ESBD_375462_1725627727539_332-RFP24-1012 Warehouse Facility Provider RFP 2024 ESBD Final.docx

Texas Department of Housing and Community Affairs

Request for Proposals 332-RFP24-1012 for

MORTGAGE WAREHOUSE FACILITY PROVIDER

By Texas Department of Housing and Community Affairs

332-RFP24-1012 Page 1 of 41

332-RFP24-1012 Page 10 of 41

TABLE OF CONTENTS

PART I

GENERAL INFORMATION

1.1 Introduction

The Texas Department of Housing and Community Affairs ("TDHCA" or “the Department”) was created pursuant to Chapter 762, Acts of the Seventy-second Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to increase the supply of affordable housing for low- and moderate-income Texans. The Bond Finance Division of TDHCA issues tax-exempt and taxable bonds as well as other alternative types of funding to finance single-family housing for low and moderate income homebuyers.

TDHCA is governed by a six-member Board appointed by the Governor with the advice and consent of the Senate serving staggered six-year terms with the terms of three directors expiring on January 31 of each odd-numbered year. Members may be re-appointed.

As a result of this Request for Proposal (“RFP”), the Department anticipates executing a contract with the successful respondent to perform the services and the contract, if any, resulting from it (the “Contract”). The time and number of Contracts resulting from this RFP and all procedures relating to such Contracts are within the discretion of the Department. Successful respondent, as an independent contractor, shall provide services under the Contract, at its facilities and with its own personnel.

1.2 Background

TDHCA is seeking a Mortgage Warehouse Facility (to be provided by a Warehouse Provider) to temporarily warehouse mortgage-backed securities (“Certificates”) issued or guaranteed as to payment by Fannie Mae, Freddie Mac, and Ginnie Mae.

TDHCA may choose to use the Mortgage Warehouse Facility to temporarily warehouse the Certificates related to the My First Texas Home Program (“MFTH”), My Choice Texas Home Program (“MCTH”), single family mortgage revenue bond issues, or other financing methods used to originate mortgage loans that are pooled into Certificates.

DESCRIPTION OF SINGLE FAMILY MORTGAGE LOAN PROGRAM

TDHCA’s Single Family Mortgage Loan Program provides first and second lien mortgage loans to very low, low and moderate income homebuyers through the MFTH and the MCTH. Historically, TDHCA has used single family mortgage revenue bonds (“SFMRBs”) and a To Be Announced (“TBA”) Program to finance loans.

TDHCA originates single family mortgage loans through various financing structures, including single family mortgage revenue bond issues. The mortgage loans are pooled into Certificates and are either sold to the bond issue trustee, or sold to a third party. The vast majority of loans originated by TDHCA include down payment assistance in the form of a 30-year, 0% interest, non-amortizing second mortgage. TDHCA reserves the right to provide other forms of down payment assistance in the future.

The current master servicers are Idaho Housing and Finance Association (“IFHA”) and The Money Source (“TMS”). The bond trustee and custodian is The Bank of New York Mellon, N.A.

PART II

SCOPE OF WORK

2.1 Service Description

The scope of this engagement is limited to the warehousing of Certificates; the Warehouse Provider will have no responsibility with respect to the pricing, hedging, origination, sale, servicing (including foreclosure and real estate owned activities), or purchase of mortgage loans.

The Warehouse Provider must manage the Mortgage Warehouse Facility with sound practices and as required by the terms and conditions of a two-year Warehouse Agreement (the "Agreement"). TDHCA reserves the right to issue a RFP for a Warehouse Facility within six months prior to the expiration of the term of the Agreement or immediately upon provision of a notice of termination by either party.

The Warehouse Provider shall provide, among other things, the services set forth in the proposed Agreement. The Warehouse Provider will be a party to the Agreement, an escrow agreement, and a custodian agreement related to the Warehouse Facility. The Warehouse Provider is responsible for providing funds to the master servicer or bond custodian for the purchase of Certificates on their settlement date and is responsible for selling those same Certificates on dates (Certificate Sale Dates) to parties as specified by TDHCA in writing.

In addition to the specific duties outlined above, the Warehouse Provider will also be required to:

1. Warehouse Certificates as directed by the Department. Anticipated warehouse timeframe could be as little as 2 – 3 days, and is not expected to exceed 3 months. Warehouse provider must be able to settle Certificates via free delivery and delivery vs. payment.

2. Provide to TDHCA a Pool Report in substantially the form of Exhibit I on a monthly basis (or such other frequency as shall be mutually agreed upon by TDHCA and the Warehouse Provider) as of the close of business on the last business day of the month for which warehoused Certificates are held by the Warehouse Provider under the Mortgage Warehouse Facility.

