3.75_AM_Questions__Answers_9_26_17_Final.pdf

3.75 Asset Manager (AM) QUESTION & ANSWERS Amendment 000006

1. Section B.4 Pricing (page 4):

How many assets (given as a percentage of the total volume of assets per contract area) are sold by incumbent Asset Manager contractors at or above 95% of initial list price and in less than 90 days?

Answer: Each Asset Manager should be knowledgeable about their market. Historical performance is no guarantee of future performance. Historical performance is as follows:

Historical Volumes: Asset Manager 3.75

Procurement

Area (7A) - GA

FY

FY 2014 FY 2015 FY 2016 FYTD 2017 as of July

31, 2017 (10 months)

% of Properties sold within 90 days at or above

95% of Appraised Value

43.59 32.27 29.74 27.77 22.76

% of Properties not sold within 90 days or above

95% of Appraised Value

56.41 67.73 70.26 72.23 77.24

100% 100.00 100.00 100.00 100.00

Area (1D)* - CO, NM, TX, UT

FY 2014 FY 2015 FY 2016 FYTD 2017 as of July

31, 2017 (10 months)

% of Properties sold within 90 days at or above

95% of Appraised Value

38.73 36.29 37.79 34.00 25.66

% of Properties not sold within 90 days or above

95% of Appraised Value

61.27 63.71 62.21 66.00 74.34

Area (5P)* - DC, DE, MD, PA, VA, WV

FY 2014 FY 2015 FY 2016 FYTD 2017 as of July

31, 2017 (10 months)

% of Properties sold within 90 days at or above

95% of Appraised Value

26.29 24.36 26.25 26.50 26.21

% of Properties not sold within 90 days or above

95% of Appraised Value

73.71 75.64 73.75 73.50 73.79

*Historical executions is not a guarantee of future executions. See contract's guarantee minimum.

2. Section C.1.3.11 New Appraisals and Report (page 21) and Section C.5.3.51 New Appraisals and Report (page 75):

Please clarify the difference in the language used in this requirement regarding ordering appraisals. Upon expiration of the appraisal that is used to establish the initial listing price, the language states that the Contractor is required to order a new appraisal. It further states "if applicable, the appraisal can only be ordered with COR approval." What does "if applicable" means if a new appraisal is required? If COR approval is required, will this be a pass-through expense or at the Contractor's expense? If it is a pass-through expense, where is that cost captured on the price proposal worksheet? If not, why is COR approval required?

Answer See Amendment 6.

3. Section C.1.3.25.5 Asset Control Area (ACA) Program (page 35):

What percentage or number of HUD’s REO assets per contract area or nationwide is sold to

ACA participants?

Answer: For FY2014-FY2017 as of July 31, 2017, less than 1% of properties were purchased by

ACA participants.

4. Section G.3 Invoicing Procedures, F. Fixed Unit Rate Services, Item 2. Appraisal Fee (page

93) states "HUD will not reimburse for 2nd or updated appraisals".

Answer: HUD will not reimburse for 2nd appraisals that have not been pre-approved by the

COR.

Does this include new appraisals that are required upon expiration of the first appraisal? If so, is this a cost the Contractor is expected to absorb as part of its marketing fee?

Answer: Yes, this does include new appraisals that are required upon expiration of the first appraisal. The contractor shall develop its own pricing model based on the PWS and any assumptions made by the contractor. The contractor is not required to obtain a 2nd appraisal once the initial appraisal expires. Subsequent appraisal requested or approved by the COR are a pass through cost.

5. Section G.3 Invoicing Procedures, F. Fixed Unit Rate Services, Item 2. Appraisal Fee (page

93) does not include the maximum cost for the first appraisal for geographic areas 7A, 1D, and

5P as shown in Section B.4 Pass-Through Expenses (page 5).

Answer: See Amendment 6.

Please confirm that these items may be included on a single invoice.

Answer: Yes.

6. Section M.3 Evaluation Approach - Key Personnel (pages 176-177):

Will recency of experience be an evaluation factor? If so, what is the requirement?

Answer: No.

7. Attachment A13 Pricing Spreadsheet:

The cells highlighted in yellow to enter unit prices for the designated CLINS are password protected and are requiring a password to unprotect. Please explain.

Answer: Contractors shall only enter data in the yellow highlighted cells. Vendor must enable edits/ macros to be able to enter data.

8. Attachment A14 HUD Historical Property Inventory:

Are the numbers provided for FY2016 and FYTD 2017 indicative of ending inventory or total inventory for the respective geographic areas? Please provide the number of acquisitions and sales for the same time periods for these areas.

Answer: The chart below reflects historical volumes for beginning inventory, acquisitions/conveyance, and ending inventory.

A14 Historical Volumes: Asset Manager 3.75 Procurement

Area (7A) - GA

FY 2013 FY 2014 FY 2015 FY 2016

FYTD

2017 as of

July 31, 2017, (10 months)

Beginning Inventory 3,092 2,454 1,337 1,279 1,131

Acquisitions/Conveyances 9,082 4,573 3,422 2,751 1,334

Sales 9,720 5,690 3,480 2,899 1,898

Ending Inventory 2,454 1,337 1,279 1,131 567

Area (1D) * - CO, NM, TX, UT

FY 2013 FY 2014 FY 2015 FY 2016

FYTD

2017 as of

July 31, 2017, (10 months)

Beginning Inventory 6,087 3,752 2,037 1,981 1,620

Acquisitions/Conveyances 9,349 5,399 4,459 3,332 1,608

Sales 11,684 7,114 4,515 3,693 2,241

Ending Inventory 3,752 2,037 1,981 1,620 987

Area (5P) * - DC, DE, MD, PA, VA, WV

FY 2013 FY 2014 FY 2015 FY 2016

FYTD

2017 as of

July 31, 2017, (10 months)

Beginning Inventory 2,426 6,215 1,559 2,799 3,063

Acquisitions/Conveyances 6,084 7,611 10,845 6,812 3,535

Sales 6,215 12,267 9,605 6,548 4,948

Ending Inventory 2,295 1,559 2,799 3,063 1,650

*Historical volumes are not a guarantee of future volumes. See contract's guaranteed minimum.

