310_Field_Service_ManagementPWS_Upload.pdf

Performance Work Statement (PWS)

3.10 Field Service Management

DRAFT

Vision Statement

1 General Information

1.1 Introduction

1.2 Background

1.3 Constraints

1.4 Description of Services

1.5 Non-Personal Services

1.6 Period of Performance

1.7 Place of Performance

1.8 Hours of Operation

1.9 Special Qualifications

1.10 Post Award/Kickoff Conference

1.11 Status Meetings

1.12 Contractor Travel

1.13 Transition In

1.14 Transition Out

2 Definitions and Acronyms

2.1 Definitions

2.2 Acronyms

3 Government-Furnished Property and Services

3.1 Government Services

3.2 Facilities

3.3 Equipment

3.4 Materials

3.5 Quality Assurance (QA)

4 Contractor-Furnished Items and Services

4.1 Facilities

4.2 Equipment

4.3 Material

4.4 Contractor Responsibilities

4.5 Contractor Personnel

4.6 Identification of Contractor Employees

4.7 Quality Control

4.7.1 Quality Control Plan

5 Specific Tasks

5.1 GENERAL REQUIREMENTS

5.2 PROPERTY MANAGEMENT

5.3 REQUIRED REPORTS

5.4 Quality Assurance

6 Deliverables

6.1 Quality Control Plan

6.2 Acceptance Criteria

7 Performance Requirements Summary

8 Related Documents

Vision Statement

The vision of this requirement is to obtain contractor support to assist HUD with property management services. By obtaining these services HUD will better ensure that:

• FHA insured properties are maintained in a manner that preserves communities;

• HUD has real time access to all property related information;

• Properties are secured and safe from hazardous conditions;

• Property values are preserved;

• Properties are maintained in a manner that reflects a high standard of care;

• There is a high level of customer satisfaction with HUDs property disposition program.

1 General Information

1.1 Introduction

The Department of Housing and Urban Development (HUD), Single Family Housing, Real-Estate Owned (REO) Division is seeking contractor support to provide property management services. Services shall include property maintenance and preservation services, property inspection, securing property, and performing cosmetic enhancements/repairs.

1.2 Background

The Federal Housing Administration (FHA), an organizational unit within HUD, administers the single-family mortgage insurance program. FHA insures approved lenders against the risk of loss on mortgages obtained with FHA financing. In the event of a default on an FHA insured loan, the lender acquires title to the property by foreclosure, a deed-in-lieu of foreclosure, or other acquisition method, files a claim for insurance benefits and conveys the property to HUD. As a result of acquisitions through the mortgage insurance program and other programs, HUD has a need to manage and sell a sizable inventory of single-family homes in a manner that promotes home ownership, preserves communities, and maximizes return to the FHA insurance funds.

HUD is the largest single seller of real estate in the US. In fiscal year 2013, the

Department sold 112,162 single-family homes.

HUD administers the REO disposition program through four (4) Homeownership

Centers (HOCs) located in: Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California. Each HOC is responsible for a designated geographic area. Within each HOC there will also be designated contract areas for Field

Service Managers.

Since 1999, HUD has been outsourcing the disposition of its REO inventory to

Management and Marketing (M&M) Contractors. To ensure the continued success of its disposition program and to further capitalize on the disposition expertise of the private sector, in 2007, HUD conducted extensive market research on industry best practices surrounding the REO asset disposition process to structure the third generation of the contracting program, herein after referred to as M&M III. This acquisition, like

Management and Marketing 3.6, is part of the third generation of M&M services. Based on a history of market research results from M&M III, HUD has continued to develop a disposition structure for the management and marketing of REO inventory that will streamline its operations, capitalize on the expertise of its potential Contractors, and provide flexibility to meet changing market conditions in the REO industry.

Key elements of the disposition structure include:

Centralization of mortgagee compliance functions under a Mortgagee Compliance

Manager (MCM) responsible for pre- and post-property conveyance activity including approval of claims for payment, title reviews, and inspection reviews.

Separation of marketing functions Asset Managers (AM) from property management functions Field Service Managers (FSM).

Creation of an Oversight Monitor (OM), focused on overall portfolio analysis, monitoring, and oversight of the disposition processes.

OVERVIEW OF ASSET DISPOSITION CONTRACT STRUCTURE

This section describes the three (3) entities under the M&M III disposition structure and the roles and responsibilities of each Contractor within the structure.

The entities under the new disposition strategy include:

Mortgagee Compliance Manager (MCM) Asset Manager (AM)

Field Service Manager (FSM)Section 1.4 includes a detailed summary of the description of services of the FSM Contractor. Below is a summary of the purpose and objectives of other Contractors in the M&M III asset disposition structure.

