ESBD_File_355508_332-24-1007 Servicer Oversight Final.pdf

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Texas Department of Housing and Community Affairs

Request for Proposals 332-RFP24-1007 for

Servicer Oversight

By Texas Department of Housing and Community Affairs

Anticipated Schedule of Events Date

RFP Issuance: April 10, 2024

Written Questions Due: April 15, 2024

Response to Questions Post: April 18, 2024

Proposals Due: May 9, 2024

Contract Execution: June 1, 2024

Commencement of Work: June 1, 2024

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TABLE OF CONTENTS

PART I GENERAL INFORMATION

1.1 Introduction

1.2 Background

1.3 Definitions and Acronyms

PART II SCOPE OF WORK

2.1 Service Description

2.2 Term of Contract

2.3 Limitation of Authority

PART III GENERAL INFORMATION

3.1 Authority

3.2 TDHCA Rights

3.3 Respondent Obligations

3.4 Successful Respondent Obligations

3.5 Schedule of Events

3.6 Issuing Office

3.7 Submission of Questions

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

3.9 Confidential Information; Nondisclosure; Open Records

3.10 Media Releases

3.11 Non-exclusivity

3.12 Incorporation of Exhibits

3.13 Transition of Services

3.14 Payment and Invoices

PART IV PROPOSAL FORMAT

4.1 Introduction

4.2 General Organization of Proposal Contents

PART V PROPOSAL EVALUATION AND SELECTION

5.1 Evaluation Process

5.2 Selection Criteria

5.3 Respondent’s Past Performance

5.4 Protest Procedures

EXHIBIT A TERMS AND CONDITIONS

EXHIBIT B EXECUTION OF PROPOSAL

EXHIBIT C HUB SUBCONTRACTING PLAN

EXHIBIT D NONDISCLOSURE AGREEMENT

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EXHIBIT E CONFLICT OF INTEREST STATEMENT

EXHIBIT F CERTIFICATION REGARDING PUBLIC NATURE OF THE PROPOSAL

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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 the Department issues tax-exempt and taxable bonds as well as other alternative types of funding to finance single-family housing.

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 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

SINGLE FAMILY MORTGAGE LOAN PROGRAM

TDHCA’s Single Family Mortgage Loan Program (the “Program”) provides first and second lien mortgage loans to very low, low and moderate income homebuyers through the My First Texas Home Program (“MFTH”) and the My Choice Texas Home Program (“MCTH”). Mortgage loans are originated through Participating Lenders and must be Federal Housing Administration (“FHA”) insured, Rural Housing Service (“RHS”) guaranteed, Veterans Affairs (“VA”) guaranteed, or insured by private mortgage guaranty insurance and eligible for securitization into Ginnie Mae, Fannie Mae, or Freddie Mac Certificates (collectively, Mortgage- Backed Securities “MBS”). First lien mortgage loans originated through the Program are referred to herein as Mortgage Loans. Second lien mortgage loans originated through the Program are referred to herein as DPA Loans.

TDHCA has historically used single family mortgage revenue bonds (“SFMRBs”) to finance the Program, TDHCA also utilizes a to-be-announced (TBA) program. Hilltop Securities provides TBA pricing, hedging, and warehousing for the Department.

Mortgage Loans originated through the Program can be combined with a mortgage credit certificate (“MCC”);

the rate for Mortgage Loans combined with an MCC is slightly higher than the rate for Mortgage Loans that do not receive an MCC.

SERVICER AGREEMENT INTRO

The Department currently works primarily with a single servicer under a sub-servicing agreement with retained servicing whereby the Department receives monthly excess servicing fees based on a fixed number of basis points against the total dollar amount of current loans being serviced.

The Servicer is obligated to service Eligible Mortgage Loans in accordance with the servicing standards required for Mortgage Loans insured by FHA or guaranteed by VA, HUD or RHS and as required by GNMA, Fannie Mae and Freddie Mac. The Servicer also services Second Mortgage Loans (Down Payment Assistance (“DPA”) Loans or Second Liens) for the Department.

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The Department currently has 44, 827 loans totaling over $8 Billion and $335 Million in Second Lien DPA Loans being serviced.

1.3 Definitions and Acronyms

Department. Texas Department of Housing and Community Affairs.

CT. Central Time.

Fiscal Year. The State of Texas and TDHCA’s fiscal year that begins on September 1 and ends on August 31.

Object Code. The machine code that can be directly executed by a computer’s central processing unit.

HUB. Historically Underutilized Business

Respondent. Company or individual responding to the solicitation

RFP. Request for Proposal

PART II

SCOPE OF WORK

2.1 Service Description

The Texas Department of Housing and Community Affairs seeks a review of Master Servicer’s historic performance in servicing the Department’s loans, compliance with internal policies and procedures, and adherence with industry best practices related to timely loan processing, loss mitigation, delinquency management, foreclosures, loan modifications, and second lien recovery. Successful Respondent shall provide services as described in this Section and in compliance with all requirements of this RFP and the Contract. Any deviations from these specific requirements must be approved by the

Department and the Successful Respondent in writing that specifically refers to the requirement and the reason for approval of the deviation. The Department will consider approving written requests for such deviations if the Department determines, in its sole discretion, that such deviations are consistent with applicable law and in the best interests of the Department.

