FINAL_RFP_Loan_Fulfillment_and_servicing_ADU_and_attachments_(deadline_ext._07232024).pdf

REQUEST FOR PROPOSAL

Accessory Dwelling Unit (ADU)

Loan Fulfillment & Servicing

1 League #62335

Irvine, CA 92602

(909) 706-7193

Key RFP Dates

Issue Date: May 17, 2024

Question Cut-off Date: June 6, 2024, by 5 p.m.

Extended to July 16, 2024 by 5 p.m.

Proposal Submission Deadline: June 13, 2024, by 5 p.m.

Extended to July 23, 2024 by 5 p.m.

Submission Instructions: Via email to RFP Contact

RFP Contact: Amanda Grill

Telephone: (949) 229-1180

Email: agrill@ochft.org

The Orange County Housing Finance Trust (“OCHFT” or “Trust”) is issuing this Request for

Proposal (RFP) soliciting proposals from interested and qualified firms (Consultants or

Proposers) to provide loan fulfillment and servicing services for the Affordable Accessory

Dwelling Unit (ADU) Loan Program (Program). This RFP is not a solicitation for employment or posting of a job opening with the Trust.

OCHFT Background The Orange County Housing Finance Trust is a Joint Powers Authority formed in March

2019 between the County of Orange and 27 member cities in Orange County, California. A complete list of member cities can be found in Attachment 1.

The mission of the Trust is to strengthen the communities in Orange County by financing the development of affordable housing for homeless and low-income individuals and families.

Affordable ADU Loan Program The OCHFT’s innovative Program generates a new accessory dwelling unit that provides an affordable unit to rent by offering a discounted capital loan and leasing support to

Orange County homeowners.

The Program offers a construction-to-permanent loan to homeowners who agree to rent their ADU for ten years to a very low-income tenant. The loans are up to $100,000, with variable low or no interest, partially forgivable, and deferred payments for up to 20 years.

These ADU rentals provide ten years of stable, appropriately priced housing for very low-income households and helps to contribute towards a regional housing affordability crisis. Upon repayment of the loan, owners have the flexibility to use the ADU to best meet their needs, and the repayment of the loan funds will be re-used to help finance another new ADU.

See supporting documents for this RFP for more information on the ADU Loan Program as it relates to the scope of work.

Scope of Work Project Objectives The Trust intends to outsource the fulfillment and servicing responsibilities of the Program to an experienced firm, aiming to achieve efficient, cost-contained, and legally compliant loan administration.

While the firm will handle the administration of the loans, the Trust will retain responsibilities for promoting and disseminating information on the Program.

Additionally, the Trust will manage and select potential applicants from the interest list on the Trust website. Furthermore, the Trust will review and provide final approval based on the firm’s underwriting, ensuring compliance of the participating homeowner with the Program terms.

All proposals must demonstrate an understanding of and account for the unique design of the Program which is detailed in the supporting Program documents and includes:

- Construction-to-permanent loan

- Secured on primary residence as a 2nd or 3rd position lien dependent on other financing of the remaining construction costs

- 20 years deferred

- Partially forgivable, applied halfway through the loan period

- Due at Maturity

- Interest rate adjustments based on borrower performance

- Three distinct interest periods, one period with three possible interest rates that change intermittently

- Last-in funding, possibly necessitating a dry-close of the loan

- Minimal underwriting standards

- No escrow (can ride along another loan that uses an escrow account)

Technical Assistance

- Validate that the Program and Trust meet all legal and regulatory requirements for any applicable state or federal laws or regulations and provide guidance if any adjustments are needed to be in legal compliance.

- Advise the Trust on lender policies, including loss mitigation, bankruptcy, and refinancing.

- Alert the Trust and make necessary adjustments to loan fulfillment and servicing due to future regulatory and legal changes that impact the program.

Loan Fulfillment

- Create and collect loan applications and make determinations on eligibility per terms of the program (not required to brand fulfillment and servicing in Trust’s name).

o Construction: the applicant has submitted evidence that:

▪ Collecting a loan condition document verifying the general contractor/ADU professional has provided a statement that the proposed ADU meets the standards of the city, has mobility accessibility, and provides a detailed, line-item budget.

▪ Receive an acknowledgment letter from the borrower that the

ADU has not been completed already with a certificate of occupancy.

o Borrower: verify the property is owned by the applicant and occupied by the same.

o Finances:

▪ Confirm with title information that the Trust loan will be no lower than 3rd lien,

▪ 90% CLTV,

▪ Loan company to verify sufficient source of funds for the completion of the ADU budget,

▪ Total debt for build is less than 120% of construction costs.

- Generate and provide all required and applicable disclosures to applicants. The contracted company will be liable for any errors in the disclosures.

- Assess the feasibility of the project and contractor experience.

- Coordinate with other lenders to minimize closing costs to the borrower.

- Validate the financial contingencies prior to loan closing.

- Coordinate loan closings including signing of documents and working with the

Trust’s preferred title company to record documents.