Mortgagee Compliance Manager (MCM)

The Mortgagee Compliance Manager shall perform a variety of pre- and post- property conveyance services to ensure that HUD's interests are protected. These services will include: reviewing property inspections to ensure the property is in conveyance condition; resolving conveyance exceptions; providing guidance to Mortgagees related to pre-conveyance and post-conveyance responsibilities; and leveraging HUDs software and information systems to execute and complete the tasks within its contract.

Asset Managers (AM)

The AMs are responsible for the marketing and sale of REO property. AMs will be contracted to market HUD-owned properties within their selected geographical area.

OVERVIEW OF THE ASSET DISPOSITION PROCESS (ADP)

M&M III consists of the following major processes; (1) Pre-Conveyance Activity; (2)

Conveyance Activity; (3) Claim Review Activity; (4) Management Activity; (5) Marketing

Activity; (6) Closing Activity; and (7) Oversight Monitoring.

ASSIGNMENT OF ASSETS

Property assignments will begin during the Ramp-up phase of the transition period (See

Section C.6.2, Ramp-up). During this phase, HUD will begin to assign new acquisitions and transfer unsold inventory, held off market and custodial properties to the Contractor.

Asset Assignments and Performance:

Through the life of the contract, the Government Technical Representative (GTR) will monitor contractor performance based on HUDs Quality Assurance (QA) procedures.

The Government will issue a Quarterly Performance Report (QPR) in the form of a contractor performance scorecard, and/or a summary of periodic HUD qualitative inspections and reviews which will assess the contractor’s adherence to the standards detailed in the Performance Requirements Summary (PRS). The assessment period will begin in the 4th month of contract award and last through the entire time period the

Contractor performs the duties as listed under this contract. Contractors who are performing at a satisfactory level as indicated on the QPR and as a result of HUD inspections and reviews will likely continue to receive new property acquisitions within their awarded geographical area. Contractors who are performing at below a satisfactory level as indicated by the QPR and as a result of HUD Inspections and reviews may find their assignments impacted by the following:

1. Realignment: The Government may unilaterally realign the existing geographic area in accordance with the clause H.8, Option to Increase/Decrease the Geographic Service

Area. After meeting the guaranteed contract minimum established in HUDAR Clause

2452.216-76, the Government reserves the right to non-competitively increase or reduce the geographic service area of this contract through contract modification. As previously noted, the resulting modification will realign the geographic area of the affected contract, but will not increase the original contract ceiling, unless one of the authorities in FAR Subpart 6.302 is cited. Realignment of the geographic area will become effective for all new assignments made after the effective date identified on the realignment modification. Assignments/Orders placed prior to a realignment modification being issued under this authority will remain with the existing contractor, unless the Government invokes a full or partial termination in accordance with FAR Part

49. The Government intends to utilize this clause as mechanism to incentivize a high level of performance by rewarding the most highly performing contractors with an opportunity to expand their geographic service area and provide a disincentive for non-performance of contract requirements by reducing the geographic service area of contractors who fail to meet contract expectations.

2. Non-Assignment: The Government may unilaterally stop assigning assets to a

Contractor due to unsatisfactory performance. Contractors are not guaranteed any new assignments if the Government has stopped assigning assets. The Government will continue to review and monitor the Contractors performance and if performance has shown improvement, the

3. Non-exercise of Option Periods: A satisfactory contract year-end performance rating is required for exercise of an option. Continued satisfactory performance is also required after an option is exercised in order for assignments to continue for the entire period.

Geographic Areas Administration and Oversight

There will be a Contracting Officer (CO) and a Government Technical Representative

(GTR) for each of the entities listed under Section 1.2 of this PWS. The contracts will be administered from the respective program/geographic areas and the M&M Acquisition

Center in Atlanta, Georgia. The program area administration will be as follows:

MCM - National Servicing Center (NSC), Oklahoma City, OK AM/FSM Designated

Homeownership Centers

1.3 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 following:

Written Approval

In general, the appropriate HUD official will provide electronic approval of Contractors requests through the applicable HUD information systems. Where approvals are not provided through the system, the GTR will provide approval in writing unless otherwise stated in this PWS. Unless the PWS specifically authorizes oral communications, the

Contractor acknowledges that oral communications do not constitute approval, consent or authorization and if it proceeds without written or electronic approval, it accepts the risk of proceeding.

Effect of Approval

Notwithstanding the rights of approval and acceptance reserved to HUD, the Contractor shall be solely and primarily responsible for the performance of every requirement in this PWS. Neither the reservation nor the exercise of HUDs approval or acceptance rights will be deemed to relieve the Contractor from its responsibility or to create any liability by HUD to the Contractor or third parties, with respect to the performance of the

PWS requirements.

