DU204SA-13-R-0004_MM_3_8_solicitation_Q_and_As.pdf

Management and Marketing Field Service Manager 3.8 Solicitation DU204SA-13-R-0004

Questions and Answers

Line of Credit/Bonding

1. L.8 Line(s) of Credit, page 165: Can HUD verify that lines of credit are not to be submitted with the offer, and only upon receipt of the intent to award from HUD?

A: See SECTION L - Instructions, Conditions, and Notices to Bidders- L.8 Line(s) of

Credit

Proposal Content and Solicitation Clarifications

1. [pg. 50, PWS] C.5.2.4.3 Purchaser Testing: Is HUD going to put a limit on the number of re-winterizations that are at the contractor’s expense per property or per buyer?

A: No. Refer to PWS for winterization requirements in section C.5.2.2.3.5, section C.5.2.4.2 section C.5.2.4.3 and Mortgagee Letter 2010-18.

a. Are deposits to ensure the re-winterization of properties after a buyer’s inspection allowed? If deposits for re-winterizations are not allowed, how is the FSM to protect the property from issues caused by the buyer's inspection?

A: Deposits for buyer costs to turn on utilities may be allowed. They cannot be exorbitant and all unused funds must be returned to the buyer within a reasonable amount of time (i.e. within 7 calendar days). The FSM should provide an itemization and invoices, when possible, to justify the amount of funds actually spent on the customer’s behalf.

b. Is the full financial burden and risk management for actions of others solely upon the FSM?

A: The FSM is responsible for the condition of the financial burden and risk management of properties in accordance with the PWS (see section C.5.1) at the FSM’s expense unless otherwise specified as a Pass- Thru item (see section C.4.2).

c. What is the requirement when and if a purchaser submits multiple activation requests?

A: Anytime a buyer submits a request for activation of services, the contractor will perform the activation request in accordance to PWS requirements and

Mortgagee Letter 2010-18 or any subsequent policy directives.

d. Will the FSM be required to approve utility activation requests by the Purchaser’s Real Estate agent?

A: Yes, please refer to PWS requirements in sections found under C 5.2.4 Utilities. Any time an agent that is listed as the Purchaser’s Real Estate Agent, and is acting on behalf of the purchaser requests utility activation, the FSM must receive and approve the request. It is incumbent upon the FSM to determine if the utilities may be turned on (i.e., they have no indication that there is a water leak or unsafe wiring). If a property has been identified at conveyance with water or electrical issues, they should be clearly disclosed on the HPIR.

e. What is an acceptable amount of time for the utilities to be activated to allow the Purchaser to test the systems?

A: Please see PWS requirements found under section C.5.2.4.

f. Who will be responsible for any damages incurred at the time of scheduled activation by the utility company should the purchaser and agent not be at the property at time of activation to prevent damage?

A: A requirement of the turn-on of the utilities is that the agent be present for the activation. If the agent is not there and damage occurs to be property, the agent or the buyer is responsible for damage. The FSM must do their due diligence in accurately reporting any known or possible problems with the systems, or they may also be liable.

2. [pg. 50, PWS] C.5.2.5.1 Homeowner’s Association Fees, Dues, Ground Rents and Non-

Tax Assessments: CLARIFICATION: The FSM is only responsible to pay HOA fees in the event a property has been in inventory for over 30 days and has NOT been assigned to the Asset Manager (AM), correct?

A: Correct.

a. If a property is assigned to the Asset Manager within 30-days of the FSM’s

Acquisition, the FSM is not responsible for Notifications, Research or Payment (Initial or Ongoing) of the HOA. Those expense resolutions will be assumed by the AM, is that correct?

A: Correct

b. How will the FSM be notified that we should start paying the HOA fees?

A: The FSM is responsible for monitoring their inventory to ensure they are aware of properties that have been in their inventory for 30 days.

c. If HUD is not going to pay for penalties and we don’t begin paying these HOAs until after 30 days there will probably be penalties – what date is HUD going to use as the

“assigned date” for HOAs to prevent these penalties – will there be notification in P260?

A: Any penalties that an HOA charges during the first 30 days in the FSM inventory will be paid by HUD. The 31st day in inventory will be the date the FSM is required to assume liability for penalties and interest. It will be the responsibility of the FSM to monitor their inventory and begin payments when necessary.

d. How can the contractor predict if a property will not be assigned an AM or be expected to be responsible for penalties/late fees within the 1st 30 days if the FSM doesn’t know they will be responsible for such dues at that time?

A: See “c” above.

e. Please provide the anticipated percentage of properties per area that will require

HOA processing and payments.

A: HUD cannot accurately predict the potential amount of properties where this situation will occur.

f. Will HOA and COA dues be paid by the AM going forward?

A: That is correct. As soon as an AM receives a property into their inventory, they become responsible for payment of HOA and COA dues.

g. Will the FSM contractor be responsible for paying HOA Condo dues, ground rents, Non-tax assessments on all of the HUD Vacant transition properties?

A: Only if the property is not assigned to an AM contractor and only after 30 days in HUD’s inventory.

h. Will the FSM contractor be responsible for paying HOA Condo dues, ground rents, Non-tax assessments on all new acquisition properties that are in inventory for 31 days and more such as (CS, HECM, HOM, etc….) non-HV properties?