- NOTE: There is no need to monitor the construction process or approve construction draws. The Trust has already created a Loan Agreement, Regulatory

Agreement, Promissory Note, and Deed of Trust for use in this Program.

- Provide customer service for applicants throughout the loan application and closing process and maintain an electronic file and where required a paper file, for each borrower.

Loan Servicing

- Provide diligent and customary loan servicing functions, including set-up of new loans, modifications, payoffs, collections, loss mitigation, defaults, foreclosures, and bankruptcy.

- Apply interest rate changes throughout the life of the loan per Program guidelines.

- Verify income qualification of tenants using HUD-adjusted income standards.

- While the Program allows borrowers to defer all their payments, the company will provide a borrower online account that is secure and allows automatic or occasional payment options.

- Provide online, secure portfolio access to accounts for the Trust, with an option to customize portfolio and individual loan reports

- Annual loan statements to borrowers and applicable tax forms.

- Escrow accounts for property taxes and insurance, if necessary (e.g. borrower does not have a loan on their home).

- Transfer of payments to the Trust.

- Assist in regulatory and financial audits, as necessary.

- Portfolio transfer if required.

- Spanish and Vietnamese language staffing is preferred, but not required

Contract Term The initial period of performance for this contract will be two years from the date of Trust

Board approval to award the contract, with a possibility of one (1) two-year extension.

Preparation of Proposals Proposals shall be accepted via email only to agrill@ochft.org no later than July 23, 2024, at 5:00 PM. Proposals should be sent as a single PDF file. Do not send a hard-copy of proposal.

The proposal shall include the following information:

1. Cover Letter/Letter of Transmittal. Include, at a minimum, a summary of the proposal and proposer firm and the main point of contact, including email address, phone number, and mailing address. Address the letter to Adam

Eliason, Trust Manager, Orange County Housing Finance Trust.

2. Firm Qualifications. This section shall describe the qualifications of the proposing firm and their ability to provide the requested services to the Trust. Please include a summary of prior projects that are similar in scope, especially for other public agencies, and the associated contact information for those clients.

3. Staff Qualifications. This section should indicate the proposer’s employees that will be working on this particular proposal and the specific role they will provide related to this contract. The proposer will provide resumes or experience summaries of the employees proposed to work on this assignment. Please also include an organizational chart.

4. Methodology/Work Management Plan. Describe the proposer’s approach to providing the services as outlined in the Scope of Services and include cost-saving ideas.

a. Sample loan application

b. Sample image of borrower account platform

c. Sample image of Trust portfolio account

d. Proposed communication methods and schedule

e. Summary of technology to be used, its capabilities, and privacy and data security practices

5. Proposed Timeline. Include a preliminary timeline and schedule in achieving all the tasks in the scope of work allowing for the work to be completed in an efficient manner to avoid any project delays.

6. Costs. Provide a matrix similar to Attachment 4, identifying the costs for each of the tasks described in the Scope of Work and the Total for the Scope of Work identified in this Request for Proposal.

7. Validity Period. The proposer shall specify a proposal validity period of no less than 120 days from the Proposal Submittal Deadline.

8. Subcontractors. The proposer shall designate each entity that is proposed to perform work or render services pursuant to a subcontract, detailing the extent of subcontracting contemplated. Information regarding suppliers is required only if the supply subcontract is anticipated to have a value exceeding 10% of the proposed value of the prime contract.

9. Conflicts of Interest. The proposer shall provide a completed Attachment 3, Conflict-of-Interest Disclosure Statement.

The intent of this RFP is to encourage responses that clearly communicate the proposer’s understanding of the Trust’s requirements and its approach to successfully provide the services on time and within budget. Only that information which is essential to an understanding and evaluation of the Proposal should be submitted. Items not specifically and explicitly related to the RFP and Proposal (e.g., brochures, marketing material, etc.) will not be considered in the evaluation.

Compensation Proposal.

The proposer shall deliver Attachment 4, Compensation Proposal, with their proposal, specifying the cost of each task to complete, which shall include all expenses and other compensation for the proposer.

Disclosure of Contributions.

The proposer shall deliver Attachment 5, Disclosure of Contributions, with their proposal, identifying all Trust Board members who received contributions from the proposer within the preceding 12 months in excess of $250 or stating that no contributions were made that require disclosure. This disclosure requirement includes all “Parties” and

“Participants” to this action as those terms are defined in Government Code §84308

(use extra forms as required).

Confidential and Proprietary Information Proposals are not to be marked as confidential or proprietary. The Trust may refuse to consider any proposal so marked. Proposals submitted in response to this RFP may become subject to public disclosure per the requirements of the California Public

Records Act, Government Code Section 6250 et seq. The Trust shall not be liable in any way for disclosure of any such records. Additionally, all Proposals shall become the property of the Trust. The Trust reserves the right to make use of any information or ideas in the Proposals submitted.

Proposal Review and Selection

*These dates are subject to change depending on the number of proposals received.