Compliance with Legislative, Regulatory and Policy Requirements

The Contractor shall comply with all Federal, state or local laws and all regulations pertaining to the activities described in this PWS. When local laws and regulations conflict with HUD requirements, the Contractor shall notify the GTR and the Contracting

Officer.

Performance and Payment Bond

HUD is entrusting the Contractor with the care of valuable government property.

Therefore, for the protection of the Federal Government and persons supplying labor or materials for the work under this PWS, the Contractor shall furnish a performance bond and a payment bond, or the Contractor may furnish the alternatives to performance bond and payment bonds described in FAR 28.204. Examples of these alternatives include United States bonds or notes, certified or cashier’s checks, bank drafts, money orders, currency, or irrevocable letter of credit.

Conflicts of Interest

General Rule

The Contractor shall not engage in, or permit, any conflict of interest. In addition to any other conflicts of interest prohibited under applicable law, each of the following situations will constitute a conflict of interest.

Pass-Through

The Contractor cannot purchase or obtain services from an Affiliated Entity of the

Contractor for which HUD makes pass-through reimbursement under this PWS.

Kick-backs, Rebates, Referral Fees

The Contractor, a Management Official of the Contractor, an Immediate Family member of a Management Official of the Contractor, or an Affiliated Entity of the Contractor may not directly or indirectly receive any form of payment, income, revenue, compensation, or anything else of value from any person or entity, other than HUD or the Contractor, for performance of the Contractors responsibilities under this PWS.

Excluded Purchasers

The Contractor, Subcontractor, a Management Official, their immediate family members, or any affiliated Entity under contract with HUD who has involvement in the management, marketing, or oversight of HUD-Owned Properties under HUDs M & M III contracts, are prohibited from purchasing or leasing a HUD-Owned Property.

Prohibition on Pre-Conveyance Preservation and Protection Work

The Field Service Manager, its affiliated companies or its agents/subcontractors are prohibited from performing pre-conveyance work on FHA Single Family Insured properties. In the event the Field Service Manager, its affiliated companies or its agents/subcontractors performs pre-conveyance work, the fees associated with post-conveyance work are expressly unallowable and will not be paid. The Field Service

Manager must obtain written certification on an annual basis from its subcontractors affirming that they have not and/or will not perform pre-conveyance work on FHA Single

Family Insured properties.

NOTICES

The Contractor shall immediately notify the GTR of any actual or suspected conflict the

Contractor becomes aware of by any Entity under contract with HUD.

ELECTRONIC DISCLOSURES, RECORDS AND SIGNATURES

With respect to Federal law, the Contractor shall comply with the Electronic Signatures in Global and National Commerce Act, 15 USC 7001-7006, (ESIGN), including the requirements to, prior to electronically delivering information to a consumer, provide the consumer with certain disclosures and obtain the consumers consent to electronically receive information. The Contractor shall provide consumers with the option of requesting a paper copy of an electronic record and will not charge any fee for such copy. The Contractor shall not use 15 USC 7001(c)(3) to evade compliance with 15

USC 7001(c)(1)(C)(ii). With respect to State law, the Contractor shall comply with

ESIGN or, if a State has enacted a statute, regulation, or other rule of law preempting

ESIGN pursuant to 15 USC 7002, the State statute, regulation, or other rule of law governing the use or acceptance of electronic records or signatures. This section does not constitute consent by HUD to the use of electronic records as a substitute for paper records or the use of electronic signatures as a substitute for ink signatures.

Cost Estimating Tool

The Contractor shall use a comprehensive cost estimation and valuation tool provided by HUD. The tool is designed to provide replacement or improvement costs for property preservation and repair, provide damage estimates, and validate bids submitted for repairs. The Contractor shall use the cost estimating tool to validate the reasonableness of bids submitted for repairs and improvement costs.

The contractor shall Furnish Systems Security Administrator.

The Contractor shall designate a Systems Security Administrator (SSA) no later than ten (10) days of the effective date of the contract and provide this information to the

GTR within this timeframe. SSA must complete the mandatory HUD specialized on-line security training course designed for this position. The SSA shall use forms provided by

HUD to initiate requests for user access to HUD IT systems and to request access modifications and deletions. The Contractor shall certify, not later than twenty (20) business days from the effective date of the contract that all staff has received instruction in system security issues, are familiar with the contents of the current version of HUD Handbook 2400.25 Rev. 2, Information Security Program. Additionally, this certification must be made within seven (7) days for any new hires.

The SSA will also be subject to HUDs IT General Controls and Monitoring of

Contractors security policy. The SSA shall conduct annual security-self assessments and content will be subject to verification by facility inspections to ensure compliance with all HUDs IT security policies.