A: The HOAs, COAs on custodial properties are paid for by the National

Servicing Center (NSC) until they actually are deeded to HUD. At that time, they become a new HV acquisition and will be subject to the 30 day rule as stated above.

i. Will Properties that are in inventory for 31 days or more with HOA Condo dues, ground rents, Non-tax assessments being paid by the FSM Contractor and then are transferred to a HUD Vacant (HV) status continue to be the FSM contractors responsibility or will the paying of the dues transfer to the Asset Manager?

A: The FSM is only responsible for HV properties after day 30, with no AM assignment. As soon as a property is assigned to an AM, the FSM is no longer responsible for payment of these fees – that duty is transferred to the AM.

j. Will the current FSM contractors provide the new FSM contractors and AM’s a detailed list of all of the current HOA contact info, bill to addresses, payment amount, payment schedule on all of the transition properties?

A: HOA information and payment history performed by previous contractor can be found in P260.

k. Please clarify properties that will require HOA processing by the FSM. It appears that HUD is requiring HOM, occupied, and custodial properties. Is this correct?

A: Refer to PWS sections under C.5.2.5 RENTS, FEES, DUES, AND

ASSESSMENTS and Housing Notice 2002-20, HUD Handbook 4310.5 Rev 2, Chapter 5. The FSM will be required to pay HOA/COA on properties that are in their inventory for 30 days or more without an assignment to an AM. Custodial properties do not apply (see H above). HOM properties are most likely to be the ones for which the FSM will be required to pay these fees, however adverse occupant or occupied conveyed properties may also fall into this category.

l. How will the FSM become aware of assignment to the AM as it relates to HOA processing?

A: When a property is put in 1C, and the AM accepts the property as being in

Ready to Show condition, it is considered assigned to an AM contractor. The

FSM is relieved of the payment of HOA/COA dues as long as the payments are current.

m. Is there a trigger to alert or define to the FSM that HOA processing is required?

A: No, the FSM should be aware of their inventory and know when a property is getting close to the 30 day mark. The FSM property management plan should address this process.

n. On cases where the FSM places the property in HOM status and there is a previously assigned AM, which entity would then do the HOA processing?

A: If the property is assigned to an AM, the AM is responsible.

o. Can HUD provide the estimated number of properties per State that will require

HOA processing by the FSM?

A: HUD cannot accurately predict the potential amount of properties where this situation will occur.

3. Section B.2, pricing, page 10: Initial Services, CLIN 4 is detailed to include the first 10

CY of debris removal at the property. There is no mention of a cap on window repair/replacement.

A: At the initial inspection Section C.5.2.2.3.3 requires that the FSM replace the first four (4) broken windows and submit a pass through request for GTR approval for any additional windows. Replacement/boarding of additional windows is a GTR determination on a case-by-case basis.

a. This definition conflicts C.5.2.2.3, initial clean out services, page 46 which states all costs associated with disposal of debris, refuse and personal property is a

Contractor Expense (C.5.2.2.3.1), and page 47 contractor shall be allowed to submit a

Pass Through Expense for all windows exceeding four (4) if accompanied with GTR approval (C.5.2.2.3.3). Will HUD be paying the allowable FHA rate for windows over 4?

A: GTR will give approval when fees are reasonable and customary in accordance with P&P mortgagee letter 2010-18.

b. Also, HUD is requiring the FSM to restore to original condition all doors and windows, of which we are required to pay for the first four at our own expense. Is it your intention that we no longer board doors and windows which are broken or damaged? Many homes in older neighborhoods do not have standard size windows, which prevents ease in finding on-hand replacements, thus requiring special order, there may be damage to the homes structure which prevents easy replacement, or we may have to contend with historic requirements which stipulate specific materials be used. These factors make the cost to replace any window more costly and depending on the availability of materials it could take up to two-four weeks to complete this task. In addition there is liability to HUD and the contractor if the component is installed incorrectly and later results in damage to the property.

A: The contractor shall use HUD P260 to communicate with their GTR to find remedies and timeframes to meet PWS requirements. The HUD contractor is solely responsible for their subcontractor interaction and performance in the installation of components

c. Additionally there is conflicting information on these 2 issues is noted in Attachment 5, Allowable Pass Through Expenses, which indicates that window repair/replacement for any quantity over 4 is an allowable PT expense, but makes no mention of debris in excess of 10 CY. Can HUD please clarify?

If only 10 CY of debris will be included in CLIN 4 and C.5.2.2.3, initial clean out services and Attachment 5, Allowable Pass Through Expenses, will be altered as such, can HUD provide details on how additional debris will be handled (i.e., will this always be pre-approved as a pass through with supporting documentation;

will there be a cap on the amount that is pre-approved to remove; will one or more bids be required if pre-approval is not given; and if no pre-approval is given, how will this additional time to submit bids and receive approvals be taken into consideration in the calculation of properties NRTS within the required 7 days)?

A: Pass through Expense must be submitted in accordance with the HUD’s

Financial Control Manual.

d. Also, please define verifiable debris. If debris is created by trimming overgrown trees, shrubs, grass, etc., is this included in the 10 CY?

A: Yes

e. Also, what proof will be required for the determination of the amount of debris?