9. In Section 4.5, page 69 where it talks about key personnel. It also mentions having an alternate. Can you clarify if we need to have three key personnel with letters of commitment or if we need six personnel and letters of commitment which would mean an alternate at each position?

Answer: Main point of contact and alternates are considered key personnel. A letter of commitment is required for all six. See Amendment 6.

10. If the QC position is a third party, do you need a letter of a commitment from an individual or can we just name a company that we're going to hire to do our QC?

Answer: Name the Company that will serve as the Third-Party Quality Control Vendor. If not using a Third-Party Quality Control Vendor, the QC key personnel position must be an employee of the prime contractor.

11. Could you separate out the Acquisitions for the last nine months for each area by month? So, that we can make an assessment if we believe total assets have been declining and if for example, two months ago, the inventory being received is different than nine months ago?

Historical Volumes: Asset Manager 3.75 Procurement

Area (7A) *

Nov 2016 Dec. 2016 Jan 2017 Feb 2017

Acquisitions 173 168 170 153

Sales 216 220 216 176

March 2017 April 2017 May 2017 Jun 2017 Jul 2017

Acquisitions 169 133 132 147 97

Sales 213 145 198 144 117

Area (1D) *

Acquisitions 169 189 222 179

Sales 266 260 212 219

March 2017 April 2017 May 2017 Jun 2017 Jul 2017

Acquisitions 210 163 199 156 142

Sales 225 174 212 194 181

Area (5P) *

Acquisitions 457 451 444 423

Sales 548 572 515 504

March 2017 April 2017 May 2017 Jun 2017 Jul 2017

Acquisitions 464 344 355 348 237

Sales 554 513 486 455 356

*Historical executions are not a guarantee of future executions. See contract's guarantee minimum.

12. How is your average price in each area calculated? Is it the average price of the last nine months or a shorter or longer period?

Answer: The average sales price is just an estimate and is for evaluation purposes only.

The average price is the based on historical sales over a twelve- month period, within the last 24 months. The Contractor is required to be knowledgeable about market conditions and historical sales in the contract area. This information is available through various sources including but not limited to MLS, AVMs, broker nets, appraisal networks etc. The CLIN rate should be based on the contractor’s independent analysis.

13. Could you explain why the bond requirements have gone up so much? On AM 3.7 the bonding requirements are a lot less (i.e. 2%) and the contractors will be under the same time period and same contract.

Answer: The government has determined that the amount needed to protect HUD’s interest is

50% the original contract price. In accordance with clause 52.228-16 PERFORMANCE AND

PAYMENT BONDS, the original contract price" means the award price of the contract or, for requirements contracts, the price payable for the estimated quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. The minimum quantity is

$750,000 and half of that is $375,000. See Amendment 6.

14. On page 30, under Section 1.3.9 ANNUAL AUDITED FINANCIAL STATEMENT

REQUIRED, No later than ninety (90) calendar days after the Contractor’s fiscal year ends, the

Contractor shall promptly furnish the Contracting Officer with audited, year-end financial statements (balance sheet also known as statement of financial position, income statement, statement of cash flow) for the most recent fiscal year prepared in accordance with generally accepted accounting principles and reporting practices. Is that for the entire company or just the contract for AM 3.75?

Answer: The entire company.

15. On page 99, under H.5 HUDAR 2452.237-70 KEY PERSONNEL (FEB 2006), would it be incorrect if the Offeror’s proposal states that each AM contract will be led by a separate Project

Manager, but does not specify that each awarded contract will also have a separate Contract

Manager and Quality Control Manager as required by H.5. of the solicitation which will require

100% of the effort for Key Personnel be devoted to each contract award?

Answer: A separate set of key personnel (including alternates) is required for each contract area awarded and each key personnel shall be devoted 100% of the time to each contract award.

16. What is the Government looking for with respect to adequate staffing recommendations in the

Offeror’s Organization Chart?

Answer: See Sections L & M.

17. Does Quality Control Manager have to be located in the corporate office or the HOC jurisdiction as discussed in the Performance Work Statement?

Answer: HOC Jurisdiction.

18. Does HUD have a preference for how many miles from each HOC must your office be located?

Answer: Office must be located within the HOC jurisdiction.

19. What would the Government consider an unacceptable discussion of Aged and Hard to Sell

Properties?

Answer: See Sections L& M.

20. What would the Government consider a failure to indicate an offeror’s “intent to use bulk sales as required by PWS?

Answer: See Sections L&M.

21. Does the Offeror’s proposal require that it state that each Offeror’s contract will be led by a separate Project Manager?

Answer: See answer to Question 15.

22. Does the Offeror’s proposal also require that it specify that each awarded contract will also have a separate Contract Manager and Quality Control Manager as required by PWS of the solicitation which required will 100% of the effort for Key Personnel be devoted to each contract award?

Answer: See answer to Question 15.

23. On page 156, 8(d) Offer expiration date. The Government states that Proposals in response to this solicitation will be valid for the number of days specified on the solicitation cover sheet (unless a different period is proposed by the Offeror). Does that mean, the Offeror can extend the expiration of its offeror beyond the expiration date on the solicitation?