3. Provide to TDHCA an Income Report in substantially the form of Exhibit J on a monthly basis (or such other frequency as shall be mutually agreed upon by TDHCA and the Warehouse Provider) as of the close of business on the 15th of the month. Any amounts that are reflected as due to TDHCA in that month’s Income Report shall be remitted by the Warehouse Provider to TDHCA within 3 business days following provision of that month’s report. The manner of payment shall be stated in the Agreement.

4. Provide to TDHCA relevant information and reports as required by TDHCA in a timeframe and manner mutually agreed upon by TDHCA and the Warehouse Provider.

5. Perform all other duties as set forth in the Warehouse Agreement that will be executed by both parties.

The successful respondent must be qualified and able to provide all of the services required by the Department. TDHCA has the option to notify vendor of any failure to provide deliverables within the agreed upon deadlines or failure to meet performance standards as outlined below. Failure to meet performance standards will result in a notification from the Department requesting resolution within ten (10) calendar days of said notification. TDHCA may exercise any other right, remedy, or privilege which may be available to it under applicable law of the state and any other applicable law or may proceed by appropriate court action to enforce the provisions of the Contract.

2.1.1 Minimum Requirements

TDHCA is seeking a Mortgage Warehouse Facility (to be provided by a Warehouse Provider) to temporarily warehouse Certificates issued or guaranteed as to payment by Fannie Mae, Freddie Mac, and Ginnie Mae.

The Warehouse Provider must be experienced with providing Mortgage Warehouse Facilities for housing bond issuers, specifically for state housing finance agencies. The Warehouse Provider must be financially able to provide a Warehouse Facility that will allow for up to $1 billion in Certificates to be warehoused annually.

TDHCA wishes to have maximum flexibility with respect to the dollar amount of Certificates that can be held in the warehouse at any one time. The Warehouse Facility may limit the dollar amount of Certificates to be held in the warehouse at any one time, but the limit may not be less than $100 million. Responding firms must have a minimum of 5 years of experience and must serve a Warehouse Provider for at least one state agency.

2.2 Term of Contract

If a Contract is awarded, the initial term of the Contract is expected to begin December 1, 2024, or as soon thereafter as practical, and to terminate November 30, 2026. In accordance with the terms of the Contract, the Department has the option, in its sole discretion, to extend the contract for three (3) additional one (1) year periods, through November 30, 2029.

A Contract awarded under this RFP, if any, shall incorporate this entire RFP. The Department reserves the right, in its sole discretion, to make a contract award without negotiation of these provisions. In the event the Department requires negotiations with respondents, any modifications or clarifications agreed to with successful respondent during contract negotiations shall also be incorporated into the final, executed Contract. Each respondent must review these terms and conditions in Exhibit A and otherwise in this RFP and must address any concerns or issues in its transmittal letter. Terms and conditions not specifically objected to in the transmittal letter will be deemed to be accepted by respondent. The Department has final approval of any contract awarded as a result of this RFP.

2.3 Limitation of Authority

Successful respondent shall have no authority to act for or on behalf of the Department, or the State of Texas except as expressly provided for in the Contract; no other authority, power, use, or joint enterprise is granted or implied. Successful respondent may not incur any debts, obligations, expenses, or liabilities of any kind on behalf of the Department or State of Texas.

PART III

GENERAL INFORMATION

3.1 Authority

The Texas Department of Housing and Community Affairs was created pursuant to Chapter 762, Acts of the 72nd Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to provide affordable homeownership opportunities to individuals and families of low and moderate income in the State of Texas (the “State”).

The Texas Homeownership Division of TDHCA works closely with private sector financial and lending institutions participating in TDHCA’s single family programs (“Participating Lenders”) to offer financing options to low and moderate income homebuyers throughout the State. Participating Lenders originate mortgage loans through TDHCA’s homeownership programs on a servicing released basis.

The Bond Finance Division of TDHCA is responsible for providing the financing to support the activities of the Texas Homeownership Division.

3.2 TDHCA Rights

In the best interest of the Department and the State, the Department, in its sole discretion, may amend or modify any provisions of this RFP, or withdraw this RFP at any time prior to award of a Contract. The Department reserves the right, in its sole discretion, to reject any or all submitted proposals or to select one or more qualified respondents to this RFP without discussion of proposals with the respective respondents. The decision of the Department, or its designee with regard to the above, shall be administratively final. The Department, in its sole discretion, may waive administrative deficiencies and/or minor technicalities in proposals received. All proposals shall become a part of the Department’s official procurement files and may be available for public inspection upon request after the procurement process is completed.