Further, any decrease in the level of services must be accompanied by a decrease in approved fees. All services must be provided at a highly competitive fee level, i.e., at a fee level that will provide the best value to the Department when all evaluation criteria are considered. The Department reserves the right, in its sole discretion, to enter into preliminary negotiations with more than one of the top Respondents. The Department may choose to award this solicitation to more than one respondent.

The Successful Respondent must be qualified and able to provide all of the services required by the Department.

2.1.1 Minimum Requirements

A. Required experience, knowledge, skills, and abilities are as follows:

1. Comprehensive knowledge, experience, and understanding of mortgage servicing industry best practices and all FHA, VA, HUD, GNMA, FNMA, and FHLMC servicing guidelines and requirements

2. Expertise in Servicing Oversight and Quality Control, Mortgage Servicing Rights (MSR) Valuation, Loss

Mitigation best practices. Loan surveillance, and Portfolio Review root-cause and forensic analysis.

3. Specifically, the Department seeks review, analysis, reporting, and recommendations on:

a) Second Lien Servicing

b) Loss Mitigation Activities

c) MSR Valuation

2.1.2 General Services

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Respondents are expected to provide services as required and to assign experienced professionals who are best suited to respond appropriately to requirements.

SERVICES REQUIRED

Servicer Oversight

1. Review Servicer’s Policies & Procedures related to:

a. Loan Processing and Origination

b. Loan Servicing

c. First Lien Mortgage Loss Mitigation and Default Servicing

d. Second Lien Management and Recovery

e. Loan Modifications

f. Foreclosures

2. Conduct Audit and Quality Control Testing to ensure adherence to internal policies and procedures as well as industry best practices on:

a. Loan Processing and Origination

b. Loan Servicing

c. First Lien Mortgage Loss Mitigation

i. Delinquency Management

ii. Foreclosures

d. Second Lien Management and Recovery

e. Historic Loan Modification activities

3. Reporting, Trend Review, and Root-Cause Analysis

a. Map necessary curative actions

b. Provide recommendations for ongoing improvement

c. Provide Executive Summary of Findings

4. Forensic Analysis of Financial Impact to the Department due to Servicer’s specific performance and activities related to the following:

a. Loan Processing

b. Loss Mitigation Activities

c. Delinquency Management

d. Foreclosures

e. Loan Modification Activities

5. MSR Valuation

ONGOING SERVICES

1. Ongoing Servicer Oversight

a) Scope of Services to be determined based on initial findings and analysis

2. Economic SRP Schedules

3. Portfolio Performance Management

4. Mortgage Data Analytics

2.2 Term of Contract

If a Contract is awarded, the initial term of the Contract is expected to begin May 1, 2024 or as soon thereafter as practical, and to terminate April 30, 2025 in accordance with the terms of the Contract, the Department has the option, in its sole discretion, to extend the contract for two (2) additional one year periods, through May 15, 2027. TDHCA will notify the respondent 30 days prior to contract term expiration via a renewal letter.

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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 (“TDHCA”) 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.

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

Contract 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.

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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:

April 10, 2024 - Issuance of RFP

April 15, 2024 - Deadline for Submission of Questions (2:00 p.m. CT)

April 18, 2024 - Electronic Posting of Official Responses to Questions (or as soon thereafter as practical)

May 9, 2024 - Deadline for Submission of Proposals (2:00 p.m. CT)

(Late Proposals will not be considered)

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

June 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.L. Except as otherwise indicated, all communications concerning this procurement must be in writing and addressed to the Issuing Office as follows:

John Stewart, Purchaser

E-mail: john.stewart@tdhca.state.tx.us

Mailing/Delivery address:

John Stewart, Purchaser

Attn: Purchasing #332-RFP24-1007

221 E 11th Street

Austin, Texas 78701 http://www.txsmartbuy.com/esbd

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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 copy 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.

http://www.txsmartbuy.com/sp http://www.lbb.texas.gov/

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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 and F 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 shall be required to submit detailed invoices to support payments. Contractor’s invoices 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.

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PART IV

PROPOSAL FORMAT

4.1 Introduction

Each original Proposal and copy shall contain a cover sheet with the following: “332-RFP24-1007 Servicer Oversight” 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) Financial Statements;

k) Execution of Proposal;

l) Historically Underutilized Businesses Subcontracting Plan;

m) Nondisclosure Agreement;

n) Conflict of Interest Statement;

o) Certification Regarding Public Nature of the Proposal; and

p) 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 ninety (90) days from the deadline for delivery of Proposals to the Department. Any Proposal containing a term of less than ninety (90) 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

332-RFP24-1007 Page 12 of 38 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, business telephone number, cell phone number, email address, and fax number of Respondent’s principal contact person regarding 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 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.F Respondent Qualifications and Experience

1. Experience:

Respondent must include a detailed overview of Respondent’s experience providing the requisite services in its

Proposal. Respondent must demonstrate its knowledge of and experience with activities relevant to the services.

