the Contractor of the specific date, location and agenda.

1.11 Status Meetings: The Contracting Officer, Government Technical Representative (GTR), as appropriate may meet periodically with the Contractor to review Contractor performance, requirement status, and any other issues identified by the Government. At these meetings, the Contracting Officer may apprise the Contractor of how the Government views the Contractor’s performance or progress of the requirement. The Contractor will apprise the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings shall be at no additional cost to the Government. Post award conference and subsequent meetings may be held via teleconference.

1.12 Contractor Travel: Prior to travel, the Contractor shall coordinate with and receive Government authorization from the GTR for all travel. Reimbursement of travel costs will be in accordance with the Federal Travel Regulation in accordance with FAR 31.205-46. The Contractor shall travel using the lower cost mode transportation commensurate with the mission requirements. When necessary to use air travel, the Contractor shall use the tourist class, economy class or similar lodging accommodations to the extent they are available and commensurate with the mission requirements. HUD will not reimburse Contractor’s local travel. Local travel is defined as travel within fifty

(50) miles of Washington, DC. All other travel will be reimbursed on a cost reimbursable basis; no profit or fee will be paid.

1.13 Transition Period

1.13.1 Transition-In: The Contractor shall, upon the CO’s written notice, furnish Transition-In services as required. As a successor, the Contractor shall have sufficient personnel on board, at no additional cost to the Government, during the 90 day Transition-In period to ensure a smooth transition with the incumbent Contractor. The Contractor shall provide an orderly transition of work acceptance and accomplishment such that any impact to a program is minimized. During the Transition-In period, the Contractor shall become familiar with the requirements in order to commence full performance of services by the end of the contract Transition-In period. Transition-In is not required if the successor Contractor is the incumbent Contractor.

1.13.2 Transition-Out: To minimize any decrease in productivity and to prevent possible negative impacts on additional services, the Contractor shall have sufficient personnel on board, at no additional cost to the Government, during the 90 day Transition-Out period. The incumbent Contractor shall ensure a smooth transition with the successor Contractor during the Transition-Out period, prior to completion of contractual performance. The incumbent Contractor shall aid the successor in the development of plans, procedures and methods for the assumption of all on going work.

The Contractor shall provide an orderly transition of work acceptance and accomplishment.

C- 2 DEFINITIONS, ACRONYMS, APPLICABLE DOCUMENTS/PUBLICATIONS

2.1 DEFINITIONS

AFS Annual Financial Statements filed electronically by the owner with REAC in the FASS system. The annual payment amount on M2M and DEMO notes are derived from AFS data.

Cash Flow Notes Notes which are not fully amortizing and do not normally have required monthly payment terms, instead payments are due to HUD usually annually or semiannually and only from cash flow. M2M, DEMO and PPC notes are usually cash flow notes payable from Surplus Cash/Net Cash as defined in the loan documents.

Cash Transactions The payment and/or receipt of funds via ACH, EFT, Fedwires, IPAC, check or money order. A Cash Transaction for HUD purposes does not include actual receipt or expenditure of cash or paper money. (No cashiering).

COHORT Direct loans obligated or loan guarantees committed by a program in the same year. All pre-1992 direct loans shall constitute a single cohort. Pre-1992 loan guarantees shall constitute a single cohort.

Contractor A supplier or vendor awarded a contract to provide specific supplies or service to the Government. The term used in this contract refers to the prime.

Contracting Officer (CO) A person with authority to enter into, administer, and/or terminate contracts and make related determinations and findings on behalf of the Government. Note: the only individual who can legally bind the Government.

Defective Service A service output that does not meet the standard of performance associated with the Performance Work Statement.

Deliverable Anything that can be physically delivered, but may include non-manufactured things such as meeting minutes or reports

DEMO The Portfolio Re-Engineering Demonstration Program is a HUD pilot program, which preceded M2M. Similar in many ways, yet different from M2M.

Direct Loan Note A HUD-Held direct loan with fully amortizing monthly payments originated under the DEMO program, unique from other DEMO notes, which are surplus cash notes (i.e., MRN, CRN, Shared Proceeds, and Repairs/Transaction Cost Note).

ELOCCS The Web-enabled module in LOCCS, which allows authorized Contract Administrators (CA) or representatives to access the Line of Credit Control System (LOCCS) through HUD’s Secure System.