3.3 Respondent Obligations

Respondents to this RFP are responsible for any expense related to the preparation and submission of a proposal. The Department shall not pay for any cost that is incurred by successful respondent prior to the effective date of the Contract. Qualified firms with the requisite experience are invited to submit proposals in accordance with this RFP. Proposals must address all requirements and/or specifications.

3.4 Successful Respondent Obligations

The Department shall look solely to successful respondent for performance of the Contract. Successful respondent shall provide the requested services under the direction of the Department. Successful respondent shall be the sole point of Contact responsibility. Successful respondent shall be liable, both individually and severally, for the performance of all obligations under the awarded Contract and shall not be relieved of the non-performance of any subcontractor.

3.5 Schedule of Events

The Department anticipates that the selection of successful respondent and execution of the Contract, if any, will proceed according to the following approximate schedule:

September 06, 2024 - Issuance of RFP (after 10:00 a.m. CT)

September 27, 2024 - Deadline for Submission of Questions (2:00 p.m. CT)

November 1, 2024 - Contract Execution (or as soon thereafter as practical)

December 1, 2024 - Commencement of Work (or as soon thereafter as practical)

The times stated in this document refer to Central Time (“CT”), Austin, Texas, where appropriate. The Department’s regular office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday, except national and official State of Texas holidays. All deadlines are subject to change at the Department’s sole discretion.

Notices of changes to items directly impacting the original RFP or proposal process will be posted on the ESBD at: http://www.txsmartbuy.com/esbd. Any amendment to this solicitation will be posted as an addendum on the ESBD. It is the responsibility of interested parties to periodically check the ESBD for updates to the procurement prior to submitting a Proposal. Respondent’s failure to periodically check the ESBD for updates will in no way release Successful Respondent from compliance with any requirements in the “addenda or additional information,” even if such compliance results in additional costs to meet the requirements.

3.6 Issuing Office

The Department, through its Purchasing Section, is the Issuing Office and the sole point of contact for this RFP. The Purchasing Section is the only office authorized to clarify, modify, amend, alter, or withdraw the specifications, terms, and conditions of this RFP and any contract awarded as a result of this RFP. Upon issuance of this RFP, other employees and representatives of the Department shall not answer questions or otherwise discuss the contents of this RFP with any Respondents or their representatives. Failure to observe this restriction may result in disqualification of any pending or subsequent proposal. This restriction does not preclude discussions unrelated to this RFP or questions relating to completing the HUB documents required in Section 4.2.M. Except as otherwise indicated, all communications concerning this procurement must be in writing and addressed to the Issuing Office as follows:

Cheryl D. Robinson-Mathis, CTCD, CTCM E-mail: cheryl.mathis@tdhca.texas.gov

Mailing address:

Cheryl D. Robinson-Mathis, Purchaser Texas Department of Housing and Community Affairs Attention: Purchasing #332-RFP24-1012 221 E 11th Street Austin, Texas 78701

3.7 Submission of Questions

Respondents may submit questions by email to the Issuing Office no later than 2:00 p.m. by the deadline set forth in the Schedule of Events. Questions concerning this RFP must be in writing and addressed to the Issuing Office at the above email address. On or about the date set forth in the Schedule of Events, the Department expects to electronically post answers to the written questions on the ESBD located at: http://www.txsmartbuy.com/esbd.

3.8 Deadline for Submission of Proposals; Delivery Instructions; Number of Copies Required

One (1) original hard copy, three (3) digital copies of the response in PDF format on thumb drives must be submitted to the mailing address in Section 3.6 (Issuing Office). The response must be received in the Issuing Office no later than 2:00 p.m. on the deadline set forth in the Schedule of Events. Facsimiles will not be accepted.

Late Proposals will not be considered under any circumstances.

Respondents are solely responsible for verifying the Department’s receipt of all proposals by the deadline specified above. The Department shall not be liable or responsible for any costs whatsoever incurred in submission of a Proposal.

Faxed Proposals are not acceptable and will not be considered.

If sending a proposal via USPS by regular mail, certified mail, or express mail, it is incumbent upon respondent to allow sufficient time to permit timely delivery by the USPS and by mail services internal to the Department. A USPS postmark or round validation stamp, a mail receipt with the date of mailing stamped by the USPS, a dated shipping label, invoice, or receipt from a commercial carrier, or any other documentation in lieu of the Issuing Office on-site time stamp WILL NOT be accepted.