A: Pass through Expense must be submitted in accordance with the HUD’s

Financial Control Manual.

f. Is there a maximum allotted price per square foot designated as pass-through for debris in excess of 10 CY and if so, what is it? If not, how is “fair and reasonable” defined by HUD? Will HUD be paying allowable FHA rates for debris over 10 CY?

A: Pass through Expense must be submitted in accordance with HUD’s Financial

Control Manual.

g. There is no mention of bringing the home into RTS condition in the description of

CLIN 4. Experience and familiarity with current contract requirements provide us with this understanding. Can HUD clarify this is the intention?

A: The basic standard of Ready to Show may be found in the definition of terms, C.2.2.

4. [pg. 46, PWS] C.5.2.2.1.3 Part III of the HPIR: Will HUD allow visual inspections for system functionality for gas systems?

a. Without activated utilities and considering the time constraints, what alternative means of testing gas lines are acceptable to HUD? Opening a closed gas system to pressure test could prove to be quite hazardous and gas testing in most areas require a licensed plumber to perform these services. Maintaining a subcontractor base of licensed plumbers across the region is costly and limited. Gas system checks require different equipment and expertise for pressurization as well as higher levels of liability.

A: The contractor provides their methods to meet the PWS requirements.

Therefore, the contractor is expected to identify a process that will confirm the functionality of the gas systems.

5. For Performance Measure Section C.5.3 (P. 62) Item Regarding Acquisition (Post Conveyance) – Properties are put into “Ready to

Show” condition in a timely manner – The Quality Assurance measure is “100% sample conducted monthly of Pre-conveyance inspections and supporting documentation, images, and reports on P260 reviewed by the GTR. Is the pre-conveyance inspection the appropriate quality assurance measure for this requirement?

A: An Amendment to the solicitation will address this point.

6. Section L.6 Proposal Content (P. 159) States that Offeror shall identify their company/organization in the body of the Technical Proposal as the FIRM or the ORGANIZATION. Can HUD confirm that the company name is to appear on any CD label and binder cover, but not mentioned in the narrative?

A: Organization Names can appear on the CD label

7. Regarding Section C 5.2.4.2 (Page 49) Post Acquisition Utility Charges: States the Contractor shall pay without reimbursement by HUD all utility charges from the date of acquisition or vacancy (whichever is later) through the closing or within the established time period , unless otherwise directed by HUD. If per ML 2010-18 Utilities are required to be turned on (Condo, Townhomes, Attached Properties Etc.), will the FSM contractor receive pass through reimbursements on these designated properties from HUD for all utility charges post acquisition throughout the life of the property while it is in HUD’s Inventory. (From FSM Acquisition until Closed (Reconciled)?

A: No. Utilities will be left on at the FSM’s discretion and cost. The PWS 5.2.4.2 gives specific requirements for utilities to preserve the property from freeze or moisture damage at HUD properties or as required by local, state, or Association requirements. The Contractor shall pay, without reimbursement by HUD, all utility charges.

8. Regarding (p. 63) C.5.3 Performance Requirements Summary (PRS) Acquisition (Post- Conveyance)

a. There are (4) Disincentives which equate to 5% reductions of the Monthly Invoice for failing to meet the MSR items for “Ready to Show Condition”, HIPR, Health and Safety, and property inspections completed in a timely manner. Is the 5% reduction of the entire monthly billing applicable the entire monthly invoice or for the specific properties and CLINS?

A: Incentives/Disincentives are removed from the PRS

b. Is the 5% disincentive for missed routine inspections in addition to the non-payment for missed inspections?

A: Incentives/Disincentives are removed from the PRS

c. 5% reduction for each deviation below the MSR, does that mean the entire billing will be reduced by 5% for 90% (1 Deviation), 85% (10% for 2 Deviations) ,80%(15% 3- Deviations) and is this for just the properties that failed to meet the MSR or is it for the entire CLIN?

A: Incentives/Disincentives are removed from the PRS

d. If we meet the performance requirement 100% of the time will we receive an Incentive of 5%?

A: Incentives/Disincentives are removed from the PRS

e. Please provide a more detailed explanation on how this disincentive is calculated where it states “5% reduction in monthly invoice for each 5% deviation below minimum satisfaction requirement.” While C.5.5.2 provides some further information, examples of how this calculation is made would be helpful.

Generally, in performance based contracting incentives are provided to motivate a contractor to achieve performance levels of the highest quality consistent with economic efficiency. It also ensures that incentives are effective and that they reflect value both to the government and to the contractor. The overall point is that incentives are an essential element of performance based contracting. The approach to incentives and disincentives stems from FAR 37.6, which states:

“performance-based contracting methods are intended to ensure that required performance quality levels are achieved and that total payment is related to the degree that services performed meet contract standards” – which can only be implemented through the use of incentives and disincentives. In the Performance Requirements Summary there are only disincentives and no incentives which appear to only penalize contractors while offering no incentive for outstanding performance. Is this HUD’s intent? If the disincentive is for the entire invoice, it would seem that a monthly invoice of $2M could be reduced by up to $400,000 if 4 items are scored at 90% - the punishment here seems quite excessive for a contractor performing at 90%. It might be a good way to put contractors out of business.