SCHEDULE*

RFP Issued: May 17, 2024

Deadline for Written Questions Due 5:00 PM: June 6, 2024

July 16, 2024

Proposals Due 5:00 PM: June 13, 2024

July 23, 2024

Tentative Evaluation Period Week of July 30th*

Tentative Interviews Week of August 5th*

Tentative Notice of Intent to Award Week of August 12th*

1. The proposals shall be reviewed in accordance with the Trust’s Procurement

Policy.

2. Any proposal that does not contain all the required information as outlined in

“Preparation of Proposals” will be either declared inadmissible or the Trust may request the missing information from the proposer, at their sole discretion.

3. The Trust shall convene an evaluation panel of at least three members to evaluate each responsive proposal. Criteria used as the basis for evaluation and ranking shall include:

• Professional capability, demonstrated competence and specialized experience of the proposer, including existing workload and ability to meet schedules – 35%

• Work plan/methodology and adherence to scope of work; including examples of previous work with comparable clients or loan programs- 35%

• Compensation Proposal – 30%;

Proposals deemed to meet all minimum RFP requirements will be scored based on established criteria, which have been weighted and will be assigned points that measure the responsiveness to each identified criterion. The total number of points earned will be tallied for each Proposal, and the Proposals will be rank-ordered, based upon proposer’s submitted written materials.

4. The Trust will rank the proposals, applying the foregoing evaluation criteria to the proposals. Upon completion of the evaluation process, the evaluation panel will summarize the strengths of each proposal, their scoring, and their rank-ordering for a decision by the Trust Board.

5. The Trust may reject all proposals without further discussion or commence negotiations with the highest-ranked proposer. If the Trust commences negotiations, the Trust may negotiate any component of the proposal. The proposer on the other hand, may raise issues only to the extent they are interrelated with negotiated topics raised by the Trust.

6. Discussions and/or negotiations may be conducted with one or more proposers.

Each proposer shall be accorded fair and equal treatment in conducting negotiations and there shall be no disclosure of any information derived from proposals submitted by competing proposer.

a. Concurrent negotiations. Negotiations may be conducted concurrently with proposers for the purpose of determining source selection and/or contract award.

b. Exclusive negotiations. Exclusive negotiations may be conducted with the proposer whose proposal is determined in the source selection process to be most advantageous to the Trust. Exclusive negotiations may be conducted subsequent to concurrent negotiations or may be conducted without requiring previous concurrent negotiations. Exclusive negotiations shall not constitute a contract award nor shall it confer any property rights to the successful proposer. If exclusive negotiations are conducted and an agreement is not reached, the Trust may enter into exclusive negotiations with the next highest ranked proposer without the need to repeat the formal solicitation process.

7. The Trust will accept proposals from one company to do all of the scope of work

OR proposals to do a limited portion of the scope of work (i.e. loan servicing only). Joint proposals between two firms are acceptable with a history of previous shared projects.

8. Contract with more than one Offeror. The Trust reserves the right to offer a contract to more than one Offeror, dividing the scope of work amongst them as necessary to meet the needs of the RFP and control for costs.

Instructions – Protest Procedures

Any actual or prospective Proposer or Contractor who alleges a grievance by the solicitation or award of a contract may submit a grievance or protest to the Trust

Manager at aeliason@ochft.org.

1. All protests shall be typed under the protester’s letterhead and submitted in accordance with the provisions stated herein. All protests shall include at a minimum the following information:

a. The name, address and telephone number of the protester;

b. The signature of the protester or the protester’s representative;

c. The solicitation or contract number;

d. A detailed statement of the legal and/or factual grounds for the protest; and

e. The form of relief requested.

2. Protest of Bid/Proposal Specifications:

All protests related to bid or proposal specifications must be submitted no later than five (5) business days prior to the close of the bid or proposal. Protests received after the five (5) business day deadline will not be considered by the

Trust.

In the event the protest of specifications is denied and the protester wishes to continue in the solicitation process, they must still submit a proposal prior to the close of the solicitation in accordance with the bid/proposal submittal procedures stated in this RFP.

3. Protest of Award of Contract:

In protests related to the award of a contract, the protest must be submitted no later than seven (7) business days after the notice of the proposed contract award is provided. Protests relating to a proposed contract award which are received after the seven (7) business day deadline will not be considered by the

Trust.

4. Protest Process:

While a protest is in progress, the Trust may proceed with the solicitation or the contract unless the Trust Manager determines there is a reasonable probability that the protest will be sustained or that the stay of procurement is not contrary to the substantial interests of the Trust. The Trust Manager shall issue a written decision to the protestor within 14 days, including an explanation of the basis of the decision and a statement of the available appeals process. If the protest is sustained, in whole or part, the Trust Manager shall implement a remedy appropriate to the circumstances.

5. Appeal Process:

A protestor may appeal the decision of the Trust Manager to the Trust Board of

Directors within seven (7) days from the date the decision is issued. The appeal shall contain all the information originally set forth in the protest, a copy of the decision of the Trust Manager; and the specific factual or legal error in the decision of the Trust Manager that forms the basis of the appeal. A decision by the Trust Board of Directors shall be final.