FASS HUD’s Financial Assessment Subsystem used by owners to electronically file

AFS.

FFB Risk Share Direct Loan A direct loan issued by FFB on behalf of FHA under the 542(b) and 542(c) risk share program

FHA Project Number A unique number assigned to a project's mortgage by HUD.

FHASL FHA Subsidiary Ledger

Field Offices Approximately fifty (50) offices containing HUD employees located throughout the United States.

GI Fund Loan guarantee programs operating under the Federal Housing Administration’s General Insurance.

Government Furnished Property (GFP) Government-furnished property” means property in the possession of and/or directly acquired by, the Government and subsequently furnished to the Contractor for performance of a contract. Government-furnished property includes, but is not limited to, spares and property furnished for repair, maintenance, overhaul, or modification. Government-furnished property also includes contractor-acquired property if the contractor-acquired property is a deliverable under a cost contract when accepted by the Government for continued use under the contract.

Government Technical Representative (GTR) An employee of the U.S. Government appointed by the Contracting Officer to perform contract administration activities in regard to technical issues. This individual has authority to provide technical direction to the Contractor as long as direction is within the scope of the contract, does not constitute a change and has no funding implications. This individual does NOT have authority to change the terms and conditions of the contract.

Government Technical Monitor (GTM) An individual designated by the Contracting Officer to assist in providing technical direction and monitoring performance under the contract.

Housing Act The National Housing Act, in the U.S. Code at 12 USC 1701 et seq.

HUDAR HUD Acquisition Regulation, 48 CFR Chapter 24; HUD's procurement regulation implementing and supplementing the Federal Acquisition Regulation (FAR).

HUD-Held Notes – Conventional Notes that have defaulted while in the Insured portfolio and, per the terms of the Insured portfolio, were assigned to HUD upon default.

HUD-Held Notes – Mark-to-market Notes that have restructured through the Mark-to-market program (M2M). M2M notes are surplus cash notes, with payments due annually based on a percentage of the property’s annual surplus cash, reported by the Owner in the Owner’s annual financial statement.

HUD-Owned Multifamily property where HUD holds title/is the owner of the property.

iREMS The Integrated Real Estate Management System is an internal HUD system for managing multifamily projects (Formerly known as iREMS).

iREMS Property Number A unique number assigned to a property by HUD, a property may have multiple FHA Project Numbers associated with it.

Key Personnel Contractor personnel that are evaluated in a source selection process and that may be required to be used in the performance of a contract by the Key Personnel clause. When key personnel are used as an evaluation factor in best value procurement, offerors can be rejected if they do not have firm commitments from the persons that are listed in the proposal.

LOCCS Line of Credit Control System (LOCCS) is an on-line multi-user disbursement and cash management system.

MIP Mortgagee is in possession of the property, and owns the note. The mortgagor still owns the property, but has either turned over the keys to mortgagee or the mortgagee has taken over operation.

Mortgage Restructuring Note (MRN) HUD-Held surplus cash note sometimes originated under the M2M or DEMO program, generally in second lien position.

OMB Office of Management and Budget.

OPIIS Online Property Integrated Information Suite.

PCPM Post Closing Portfolio Management, HUD Contractor performing analysis to review surplus cash calculations and payments on M2M and DEMO notes.

PDD The Property Disposition Division is responsible for the administration of property (MIP and HUD-owned), foreclosure and HUD-Owned sales, and relocation actions.

PPC Partial Payment of Claims for FHA insured multifamily mortgages that are done outside of the Mark to Market program, but that nevertheless result in a HUD-Held cash flow notes that have many similarities to the M2M and Demo Notes.

PRAC - Project Rental Assistance Contract - An operating subsidy to the owner to ensure lower rents.

Performance Work Statement (PWS) A statement of work for performance based acquisitions that describe the required results in clear, specific and objective terms with measurable outcomes.

Physical Security - Actions that prevent the loss or damage of Government property.

QNP Qualified Non Profit purchaser entity, which may request M2M debt relief under the MAHRA statute. If approved, the debt relief impacts subsequent servicing of M2M notes under the contract.

Quality Assurance (QA) Policies and procedures adopted by the Government to ensure that supplies and services acquired under Government contracts conform to the contract’s quality requirements.