A: Incentives/Disincentives are removed from the PRS

f. Will there be a cap to the maximum amount HUD can reduce from the invoices?

A: Invoices must reflect the amount for services rendered.

g. What specific methodology is being used to calculate the Performance Measure for the Disincentive items from the Performance Requirements Summary? The Disincentive language in the PRS states: 5% reduction in monthly invoice for each 5% deviation below minimum satisfaction requirement. For clarity purposes, if the FSM scores 89% on that requirement, they will have a 5% disincentive. If the FSM scores 92%, there would be no applicable disincentive.

Is this interpretation correct?

A: Incentives/Disincentives are removed from the PRS

9. C.1.4 Assignment of Assets, page 19: This indicates that a satisfactory contract year-end performance rating is required for exercise of an option. This is not new language in this contract, but previously referred to a contractor’s CPARs report cards. With the introduction of the new report cards from P260, we will need clarification on what constitutes “satisfactory” and what rating method will be used to determine “satisfactory” performance.

A: See the Performance Requirements Summary.

10. C.2.2 Definitions, page 26: Ready to show condition states:

a. “Upon GTR direction, carpet and tack strip may be removed if condition impedes marketability.” If nature of carpet removal is cosmetic only (i.e., carpet is stained) and carpet poses no health or safety threats (i.e., it is free of urine/feces), will HUD consider another WON classification so that it is not treated as a NRTS WON and count against the

FSM’s monthly scorecard?

A: This will be a GTR determination on a case by case basis. Please note: Carpet tacks and strips pre-existing or due to the removal of the flooring should be removed if it poses a hazard. If not removed and a hazard exists, a NRTS WON may be issued.

b. Further, can HUD provide any direction on the process of submitting carpet removal when it is cosmetic in nature, or any items outside of the scope mentioned here, as pass-throughs? Attachment 5, Allowable Pass Through Expenses, does not specifically provide for carpet removal of any nature to be submitted as a pass-through expense. Is this HUD’s intention?

A: Yes. Carpet removal is not a pass through expense, and the FSM will be responsible for the cost. The contractor can use the communication features provided in P260 and or submit work order notifications to their GTR for approval.

c. “Stairs and handrails must be secure and installed per local code and in a manner that conforms to the esthetics of the property”. The wording “conforms to the esthetics of the property” may require the FSM to install ornamental railings, finished railings, and pickets. Is this HUD’s intentions? Not only will this add greatly to the cost, it can also cause delays while attempting to source specific products.

A: Yes. The PWS gives specific timeframes for the contractor to accomplish their tasks.

d. “Swimming pools must be properly secured and in accordance with local ordinance.” Many ordinances require fences of a particular standard. Past procedures have allowed us to cover the pool to HUD specs in lieu of fence installation. Is HUD’s intention to have the FSM be responsible for both?

Attachment 5, Allowable Pass Through Expenses, only provides pass-through approval for covers, not fences. Is this HUD’s intention?

A: The Contractor is responsible for ensuring that the property is safe and secure, and determine if additional means are necessary based on state and local legal regulations, codes, and guidelines. In some cases, a pool cover will be considered an acceptable method of securing a pool. If a property comes into HUD’s inventory with a pool and a fence, the fence must be repaired and gates locked to prevent access, but the FSM is not expected to build a fence without consulting with GTR who will further advise.

e. “All graffiti, vulgarity and pornography must be removed or covered in a professional manner.” Under current direction, efforts are made to cover such graffiti, vulgarity and pornography in the most professional, cost-effective manner as possible; as such, sometimes patching is used as an approved method rather than painting entire rooms. Will

HUD still consider these efforts acceptable, or are full restorative services now required?

Would any consideration be made to allowing these painting services where entire rooms must be painted, as a pass through?

A: Remediating graffiti is an FSM expense and will not be allowed as a pass through.

f. “Limbs must be cut to a minimum 18” away from the roof.” Does this directive no longer apply to walls of home?

A: The Contractor is responsible for ensuring that the property is safe and secure and that hazards are addressed. The Contractor should consult with their GTR, on a case by case basis. The directive is still applicable. For example, a flat roof may not have an overhang, and limbs may be within 18 inches of the wall and roof.

g. Attachment 5, Allowable Pass Through Expenses, does not provide for any services outside of this scope of work to be submitted as a pass-through expense. Is this HUD’s intention?

A: All expenses must be within the scope of the requirement.

11. C.5.1.1.6 Physical File Maintenance and Retention, page 35: This is not new language, but conflicts current understanding of requirements under other existing contracts. This clause states that the contractor must retain the property file for no less than six months after the property closes and then the hard file can be destroyed. C.5.1.1.7 Delivery of

Files Upon Request states that “The Contractor shall, no later than five (5) days from receipt of a written request from the CO or GTR, deliver to HUD complete, accurate, legible, and accessible copies of any requested physical files.” There appears to be a conflict between the two clauses, if a file is destroyed six months after closing, the contractor can no longer deliver the file. Can HUD clarify its position on our obligation to maintain physical hard copy files vs electronic ones? Should hard copy files not be required, this would also necessitate change to the language in D.3 Marking of

Deliverables, page 74 which states that every six months, contractor is required to forward physical property files for all cases that have been closed or reconveyed for one year to HUD. Also, it seems against the government’s commitment to “Reduce, Reuse and Recycle” to print all the physical property files only to have them destroyed 6 months after the property closes. Please consider that all these files are uploaded to P260 electronically and if anyone from the Government requires a physical copy of any case that we could save paper by printing only what is needed as requested. Alternatively, if

HUD is set on contractors keeping physical files for all the properties, we would request that HUD consider these files to be kept at our biggest office due to the space requirements associated with all the case files and this office may not be the regional/field office in the HOC. Is the destruction of physical files an approved pass through expense?