ATTACHMENT 1

LIST OF TRUST MEMBERS

1. Aliso Viejo

2. Anaheim

3. Buena Park

4. Costa Mesa

5. County of Orange

6. Dana Point

7. Fountain Valley

8. Fullerton

9. Garden Grove

10. Huntington Beach

11. Irvine

12. Lake Forest

13. Laguna Beach

14. Laguna Hills

15. Laguna Niguel

16. La Habra

17. Los Alamitos

18. Mission Viejo

19. Newport Beach

20. Orange

21. Placentia

22. San Juan Capistrano

23. Santa Ana

24. Seal Beach

25. Stanton

26. Tustin

27. Westminster

28. Yorba Linda

Attachment 2

MODEL/PROPOSED CONTRACT

Between

ORANGE COUNTY HOUSING FINANCE TRUST

And

[INSERT COMPANY NAME/TBD]

For

ADU Loan Fulfillment and Servicing

This Contract for ADU Loan Fulfillment and Servicing, hereinafter referred to as

“Contract,” is made and entered into as of the date fully executed by and between the Orange County Housing Finance Trust, a California public agency formed pursuant to California Government Code section 6500 et. seq. with a place of business at 1

League #62335, Irvine, CA 92602: hereinafter referred to as “Trust,” and [Insert Company

Name /TBD] with a place of business at [Insert Address/TBD]; hereinafter referred to as

“Contractor,” with Trust and Contractor sometimes referred to as “Party,” or collectively as “Parties.”

ATTACHMENTS

Attachment A – Scope of Work Attachment B – Compensation/Payment Attachment C – Staffing Plan

RECITALS

WHEREAS, Trust issued a Request for Proposal (RFP) for ADU Loan Fulfillment and

Servicing; and

WHEREAS, the Contractor responded and represents that its proposed services shall meet or exceed the requirements and specifications of the RFP; and

WHEREAS, the Trust Board of Directors has authorized the Trust Manager or their designee to enter into a Contract with Contractor for ADU Loan Fulfillment and

Servicing Services; and

NOW, THEREFORE, the parties mutually agree as follows:

ARTICLES

I. GENERAL Terms and Conditions:

A. Governing Law and Venue: This Contract has been negotiated and executed in the state of California and shall be governed by and construed under the laws of the state of California. In the event of any legal action to enforce or interpret this Contract, the sole and exclusive venue shall be a court of competent jurisdiction located in

Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394.

Furthermore, the parties specifically agree to waive any and all rights to request that an action be transferred for adjudication to another county.

B. Entire Contract: This Contract, including Attachments A, B, and C which are attached hereto and incorporated herein by this reference, contains the entire

Contract between the parties with respect to the matters herein, and there are no restrictions, promises, warranties or undertakings other than those set forth herein or referred to herein. No exceptions, alternatives, substitutes or revisions are valid or binding on Trust unless authorized by Trust in writing. Electronic acceptance of any additional terms, conditions or supplemental Contracts by any Trust employee or agent, including but not limited to installers of software, shall not be valid or binding on Trust unless accepted in writing by Trust’s Agent or designee.

C. Amendments: No alteration or variation of the terms of this Contract shall be valid unless made in writing and signed by the parties; no oral understanding or agreement not incorporated herein shall be binding on either of the parties; and no exceptions, alternatives, substitutes or revisions are valid or binding on Trust unless authorized by Trust in writing.

D. Taxes: Unless otherwise provided herein or by law, price quoted does not include

California state sales or use tax. Out-of-state Contractors shall indicate California Board of Equalization permit number and sales permit number on invoices, if California sales tax is added and collectable. If no permit numbers are shown, sales tax will be deducted from payment. The Auditor-Controller will then pay use tax directly to the

State of California in lieu of payment of sales tax to the Contractor.

E. Delivery: Time of delivery of goods or services is of the essence in this Contract.

Trust reserves the right to refuse any goods or services and to cancel all or any part of the goods not conforming to applicable specifications, drawings, samples or descriptions or services that do not conform to the prescribed statement of work.

Acceptance of any part of the order for goods shall not bind Trust to accept future shipments nor deprive it of the right to return goods already accepted at Contractor’s expense. Over shipments and under shipments of goods shall be only as agreed to in writing by Trust. Delivery shall not be deemed to be complete until all goods or services have actually been received and accepted in writing by Trust.

F. Acceptance/Payment: Unless otherwise agreed to in writing by Trust, 1) acceptance shall not be deemed complete unless in writing and until all the goods/services have actually been received, inspected, and tested to the satisfaction of Trust, and 2) payment shall be made in arrears after satisfactory acceptance.

G. Warranty: Contractor expressly warrants that the goods covered by this Contract are 1) merchantable and good for the ordinary purposes for which they are used, and

2) fit for the particular purpose for which they are intended. Acceptance of this order shall constitute an agreement upon Contractor’s part to indemnify, defend and hold

Trust and its indemnities as identified in paragraph “Z” below, and as more fully described in paragraph “Z,” harmless from liability, loss, damage and expense, including reasonable counsel fees, incurred or sustained by Trust by reason of the failure of the goods/services to conform to such warranties, negligent or unlawful acts, and non-compliance with any applicable state or federal codes, ordinances, orders, or statutes. Such remedies shall be in addition to any other remedies provided by law.