1.4 Description of Services

HUD seeks Field Service Manager Contractors who shall provide property maintenance and preservation services for HUD REO properties. Contractors will use this information to propose technical solutions that will provide a detailed description of the procedures, documents, or reports that will be developed to meet the services requested. These services shall include:

Property Management;

Require Reporting;

Quality Assurance

1.5 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.

If the Contractor believes that any actions constitute, or are perceived to constitute personal services, it shall be the Contractor's responsibility to notify the Contracting

Officer (CO) 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.

1.6 Period of Performance

The period of performance shall be for one base period of 12 months and four 12-month option periods

1.7 Place of Performance

The services to be performed under this contract shall be at the contractor’s facility.

1.8 Hours of Operation

The Contractor is responsible for providing services between the hours of 8AM to 5PM

Monday thru Friday except for Federal holidays or when the Government facility is closed due to local or national emergencies, administrative closing, or similar

Government directed facility closings. Weekly hours shall not exceed a forty (40) hour work week and a typical work day will be 8 hours each day Monday through Friday. The

Government reserves the right to change hours of operation or restrict contractor access. Work outside of these daily hours is prohibited without Contracting Officer approval. Government agencies will not be available during scheduled holidays, inclement weather, weekends, and after duty hours.

The Contractor shall 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.

After Business Hours

The Contractor shall be available to respond to and resolve property related emergencies after regular business hours. The Contractor shall maintain and monitor a phone number and an e-mail address that are available twenty-four (24) hours a day, seven (7) days per week, 365 days a per year.

1.9 Special Qualifications

N/A

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 within five business days after contract award.

1.11 Status Meetings

The Contracting Officer, Government Technical Representative (GTR) and other

Government personnel, as appropriate may meet periodically with the Contractor to also review Contractor performance, requirement status, etc. At these meetings, the

Contracting Officer will 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 and 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 In

To ensure a smooth transfer of property and preservation responsibilities from the existing M&M contractors(s), herein after called "Former Contractors", to the Contractor, HUD has provided for a Transition Period. The Transition Period will run from the effective date of the Contract and will not exceed the timeframes established herein or as set forth by the Contracting Officer. During the Transition Period, the Contractor shall establish or adapt its physical infrastructure, retain qualified staff and develop or obtain necessary hardware, software, Internet applications and information technology. The

Contractor shall also: attend HUD provided training, provide training to its workforce to enable them to provide required services under this PWS; obtain all required licenses, permits, bonds and legal permissions required to transact business within the geographical area; and develop and implement quality assurance programs, assuming contract responsibilities as described in this section.

The Transition Period shall have two (2) phases, the Start-Up and the Ramp-Up. The activities and timeline for each phase are described below.

The Contractor shall, upon the Contracting Officer's written notice, furnish Transition-In services as required. As a successor, the Contractor shall have sufficient personnel on board during the [insert applicable time] 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 the 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.

Start Up

The Start-Up Phase begins on the effective date of the contract and continues for no more than sixty (60) calendar days. During this period the Contractor shall complete preparation activities, including but not limited to: attending post award conferences and meetings with HUD staff, attending specialized training provided by HUD; establishing its physical infrastructure; ensuring that a qualified and trained workforce of employees or Subcontractors is in place; obtaining all licenses, permits, bonds and qualifications, required to transact business in the geographic area; and implementing the information technology and support necessary to fully perform the requirements contained in this

PWS.

Contractor Responsibilities

Post Award Conference Within the first week following the effective date of the Contract, the GTR will notify the Contractor of the date and location of the post award conference.

The Contractor and key personnel shall attend the post award conference. Contractor orientation as set forth in Section 6.1.1.7 will be provided at the post award conference.

Quality Control, Contingency, and Property Management Plans (collectively, "the Plans)

Within ten (10) calendar days after the post award conference, the Contractor shall submit a Quality Control Plan (QCP) and a Property Management Plan (PMP) to the

GTR and CO. Plans shall be submitted electronically. The GTR will review and acknowledge receipt of the QCP and PMP within thirty (30) calendar days. Upon receipt of comments from the GTR, the Contractor shall submit to the GTR within 10 business days, a revised QCP and PMP incorporating all comments. The QCP and PMP will be revised as circumstances dictate, to reflect necessary changes throughout the term of the Contract. Procedures for Quality Control and Property Management as outlined by the respective plans should be accurate descriptions of Contractor activities in performance of the activities as outlined in the PWS. Prior to implementing changes, the

GTR must receive all changes to the QCP and PMP Plan in writing for review, comment, and approval. The contractor will be responsible for any charge incurred by

HUD as the result of any unapproved deviation from the activities outlined in the

Contractors QCP and PMP. The Contractor shall maintain the QCP and PMP Plan throughout the Contract or as otherwise required in transfer to HUD or another contractor, if needed.