Under Section 322.020 of the Texas Government Code, the Legislative Budget Board (“LBB”) has implemented a database of State agency contracts. (See the LBB website at www.lbb.texas.gov.) The Department will upload to the LBB’s contract database the text of the complete Contract, including successful respondent’s proposal (with limited redaction and appendix) after the date of Contract award. In submitting a proposal, respondent acknowledges that it understands and accepts this requirement.

3.9 Confidential Information; Nondisclosure; Open Records

All information gathered, produced, derived, obtained, analyzed, controlled or accessed by respondent in connection with a contract resulting from this RFP (“Confidential Information”) shall be and remain Confidential Information and shall not be released or disclosed by respondent without the prior written consent of the Department. Such consent must specifically identify the Confidential Information allowed to be disclosed by respondent and the nature of the disclosure allowed. Respondent must execute and return with its proposal a Nondisclosure Agreement with the Department, in the form of Exhibit E attached hereto.

Following the award of a Contract, proposals are subject to release as public information unless the proposal or specific parts of the proposal can be shown to be exempt from the Texas Public Information Act. All respondents are advised to consult with their legal counsel regarding disclosure issues and take the appropriate precautions to safeguard trade secrets or any other proprietary information disclosed in their Proposals. The Department assumes no obligation or responsibility relating to the disclosure or nondisclosure of information submitted by respondents.

If a respondent believes that any portion of a proposal is confidential, then respondent must so specify. Respondent must stamp in bold red letters the term “CONFIDENTIAL” on that specific part or page of the proposal that respondent believes to be confidential. Respondent must submit in writing specific, detailed reasons, including any relevant legal authority, stating why respondent believes the material to be confidential. Vague and general claims of confidentiality will not be accepted. The Department will be the sole judge of whether a claim is general and/or vague in nature. All proposals and parts of proposals that are not marked as confidential will be automatically considered public information after the contract is awarded. A proposal resulting in an award may be considered public information even though parts are marked confidential.

In the event the Department receives portions of a proposal marked “CONFIDENTIAL” as specified above, the Department shall forward such request to the Office of the Attorney General of Texas (“Attorney General”) for an opinion on whether such information may be withheld from disclosure under the Texas Public Information Act. The Department will notify respondent whose proposal is the subject of the request when the information is forwarded to the Attorney General. The Department assumes no obligation for asserting legal arguments on behalf of respondent. Respondents are advised that the Department is obligated to comply with the decision of the Attorney General, including any decision calling for the release of information marked “CONFIDENTIAL” by a respondent.

Copyrighted Proposals are unacceptable and are subject to disqualification as non-responsive.

3.10 Media Releases

The Department does not endorse any vendor, commodity, or service. Media releases pertaining to this RFP, the Contract, if any, or the services to which they relate shall not be made without the prior written consent of the Department. The disclosure of the contents of proposals prior to the award of the Contract, if any, or any other violation of this section, may result in disqualification.

3.11 Non-exclusivity

This RFP is not exclusive, and the Department reserves the right to issue additional solicitations regarding the services described in this RFP or similar services at any time.

3.12 Incorporation of Exhibits

Exhibits A, B, C, D, E, F and G are attached hereto and incorporated as part of this RFP for all purposes.

3.13 Transition of Services

Upon termination of the Contract for any reason, the contractor shall, in good faith and with reasonable cooperation, aid in the transition to any new arrangement and provider. The Contractor shall deliver to the Department or its’ new contractor all completed, or partially completed, work and any and all documentation or other products and results of these services.

3.14 Payment and Invoices

Contractor’s total compensation under this Contract shall not exceed the pricing set forth in the proposal unless agreed upon by both parties. Contractor will retain a portion of interest earned on Certificates while held in the warehouse. Contractor shall be required to submit detailed reports to support fees. Contractor’s reports must be complete with reasonable supporting documentation and submitted within fifteen (15) calendar days after month end for Services provided in the preceding month.

In submitting an invoice to the Department, contractor certifies to the following: that the invoice has been carefully reviewed for detailed description of the services performed; that the services have been performed in compliance with this Contract; that the amount of the invoice and all previous invoices together do not exceed the contractual cap of the Contract or contractor’s negotiated fees; that the charges and expenses shown on the invoices are reasonable and necessary; and that all appropriate and required supporting documentation is attached. The Department may, in its sole discretion, require additional documentation to support payment and contractor shall respond to any such requests within five (5) business days of receipt.

Payment shall be made in accordance with Texas Prompt Payment Act, Chapter 2251 of the Texas Government Code. The Department shall not pay any amounts for any purpose to contractor or any other entity, except as expressly provided for in this Contract. The Department reserves the right to make payments only upon receipt of a correct invoice, including all of the required supporting documentation. The Department also reserves the right to refuse payments for invoices that exceed the rates specified in this Contract or if the Department disputes an invoice in writing for services that were not provided in a satisfactory manner.