24. On page 157, The Government mentions “52.232-38 SUBMISSION OF ELECTRONIC

FUNDS TRANSFER INFORMATION WITH OFFER. (JUL 2013)”, but provides no detail.

Where should that be included in the proposal?

25. On page 159, under L.4 HUDAR 2452.215-70 Proposal Content, the Government request under (b) two (2) CD/DVD (one redacted/one unredacted) copies of Part I, and (1) one unredacted

CD/DVD copy of Part II. What would the Government like redacted?

Answer: See L.5 Note.

26. On page 161, under L.5, Instructions to Offerors, during the “initial conformance review” will the offers be notified prior to evaluation what, if anything was non-conforming before full evaluation? Is there a checklist the Government will use and provide the offerors prior to submission?

Answer: No, offerors will not be notified. No, there is not a checklist.

27. On page 162, under L.6, Limitation of Number of Contract Awards within HOC Jurisdiction, can the Government explain with exact detail what they mean? Will they limit the number of

3.7AM currents who can bid/win other areas under 3.75AM? The solicitation mentions, that current area awardees are not eligible, are they allowed to bid as primes under a different company?

a. L.6 LIMITATION ON NUMBER OF CONTRACT AWARDS WITHIN HOC

JURISDICTION

b. Offerors proposing on this requirement are permitted to bid on all contract areas in the identified HOC Jurisdictions. However, Offerors are hereby notified that any resulting awards made under the terms of this solicitation may impact additional awards to 3.7 AM contractors and future awards that will result in concurrent performance within the same HOC jurisdiction.

HUD has identified a need to restrict the number of active AM awards within a given HOC jurisdiction to no more than two. This requirement is essential to maintain the ability to quickly realign areas of performance in accordance with H.2, Option to Increase/Decrease the

Geographic Service Areas. There are three (3) separate HOC jurisdictions covered by the terms of this solicitation, with one (1) anticipated award resulting in each. Therefore, no evaluation preference will be necessary for the 3.75 AM solicitation.

Answer: If a contractor already has one award under the 3.7 AM in a given HOC jurisdiction, they can only receive one additional award within that HOC jurisdiction under the 3.75AM. If you currently have two 3.7 AM awards within the same HOC jurisdiction, you will be ineligible for an award.

28. On page 162, under L.7, General Instructions, where does the Proposal Matrix go?

Answer: Proposal Matrix should follow the cover page and is not included in the page count.

29. On page 168 under Part II – Business Proposal, Price of the RFP, what would the Government consider sufficient support (historical and relevant market index information), if the offeror proposes annual cost of living increases to support the proposed increases in pricing?

Answer: The offeror should provide relevant information used to determine the annual cost of living adjustments.

a. Under business proposal and in a related attachment, there is projected decrease in inventory, does HUD foresee this trend continuing?

Answer: The projected volumes provided are estimates that may increase or decrease over time.

b. There is a million-dollar minimum, is that revenue or profit?

Answer: This is the minimum amount the government guarantees to order over the life of the contract. See Amendment 6.

30. On page 169 under Section L.8, Lines of Credit of the RFP, will the $500,000 or more per contract area line(s) of credit have to be submitted with the proposal?

Answer: No, Refer to Section L.8.

31. On page 172 under Section M.3, Technical Acceptability of the RFP, with respect to technical acceptability, the Government wants to know whether the Workflow Chart demonstrates that the offeror’s approach, and methods and procedures are in compliance with Performance Work

Statement Section 5.2 Marketing and Sales and Section 5.5 Customer Service, is that it?

Answer: See Sections L&M.

32. On page 175 under Section M.3, Management Plan of the RFP, with respect to the Marketing

Plan, Section L.7 discussed the Listing Broker assignment and responsibilities; Aged and Hard to Sell Properties; Broker Training; and Market Analysis and Property Valuation what exactly is the Government looking for under this requirement?

a. Under marketing plan, is the page limit for the each area, or in total?

Answer: See L.7 Note.

b. Under quality control plan are drafts sufficient?

c. Under marketing plan, how much time is allotted to set up vendor lists?

Answer: The Contractor Shall submit plan for review based on understanding of the PWS.

33. On page 175 under Section M.3, Management Plan of the RFP, what exactly is the

Government looking for to demonstrate whether the offeror’s Organizational Chart outlines clear lines of authority from the top of the organization to all those working on this effort, and a staffing plan including the key personnel for each major service area(s) and their responsibilities.

34. On page 176 under Section M.3, Management Plan of the RFP, under Management Plan, does the proposal have to specifically name and demonstrate the subcontractor who will perform the work If the work is being performed by a subcontractor, whether the separate breakout is provided and includes the estimated number of subcontractors and subcontractor employees intended to service each major service area(s).

35. On page 176 under Section M.3, Key Personnel of the RFP, what is the appropriate number of proposed staff within each major area of operation that would reflect adequate capabilities and skillsets to ensure the outcome and benefits sought by the government are achievable?

a. Under key personnel, can key personnel be committed to more than one company?

b. Under key personnel, does HUD, have a preferred commitment letter format?

36. On page 177 under Section M.3, Key Personnel of the RFP, what does the Government consider “relevant experience” for each person serving in key personnel (Contract Manager, Project Manager and Quality Control Manager/ Third Party Quality Control Vendor) position of five (5) years of property management experience in relation to NAICS code 531210 -

Office of Real Estate Brokers and Agents and does that relevant experience have to be continuous?