A: The Contractor will still be able to deliver a hard copy file, throughout the duration of the contract, as all documents should be uploaded in p260. The destruction of physical files is an approved pass through expense, provided the costs to shred are less than or equal to costs to ship. HUD expects to amend page 74, Section D.3, to remove the requirement for the Contractor to send hard copy files to the Records Center for all closed cases or reconveyed cases after one year.

12. C.5.2.2 Acquisition (Post Conveyance), page 42:

a. Does HUD have any immediate plans to change the conveyance requirements to mirror the new post conveyance requirements as defined in 2.2 Definitions, page 26, Ready to show condition? For example, if windows and doors are repaired prior to conveyance, will they now need to be “restored to original condition”?

A: The PWS is applicable only to the FSM.

b. Is HUD able to provide details as to how expenses are handled for the FSM when they are required to clean or repair items outside of the normal scope of work when properties are conveyed with dirty or damaged items that conflict with the definition of conveyance condition? Attachment 5, Allowable Pass Through

Expenses, does not specifically provide for any services outside of this scope of work to be submitted as a pass-through expense.

A: That is correct, unless it is an allowable pass-through expense, it will be at the contractor’s expense.

13. C.5.2.2.1.2.1 Health and Safety Hazards and Emergency Repairs, page 45: this section indicates that the contractor will remedy all health and safety issues within one day of discovery. There are several items listed, and others that are possible, but not listed, that are not possible to remedy within a day. (e.g., installation of a pool cover, removal of large tree, clean up from casualty damage) Can HUD offer any leniency on the 24 hour threshold for remediation when circumstances outside of the contractor’s control prohibit completion within allotted time period?

A: 24 hours is specific to the required timeframe expected to complete the task. When the FSM determines that additional time is required to complete a remedy of the hazard, the FSM should notify the GTR immediately (within 24 hours of notice) for guidance.

The contractor will be using a P260 Work Order Notification and can request their GTR to review and change the Health & Safety classification.

a. Further, will any consideration be given for pass-throughs on any items other than pool and spa covers? Under C.5.5.2 Quality Assurance, page 67, the PWS states that the 5% disincentive for properties NRTS will not be assessed during the time permitted to remedy Vandalism, Casualty Damages or other issues as determined by the GTR to be no fault of the Contractor.

A: Incentives/Disincentives are removed from the PRS

b. Will the same leniency be given on the 5% disincentive for properties where health and safety issues cannot be remediated within the allotted time period due to casualty damage, as well?

A: Incentives/Disincentives are removed from the PRS

14. C.5.5.1 Quality Assurance Reviews: Regarding withholding of payment for defective performance, are such hold backs limited to the CLIN line items on which defective performance was discovered. In the case of missing or late Routine Inspections where a disincentive will be assessed, is this considered defective performance that will withhold payment as well as reduce payment?

A: Depending on the nature of the non-complied service, HUD can withhold payment of invoiced services related to the defective performance until a corrective action is competed and approved.

For example: The FSM is responsible for submitting an accurate and true invoice. Missed inspections are services that were not rendered. Late inspections are inspections that were completed late, but prior to the next scheduled inspection. The government reserves the right to withhold or pro-rate payment based on the acceptance clause, HUDAR

2452.246-70, Inspection and Acceptance, for any services not rendered or partially completed.

a. Who determines if a corrective action plan is acceptable and is there an appeal process in place should the contractor believe that approval is being unreasonably withheld?

A: The GTR determines if a corrective action plan is acceptable. Appeals may be made to the Contracting Officer.

15. C.5.2.2.3 Initial Clean-out Services, pages 46 & 47: There is no mention of initial lawn services in this PWS nor existing PWSs which has led to some ambiguity on HUD’s expectations in the past on what should be completed at contractor’s expense. Can

HUD provide initial lawn service guidelines for this contract?

A: A basic definition of Ready to Show condition is listed on pages 26-27, which includes a statement about the condition of the exterior/landscaping of the property.

16. C.5.2.2.3.1 Disposal of all Debris, Refuse, and Personal Property, pages 46 & 47:

a. This section states “All costs associated with disposal of debris, refuse and personal property is a Contractor Expense.” This conflicts with Section B.2, pricing, page 10 Initial Services, CLIN 4 definition which states that Initial

Services will include only the first 10 CY of debris removal at the property at the

Contractor’s Expense (C.5.2.2.3.1). Can HUD clarify its position on this?

A: Section B.2. page 10 refers to pre-conveyance acquisitions, and section

C.5.2.2.3.1 refers to post conveyance acquisitions.

b. Additionally, if there will be a 10 CY cap, will exterior debris (e.g., fallen limbs, trees that have been cut down, above ground pools, etc.) count towards the 10 CY of debris? Will HUD be paying the allowable FHA rate for debris over 10 cu yds?