Quality Assurance Surveillance Plan (QASP) A plan describing how the agency will survey, observe, test, sample, evaluate and document the contractor’s performance in meeting critical performance standards identified in the contract.

Quality Control (QC) All necessary measures taken by the Contractor to assure that the quality of an end product of service shall meet contract requirements.

Repairs/Transaction Cost Note HUD-Held surplus cash note sometimes originated under the DEMO program.

R/R or R4R Account The Reserve for Replacements escrow account.

Sales Costs Sales costs include, but are not limited to, advertising, repair, environmental reports, and 106 surveys, or other costs incurred during the HUD-Owned sale action.

SCA Surplus Cash Analysis, a review to ascertain the accuracy of the annual payment amounts for M2M and DEMO notes.

Scattered Sites A HUD-Held loan secured by more than one noncontiguous parcel.

Section of the Act Alpha Automated data processing codes used in the processing of FHA insured mortgages according to the section of the National Housing Act under which FHA mortgages are insured.

SP Shared Proceeds Note is a HUD-Held surplus cash note, sometimes originated under the DEMO program.

SRI Fund Loan guarantee programs operating under the Federal Housing Administration’s Special Risk Insurance Fund.

Subcontractor Any person, other than the prime Contractor, who offers to furnish or furnishes any supplies, material, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract, and any person who offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor. The Government does not have priority of contract with a subcontractor.

Surplus Cash A defined term in HUD Notes and Regulatory Agreements on which computation of required annual M2M and DEMO loan payments are based.

TPA Transfer of Physical Assets describes HUD’s process for reviewing and approving a change in the owner entity when a property has HUD-insured or HUD-Held debt. Prior approval of a TPA is required to avoid violation of the Regulatory Agreement and to seek a waiver of the “due on sale” clause in the Note.

TRACS Tenant Rental Assistance Certification System tracks tenant data requirements.

This system contains computer-generated file copies of tenant and owner certifications.

Work Day The number of hours per day the Contractor provides services in accordance with the contract.

Work Week Monday through Friday, unless specified otherwise.

2.2 ACRONYMS

ACRONYM DEFINITION

ACH Automatic Clearing House

ACDAP Accelerating Curtail Declining Annuity Payments

AFS Annual Financial Statements

AICPA American Institute of Certified Public Accountants

ASSG Assignment

CFR Code of Federal Regulations

CFO or OCFO Office of the Chief Financial Officer of HUD

CFR Code of Federal Regulations

CIO or OCIO Office of the Chief Information Officer of HUD

CLIN Contract Line Item Number

CO Contracting Officer

COOP Continuity of Operations

COR Contracting Officer Representative

COTS Commercial Off-the-Shelf

CPO Office of the Chief Procurement Officer of HUD

CR Change Request

CRN Contingent Repayment Note

DEMO Re-Engineering Demonstration Program

ECP Electronic Check Processing

EFT Electronic Funds Transfer

EOM End of Month

EST Eastern Standard Time (U.S.)

FAR Federal Acquisition Regulations

FASS Financial Assessment Subsystem

FEDGAAP Federal Generally Accepted Accounting Principles

FHA Federal Housing Administration

FHASL FHA Subsidiary Ledger

FO Field Office

FY Fiscal Year

GAO U.S. General Accounting Office

GTM Government Technical Monitor

GTR Government Technical Representative

HAP Contract Housing Assistance Payment Contract

HIAMS HUD Integrated Acquisition Management System (replaced HPS)

HPS HUD Procurement System

HUD U.S. Department of Housing and Urban Development

HUDAR HUD Acquisition Regulation

HUDATWORK HUD’s Intranet Web Site and related WEB pages.

HUD Web HUD’s Intranet Web Site and related WEB pages.