37. On page 178 under Section M.3, Price Evaluation of the RFP, the Government states under

Reasonableness, the “use of parametric estimating methods/application of rough yardsticks

(such as dollars per pound or per horsepower, or other units) to highlight significant inconsistencies that warrant additional pricing inquiry; and/or” – what does that mean?

38. On the organizational chart requirement, what part of the proposal should provide a sound organizational structure that would demonstrate an ability to maintain contract performance, quality, schedule, cost and mission requirements as required by the solicitation?

39. Will HUD consider, preference for SBA 8(a) small businesses?

40. Will HUD consider, preference pricing factored in for HUB Zone?

41. Will HUD consider, procuring this opportunity through the SBA 8(a) program?

Answer: No. The agency is not required to use the 8(a) program for this requirement.

42. In Part 1 of the instructions to offerors it reads the following -

NOTE: Offeror shall identify their company/organization in the body of the Technical Proposal

(Part I) as The FIRM or The ORGANIZATION. Except for key personnel resumes, Part I shall not contain any names (such as offeror names, company letterhead, personnel names, previous contract awards, projects or product names). There shall be no reference to any current HUD contracts. The Technical Proposal shall not contain any company marketing information (photos, mention of awards, size of firm, etc.) Any Technical Proposals found to have any of the prohibited marking may be deemed nonconforming to the terms and conditions of this solicitation and the proposal may not receive any further consideration. These restrictions"

Does this apply to both the redacted and non-redacted copies?

Answer: REDACTED only.

43. May the offeror turn in an electronic copy of the proposal instead of a hard copy?

Answer: See Section L.

44. If the company is found in Sam.gov may they elect not to turn in section K in Part 2?

Answer: See Section L.

45. Section B.4, page 4, Pricing – Marketing Fee:

a. Please clarify what listing broker fees are to be paid by the AM if the listing broker commission, which typically includes all listing broker fees, is being paid directly by

HUD? There is no reference anywhere in the PWS to separate listing broker fees, and it is believed this is an erroneous reference that should be removed.

Answer: The Listing Broker and Selling Broker Commissions are to paid out of sales proceeds at closing.

46. Section B4, page 5, Pricing – Pass-Through Expenses: Section 1.3.12 (page 22) states that the cost of obtaining valuation services from a third-party vendor that is not the listing broker are eligible pass-through expenses, but it is not included in the list of Pass-Through Expenses on page 5. Please confirm the cost of obtaining BPOs, CMAs, AVMs, etc. are eligible pass-through expenses when obtained from third party sources that are not the listing broker.

Answer: Yes, contingent that prior approval is obtained from the COR. Once approved, by the

COR, the pass-through CLIN in Attachment A4, entitled Negative Sales and Other Expenses can be used for the referenced expenses.

47. Section 1.3.11, page 21, New Appraisals and Report: Is the AM responsible for ordering secondary appraisals for all expired appraisals? Will the AM be able to submit secondary appraisals as a pass-through expense?

48. Section 1.3.16, page 23, Initial List Price:

a. If the AM deems it to be in HUD’s best interest based on all valuation tools including the appraisal to list below appraised value, can the AM proceed to list below appraised value?

b. Will there be a new scoring metric to track whether the AM listed the property within three business days of receipt of the appraisal or will this be rolled into the current days to list performance metric?

Answer: Currently, this requirement does not have an independent scorecard metric .Any changes to this requirement shall be incorporated via modification.

c. Is the AM required to obtain an appraisal on every property, or can the AM list the property using a combination of two other valuation tools?

Answer: Yes, the contractor is required to obtain an appraisal unless the COR authorizes an alternate method.

d. If the AM is allowed to list with a combination of two other valuation tools without an appraisal, how will the requirement to list the property within three business days of receipt of the appraisal be applied? Will the receipt date of the other valuation tools be the measure for when the property is listed?

Answer: All valuation tools must be obtained in sufficient time in order to list properties timely.

49. Section 1.3.18, page 24, Marketing Reanalysis:

a. Is a BPO required for every market reanalysis?

Answer: Refer to Section 1.3.18, Marketing Reanalysis with Regard to Broker Price

Opinions (BPOs).

b. Can the AM interpret that if our approved marketing plan allows for a price reanalysis every 30 days on market, we must order an updated BPO every 30 days?

c. Please clarify how recently a BPO must be completed in comparison to the marketing reanalysis in order to be considered “current” (i.e., 30 days, 60 days, 90 days)?

Answer: BPOs performed by third parties are considered current if less than 120 days from the issuance date. BPOs performed by Listing Agents or AVMs are considered current if less than 30 days from the issuance date.

d. This section states the AM will determine whether the property should be offered in an

Exclusive Listing Phase or continue on the Extended Listing Basis. P260 does not currently allow this. Please clarify if this supersedes the Listing Phases referenced in this

PWS (i.e., 1.3.25.3 and subsections, pages 32-35). If the AM has the ability to extend an

Exclusive Bid Period, will P260 be updated to accommodate this?

Answer: No. Any changes to the Extended and Exclusive Listing Period will be made via modification to the contract.

50. Section 1.3.19, page 24, Use of Listing Brokers:

a. Does the AM need to submit a WON prior to the 90 days to obtain COR approval to extend the assignment?

Answer: Yes, unless the COR notifies the Contractor in writing that the

Contractor may use an alternative method.

b. If the 90 day listing period begins counting based on the list date, does P260 account for days that the property was offered to Lottery, when the Listing Broker does not typically list the property in the MLS due to restrictions on purchaser type?