A: Debris can be either external or internal. In accordance with the PWS, GTR approval shall be requested.

17. C.5.2.2.2 Initial Securing, page 46: this section states “The Contractor shall keep an itemized record of all charges incurred for activities performed on properties that are reconveyed and provide submit this information to the GTR upon request.” Services are not currently paid for by HUD until the property is placed into RTS (1C) in P260. Because reconveyed properties never are put in 1C status, there is no current indicator for payment to be made. Attachment 5, Allowable Pass Through Expenses, does not specifically provide for any services completed on reconveyed properties to be submitted as a pass-through expense. Can HUD provide any additional details on how the FSM will be reimbursed for these expenses?

A: The contractor should at initial securing/inspection determine whether a property has sustained mortgagee neglect and should be reconveyed. Since the mortgagee is required to convey a property in broom swept condition and it is not expected that the property will be marketed, it is not apparent that the contractor will perform any additional services beyond initial inspection and routine maintenance. The Contractor must substantiate any additional services and request GTR approval, if allowable pass through expenses fall within PWS requirements.

18. C.5.2.2.3.3 Repair Broken Windows and Doors, page 47:

a. This section states that “All doors and the first four (4) broken or missing windows will be repaired/replaced as a Contractor Expense.” This conflicts with Section B.2, pricing, page 10 Initial Services, CLIN 4 definition which does not mention a 4 window cap. Can HUD clarify its position on this?

A: At initial services only HUD will pay as a pass-through expense the cost for window #5 and up.

b. There is no mention of any approved boarding areas. Is this an intentional omission mandating that no HUD properties are boarded?

A: Approved boarding areas may be identified within each HOC or boarding is allowed with GTR approval.

c. Also, can HUD specifically address sliding glass doors (i.e., will sliding glass doors be counted towards the window allowance, or will they be treated as a door?)?

A: If the entire door (framing, sliders, etc. needs to be replaced it will fall under door, if just the glass needs to be replaced, it will be counted as a window.

d. Can HUD provide further definition of expectations for “the restoration to original condition of all doors and windows” so potential contractors can better understand the possible liability involved? If all window frames and door jambs can no longer be patched and must be replaced, and multi-pane windows must be completely re-glazed or replaced, the cost could be astronomical, even with only four windows at the contractor’s expense. Will any consideration to altering this requirement or permitting these as pass-throughs be given?

A: Doors must be replaced if they are missing, and repaired if they are still there but not working. These will not be pass-through expenses.

e. Will the FSM contractor be responsible for paying for and replacing broken doors and windows due to vandalism when the property is in inventory and in a high crime area even though the windows cannot be boarded and protected per new

HUD guidelines?

A: Yes. If a property sustains vandalism more than one (1) time, the contractor may request boarding from their GTR.

f .If windows were broken due to a natural occurrence (such as a tornado, strong wind, and hurricane) after the property has been through the initial inspection.

Will the cost of replacing/repairing windows be a pass through expense?

A: Storm related expenses are pass-through expenses

19. C.5.2.2.3.6 Prevent Further Moisture Damage, page 47: this section indicates that “Contractor must stop active leaks that may cause deterioration of the property or pose an imminent health or safety hazard. This includes ensuring proper drainage is maintained around the perimeter of the property”. Can HUD provide further definition of expectations for this requirement so potential contractors can better understand the possible liability involved?

A: The PWS is specific on stopping active leaks and provides the desired outcome for the property and for the contractor to ascertain the likelihood of damage to the property and take protective measures.

a. Would this be limited to repair of gutters and/or adding gutter extensions? Will the installation of gutters/downspouts be a pass through expense to prevent further moisture damage via the foundation?

A: No, this specific repair will be part of initial services.

b. Would the FSM be expected to perform grade work at the property to correct drainage issues? Regrading property or replacement of water supply pipes and associated landscaping, for example, are extraordinary cases which could cost thousands of dollars.

A: This would be a GTR decision on a case-by-case basis.

c. If grade work is required, would this be a Pass-Through Expense that would be charged back to the lender, if the lender did nothing to correct prior to conveyance?

A: This would be a GTR decision on a case-by-case basis.

d. Would FSM be expected to perform more extensive repairs to areas in and around basement or crawlspace walls (e.g. perimeter drains, dry-lok, sump pumps, dehumidifiers) at FSM’s expense, or would these be Pass-Through Expenses?

A: This would be a GTR decision on a case-by-case basis.

e. If roof repairs are necessary to preserve and protect a property from moisture damage due to an active leak, would FSM be expected to cover the cost of repair or is this a Pass-Through Expense?

A: The Contractor is expected to repair the property to prevent moisture at the FSM’s expense. If the repair is excessive in cost, the Contractor could consult with the GTR for additional guidance.

f. Is there a monetary limit that HUD would expect an FSM to cover before a roof repair would be considered for reimbursement?

A: The FSM should determine if the roof can be repaired, and if it can be repaired, the FSM would repair the roof at their cost. If the cost is excessive, contact the GTR for guidance.

g. Please explain what proper drainage entails and whether that will be reimbursed as a pass through.