ICD Interface Control Document

IG or OIG Inspector General (Office of)

IPT Integrated Project Team

IRP Interest Reduction Payments

IPAC Intra-Governmental Payment & Collection System iREMS Integrated Real Estate Management System

IT Information Technology

LAMP Level Annuity (or Amortizing) Monthly Payment

LOCCS Line of Credit Control System

LOE Level of Effort

MFAB Multifamily Accounting Branch

MFNSB Multifamily Notes Servicing Branch

MIP Mortgagee in possession

MLS Mortgage Loan Servicing

MMP Minimum Monthly Payment

MNA Mortgage Notes Assigned

MRN Mortgage Restructuring Note

NARA National Archives and Records Administration

NLT Not Later Than, or No Later Than

NTDO Non-Treasury Disbursement Office

OAMPO Office of Asset Management and Portfolio Oversight

OCPO Office of the Chief Procurement Officer

OIG Office of Inspector General

OMB Office of Management and Budget

OPIIS Online Property Integrated Information Suite

PAE Participating Administrative Entity

PCPM Post Closing Portfolio Management

PDD Property Disposition Division

PI Principle and Interest

PII Personally Identifiable Information

PIV Personal Identity Verification

PM Project Manager

PMS Property Management System

PPOC Partial Payment of Claims

PPM Project Planning and Management

POC Point of Contact

PRAC Project Rental Assistance Center

POP Period of Performance

QA Quality Assurance

QASP Quality Assurance Surveillance Plan

QCP Quality Control Plan

QNP Qualified Non Profit

RAP Rental Assistance Payment

REAC Real Estate Assessment Center

RECAP Office of Recapitalization

REO Real Estate Owned

ROM Rough Order of Magnitude

R/R or R4R Reserve for Replacement

SCA Surplus Cash Analysis

SF Standard Form

SOA Section of the Act

SP Shared Proceeds Note

SPS Secure Payment System

SSAE16 Statement on Standards for Attestation Engagements No. 16

TBD To Be Determined

TPA Transfer of Physical Assets

TRACS Tenant Rental Assistance Certification System

TROR Treasury Report on Receivables

UCC Uniform Commercial Code

U.S.C United States Code

USSGL United States Standard General Ledger

WSR Weekly Status Report

C-3 GOVERNMENT-FURNISHED PROPERTY AND SERVICES

The Contractor shall ensure accurate control and accountability of all Government- Furnished Property (GFP) in accordance with the terms and conditions of this contract.

The Government will furnish, at no cost to the Contractor, the GFP shown below.

3.1 Materials: The Government will provide data as outlined in Task 1 - Transition-In of this PWS as follows:

Hard copy documents and various correspondence will be made available for pick-up by the Contractor within 60 days after contract award.

Soft copy data via secure external hard drives within five business (5) days after contract award.

C-4 CONTRACTOR FURNISHED ITEMS AND SERVICES

The Contractor shall furnish, all facilities, equipment, and supplies required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

4.1 Facilities: The Contractor shall furnish the necessary facilities, including storage facilities, to meet the requirements under this PWS.

4.2 Equipment: The Contractor shall furnish a servicing system that shall meet all requirements listed in this PWS.

4.3 Material: N/A

4.4 Contractor Responsibilities: The Contractor shall only conduct business with the designated Government Technical Representative (GTR). The name of the GTR shall be provided to the Contractor by the Government, in writing and updated as necessary throughout the contract period.

U.S. Government records, copies of original results and reports, verified original data, corrected data and corrected supporting final reports which are maintained by the Contractor remain the property of the U.S. Government. These files/results must be surrendered to the GTR.

4.5 Contractor Personnel: The Contractor shall provide a Contract Manager/Project Manager who shall be responsible for the performance of work. An alternate shall also be designated to act in the absence of the Contract Manager. These Contractor personnel (main point of contact and alternate point of contact) are considered Key Personnel by the Government and shall be listed as such in accordance with HUDAR 2452.237-70, “Key Personnel”. The Contract Manager/Project Manager or alternate shall have full authority to act on all contact matters relating to daily operations of this contract. Accordingly, at a minimum, the points of contact shall have the technical knowledge of the requirement and be in the position to actually receive assignment, guidance and direction from the GTR, GTM and CO per HUDAR 2452.237-73, Conduct of Work and Technical Guidance and shall be allocated enough hours to the requirement to ensure successful performance. These points of contact shall each be an employee of the Contractor. An employee of a subcontractor is not acceptable for either of these positions. The Contract Manger/Project Manager or alternate shall be available between the hours of 8:00am to 5:00pm, Monday through Friday EST, except Federal Holidays or when the Government facility is closed for administrative reasons.