Answer: The 90 day period begins when the property is assigned to AM. The 90 day period includes the Lottery period.

c. If the AM determines it is appropriate to change the Listing Broker Commission at the end of the 90 day listing period, will P260 be updated to allow this modification? It does not currently allow the AM to change the Listing Broker

Commission.

Answer: The AM is not permitted to change the Listing Broker Commission without COR approval. P260 currently permits the listing broker’s commission to be changed.

d. The PWS states that Listing Brokers may be required to provide other Property

Management Services, such as coordinate initial inspections and cleanout, lawn maintenance, etc. In these instances, would they be in replacement of an FSM or in addition to. If in replacement, would the AM receive these properties prior to step 1c?

Answer: No. See Amendment 6.

51. Section 1.3.25.2.2 A, Page 30, Discount Sales to Qualified Nonprofits and Government

Entities: Please provide the correct link as the Nonprofits Roster link provided is not valid.

Answer: https://entp.hud.gov/idapp/html/f17npdata.cfm This link takes you to the Nonprofit

Roster in a searchable format. There may not be a link where you can get the entire list. Note that government entities are not included in the Roster because they don’t need HUD’s approval.

52. Section 1.3.25.2.2 B., page 30, Uninsurable Properties: Will non profits receive a discount during a competitive listing period?

53. Section 1.3.25.2.3 B., page 31, Selection of Bid Winners: Currently, P260 automatically awards a winning bid, not the AM. Will the AM now be responsible for selecting the winning bidder?

54. Section 1.3.28, page 41, Termites and Wood Destroying Organisms:

a. Please confirm that the AM is now required to issue the termite and WDO work order notification within two business days of contract ratification.

Answer: Two business days is confirmed.

b. Please provide the correct link as the TPZ link provided is not valid.

Answer:

https://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_TERMITE.pdf

55. Section 1.3.29.6, page 44, Acceptance of Contracts: This section states that the AM is required to use E-signature.

a. What about cases where buyer is unable to utilize?

Answer: This section discusses that the contractor needs to utilize E-Signature. If the buyer does not utilize E-Signature, HUD will accommodate and allow a paper sales contract package. The manually signed ratified sales contract package will need to be uploaded into

P-260.

b. Also, if an executed contract requires corrections, how will this affect the 3 business day requirement to ratify?

Answer: The three business days allows time for the contractor to review the sales contract and obtain corrections.

https://entp.hud.gov/idapp/html/f17npdata.cfm https://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_TERMITE.pdf

c. Will P260 be updated to allow the AM to process e-signatures for auction properties?

Since the bid was not submitted through HUDhomestore.com, we process a direct sale and utilizing e-signature cannot be done.

Answer: At this time P-260 does not allow the AM to process e-signatures for auction properties. This may be a future update and if implemented would require a modification to the contracts.

56. Section 1.3.30.1 A., page 47, Sale Assignments:

a. Please confirm that the AM will now be required to provide documents to the BSCA which were once required of the BSCA to provide to the AM, such as HOA documents, title evidence, outstanding bills, etc.

b. Please clarify or provide details regarding how the AM or Listing Broker may be required to represent HUD at settlement.

Answer: The AM approves the Closing Disclosure and provides Closing Instructions to the Settlement Agent.

57. Section 1.3.30.3, page 48, Contract Extensions: How will buyer delay extensions impact scorecard requirements for days to close?

Answer: HUD reviews all closings completed in the previous month for “Days to Close” on the scorecard. Buyer Delayed Closings may cause the monthly average “Days to Close” number to increase, however all closings are averaged, to include both owner-occupant and investors closings that have quick turnaround timeframes. HUD’s satisfactory scorecard standard is that the AM contractor maintain an average 45 “Days to Close” in a monthly review period.

The contractor may request an exclusion(s) if the exclusion(s) will change the contractor’s overall ratings. The Performance Requirements Summary (PRS) contains the elements established in the scorecards.

58. Section 1.3.30.4, page 49: Homeowners Association Fees, Dues, Ground Rents and Non-

Tax Assessments:

a. What happens if unpaid HOA or taxes result in a lien or sale before closing?

Answer: The PWS states the entity responsible for penalties, interest, attorney fees, etc. AM will work with the COR to settle dispute and pay at closing or cancel the sale and re-convey the property to the mortgagee if deemed appropriate.

b. Similar to taxes, will the AM only be responsible for paying HOA dues on non-super lien states if a ratified contract has not been obtained within 180 days from conveyance?

Currently, the PWS only states the contractor is responsible for P&I from 181 days to settlement.

c. Will all required HOA related fees be considered a pass through expense (i.e., demand statements, transfer fees, capital contribution fees, collection fees, legal fees, key fees, etc.)?

d. The PWS states “The Contract must begin paying Homeowner’s Association Fees, Dues, Ground Rents and Non-Tax Assessments for Super Lien States no later than 30 days after assignment. “

i. Please confirm if the after assignment date is the HUD acquisition date

OR if it is AM assignment date.