PART IV

PROPOSAL FORMAT

4.1 Introduction

Each original proposal and copy shall contain a cover sheet with the following: “332-RFP24-1012 Warehouse Facility Provider” and the name and address of respondent. Proposal pages must be numbered consecutively.

Proposals must be organized as described in Section 4.2. Proposals not organized in this manner may be subject to disqualification. Conciseness and clarity of content are required; vague and general proposals may be considered non-responsive, which may result in disqualification of such proposals. Proposals must be complete; failure to provide all required information may result in the disqualification of the proposal.

ALL EXHIBITS TO THIS RFP ARE PREPARED EXCLUSIVELY FOR THIS RFP. RESPONDENT’S SUBMISSION OF OTHER EXHIBITS OR DOCUMENTS, INCLUDING PRIOR RFP EXHIBITS, MAY RESULT IN DISQUALIFICATION OF THE PROPOSAL.

4.2 General Organization of Proposal Contents

Proposals must be organized as follows:

a) Transmittal Letter;

b) Executive Summary;

c) Table of Contents;

d) Respondent Identifying Information;

e) Proposed Subcontractor(s) Identifying Information;

f) Respondent Qualifications and Experience;

g) Proposed Personnel;

h) Respondent Narrative and Preliminary Work Plan;

i) Proposed Fee;

j) TDHCA Liability

k) Financial Statements;

l) Execution of Proposal;

m) Historically Underutilized Businesses Subcontracting Plan;

n) Criminal Conviction Certification;

o) Nondisclosure Agreement;

p) Conflict of Interest Statement;

q) Certification Regarding Public Nature of the Proposal; and

r) Vendor Reference Questionnaire.

A description of the information required for each of the items listed above is set forth below.

4.2.A Transmittal Letter

Respondent must submit a transmittal letter that identifies the entity submitting the proposal and includes a commitment by that entity to provide the Services required by the Department. The transmittal letter must state that the proposal is valid for one hundred eighty (180) days from the deadline for delivery of proposals to the Department. Any proposal containing a term of less than one hundred eighty (180) days for acceptance from this deadline will be rejected as non-responsive.

The transmittal letter must be signed by a person legally authorized to bind respondent. Respondent also must indicate in its transmittal letter why it believes it is the most qualified to provide the requisite services and why it believes its proposed services best meet the Department’s objectives and RFP requirements.

The transmittal letter must include a statement of acceptance of the terms and conditions located in Exhibit A to the RFP. If a Respondent takes exception to any of the proposed terms and conditions, respondent must identify the exception(s) specifically and clearly in the transmittal letter and explain both (1) the reason for the requested change and (2) proposed alternative language. Failure to accept the terms and conditions as set forth in Exhibit A may result in disqualification of the proposal.

4.2.B Executive Summary

Respondent must provide an executive summary of its proposal and a representation that the proposal addresses all of the requirements of this RFP. The executive summary must not exceed three (3) pages and must represent a full and concise summary of the contents of the proposal. Respondent must identify any services that are provided beyond those specifically requested. If respondent is providing services that do not meet the specific requirements of this RFP but in the opinion of respondent are equivalent or superior to those specifically requested, any such differences must be noted in the executive summary. Failure to provide the services specifically required may result in disqualification of the proposal.

4.2.C Table of Contents

Each proposal must be submitted with a table of contents that clearly identifies and denotes by page number each section of the proposal and the location of all enclosures of the proposal. The table of contents must follow the RFP’s structure as much as possible.

4.2.D Respondent Identifying Information

Respondent must provide the following identifying information:

· name and address of business entity submitting the proposal;

· type of business entity (e.g., corporation, partnership, etc.);

· state of incorporation or organization and principal place of business;

· name and location of Texas offices, other major offices, and other facilities that relate to Respondent’s performance under this RFP;

· name, address and telephone number for the contact person in your firm authorized to negotiate agreement terms and render binding decisions on contract matters.

· location of the office that will administer the program. Indicate the number of and identify the positions of personnel that will be available to answer questions during the term of the contract.

· Respondent’s Federal Employer Identification Number (“FEIN” or “EIN”) and Texas Tax Identification/Registration Number, if any;

· all affiliated companies and subsidiaries, or any joint ventures or other affiliations;

· detail if respondent, any predecessor of respondent, or any member of respondent been the subject of any disciplinary action by any regulatory agency or professional organization within the last five (5) years;

· detail of any firm ownership changes which have occurred in the last five (5) years, including changes pending;

· detail whether, within the last five years, respondent, any predecessor of respondent, or any member of respondent has been a party to any litigation directly or indirectly related to the conduct of respondent’s business; and

· indicate whether respondent, any predecessor of respondent, or any member of respondent is currently a party to litigation in process; if so, identify the parties, jurisdiction, case number, and subject matter.