4.6 Identification of Contractor Employees: All Contractor/subcontractor personnel shall wear company picture identification badges as to distinguish themselves from Government employees. When conversing with Government personnel during business meeting, over the telephone or via electronic mail, Contractor/subcontractor personnel shall identify themselves as such to avoid situations arising where sensitive topics might be better discussed solely between Government employees.

Contractors/subcontractors shall identify themselves on any attendance sheet or any coordination documents they may review. Electronic mail signature blocks shall identify their company affiliation. Where practicable, Contractor/subcontractors occupying collocated space with their Government program customer shall identify their work space area with their name and company affiliation, or as a minimum, “Contractor” after name.

4.7 Quality Control: The Contractor shall establish and maintain a complete Quality Control Program that shall ensure services are performed in accordance with this contract. The Contractor shall develop and implement procedures to identify, prevent, and ensure non reoccurrence of defective services. The Contractor’s quality control program is the means by which he assures himself that his work complies with the requirements of the contract. The Contractor shall provide the associated Quality Control Plan within thirty days of contract award.

4.7.1 Quality Control Plan: The Contractor shall develop, maintain, enforce and document a Quality Control Plan (QCP). The QCP shall ensure the Government receives the level of quality that is consistent with the requirements specified in this contract. The QCP shall be detailed as follows:

In accordance with FAR clauses 52.246-4, 52246-5, the Contractor shall establish and maintain a QC program that ensures that the requirement of the contract are met. The program shall:

Identify the Contractors’ standards that are applicable to this effort, Identify techniques and metrics for measuring compliance, Include an approach for eliminating the causes of unsatisfactory/unacceptable performance, and

Interact with HUD counterparts on the selection decisions and seek advice and guidance from HUD for any emerging problems.

The program shall include an inspection system covering all contract services as follows:

All areas and services to be inspected

Whether areas/services are to be inspected on a scheduled or unscheduled basis

How inspections are to be conducted.

The name(s) and qualifications of the individual(s) responsible for performing the quality control inspections, the specific areas/services to be inspected by each such person, and the extent of their authority.

A method for identifying deficiencies in meeting the performance requirements of the contract and in the quality of service performed and taking corrective action before the level of performance becomes unsatisfactory.

Complete documentation of Quality Control Inspections, inspection results and any corrective action required and taken. During the term of the contract, the Contractor shall establish and maintain QC files for documentation of the quality control inspections performed by the Contractor , the inspection results and any corrective action required and taken by the Contractor to improve contract performance. Documentation is maintained until the completion of each annual SSAE16 system security audit.

C-5 SPECIFIC TASKS AND DELIVERABLES

5.1 Scope of Work: The Contractor shall provide the following mortgage loan servicing support to include the following:

Transition - In

New Loan Set-up / Take-Down

Note Servicing o Mark-to-Market, DEMO and Prepayment of Claim Notes o Payments on M2M/DEMO/PPC Notes o Transfer of Physical Asset (TPA) Process with M2M/DEMO Notes o Risk-Share and the Direct Loan Programs o Help Desk and Training Support

UCC Filing and Tracking

Property Disposition Portfolio Services

Document Retention and Storage

Accounting Services

Audit and Internal Control

Transition-Out

Detailed task descriptions are as follows:

5.1.1 Task 1 - Transition-In

The Contractor shall submit a Transition-In Plan within five (5) business days after contract award. The Transition-In Plan shall address how the Contractor will provide a seamless transition of services from the Government and/or incumbent contractor that does not impact program operations. The plan shall include a detailed schedule addressing the transition-in tasks listed below. The Contractor shall be ready to perform all services stated within the PWS, which includes a fully operational web-based servicing system within 90 days after contract award.

Within the ninety-day transition-in period, the Contractor shall:

1. Provide a web-based servicing system which shall be fully operational and have the capability to service all HUD-Held notes and provide property disposition portfolio and accounting services as stated in the PWS within 90 days after contract. The servicing system shall have the following functionality:

Allow for two levels of password protected security levels of access for a variety of system users to include read only, reports only, data entry, and specific project/portfolio access.

o The first level shall be for property owners or their designees for inquiry and report production. The access shall be limited only to specific property information to include, the most recent 12 months of billing statements, taxes and other escrow information. The servicing system shall require property owners or their designees to re-verify their user information annually.

o The second level of system access shall be for internal HUD staff and any HUD contractors. This level shall allow for complete access to all functionality of the system.