H. Patent/Copyright Materials/Proprietary Infringement: Unless otherwise expressly provided in this Contract, Contractor shall be solely responsible for clearing the right to use any patented or copyrighted materials in the performance of this Contract.

Contractor warrants that any software as modified through services provided hereunder will not infringe upon or violate any patent, proprietary right, or trade secret right of any third party. Contractor agrees that, in accordance with the more specific requirement contained in paragraph “Z” below, it shall indemnify, defend and hold

Trust and Trust Indemnitees harmless from any and all such claims and be responsible for payment of all costs, damages, penalties and expenses related to or arising from such claim(s), including, costs and expenses but not including attorney’s fees.

I. Assignment: The terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators and assigns of the parties.

Furthermore, neither the performance of this Contract nor any portion thereof may be assigned by Contractor without the express written consent of Trust. Any attempt by

Contractor to assign the performance or any portion thereof of this Contract without the express written consent of Trust shall be invalid and shall constitute a breach of this

Contract.

J. Non-Discrimination: In the performance of this Contract, Contractor agrees that it will comply with the requirements of Section 1735 of the California Labor Code and not engage nor permit any subcontractors to engage in discrimination in employment of persons because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, or sex of such persons.

Contractor acknowledges that a violation of this provision shall subject Contractor to penalties pursuant to Section 1741 of the California Labor Code.

K. Termination: In addition to any other remedies or rights it may have by law, Trust has the right to immediately terminate this Contract without penalty for cause or after

30 days’ written notice without cause, unless otherwise specified. Cause shall be defined as any material breach of contract, any misrepresentation or fraud on the part of the Contractor. Exercise by Trust of its right to terminate the Contract shall relieve

Trust of all further obligation.

L. Consent to Breach Not Waiver: No term or provision of this Contract shall be deemed waived and no breach excused, unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented. Any consent by any party to, or waiver of, a breach by the other, whether express or implied, shall not constitute consent to, waiver of, or excuse for any other different or subsequent breach.

M. Independent Contractor: Contractor shall be considered an independent contractor and neither Contractor, its employees, nor anyone working under

Contractor shall be considered an agent or an employee of Trust. Neither Contractor, its employees nor anyone working under Contractor shall qualify for workers’ compensation or other fringe benefits of any kind through Trust.

N. Performance: Contractor shall warrant all work under this Contract, taking necessary steps and precautions to perform the work to Trust’s satisfaction. Contractor shall be responsible for the professional quality, technical assurance, timely completion and coordination of all documentation and other goods/services furnished by the

Contractor under this Contract. Contractor shall perform all work diligently, carefully, and in a good and workmanlike manner; shall furnish all necessary labor, supervision, machinery, equipment, materials, and supplies, shall at its sole expense obtain and maintain all permits and licenses required by public authorities, including those of Trust required in its governmental capacity, in connection with performance of the work. If permitted to subcontract, Contractor shall be fully responsible for all work performed by subcontractors.

O. Insurance Provisions: Prior to the provision of services under this Contract, the

Contractor agrees to purchase all required insurance at Contractor’s expense, including all endorsements required herein, necessary to satisfy the Trust that the insurance provisions of this Contract have been complied with. Contractor agrees to keep such insurance coverage, Certificates of Insurance, and endorsements on deposit with the Trust during the entire term of this Contract. In addition, all subcontractors performing work on behalf of Contractor pursuant to this Contract shall obtain insurance subject to the same terms and conditions as set forth herein for Contractor.

Contractor shall ensure that all subcontractors performing work on behalf of Contractor pursuant to this Contract shall be covered under Contractor’s insurance as an

Additional Insured or maintain insurance subject to the same terms and conditions as set forth herein for Contractor. Contractor shall not allow subcontractors to work if subcontractors have less than the level of coverage required by Trust from Contractor under this Contract. It is the obligation of Contractor to provide notice of the insurance requirements to every subcontractor and to receive proof of insurance prior to allowing any subcontractor to begin work. Such proof of insurance must be maintained by

Contractor through the entirety of this Contract for inspection by Trust representative(s) at any reasonable time.

All self-insured retentions (SIRs) shall be clearly stated on the Certificate of Insurance.

Any self-insured retention (SIR) in an amount in excess of Fifty Thousand Dollars ($50,000) shall specifically be approved by the Trust’s Risk Manager, or designee, upon review of

Contractor’s current audited financial report. If Contractor’s SIR is approved, Contractor, in addition to, and without limitation of, any other indemnity provision(s) in this Contract, agrees to all of the following:

1. In addition to the duty to indemnify and hold the Trust harmless against any and all liability, claim, demand or suit resulting from Contractor’s, its agents, employee’s or subcontractor’s performance of this Contract, Contractor shall defend the Trust at its sole cost and expense with counsel approved by Board of

Directors against same; and

2. Contractor’s duty to defend, as stated above, shall be absolute and irrespective of any duty to indemnify or hold harmless; and

3. The provisions of California Civil Code Section 2860 shall apply to any and all actions to which the duty to defend stated above applies, and the Contractor’s

SIR provision shall be interpreted as though the Contractor was an insurer and the Trust was the insured.