4.2.E Proposed Subcontractor(s) Identifying Information

The proposal must identify any subcontractors and outline the contractual relationship between respondent and each proposed subcontractor. The respondent is solely responsible for any proposed subcontractor’s work performed under any contract resulting from this RFP.

4.2.G Proposed Personnel The proposal must identify all key personnel who are to be part of the proposed team and detail their experience. Please include brief resumes of all key personnel that will be involved in performing the Services.

· full name

· specific description of relevant experience and skills that person has with the required services.

· professional certifications and licenses, if applicable

· a specific indication of what role the individual will have in this project; and

· any additional pertinent information to indicate the individual's ability to aid Respondent in successfully completing the required Services (limit to one page).

In addition, respondent must provide an organizational chart indicating lines of authority, names, titles, and functions of individuals responsible for the Services.

4.2.H Respondent Narrative and Preliminary Work Plan

Provide a brief narrative outlining your ability to perform all activities described in PART II, SCOPE OF WORK, Section 2.1 Service Description.

4.2.I Proposed Fee Provide a proposed itemized cost schedule for the services described in this RFP. Please assume that all costs associated with the Warehouse Facility, including counsel fees and expenses, are borne by the Warehouse Facility Provider. This is a fee for service contract.

1. Please provide a fee proposal for the proposed Program. Please use the format provided in Exhibit H, Proposed Warehouse Facility Pricing.

2. State, describe, and estimate any other fees your firm will require to provide the Warehouse Facility.

3. Describe any alternative pricing methods that you propose for consideration.

4.2.J TDHCA Liability

TDHCA is required by law to limit its liability with respect to the Warehouse Facility. Under the current program, this is accomplished by deposit of an escrow for the benefit of the Warehouse Provider to the extent that TDHCA does not take delivery of the Certificates and the sale of the Certificates by the Warehouse Provider results in net sales proceeds less than the outstanding principal amount of Certificates sold. This escrow is held by the Texas Treasury Safekeeping Trust Company. TDHCA and the Warehouse Provider will agree upon the established minimum amount to be maintained in the escrow.

Please provide the specifics of your proposal with respect to limiting TDHCA’s liability to the Warehouse Provider, including your proposed initial deposit and the ongoing minimum required escrow amount. Please be specific with respect to the methodology and calculation of the ongoing minimum requirement of the escrow.

Please describe any proposed alternative to this structure, recognizing that state law prohibits TDHCA from having an undefined liability.

4.2.K Execution and delivery of the final Warehouse Facility is subject to the approval of the Texas Attorney General’s Office

4.2.L Financial Statements

In its proposal, respondent and its parent company, if applicable, must provide evidence of financial stability by providing audited financial statements for each of the last two (2) years of respondent’s operations or, in the alternative, financial statements compiled, reviewed and attested by an independent certified public accountant or certified public accounting firm.

In lieu of providing financial statements in its proposal, a respondent may provide a statement regarding the respondent’s financial stability and viability to perform under any resulting contract. If respondent elects this approach rather than audited financial statements, the respondent must submit a statement, with appropriate supporting documentation, sufficiently detailed to demonstrate financial solvency, and to verify the capacity to fulfill the requirements of this RFP.

4.2.M Execution of Proposal

Exhibit B must be completed and signed by respondent.

4.2.N Historically Underutilized Businesses Subcontracting Plan

The State of Texas and the Department are committed to assisting Historically Underutilized Businesses (“HUBs”) through the procurement process. In accordance with Sections 2161.181 and 2161.182, Texas Government Code, each state agency shall make a good faith effort to increase the contract awards for the purchase of goods or services to HUBs based on rules adopted to implement the disparity study described by Section 2161.002(c), Texas Government Code. In accordance with Section 2161.252, Texas Government Code and 34 Texas Administrative Code §20.285, each state agency (including institutions of higher education) as defined by Section 2151.002, Texas Government Code that considers entering into a contract with an expected value of $100,000 or more shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest, determine whether subcontracting opportunities are probable under the contract. If subcontracting opportunities are probable, each state agency’s invitation for bids or other purchase solicitation documents for construction, professional services, other services, and commodities with an expected value of $100,000 or more shall state that probability and require a HUB Subcontracting Plan (“HSP”) and supporting documentation.