Answer: HUD acquisition date. See Amendment 6.

ii. If HUD acquisition date, how does HUD expect the AM to pay HOA fees if the property has not been promoted to a Step 1c 30 days after HUD acquisition date? (I.e. the property will still be in the FSM inventory and the AM contractor cannot see the FSM inventory in P260 unless addition access is granted.)

e. The PWS states “For Super Lien States and Territories: Any penalties or interest charges incurred and allocable prior to 30 days after assignment/conveyance shall be the responsibility of the Mortgagee. Any penalties or interest charges incurred from day 31 to settlement shall be the responsibility of the Contractor.”

i. If assignment/conveyance = HUD acquisition date, how does HUD expect the AM to pay HOA fees if the property has not been promoted to a Step

1c 31 days after HUD acquisition date? (I.e. the property will still be in the

FSM inventory and the AM contractor cannot see the FSM inventory in

P260 unless addition access is granted.)

ii. If P260 access to view FSM inventory is not granted and the property is not promoted to a Step 1c 31 days after the HUD acquisition date/conveyance, then BLB is recommending that any HOA penalties or interest incurred from day 31 to Step 1c is the responsibility of HUD.

f. The PWS states “For Non-Super Lien States and Territories: Any penalties or interest charges incurred prior to 30 days after assignment/conveyance shall be the responsibility of the Mortgagee. Any penalties or interest charges incurred from 31 days from assignment to 180 from assignment has be the responsibility of HUD. Any penalties or interest charges incurred from day 181 to settlement shall be the responsibility of the

Contractor.

i. If assignment/conveyance = HUD acquisition date, then how does HUD expect the AM to pay HOA fees if the property has not been promoted to a

Step 1c 181 days after HUD assignment date? (I.e. the property will still be in the FSM inventory and the AM contractor cannot see the FSM inventory in P260 unless addition access is granted.)

ii. If P260 access to view FSM inventory is not granted and the property is not promoted to a Step 1c 181 days after the HUD acquisition date/conveyance, then BLB is recommending that any HOA penalties or interest incurred from day 31 to Step 1c is the responsibility of HUD.

59. Section 1.3.30.4 A, page 50: Paying Taxes, Assessments, Fees, HOA Dues or any

Lienable Bill at Settlement:

a. Does “any lienable bill” include those relating to taxes and HOAs only or does it include ALL lienable bills (such as water, sewage, vacant property registration, code enforcement issues, etc.)? These types of lienable bills, if not rolled to taxes, are the responsibility of the FSM.

Answer: Yes. The AM is responsible to pay HOA and Tax bills that have lienable bills rolled into tax or HOA bill. This is a pass thru expense that would be reimbursed by

HUD provided it is paid timely per the PWS requirements. See Section 1.3.30.4.

b. Please confirm that the AM has 15 days to “confirm” “via P260” bill that has not been paid by the Mortgagee, which means the AM is ONLY responsible for reviewing documents that are available to the AM via P260?

Answer: Yes, the 15 days is correct. See Section 1.3.30.4. See Amendment 6.

What should the AM do upon confirming that these items were not paid?

Answer: The AM should pay the outstanding amount if there are no non-routine expenses (i.e. penalties, interest, attorney fees etc.). Contact COR if there are non-routine expenses that are outstanding.

What should the AM do if there are no documents available indicating whether or not the bills were paid? Answer: If no documents are available notate in P260.

The AM is required to begin paying bills 31 days after assignment to HUD. The

AM should pay the outstanding amount if there are no non-routine expenses (i.e.

penalties, interest, attorney fees etc.). Contact COR if there are non-routine expenses that are outstanding.

c. The PWS states “Then, if due to a pending sale or other timing considerations, the Contractor determines that it is in the best interest of HUD to have property taxes, assessments or any lienable bill paid from settlement proceeds, the

Contractor is required to obtain COR approval for the Settlement Company to include these charges on the Settlement Statement, as a seller’s expense only if penalties, interest, attorney fees and other non-routine charges are assessed.”

i. Will HUD provide a blanket approval for a small amount of P&I to be paid at closing?

d. The PWS states “No later than 15 days after a property is assigned, the contractor is required to confirm that Taxes, Assessments, Fees, HOA Dues or any lienable bill have not been paid by the Mortgagee via P260”

i. Please clarify method of confirmation (via 27011A, proof of payment, etc.). The wording seems to only address confirmation of known bills; is there a confirmation for unknown bills that are not provided in P260?

Answer: The contractor should be able to confirm that lienable bills such as Taxes, Assessments, Fees, HOA Dues, etc. have not been paid by the Mortgagee by reviewing the 27011 claims and supporting documentation to include any evidence of receipt of payment that has been uploaded to P260. The Listing Broker and the

Buyer Select Closing Agents can also be a resource for identifying bills that are unknown at some point in the closing process.

The AM is required to begin paying bills 31 days after assignment to HUD. The

AM should pay the outstanding amount if there are no non-routine expenses (i.e.

penalties, interest, attorney fees etc.). Contact COR if there are non-routine expenses that are outstanding.

ii. The AM is required to verify some information within 15 days via P260. Since the

MCM has 30 days to provide some of the required documents in P260, how would this impact the AM’s ability to stay in compliance with the contract?

Answer: If the contractor verifies the documents are not in P260 by the 15th day, contact the COR

e. The PWS states “…the Contractor is required to obtain COR approval for the Settlement

Company to include these charges on the, Settlement Statement…..”

i. Is approval being done via email or WON approvals?

Answer: A WON.

f. The PWS states “If penalties, interest, attorney fees and other non-routine fees are assessed/included on the Settlement Statement, the Contractor must identify the responsible party (e.g. Mortgagee, HUD, Contractor, etc.). Unless the COR agrees that HUD is the responsible party, penalties, interest, attorney fees and other non-routine charges must be reported by the AM to the COR via an Administrative Remedy WON. The COR will be responsible for proceeding with the appropriate collection actions to recover the expenses from the responsible party through the Administrative Remedy WON. The COR must approve any penalties, interest, attorney fees and other non-routine charges for these expenses to be paid on the settlement statement.”

i. Currently the AM can only create admin remedies to the MCM. Will access be given to create admin remedies to the FSM? And will the AM have to create Admin remedies to the AM?