The Contingency Plan shall be submitted no later than forty-five (45) days after the post award conference to the GTR and CO. The Plan shall be submitted electronically. The

GTR will review and acknowledge receipt of the Contingency Plan within thirty (30) calendar days. Upon receipt of comments from the GTR, the Contractor shall submit to the GTR, for their approval, a revised Contingency Plan all comments within 10 business days. The Contractor must implement the Contingency Plan prior to completing the Start Up phase of the transition. The Contingency Plan may be revised as circumstances dictate, to reflect necessary changes throughout the term of the contract. The GTR must approve all changes prior to implementation. The Contractor shall maintain the Contingency Plan throughout the contract or as otherwise required in transfer to HUD or another contractor, if needed.

Office Space No later than the tenth (10th) business day following the effective date of the Contract, the Contractor shall secure any and all office space required under

Section 5.1.2 and notify the GTR via electronic transmission of the address.

Systems Security - No later than the tenth (10th) business day after the effective date of the Contract, the Contractors System Security Administrator (SSA), shall obtain the necessary forms from the designated HUD Security Administrator for each staff person who will need access to HUD systems. The SSA shall arrange for completion of the forms and shall transmit the completed forms to HUDs Security Administrator no later than the fourteenth (14th) calendar day after the contract award date.

Performance Bond and Payment Bond -The Contractor shall deliver to the CO a performance bond and a payment bond or acceptable alternative in an amount and timeframe as required.

Phone Service - No later than the fifteenth (15th) business day following the effective date of the contract, the Contractor shall contract for phone service and notify the GTR via electronic transmission of the phone number(s).

Orientation Within 60 days of the effective date of the contract, the Contractor shall attend the HUD provided orientation described in Section 6.1.2.2. The orientation will be held at HUD designated locations. HUD reserves the right to limit the number of trainees who may attend. The Contractor shall be required to train those members of its workforce that do not attend HUD provided orientation, as well as new employees as they are hired, to enable them to provide required services under this PWS.

Transition Coordination - The Contractor shall meet with the GTR and the Former

Contractor and cooperate in good faith to develop a detailed protocol for transfer of ongoing contract activities in order to ensure a continuity of service to external customers.

HUD Responsibilities

Review of Contractors Plans - No later than thirty (30) calendar days after receipt of the

Contractors Quality Control and Property Maintenance Plans, the GTR will review these plans and provide comments to the Contractor for incorporation in each Plan. No later than thirty (30) calendar days after receipt of the Contingency Plan, the GTR will notify the Contractor whether HUD accepts or rejects each Plan. The Contractor shall incorporate HUD comments into the Plans and issue revised Plans within ten (10) business days after receipt of the GTRs comments. The Contractor shall satisfy the requirements of HUD for acceptance of each Plan. These requirements include consistency with the Plans presented as part of the Contractors proposal and HUDs regulatory and statutory authorities.

Orientation HUD GTR will notify the Contractor of the time and location of HUD provided training.

Policy and Process - This training will include an overview of HUD and the policies and procedures related to property management, including but not limited to: processing homeowner’s association dues payment; lead based paint requirements; interaction with other HUD Contractors; quality assurance and compliance monitoring activities;

and Contractor invoicing procedures.

Systems HUD will provide training to Contractor staff on the use of HUD systems identified in this PWS.

Ramp Up

The Ramp Up Phase of the Transition Period shall begin on the sixty-first (61st) calendar day after the effective date of the contract, unless otherwise extended by the

Contracting Officer and will end on the expiration date of the final option year of the contract with the Former Contractors, or such later date as determined by the CO.

During the Ramp Up Phase, the Contractor shall assume responsibility for specific tasks in the order described below.

Transition Schedule:

Ramp Up

The Ramp Up Phase of the Transition Period shall begin on the sixty-first (61st) calendar day after the effective date of the contract, unless otherwise extended by the

Contracting Officer and will end on the expiration date of the final option year of the contract with the Former Contractors, or such later date as determined by the CO.

During the Ramp Up Phase, the Contractor shall assume responsibility for specific tasks in the order described below.

61st Day - On the sixty-first (61st) calendar day after the effective date of the contract, the Contractor shall begin performance of property and preservation services.