A: Proper drainage of water is to stop deterioration of the property or correct an imminent health or safety hazard. If the contractor is concerned that a property will flood or sustain water damage it is the contractor’s responsibility to correct the situation as a part of initial securing.

20. C.5.2.4.2 Post Acquisition Utility Charges, page 49: this section indicates that The Contractor shall pay without reimbursement by HUD all utility charges from the date of acquisition or vacancy

(whichever is later) through the closing or within the established time period, unless directed as to otherwise by HUD.

A: That is correct.

a. Does HUD indeed expect the FSM to pay all utility charges out of pocket with no reimbursement? If this is correct, how will HUD treat properties that convey with unresolved bills? Can HUD clarify its intentions with regards to this process?

A: Yes. The FSM are responsible for paying are all of the charges in accordance to the PWS from acquisition to closing. The FSM will determine HUD’s responsibility for any unresolved balance, and submit for GTR approval.

b. Will HUD reimburse as a pass through for recurring utility charges associated with turned off accounts that keep accruing a base fee even if the account is shut off?

A: This specific issue can be address by the GTR with information provided by the contractor.

c. Will the contractor be responsible for bills such as outstanding water bills and sewer bills that are not discovered until after acquisition date?

A: The Contractor is responsible for outstanding water and sewer service(s) that occur after acquisition. The responsibility of charges is based on the dates of usage or service.

d. Will the contractor be responsible for bills that are associated with the property but not associated with a utility usage such as storm water drainoff/runoff bill that may be billed quarterly in some regions of the US?

A: See response to “b” above.

e. Will the current FSM contractors provide the new FSM contractors a detailed list of all of the current utility bill contact info, bill to addresses, payment amount, payment schedule on all of the transition properties?

A: This information should be available in P260.

f. How will the transition inventory utility bill info be transferred to the new FSM contractor to ensure that no bills are missed or late during the transition period?

A: This information should be available in P260.

g. Are all deposits and usage fees the responsibility of the FSM. Thus, these are no longer pass through expenses?

A: That is correct. Please refer to the PWS for allowable pass through expenses.

21. C.5.2.4.3 Purchaser testing, page 50: The Contractor shall not charge the purchaser a fee for the

Contractor's efforts to facilitate this process. However, the purchaser is responsible for the actual costs to activate, deactivate and usage. Will HUD consider the de-winterization of a property that has been winterized a “cost of activation” and allow a fee to the purchaser to complete this function? Will HUD provide an approval to make the minimum necessary repairs to allow potential buyers to perform an inspection prior to sale?

A: In accordance with the PWS section C.5.2.4.3 re-winterization is a FSM cost. Prior to sale inspection requirement can be found in section C.5.2.4.3. Repairs may be requested through GTR approval on a case-by-case basis.

22. C.5.2.6.2 Mold, pages 52 & 53: Can HUD clarify their expectations with regards to mold remediation for 25 square feet of less of mold?

a. What is necessary for the contractor to submit to HUD for approval of areas in excess of 25 square feet in order to gain pass-through approval?

A: Proof may include but is not limited to: Pictures, statements as to strong odors, etc. The contractor shall follow PWS section C.5.2.6.2 to gain GTR approval for remediation.

b. Does HUD have a preferred method regarding cleaning, testing, and removal of materials that they would like the FSM to utilize?

A: The contractor is the subject matter expert on this type of decision.

c. Please provide an estimate of the percentage of inventory affected by mold and any related historical expenses paid by HUD.

A: HUD cannot accurately predict the potential amount of properties where this situation will occur.

d. Can HUD please stipulate a guiding principal for mold removal up to 25 SQFT;

suggestion would be HUD’s guide “Healthy Homes Issues: Mold”; HEALTHY

HOMES INITIATIVE (HHI) BACKGROUND INFORMATION, Version 3, March 2006 or HUD’s “The key to mold control is moisture control” pamphlet as found at: http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12335.pdf

A: HUD cannot answer that question at this time but the suggestion is appreciated.

e. Please define ‘any single area.’ Is that on one wall, per one room, one floor?

A: A “single area” is any particular extent of space or surface. In accordance to the PWS, the Contractor shall remedy at their expense small amounts of mold not to exceed twenty-five (25) square feet in any single area.

f. Will HUD pay for mold remediation on properties when mold is found after the property is in inventory and mold is due to poor ventilation conditions?

A: No. It is the FSM’s responsibility to prevent new mold.

g. What precisely is included and excluded from the definition of “remedy” in regards to mold on pages 52-53? Scrubbing with bleach? Painting with Kilz?

Cutting and removing drywall? Treating with fungicide?

A: The contractor is the subject matter expert for this and should determine the best method of treatment so that the mold does not reappear and poses no health hazard. Simply covering up with paint is not considered treatment.

23. C.5.2.7 Termites and Wood Destroying Organisms, page 54: Can HUD advise which states WDO inspections are currently deemed a customary seller concession?

A: The contractor should research that information based on the areas in which they plan to submit a proposal.

24. C.5.2.10 Custodial Properties, page 56: Occupied custodial properties often require additional trips to the property for occupant coordination and meetings under current

FSM contracts. Can HUD clarify its intentions to reimburse the FSM for additional services that are required on custodial properties that fall outside of the normal scope of work? Attachment 5, Allowable Pass Through Expenses, does not specifically provide for any services outside of this scope of work to be submitted as a pass-through expense. Is this HUD’s intention?