If the Contractor fails to maintain insurance acceptable to the Trust for the full term of this Contract, the Trust may terminate this Contract.

Qualified Insurer:

The policy or policies of insurance must be issued by an insurer with a minimum rating of

A- (Secure A.M. Best's Rating) and VIII (Financial Size Category as determined by the most current edition of the Best's Key Rating Guide/Property-Casualty/United States or ambest.com). It is preferred, but not mandatory, that the insurer be licensed to do business in the state of California (California Admitted Carrier).

If the insurance carrier does not have an A.M. Best Rating of A-/VIII, the Trust retains the right to approve or reject a carrier after a review of the company's performance and financial ratings.

The policy or policies of insurance maintained by the Contractor shall provide the minimum limits and coverage as set forth below:

Coverage Minimum Limits

Commercial General Liability $1,000,000 per occurrence

$2,000,000 aggregate

Automobile Liability including coverage for owned, non-owned and hired vehicles

$1,000,000 per occurrence

Workers' Compensation Statutory

Employers' Liability Insurance $1,000,000 per occurrence

Professional Liability Insurance $1,000,000 per claims made per occurrence

Required Coverage Forms:

The Commercial General Liability coverage shall be written on Insurance Services

Office (ISO) form CG 00 01, or a substitute form providing liability coverage at least as broad.

The Business Auto Liability coverage shall be written on ISO form CA 00 01, CA 00 05, CA

0012, CA 00 20, or a substitute form providing coverage at least as broad.

Required Endorsements:

The Commercial General Liability policy shall contain the following endorsements, which shall accompany the Certificate of insurance:

1) An Additional Insured endorsement using ISO form CG 20 26 04 13or a form at least as broad naming the Trust, its elected and appointed officials, officers, agents and employees as Additional Insureds, or provide blanket coverage, which will state AS

REQUIRED BY WRITTEN CONTRACT.

2) A primary non-contributing endorsement using ISO form CG 20 01 04 13, or a form at least as broad evidencing that the Contractor’s insurance is primary and any insurance or self-insurance maintained by the Trust shall be excess and non-contributing.

The Workers’ Compensation policy shall contain a waiver of subrogation endorsement waiving all rights of subrogation against the Trust, its elected and appointed officials, officers, agents and employees or provide blanket coverage, which will state AS

REQUIRED BY WRITTEN CONTRACT.

All insurance policies required by this Contract shall waive all rights of subrogation against the Trust, its elected and appointed officials, officers, agents and employees when acting within the scope of their appointment or employment.

Contractor shall notify Trust in writing within thirty (30) days of any policy cancellation and ten (10) days for non-payment of premium and provide a copy of the cancellation notice to Trust. Failure to provide written notice of cancellation may constitute a material breach of the Contract, upon which the Trust may suspend or terminate this

Contract.

The Commercial General Liability policy shall contain a severability of interest’s clause also known as a “separation of insured” clause (standard in the ISO CG 0001 policy).

Insurance certificates should be forwarded to the agency/department address listed on the solicitation.

If the Contractor fails to provide the insurance certificates and endorsements within seven (7) days of notification by CEO/Purchasing or the agency/department purchasing division, award may be made to the next qualified vendor.

Trust expressly retains the right to require Contractor to increase or decrease insurance of any of the above insurance types throughout the term of this Contract. Any increase or decrease in insurance will be as deemed by Trust Risk Manager as appropriate to adequately protect Trust.

Trust shall notify Contractor in writing of changes in the insurance requirements. If

Contractor does not deposit copies of acceptable Certificates of Insurance and endorsements with Trust incorporating such changes within thirty (30) days of receipt of such notice, this Contract may be in breach without further notice to Contractor, and

Trust shall be entitled to all legal remedies.

The procuring of such required policy or policies of insurance shall not be construed to limit Contractor's liability hereunder nor to fulfill the indemnification provisions and requirements of this Contract, nor act in any way to reduce the policy coverage and limits available from the insurer.

P. Changes: Contractor shall make no changes in the work or perform any additional work without the Trust’s specific written approval.

Q. Change of Ownership/Name, Litigation Status, Conflicts with Trust Interests:

Contractor agrees that if there is a change or transfer in ownership of Contractor’s business prior to completion of this Contract, and the Trust agrees to an assignment of the Contract, the new owners shall be required under the terms of sale or other instruments of transfer to assume Contractor’s duties and obligations contained in this

Contract and complete them to the satisfaction of the Trust.

Trust reserves the right to immediately terminate the Contract in the event the Trust determines that the assignee is not qualified or is otherwise unacceptable to the Trust for the provision of services under the Contract.