Custodial Properties - The Former Contractor shall transfer case files for each custodial property under management to the Contractor. These properties will be transferred randomly, yet evenly without regard to property characteristics. The case files will contain all available documents, including the Former Contractors inspections and copies of work orders, if any. The files will arrive in standard record boxes via overnight delivery. Each box will include a file inventory pulled from P260, listing the FHA Case

Number, property address and date the property was assigned to the Former

Contractor. The Contractor shall perform a property inspection of each property no later than five (5) business days following receipt of the shipment and, no later than twenty-four (24) hours from inspection or notification of hazard, shall immediately secure the property and make required health and safety repairs or any emergency repairs.

Repair Expenses due to Former Contractors Non-Performance. The Contractor shall track any emergency repairs or health and safety hazards in order for HUD to request reimbursement amounts from Former Contractors.

91st Day On the ninety-first (91st) calendar day after the effective date of the contract, the Contractor shall begin performance of all property and preservation services related to Held Off Market Properties and unsold inventory.

Held Off Market (HOM) Properties - The Former Contractor shall transfer to the

Contractor case files for each property currently in a held off market status (Section

5.2.11). The case files will contain all available documents, including the Former

Contractor inspections and copies of work orders, if any. If the property is occupied, the file will contain lease information and payment history. The files will arrive in standard record boxes via overnight delivery. Each box will include a file inventory pulled from

P260, listing the FHA Case Number, property address and date the property was assigned to the Former Contractor. The Contractor shall perform a property inspection of each property no later than five (5) business days following receipt of the shipment and, no later than twenty-four (24) hours from inspection or notification of a hazard shall immediately secure the property and make required health and safety repairs.

Unsold Inventory - The Former Contractor shall transfer to the Contractor all remaining properties in their inventory that are not under contract for sale A case file will be provided for each property containing all available documents including the Former

Contractors inspections and copies of work orders, if any. The files will arrive in standard record boxes via overnight delivery. Each box will include a file inventory pulled from P260, listing the FHA Case Number, property address and date the property was assigned to the Former Contractor. The Contractor shall perform a property inspection for each property no later than fifteen (15) business days following receipt of the shipment and, no later than twenty-four (24) hours from inspection or notification of a hazard shall immediately secure the property and make required emergency or health and safety repairs.

136th Day Transfer of Pending Contracts - The Former Contractor shall retain custody of properties in their inventory that are under contract for sale as of the 91st day after the effective date of the contract. Any property that has not closed by the 135th day after the effective date of the contract will be assigned to the M&M III Contractor.

Property Management -The provisions of Section 5.2.3 apply to properties subject to transferred pending sales except that the Contractor shall not be required to begin inspection of properties with a scheduled closing date within fifteen (15) calendar days of the date of transfer, unless the pending sale is postponed or terminated or the

Contractor shall be notified of an imminent health or safety hazard on the property.

Terminated Sales - If, after transfer, a pending sale is terminated and the property is returned to the market for sale the Contractor shall manage the property in accordance with Section 5.2.3. The Contractor shall perform a property inspection for the property within five (5) business days after termination of the pending sale.

1.14 Transition Out

Upon expiration or termination of this contract, contract services shall be assigned to the new contractor beginning the first day following expiration or task order termination. Prior to beginning a Transition Out, the Contracting Officer will provide the FSM contractor the specific requirements for transition via a bi-lateral modification

To minimize any decrease in productivity and to prevent possible negative impacts on additional services, the Contractor shall have sufficient personnel on board during the

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, such that full control by the successor Contractor is achieved by the end of the new contract Transition-In period.

2 Definitions and Acronyms

2.1 Definitions

Adverse Occupants - Occupants who are in possession of a HUD owned or Custodial property without the legal right to be there.

Administrative Contracting Office Staff - After contract award, the HUD official authorized to execute and administer contractual documents based on this contract and who is also responsible for the day-to-day administration of this contract and delegating contract administration responsibilities to contracting staff and Government Technical

Representatives.

Acquisition - the process through which a real property or mortgage note secured by a real property is conveyed to HUD. Properties and mortgage notes are conveyed

(acquired) from a number of sources. See Acquisition Types, Section 2.3.

Acquisition Types

The vast majority of acquired properties are conveyed to HUD by a Servicing

Mortgagee following foreclosure of an FHA insured mortgage and the filing of a claim for insurance benefits. However, HUD also acquires properties from a variety of other sources. The type of acquisition may impact the method by which the Contractor is informed of the new assignment and the scope of services required. A listing of possible acquisition sources follows:

Conveyance Foreclosures - properties conveyed to HUD by a Mortgagee following foreclosure, or deed-in-lieu of foreclosure of an FHA insured mortgage, and the filing of a claim for insurance benefits.