Answer: The contractor will not be given access to create admin remedies to the

FSM. The contractor is not required to obtained COR approval for outstanding bills that do not include non-routine expenses. If non-routine expenses are included in outstanding bills, COR approval is required. If the non-routine expenses are responsible of the mortgagee, the Asset Manager must seek guidance from the COR.

ii. Will access be given to the AM to create Admin Remedy WONs to the FSM and

AM? The AMs do not currently have that type of access.

60. Section 1.3.33.1, page 53: Initial Real Estate Taxes:

a. The PWS states “No later than 15 days after a property is assigned, the Contractor is to verify the mortgagees’ compliance with HUD Handbook 4000.1.”

i. Can HUD please confirm what method of verification (27011A, proof of payment, etc.) is required of the AM?

Answer: Yes. The AM is responsible to pay HOA and Tax bills that have lienable bills rolled into tax or HOA bill. This is a pass thru expense that would be reimbursed by HUD provided it is paid timely per the PWS requirements. See

Section 1.3.30.4. See Amendment 6.

ii. This sentence appears to be asking the AM to verify all of the mortgagees’ compliance to the Handbook. Please confirm that the AM is only to verify matters relating to property taxes as stated in the Handbook on page 712 and/or ML 2013-18 as follows:

Answer: The Asset Manager is responsible for complying with all aspects of the

Handbook that pertain to its Asset Manager contract.ML 2013-18 was superseded by

Handbook 4000.1. The contractor is responsible for adhering to the requirements in

Handbook 4000.1.

61. The Handbook is 994 pages long, are there any other sections of the Handbook that HUD expects the AM to “verify” the mortgagee compliance since verifying the mortgagee compliance has customarily been the MCM’s responsibility?

Answer: The Contractor is required to be knowledgeable and to comply with the Handbook requirements that impact its responsibilities within the contract.

b. Can HUD please clarify this sentence: “The MCM will create an Administrative

Remedy/offset for allocable portion of penalties and interest that accrued due to

Mortgagee nonpaying of the tax prior to conveyance, unless otherwise directed by the

COR, the Contractor must obtain tax bills on all properties in their inventory in time for the 1106 to be processed without penalties or interest to be assessed.”

Answer: Refer to Section 1.3.33.1 in its entirety.

i. We do not understand the yellow highlighted portion above. The statement contradicts with the requirements identified later in this section. Can HUD please clarify what is meant by stating that the AM “must obtain tax bills on all properties in their inventory for the 1106 to be processed without penalties and interests to be assessed”? Under the non-super lien states, the AM is not to obtain tax bills until after 180 days.

Answer: Refer to Section 1.3.33 in its entirety.

c. Throughout the PWS, it states for the AM “to process the 1106 transmittal for payment” but never instructs the AM to make the tax payment and seek reimbursement. Should the AM assume that the AM does not have to make these payments (i.e., advance the funds and then seek reimbursement) and that HUD will be paying the taxing authorities directly?

Answer: See Section 1.3.32.

d. Supplemental/unsecured tax bills are generated after the sale of the HUD home due to increased assessed values. The county assessor will send the additional tax bill to HUD. In the past, the AM has processed these as a post-closing complaint. Since the bills generate after the sale, can you please confirm the AM will not be responsible for any penalties and interest assessed on these supplemental/unsecured tax bills?

Answer: Any such concerns should be referred to the respective COR.

62. Section 1.3.33.1, page 53: For Super Lien States and Territories:

a. The PWS states “The Contractor is responsible for property taxes that are due 30 days from assignment/conveyance to settlement.”

i. There is no comment regarding ratified contracts. It looks like the AM is responsible for paying tax bills up until closing on super lien states. Please clarify.

ii. Does the AM process payments for cases with a ratified contract? If not, will HUD be responsible for P&I allocable during the step 8 period? And if HUD will be responsible for P&I allocable during the step 8 period, what happens if the case falls out of step 8? Will HUD provide a 30 day grace period to the Contractor to process payments?

b. The PWS states “The Contractor is responsible for P&I allocable from day 31- to settlement.

If P&I is included in the taxes due, COR approval is required.”

i. When it says “Contractor is responsible for P&I allocable,” does it mean the AM is paying for the P&I out of our own funds? If so, why would the AM need to obtain

COR approval to pay P&I that is coming out of its own funds?

Answer: Yes, COR approval is required if P&I allocable to the contractor is approved to be paid out of sales proceeds. The Contractor would have to deduct this amount from its next monthly invoice.

c. The PWS states “The Contractor is responsible for P&I allocable from day 31- to settlement. “Please confirm that it is day 31 from AM assignment (not from HUD acquisition).

Answer: Day 31 is from HUD acquisition date.

63. Section 1.3.33.1, page 53: For Non-Super Lien States and Territories:

a. The PWS states “If the property taxes (1) were not paid by the mortgagee, as required when the property was conveyed to HUD or (2) not paid in accordance with "Initial Real Estate

Taxes" (see above #1), and (3) and a ratified contract has not been obtained within 180 days after the conveyance date, then the contractor must research and contact the taxing authority to obtain the current tax bill and any subsequent bill to process the 1106 transmittal for payment.”

i. The wording regarding the property not having a ratified contract within 180 days is vague and can be interpreted as…..” if a ratified contract has been obtained within

180 days, then the Contractor would not be responsible for P/I”. Please clarify. If it holds true that if a contract is ratified within the 180 days and the Contractor would not be responsible for P/I, then what happens if the Contract gets cancelled after the

180 days? Will HUD then provide a 30day grace period to the Contractor to process payments?

ii. Does the AM process payments for cases with a ratified contract 180 days after the conveyance date? If not, will HUD be responsible for P&I allocable during the step

8 period? And if HUD will be responsible for P&I allocable during the step 8 period, what happens if the case falls out of step 8? Will HUD provide a 30 day grace period to the Contractor to process payments?