The HUB goals per 34 Texas Administrative Code §20.284 are: 11.2% for heavy construction other than building contracts; 21.1% for all building construction, including general contractors and operative builders contracts; 32.9% for all special trade construction contracts; 23.7% for professional services contracts; 26.0% for all other services contracts; and 21.1% for commodities contracts.

The Department has determined that this procurement falls under the following category:

Special Trade Construction ___ Professional Services Other Services X Commodities ___

The Department has determined that HUB subcontracting opportunities are probable and requires respondents to complete the HSP form located at: https://comptroller.texas.gov/purchasing/vendor/hub/forms.php. The HSP form is also posted to the ESBD as a separate package under this RFP. The Department has identified the possible subcontracting opportunities on the “Agency Special Instructions/Additional Requirements” portion of the State of Texas HUB HSP form set forth in the following chart. The class and item codes for this RFP are as follows: Class 946, Item 12.

- - Agency Special Instructions/Additional Requirements - -

The Texas Department of Housing and Community Affairs is committed to increasing contracting opportunities with HUBs by contracting directly with HUBs or indirectly through subcontracting opportunities in compliance with Chapter 2161 of the Texas Government Code.

If a bid/proposal/offer to a solicitation with an expected value of $100,000 or more does not contain a completed HSP and supporting documentation, the bid/proposal/offer will be considered non-responsive and will be disqualified. After contract award, Successful Respondent may be subject to debarment pursuant to Section 2161.253(d) of the Texas Government Code if any modifications are made to the HSP without PRIOR approval from the Department.

For assistance in completing the HSP, Respondent may visit the following website: https://comptroller.texas.gov/purchasing/vendor/hub/. If any questions, the respondent may contact the person identified in Part III Section 3.6.

If Respondent is not subcontracting any portion of the contract, Sections 1, 2(a), 3 and 4 must be completed.

If Respondent is subcontracting some portion of the contract, the supporting documentation of “Good Faith Effort” must be demonstrated in either Method A (Attachment A) or Method B (Attachment B).

The Texas Department of Housing and Community Affairs requests all Respondents to consider utilizing HUBs in subcontracting areas that are listed below; however, this list should not be considered exhaustive.

In accordance with 34 TAC §20.285(d)(1)(D)(iii), a Respondent (prime contractor) may demonstrate good faith effort to utilize Texas certified HUBs for its subcontracting opportunities if the total value of Respondent’s subcontracts with Texas certified HUBs meets or exceeds the statewide HUB goal or the agency specific HUB goal, whichever is higher. When a Respondent uses this method to demonstrate good faith effort, the Respondent must identify the HUBs with which it will subcontract. If using existing contracts with Texas certified HUBs to satisfy this requirement, only contracts that have been in place for five years or less shall qualify for meeting the HUB goal.

Respondent must carefully review, complete and return all HUB forms, as required by this Section.

4.2.O NOT APPLICABLE

4.2.P Nondisclosure Agreement

Exhibit D must be completed and signed by respondent.

4.2.Q Conflict of Interest Statement

The Conflict of Interest Statement must be prepared, signed by respondent, and returned with the proposal as Exhibit E.

In its proposal, a respondent must represent and warrant to the Department that it and each of its subcontractors have the requisite resources, qualifications, and independence to conduct the services free from outside direction, control, or influence, and subject only to the accomplishment of the Department’s objectives. Respondents that cannot make this representation and warranty should not respond to this RFP.

Respondent must disclose any existing or potential conflicts of interest or possible issues that might create appearances of impropriety relative to the submission of a proposal from respondent and its possible selection as successful respondent, or its performance or the performance of its proposed subcontractor(s).

As part of this disclosure requirement, each respondent must include in its proposal all past and present contractual, business, financial or personal relationships between respondent and the Department and between respondent’s proposed subcontractors, if any, and the Department. For purposes of this disclosure requirement, (i) “past” is defined as within the two (2) calendar years prior to the deadline for submission of proposals; (ii) the “Department” is defined as the agency as well as the agency’s employees or recent former employees; and (iii) “recent former employees” are defined as those Department employees who have terminated agency employment within the two (2) calendar years prior to the deadline for submission of proposals. For each item, respondent must provide a detailed explanation of why respondent does or does not believe such item poses a conflict of interest, potential conflict of interest, or appearance of impropriety issue relative to respondent’s submission of a proposal, possible selection as successful respondent or its performance of the Contract.