Custodial Properties - properties secured by a Secretary-Held mortgage or HECM, which are in default and upon inspection by HUDs servicing Contractor determined to be vacant or abandoned. Title is not yet in HUDs name. Upon receipt of notification from the GTR, the Contractor shall take possession to protect and preserve the property until title is acquired. Custodial properties are not marketable until foreclosure is completed and title is vested in the Secretary of HUD. These properties will be assigned by the

GTR. Mortgagee compliance and marketing and sales tasks are not required for these properties. There are limited property management tasks associated with these properties.

Foreclosed Secretary Held Mortgages (SHMs) - properties acquired as the result of the foreclosure of a mortgage serviced by HUD including assigned and purchase money mortgages. These properties will be assigned by the GTR. Mortgagee compliance tasks are not required for these properties.

Home Equity Conversion Mortgages (HECM) - a property acquired as the result of foreclosure of a reverse mortgage insured by FHA. These properties will be assigned by the GTR and will not be in SFIS.

Legal Settlement - properties that are not FHA-insured but were acquired as a result of a lawsuit or for other reasons such as to accommodate another Federal agency. These properties will be assigned by the GTR.

Repurchases/Buy Backs properties repurchased by HUD to resolve a post-sale claim by the purchaser of a HUD-Owned Property. The HUD GTR must approve all repurchase requests.

184s properties on Indian or tribal lands acquired as a result of foreclosure of a loan guaranteed by HUDs Office of Native American Programs under the Section 184, Loan

Guarantee for Indian Housing Program of the Housing and Community Development

Act of 1992. These acquisitions may be lease-holds and have tribal specific resale restrictions.

312s - Properties acquired as a result of foreclosure of a HUD Community Planning and

Developments Rehabilitation Mortgage. Notification of acquisition is provided by memorandum from the current servicer.

Affiliated Entity - (a) As to Contractor, any Entity (i) controlling, controlled by, or under common control with the Contractor, or (ii) whose Management Officials are an

Immediate Family member of a Management Official of the Contractor; or (b) As to

Subcontractor, any Entity (i) controlling, controlled by, or under common control with the

Subcontractor, or (ii) whose Management Officials are an Immediate Family member of a Management Official of the Subcontractor, including any agent or broker, licensed under a listing broker, used to list HUD-owned properties; or (c) As to any other Entity, any Entity (i)controlling, controlled by, or under common control with the other Entity, or

(ii) whose Management Officials are an Immediate Family member of a Management

Official of the other Entity.

Asset Control Area (ACA) Program - a program for the disposition to eligible participants of HUD-owned properties and future HUD acquisitions of properties and/or mortgage loans located within HUD designated revitalization areas.

Asset Manager - a HUD Contractor responsible for the marketing of HUD REO properties.

Blanket Approval - A pre-approved amount determined by the GTR for recurring similar services. Blanket Approval can be issued for specific Casualty Damage occurrences or for extended periods not to exceed one year. I.e. a predetermined amount for WDO inspections.

Broken Window - a pane of glass that has a visible opening that permits entry or exposure to the elements or which is so badly cracked as to constitute a hazard, e.g. a window with a crack that divides a single pane into more than two pieces or is loose when pressed upon.

Business/Work Days - Every official work day of the week which are days between and including Monday to Friday. This does not include public holidays and weekends.

Calendar Day - Any day of the week.

Casualty Damage - is loss or harm to real or personal property that resulted from an accident, negligence and, or willful destruction, attributed to other than a Contractor, its employees or any affiliated Contractors, Subcontractors or its employees, or an uncontrollable event such as fire, or some act of nature such as windstorm, snowstorm, or hurricane.

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.

Contract Award Date - the date upon which HUD and the Contractor have both executed a Contract based on this PWS.

Contract Effective Date - the date upon which the Contractor begins to perform work under the PWS as identified in block 3 of form SF-1449.

Contracting Officer - the HUD official authorized to execute and administer a contract based on this PWS on behalf of HUD and includes any duly appointed successor or authorized representative.

Control - as to any Entity, the power to direct or cause the direction of the management and policies of such Entity, whether through the ownership of voting securities, by contract, or otherwise. The term “Controlled” shall have a correlative meaning.

Conveyance Condition - Properties that are conveyed free of surchargeable damage

(see definition of surchargeable damage).

Cracked Window - a pane of glass that has no more than one crack and is still tight when pressed upon. A cracked window must have clear tape on both sides or it will be constituted as a Safety Hazard.

Custodial Property - a borrower owned property that serves as security for a secretary-held mortgage (including a HECM), which HUD, through the Contractor, has taken possession of following default and vacancy or abandonment.

Daily Holding Cost - an estimated expense of HUD owned properties including taxes, interest and miscellaneous operating expenses.

Days - Unless otherwise specified in the Request for Proposal (RFP), all references to days means calendar days.