In addition, Contractor has the duty to notify the Trust in writing of any change in the

Contractor’s status with respect to name changes that do not require an assignment of the Contract. The Contractor is also obligated to notify the Trust in writing if the

Contractor becomes a party to any litigation against the Trust, or a party to litigation that may reasonably affect the Contractor’s performance under the Contract, as well as any potential conflicts of interest between Contractor and Trust that may arise prior to or during the period of Contract performance. While Contractor will be required to provide this information without prompting from the Trust any time there is a change in

Contractor’s name, conflict of interest or litigation status, Contractor must also provide an update to the Trust of its status in these areas whenever requested by the Trust.

The Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with Trust interests. In addition to the

Contractor, this obligation shall apply to the Contractor’s employees, agents, and subcontractors associated with the provision of goods and services provided under this

Contract. The Contractor’s efforts shall include, but not be limited to establishing rules and procedures preventing its employees, agents, and subcontractors from providing or offering gifts, entertainment, payments, loans or other considerations which could be deemed to influence or appear to influence Trust staff or elected officers in the performance of their duties.

R. Force Majeure: Contractor shall not be assessed with liquidated damages or unsatisfactory performance penalties during any delay beyond the time named for the performance of this Contract caused by any act of God, war, civil disorder, employment strike or other cause beyond its reasonable control, provided Contractor gives written notice of the cause of the delay to Trust within 36 hours of the start of the delay and Contractor avails himself of any available remedies.

S. Confidentiality: Contractor agrees to maintain the confidentiality of all Trust and

Trust-related records and information pursuant to all statutory laws relating to privacy and confidentiality that currently exist or exist at any time during the term of this

Contract. All such records and information shall be considered confidential and kept confidential by Contractor and Contractor’s staff, agents and employees.

Contractor’s confidentiality obligations in this Contract and the obligations of this

Section shall survive the termination or expiration of the Contract and all related subordinate contracts.

T. Compliance with Laws: Contractor represents and warrants that services to be provided under this Contract shall fully comply, at Contractor’s expense, with all standards, laws, statutes, restrictions, ordinances, requirements, and regulations

(collectively “laws”), including, but not limited to those issued by Trust in its governmental capacity and all other laws applicable to the services at the time services are provided to and accepted by Trust. Contractor acknowledges that Trust is relying on Contractor to ensure such compliance, and pursuant to the requirements of paragraph “Z” below, Contractor agrees that it shall defend, indemnify and hold Trust and Trust Indemnities harmless from all liability, damages, costs and expenses arising from or related to a violation of such laws.

U. [INTENTIONALLY OMITTED.]

V. Severability: If any term, covenant, condition or provision of this Contract is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.

W. Attorney Fees: In any action or proceeding to enforce or interpret any provision of this Contract, each party shall bear their own attorney’s fees, costs and expenses.

X. Interpretation: This Contract has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters dealt with in this Contract. In addition, each party had been represented by experienced and knowledgeable independent legal counsel of their own choosing or has knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so. Each party further acknowledges that they have not been influenced to any extent whatsoever in executing this Contract by any other party hereto or by any person representing them, or both. Accordingly, any rule or law (including California Civil

Code Section 1654) or legal decision that would require interpretation of any ambiguities in this Contract against the party that has drafted it is not applicable and is waived. The provisions of this Contract shall be interpreted in a reasonable manner to effect the purpose of the parties and this Contract.

Y. Employee Eligibility Verification: The Contractor warrants that it fully complies with all Federal and State statutes and regulations regarding the employment of aliens and others and that all its employees performing work under this Contract meet the citizenship or alien status requirement set forth in Federal statutes and regulations. The

Contractor shall obtain, from all employees performing work hereunder, all verification and other documentation of employment eligibility status required by Federal or State statutes and regulations including, but not limited to, the Immigration Reform and

Control Act of 1986, 8 U.S.C. §1324 et seq., as they currently exist and as they may be hereafter amended. The Contractor shall retain all such documentation for all covered employees for the period prescribed by the law. The Contractor shall indemnify, defend with counsel approved in writing by Trust, and hold harmless, the Trust, its agents, officers, and employees from employer sanctions and any other liability which may be assessed against the Contractor or the Trust or both in connection with any alleged violation of any Federal or State statutes or regulations pertaining to the eligibility for employment of any persons performing work under this Contract.

Z. Indemnification: Contractor agrees to indemnify, defend with counsel approved in writing by Trust, and hold Trust, its elected and appointed officials, officers, employees, agents and those special districts and agencies which Trust’s Board of

Directors acts as the governing Board (“Trust Indemnitees”) harmless from any claims, demands or liability of any kind or nature, including but not limited to personal injury or property damage, arising from or related to the services, products or other performance provided by Contractor pursuant to this Contract. If judgment is entered against Contractor and Trust by a court of competent jurisdiction because of the concurrent active negligence of Trust or Trust Indemnitees, Contractor and Trust agree that liability will be apportioned as determined by the court. Neither party shall request a jury apportionment.