For purposes of this RFP, “personal relationship” is defined as a current or past connection other than a clearly contractual, business, financial, or similar relationship and includes family relationships or other connections other than simply providing a response to this RFP. For this purpose, “family relationship” means a relationship within the third degree of consanguinity or second degree of affinity. Chapter 573 of the Texas Government Code defines these degrees of consanguinity and affinity. Connections other than such family relationships fall within this definition and must be disclosed if a reasonable person could expect the connection to diminish respondent’s independence of judgment or effectiveness in the performance of respondent’s responsibilities to the Department or the State of Texas under the Contract. Connections also fall within this definition if a reasonable person could expect the connection, within the overall context of respondent’s submission of a proposal, possible selection as successful respondent, or its performance of the Contract, to create an issue for the agency’s consideration relative to a potential appearance of impropriety or conflict of interest. Connections also fall within this definition if the relationship is with the Department or other State of Texas employee with authority to make decisions or recommendations on State of Texas contracting or procurement or this RFP. For purposes of this provision, those persons with authority to make decisions or recommendations are those persons who fall within the definition of “purchasing personnel” in Section 2262.004(a)(2) of the Texas Government Code.

In submitting a proposal, a respondent affirms that it has not given, nor does it intend to give, at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant or any employee or representative of same, in connection with this procurement.

Respondents must disclose any proposed personnel under the Contract who are current or recent former employees of the Department or the State of Texas. Recent former employees are defined above.

Also, under Section 2254.033 of the Texas Government Code, an individual who offers to provide consulting services to the Department and who has been employed by the Department or another agency at any time during the two years preceding submitting the proposal shall disclose in its proposal: (i) the nature of the previous employment with the Department or the other agency; (ii) the date the employment was terminated; and (iii) the annual rate of compensation for the employment at the time of its termination.

Disclosures under these provisions will be evaluated by the Department. However, all information provided will not necessarily lead to a restriction or disqualification. Issues will be considered on a case-by-case basis in the best interests of the State of Texas. If a respondent is in doubt about whether information should be disclosed, respondent should consult its legal counsel. Failure to disclose any required information under these provisions may be cause for proposal disqualification or termination of the contract, if any, awarded as a result of this RFP. The Department reserves the right, in its sole discretion, to determine if an issue should result in proposal disqualification or termination of the Contract. If circumstances change or additional information is obtained subsequent to submission of proposals, respondent’s duty to disclose under these provisions continues under the term of the Contract and does not end with submission of a proposal or receipt of Contract award.

4.2.R Certification Regarding Public Nature of the Proposal

Exhibit F must be completed and signed by Respondent.

4.2.S Vendor Reference Questionnaire

Respondents must send the Vendor Reference Questionnaire (Exhibit G) to three (3) companies or government agencies. Instructions are included on the questionnaire. Respondents may send the questionnaire to references via email. The Department is not responsible for undeliverable e-mails or for non-responsive references. Respondents’ references will be evaluated in accordance with Section 5.2 (Selection Criteria) and 5.3 (Past Performance). Include all requested information in the top portion of the questionnaire. References must respond to the Department on the form provided by the due date provided in Section 3.5 (Schedule of Events) to be considered in Proposal evaluation. The questionnaire form must be submitted directly from the references to the Department. Respondents shall not submit the reference form to the Department. References may be contacted for clarification at the Department’s discretion.

PART V

PROPOSAL EVALUATION AND SELECTION

5.1 Evaluation Process

The Department shall establish an evaluation committee. Copies of proposals the Department determines are responsive and in compliance with this RFP will be distributed to the members of the evaluation committee for their review and evaluation. Clarifications on issues raised in the proposals may be sought from individual respondents. Best and final offers may be sought from respondents whose proposals are ranked highest by the evaluation committee. However, respondents are encouraged to present their best pricing and best offer in their proposals.

The Department may request that top-scoring respondents present an overview of the proposed services. The number of top-scoring respondents selected to provide presentations will be determined by the Department in its sole discretion. Such respondents will be notified and presentation dates and times will be arranged.

Upon the selection of successful respondent, if any, the Department shall proceed with contract negotiations and attempt to finalize the contract with the apparent successful respondent. If a contract cannot be successfully negotiated within a reasonable period, negotiations will be terminated, and negotiations with the next-highest-ranking respondent may commence. The process may continue until a contract is signed or the RFP is withdrawn. Upon failure of negotiations, the Department may at any time choose to reissue or withdraw the RFP rather than continue with negotiations.

As soon as possible after the execution of a written contract with successful respondent, the award will be posted on the ESBD.

5.2 Selection Criteria

Only those proposals that meet the minimum qualifications shall be evaluated and scored. The evaluation of the proposals will be conducted in accordance with the best value standard set forth in Section 2254.027 of the Texas Government Code, and the criteria and relative weights are as follows:

5.3 Respondent’s Past Performance

In addition to the references under Section 4.2.R,…