A: In accordance with the PWS, expenses associated with an occupied custodial property not a pass-through expense.

a. Can HUD define the actual scope required to perform on these properties? Doing work on these properties is dangerous for the FSM field crews, and in most cases exposes HUD and the FSM to legal risks associated with trespassing.

A: The FSM is required to perform services to the extent that they will not constitute an illegal trespass, and properly document the reason for the limitations when necessary on the inspection form. The GTR can also provide guidance when notified; otherwise the contractor shall refer to the PWS for Custodial property requirements.

25. C.5.2.18 Purchaser Post-Closing Complaints, page 59: Will the AM will still manage complaints pertaining to title, mortgage insurance, etc. or will all complaints be directed to the FSM under this new contract?

A: Where appropriate to their responsibilities as the FSM, the contractor should notify their GTR in accordance to the PWS requirements in section 5.2.18.

a. C.5.3 Performance Requirements Summary, page 60: Can HUD clarify, for performance compliance failures where a disincentive is indicated of 5% off of the monthly invoice for each 5% deviation below minimum satisfaction requirements, will the 5% penalty apply to all compensation for the subject month or only to the CLIN associated with that particular scorecard item?

A: Incentives/Disincentives are removed from the PRS

b. Can you provide for each performance requirement with a disincentive requirement a related CLIN number that ties to that requirement? Please explain the actual calculation of the disincentive language.

A: Incentives/Disincentives are removed from the PRS

c. Also, the far right column of the chart mentions “Incentive/Disincentive”. What “Incentives” are there in this contract as they all seem to be “disincentives”?

A: Incentives/Disincentives are removed from the PRS

26. C.5.4.2 Annual Audited Financial Statement Required, page 66: This section, like previous FSM contracts, state that audited financials must be prepared no later than 120 days before the expiration of the base year, and each option year. This puts audited financials due February 28 for this contract which does not provide most companies with sufficient time to close out the year, have financials prepared and subsequently audited.

Would HUD give consideration to adjusting this requirement uniformly from 120 days to

90 days

A: HUD will provide an Amendment to allow for 90 days

a. Also, this clause does not specify what type of audited statement is required, is an internally audited statement sufficient or does HUD require contractors to retain an outside CPA firm? Formal CPA audit of financial statements that comply with financial regulations are very costly, particularly for small businesses that do not have an on-staff Certified Public Accountant.

b. A: Audited Financial Statements are required to be prepared and certified by a

Certified Public Accountant (CPA) in accordance with Generally Accepted

Accounting Principles (GAAP).

27. L (2), page 146: this section indicates that the first page of the proposal must show:

a. The solicitation number

b. Name address, tel & fax of offeror

c. Statement specifying extent of agreement

d. Names, titles, tel and fax of persons authorized to negotiate

e. Names, titles, tel and fax of persons authorized to sign

However, L.6 Proposal Content, beginning on page 153 clearly provides information about each volume to include page length and content, and specifically states not to include cover pages. “Only the first pages of that proposal Volume, up to the stated limit, will be evaluated. Do not include extraneous pages in the proposal. Separate cover pages beyond the requested cover letter, tables of contents, company statements, executive biographies, etc., will be counted when determining if a proposal exceeds the page limits and may prevent the Offeror's substantive information from being reviewed.” Can HUD clarify:

should there be a separate cover page for each volume to include the information listed above, or should this information be included only in the cover letter?

A: Cover pages to be included in volume I only.

28. L.6, Volume 1, RFP Documents, pages 156 & 157: Can HUD specify “Cover letters, company statements, and executive biographies are limited to two (2) pages.” means 2 pages each, or 2 pages total?

A: 2 pages total

29. L.6, Volume 2, Technical Approach, page 159: this section indicates that “Offeror shall identify their company/organization in the body of the Technical Proposal (Volume II) as The FIRM or The ORGANIZATION. Volume II shall not contain any names (such as offeror names, company letterhead, personnel names, previous contract awards, projects or product names). Can HUD clarify, company name is not to be included in header, footer or cover page (if applicable) of technical volume, or does this request only apply to body of volume? If each volume is to be evaluated independently, “Each of the volumes must be complete in itself so that evaluation of each part may be conducted independently and so that the technical part may be evaluated strictly on its own merit”, how will HUD identify offeror if name is not to be included anywhere within this volume?

A: Organization Names should appear on the CD label

30. Section B - Routine Inspections: This Section states that “The failure of the Contractor to perform (1) any routine inspection, and/or (2) the proper upload of required documentation into P260 within the required timeframe (see section C.5.2.3.2) of the

Performance Work Statement will be considered a complete failure by the Contractor in performing the required property inspection.” It further states that “The Government reserves the right to withhold or pro-rate payment based on the acceptance clause, HUDAR 2452.246-70, Inspection and Acceptance, for any services not rendered or partially completed.” This HUDAR clause simply states that inspection and acceptance shall be performed by the GTR, it does not authorize withholding or pro-rating payment.

Also isn’t this a disincentive and shouldn’t it be listed as such in the Performance

Requirements Summary?

A: This not a disincentive, see Section G – Contract…