AA. Audits/Inspections: Contractor agrees to permit the Trust’s Auditor-Controller or the Auditor-Controller’s authorized representative (including auditors from a private auditing firm hired by the Trust) access during normal working hours to all books, accounts, records, reports, files, financial records, supporting documentation, including payroll and accounts payable/receivable records, and other papers or property of

Contractor for the purpose of auditing or inspecting any aspect of performance under this Contract. The inspection and/or audit will be confined to those matters connected with the performance of the Contract including, but not limited to, the costs of administering the Contract. The Trust will provide reasonable notice of such an audit or inspection.

The Trust reserves the right to audit and verify the Contractor’s records before final payment is made.

Contractor agrees to maintain such records for possible audit for a minimum of three years after final payment, unless a longer period of records retention is stipulated under this Contract or by law. Contractor agrees to allow interviews of any employees or others who might reasonably have information related to such records. Further, Contractor agrees to include a similar right to the Trust to audit records and interview staff of any subcontractor related to performance of this Contract.

Should the Contractor cease to exist as a legal entity, the Contractor’s records pertaining to this agreement shall be forwarded to the Trust’s project manager.

BB. Contingency of Funds: Contractor acknowledges that funding or portions of funding for this Contract may be contingent upon state budget approval; receipt of funds from, and/or obligation of funds by, the state of California to Trust; and inclusion of sufficient funding for the services hereunder in the budget approved by Trust’s Board of Directors for each fiscal year covered by this Contract. If such approval, funding or appropriations are not forthcoming, or are otherwise limited, Trust may immediately terminate or modify this Contract without penalty.

CC. Expenditure Limit: The Contractor shall notify the Trust assigned Agent in writing when the expenditures against the Contract reach 75 percent of the dollar limit on the

Contract. The Trust will not be responsible for any expenditure overruns and will not pay for work exceeding the dollar limit on the Contract unless a change order to cover those costs has been issued.

II. ADDITIONAL TERMS AND CONDITIONS:

1. Scope of Contract: This Contract specifies the contractual terms and conditions by which the Trust will procure services from Contractor as set forth in the Scope of

Work, attached hereto as Attachment A and incorporated by this reference.

2. Term of Contract: This Contract shall commence on TBD or upon execution of all necessary signatures, whichever comes later, and continue for two calendar years from that date, unless otherwise terminated by Trust.

3. Compensation/Payment: The Contractor agrees to accept the specified compensation, as set forth in Attachment B – Compensation/Payment, as full remuneration for performing all services and materials called for. The Contractor assumes responsibility for performance of all its duties and obligations hereunder.

5. Usage: No guarantee is given by the Trust to the Contractor regarding usage of this Contract. Usage figures, if provided, are approximations. The Contractor agrees to supply services and/or commodities requested, as needed by the Trust, at rates/prices listed in the Contract, regardless of quantity requested.

6. Adjustments-Scope of Work: No adjustments made to the scope of work will be authorized or paid for without prior written approval of the Trust assigned Agent.

7. Authorization Warranty: The Contractor represents and warrants that the person executing this Contract on behalf of and for the Contractor is an authorized agent who has actual authority to bind the Contractor to each and every term, condition and obligation of this Contract and that all requirements of the Contractor have been fulfilled to provide such actual authority.

8. [INTENTIONALLY OMITTED.]

9. Breach of Contract: The failure of the Contractor to comply with any of the provisions, covenants or conditions of this Contract shall be a material breach of this

Contract. In such event the Trust may, and in addition to any other remedies available at law, in equity, or otherwise specified in this Contract:

a. Terminate the Contract immediately, pursuant to Section K herein;

b. Afford the Contractor written notice of the breach and ten (10) calendar days or such shorter time that may be specified in this Contract within which to cure the breach;

c. Discontinue payment to the Contactor for and during the period in which the Contractor is in breach; and

d. Offset against any monies billed by the Contractor but yet unpaid by the

Trust those monies disallowed pursuant to the above.

10. Civil Rights: Contractor attests that services provided shall be in accordance with the provisions of Title VI and Title VII of the Civil Rights Act of 1964, as amended, Section

504 of the Rehabilitation Act of 1973, as amended; the Age Discrimination Act of 1975 as amended; Title II of the Americans with Disabilities Act of 1990, and other applicable

State and federal laws and regulations prohibiting discrimination on the basis of race, color, national origin, ethnic group identification, age, religion, marital status, sex or disability.

11. [INTENTIONALLY OMITTED.]

12. Conditions Affecting Work: The Contractor shall be responsible for taking all steps reasonably necessary to ascertain the nature and location of the work to be performed under this Contract and to know the general conditions which can affect the work or the cost thereof. Any failure by the Contractor to do so will not relieve Contractor from responsibility for successfully performing the work without additional cost to the Trust.

The Trust assumes no responsibility for any understanding or representations concerning the nature, location(s) or general conditions made by any of its officers or agents prior to the execution of this Contract, unless such understanding or representations by the

Trust are expressly stated in the Contract.

13. Conflict of Interest – Contractor’s Personnel: The Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with the best interests of the Trust. This obligation shall apply to the

Contractor; the Contractor’s employees, agents, and subcontractors…