64. Section 1.13.1, page 56, Start Up Day 1 Through Day 30; 1.13.1.1.4, page 57, Systems

Security; and Section 1.13.1.2.1, page 58, System Security Clearance/Access:

a. How will the start up phase be impacted if the required security clearance forms are not able to be processed in time for the AM’s personnel to obtain access to

HUD systems within the specified timeframe? Previous experience has shown that it can take up to 6-9 months for some security clearances to be processed.

Answer: The awarded Contractor must submit required forms timely in order for

HUD to process security clearance to mitigate the risk of impacting performance.

b. Will previous AM contractor employees retain their security clearance/access if the AM incumbent is awarded a contract under this solicitation or if the prior

AM’s personnel is hired by the new AM?

Answer: A previous contractor can retain their “C” number under the following conditions: 1) the current contract period of performance has not expired; and 2) The new awardee submits the PIV Form and HUD Management Survey Form for processing.

65. Section 4.5, page 69, Contractor Personnel: Is an alternate key personnel required in addition to the proposed Contract Manager, Project Manager, and Quality Control Manager?

If so, is one alternate key personnel acceptable, or must the AM provide alternates for each of the three identified key personnel?

66. Section 4.6, Page 69, Identification of Contractor Employees: Are all AM contractor personnel required to obtain and wear company photo ID badges at the AM’s normal place of business operations if the AM is not sharing co-located space with government employees?

67. Section 5.2.2 (10), page 73, Monthly Appraiser Review and Appraisal Analysis; and

Section 5.7, page 79, Training: These sections instruct the AM to provide appraiser training. AM Contractors have previously been specifically instructed NOT to train appraisers and to remove all training appraisal training materials. Will the AM now be required to train appraisers? Please provide guidance on what training is expected to be provided to appraisers.

Answer: Refer to PWS.

68. Section 5.4.1, page 75, Daily Posting of Records: Please clarify whether this requirement is one calendar day or one business day. What if documents are received during a weekend?

Answer: Business Day. See Amendment 6.

69. Section 5.7, page 79, Training: Training of Buyer Select Closing entities usually occurs on an individualized, case-by-case basis. Please confirm that HUD is now requiring widespread training seminars for Buyer Select Closing entities.

Answer: Training Is Required as Stated in Section 5.7.

70. Section L.4, page 160-161: HUDAR 2452.215-70 Proposal Content (Mar 2016) and L.7 pages 163-166 General Instructions: Will larger sheets (i.e., 11x17) or smaller font sizes be acceptable for the workflow charts? If the workflow charts must be on 8-1/2”x11” paper, could the workflow chart be excluded from the page limitation of 15 pages for the technical approach? It will be difficult to provide the level of detail to adequately describe the AM’s proposed approach that HUD is requesting in the workflow chart under these limitations.

Answer: The answer is no to all questions above.

71. Section L5, page 161, Instructions to Offerors and L.7, page 164, General Instructions:

Please confirm that a total of three (3) CDs/DVDs are required to be submitted (i.e., one unredacted Part I, one redacted Part I, and one unredacted Part II), and that an unredacted

CD/DVD of Part II is not required?

Answer: Refer to L.5 And L.7.

72. Section L.7, page 168-169, Key Personnel:

a. Please confirm that the key personnel resumes/letters of commitment are not included in the page limitations for Part I.

Answer: Refer to L.7 Resumes/Letters of Commitment (Not Included in The Page

Limitation). See Amendment 6.

b. Are both resumes and letters of commitment required for all proposed key personnel?

Answer: Yes. If so, is the two-page limit per person inclusive of both the resume and the letter? Answer: Resume Shall Not Exceed 2 Pages Per Person Submitted. Letter of Commitment Is a Separate Document Not Included in The Page Count (See L.7).

c. Please clarify what is meant where it says “The minimum level of experience for any person serving in a key personnel position is five (5) years of property management experience in relation to NAICS code 531210 – Office of Real Estate Brokers and

Agents.”

i. What does “property management experience in relation to NAICS code

531210” mean?

Answer: See Amendment 6.

ii. Does this mean that all key personnel must be licensed real estate brokers or agents?

d. The instructions state that the names of the individual key personnel shall not be disclosed, nor shall the name of the company be stated (i.e., offeror name, company letterhead, personnel names, previous contract awards, projects or product names). Instead, the company shall be identified as “The Firm” or “The

Organization”. This is, in essence, redacting the proposal. How can one unredacted copy and one redacted copy of the proposal be submitted, if no identifying information is allowed to be included in the first place? Both copies will essentially be redacted. Please clarify.

73. Section L.7, page 168-169, Key Personnel: Does the offeror company need to be a licensed real estate brokerage?

74. Section L.7, page 169, Part II – Business Proposal:

a. Where it states “Cover letters, company statements, and executive biographies are limited to two (2) pages altogether”, please confirm that all of this information should not exceed two pages total.

b. Please also confirm that it is acceptable to identify the offeror/company name and relevant experience/information in the cover letter, company statements, and executive biographies, and that the restriction in the note to the previous section not to identify the offeror applies only to Part I.

75. Section M.1, page 172: Basis for Award: In the event that there are two offerors with similar pricing and technically acceptable proposals, in the absence of any formal scoring, ranking or rating of the non-cost/price technical factors, how will HUD determine…