Deteriorated Paint - any interior or exterior painted surface that exhibits cracking, scaling, chipping, peeling, or loose paint.

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

Defective Service - a service or deliverable that does not meet the performance standard specified in the contract for a specific performance requirement.

Electronic Data Interchange (EDI) - Software application-to-application communication of data in standard format for business transactions, EDI is a set of standards for structuring information that is to be electronically exchanged between and within businesses, and organizations.

Electronic Transmission - a message transmitted electronically in a format displayed on equipment, for example, a personal computer monitor or facsimile machine. The electronic media used to deliver electronic messages displayed on a personal computer monitor includes electronic mail or another method acceptable to HUD.

Emergency Contact Sign - a visible sign on the property that provides a toll free, 24-hour telephone number, and other information as required by HUD to report emergencies.

Entity - any individual, corporation, partnership, joint venture, limited liability company, trust, association.

FHA Connection - an Internet-based system that provides FHA business partners and

Contractors secure interaction with HUD mainframe systems to perform required reporting and research the origination and servicing history of FHA insured loans.

Field Service Manager (FSM) - a HUD Contractor responsible for property management, maintenance, and preservation services.

Financial Control Manual - A manual that describes HUD-Single Family Housing

Program's uniform policies and procedures for processing and approving contractor invoices related to the Marketing and Management of HUD's properties - It also describes the minimum documentary evidence required of each type of transmittal.

Government Technical Monitor (GTM) - a HUD employee who assists the GTR in a limited area of expertise and who may be delegated some duties of the GTR.

Government Technical Representative (GTR) - a HUD employee who acts as the

Contracting Officer's representative in all matters concerning the technical aspects of a contract. The GTR is responsible for giving Contractors technical advice and guidance related to the work required by the contract. Moreover, the GTR is the principal judge of a Contractor's performance, including the quality and timeliness of services.

Health and Safety Hazards - Any condition or situation at the property that exposes the government to abnormal risk, that presents a source of danger, which could cause an accident, or poses the threat of injury, harm to the public or property that must be corrected within one (1) day of discovery or notification.

Home Equity Conversion Mortgage (HECM) a specialized mortgage product available only to senior citizens that allows them to receive cash payments from the equity in their home.

HUDCLIPS - a web-based directory of all of HUDs official policies and directives including notices, Mortgagee Letters, Housing Notices, Handbooks, Code of Federal

Regulations and US Codes Titles 12 and 24. The Internet address for HUDs Client

Information and Policy System (HUDClips) is http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips

HUD-Owned Properties - Those properties that HUD owns by reason of payment of an insurance claim or another acquisition method. Unless otherwise indicated the term includes vacant land and occupied-conveyance properties. HUD-owned properties are also referred to as HUD REO or HUD-homes.

Immediate Family - As to any person and whether by blood, law, or marriage, (i) his or her spouse or domestic partner, (ii) his or her children, siblings, or parents, or (iii) the spouses or domestic partners of his or her children, siblings, or parents.

Key Personnel - Key personnel under this requirement are Contract Manager, Project

Manager and Quality Control Manager and tasks, percentage of effort, number of hours, etc., for which they are responsible, as applicable.

Management Official - As to any Entity, its owner, partner, principal, shareholder, director, officer, employee, agent, representative, or any individual who directs or has the power to direct its daily operations.

Minimum Property Requirements (MPR) - the minimum level of quality for existing single-family 1-4 unit properties to be considered technically acceptable for insurance under FHA Programs. MPR can be found in HUD Handbook 4905.1 rev-1 and

Mortgagee Letter 2005-48.

Mortgagee - an FHA approved mortgage loan holder or mortgage loan servicer.

Mortgagee is also referred to as Lender.

Mortgagee Compliance Manager - The Contractor responsible for performing a variety of pre- and post- property conveyance services on behalf of HUD.

Mortgagee Neglect - for a mortgage insured on or after January 1, 1977, the failure by a Mortgagee to inspect, or take reasonable action to preserve and protect a property until conveyance to the Secretary securing an FHA insured mortgage, as required by 24

CFR 203.377. Reasonable action includes initiating foreclosure within the required time frame pursuant to 24 CFR 203.355(b).

Non-Adverse Occupants - Occupants who are in possession of a HUD owned or

Custodial property with a legal right to occupy, i.e. with HUD or MCM approval, or a lawful lessee.

Non-Surchargeable Damage - damage to the property that is not the responsibility of the Mortgagee because it was not caused by Mortgagee Neglect, fire, flood, earthquake, hurricane, tornado, or for condominiums, boiler explosions.

Notice of Acquisition - the notice provided to the…