Respondent must provide a detailed profile that describes the following:

(1) the size and scope of all operations, including number of Respondent’s employees and years in business;

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(2) the general nature of previous similar work performed by Respondent, particularly work in the last three (3) years;

(3) Respondent’s depth and length of experience with state agencies;

(4) Respondent’s experience in the required services;

(5) for each proposed subcontractor:

a) the size and scope of all operations, including number of employees and years in business;

b) the general nature of previous similar work performed, particularly work in the last three (3) years;

c) depth and length of experience with state agencies; and

(6) Respondent should also describe any disaster recovery plan in place to maintain business operations;

and

(7) any other information Respondent believes is pertinent to 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. Respondent must include in the Proposal resumes of all management, supervisory, and key personnel that will be involved in performing the services, and must provide for each person:

a full name;

a specific description of relevant experience and skills that person has with the required services, that must include at least three (3) years of experience performing work similar to the required services (limit to one page);

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.

Resumes must present the required personnel information in sufficient detail to provide the Department with a convincing indication that the personnel involved can successfully provide the required Services. The personnel, as identified in the

Proposal, are considered to be essential to the Services. The Department reserves the right, in its sole discretion, to approve each member of the team and to request substitutions. All replacements of personnel must be of equal or superior experience or skill as the person replaced.

4.2.H Respondent Narrative and Preliminary Work Plan

In its Proposal, Respondent must submit a narrative explanation of how the offered services will meet the requirements of this RFP. In its narrative, Respondent may also concisely describe any additional features, aspects, or advantages of its services in any relevant area not covered elsewhere in its Proposal.

4.2.I Proposed Fee

The Department is soliciting proposals to procure the services for a firm, fixed price. Respondents are encouraged to propose their best pricing at all times. Respondent must include all costs of providing the services on a price sheet. All costs and expenses associated with the services, including attendance at, and participation in, all meetings as requested by the

Department, must be included on the proposed price sheet. Variable costs such as travel-related expenses must not be added as line items on the price sheet. The Department reserves the right to negotiate budget and budgetary constraints at the time of contract award. Any Contract resulting from this RFP shall include a total not-to-exceed fee for all costs associated with providing the services.

4.2.J Financial Statements

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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.K Execution of Proposal

Exhibit B must be completed and signed by Respondent.

4.2.L Historically Underutilized Businesses Subcontracting Plan

Exhibit C must be completed and signed by Respondent.

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 48 49and Class 946, Item 49.

https://comptroller.texas.gov/purchasing/vendor/hub/forms.php

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

4.2.M Nondisclosure Agreement

Exhibit D must be completed and signed by Respondent.

4.2.N 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).

- - 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.

Class Item Description

946 48 Financial Advisors

946 49 Financial Services (Not otherwise Classified)

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.

https://comptroller.texas.gov/purchasing/vendor/hub/

332-RFP24-1007 Page 16 of 38

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.O Certification Regarding Public Nature of the Proposal

Exhibit F must be completed and signed by Respondent.

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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:

(1) Respondent’s Demonstrated Competence, Knowledge, and Qualifications, including:

a) Respondent’s preliminary Work Plan and methodology for providing the requested services; 30%

b) Respondent’s proposed personnel, including their applicable experience in providing same or similar services to those requested in this RFP; 20%

c) Respondent’s past performance, qualifications, and experience in providing same or similar services to those requested in this RFP; 20%

d) Respondent’s quality of performance on previous engagements, including

Department and Board projects; 10%

(2) Reasonableness of Proposed Fee 20%

100%

5.3 Respondent’s Past Performance

In addition to the references the Department may conduct reference checks with other entities regarding past performance of Respondent or its subcontractors. In addition to evaluating performance through the Vendor Performance Tracking

System as authorized by 34 Texas Administrative Code §20.115, the Department may examine other sources of vendor performance, including, but not limited to, notices of termination, cure notices, assessments of liquidated damages, litigation, audit reports, and non-renewals of contracts. Such sources of vendor performance may include any governmental entity, whether an agency or political subdivision of the State of Texas, another state, or the Federal government. Any such investigations shall be at the sole discretion of the Department, and any negative findings, as determined by the Department, may result in a non-award to Respondent. The Vendor Performance Tracking System information is located on

Comptroller’s website at:

https://www.comptroller.texas.gov/purchasing/programs/vendor-performance-tracking/.

https://www.comptroller.texas.gov/purchasing/programs/vendor-performance-tracking/

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5.4 Protest Procedures

Respondents must use…