HECM Accounting Business Sys PWS (V3).pdf

DRAFT

1 September 2024

Performance Work Statement (PWS)

Home Equity Conversion Mortgage (HECM)

Accounting Business System

10 / 09 / 2024

Version 3.0

2 September 2024

1 General Information

1.1 Scope of Work

1.2 Background

1.3 Constraints

1.4 Non-Personal Services

1.5 Period of Performance

1.6 Place of Performance

1.7 Hours of Operation

1.8 Special Qualifications

1.9 Post Award/Kickoff Conference

1.10 Status Meetings…..…………………………………………………………………………………..12

1.11 Contractor Travel

1.12 Transition In

1.13 Transition Out

2 Definitions and Acronyms

2.1 Definitions

2.2 Acronyms

3 Government-Furnished Property and Services

3.1 Government Services

3.2 Facilities

3.3 Equipment

3.4 Materials and Information

3.5 Quality Assurance (QA)

4 Contractor-Furnished Items and Services

4.1 Facilities

4.2 Equipment

4.3 Materials

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4.4 Contractor Responsibilities

4.5 Contractor Personnel

4.6 Identification of Contractor Employees

5.0 Specific Tasks

5.1 HECM Accounting Business System ………………………………………………………...………19

5.1.1 IMIP and MMIP Functions ……………………………………………………20

5.1.2 Claims Type 21, 22, 23, and 24 Processing ……………………………….……22

5.1.3 Task HECM-related Calculations…………...………………………….……… 26

5.1.4 Accounting ……………………………………………………………….……..28

5.1.5 Management and Budgetary Reporting ………………………………….…….33

5.1.6 GNMA Securities ...……………………………………………………….……35

5.1.7 Reports …………………………………………………………………….……35

5.1.8 Testing..………………………………………………………………..….…….42

5.1.9 Meetings…………………………………………………………………………43

5.1.10 Training..……………………………………………………………………….44

5.2 Help Desk Support.........………………….………………………………………………………….45

5.2.1 Financial Operating Procedures Support ……………………………………….46

5.2.2 Infrastructure Production Support

Relating to Performance Testing and Enhancement……………………………46

5.2.3 Performance Monitoring…………………………………………….………….46

5.2.4 Participate in FHA Management Meetings

Relating to Integrated Financial Operations ………………………….……….47

5.2.5 Operational Support…………………………………………………….………47

5.3 Certification and Accreditation……………………………………………………………….….……47

5.4 Transition Out………………………………………………………….……………………….……..48

6 Deliverables……………….………………………………………………………………..………..….50

6.1 Quality Control Plan…………………..………………………………………………………………51

6.2 Acceptance Criteria

7 Related Documents

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8. Performance Requirements

Summary…..………………………………….……………….…………..52

1 General Information

1.1 Scope of Work

The U.S. Department of Housing and Urban Development (HUD), Office of Finance & Budget (FAB) requires contractor support to provide a HECM Accounting Business System that fully supports all functional requirements, processes, steps, and timelines associated with insurance application processing, pre-endorsement, loan production, and loan servicing for its HECM loan portfolios and insurance program. Tasks shall include:

HECM Accounting Business System

HECM Help Desk Support

Certification and Accreditation (ATO)

Transition Out

Detailed descriptions of specific tasks are provided in Section 5 – Specific Tasks.

1.2 Background

The HECM program provides mortgage financing options that enable eligible homeowners (age 62 and above) to convert some of their accumulated home equity into cash to meet their special needs without requiring repayment for as long as the borrower resides in the home and complies with the terms and conditions of the mortgage. HUDs HECM product has become the dominant reverse mortgage product in the U.S. Market.

Funds from a HECM loan are distributed to the borrower either in a lump sum payment at closing, or in the form of a monthly payment. Funds can also remain in a line of credit. The borrower can choose to combine these payment options or can change payment options at any time for a fee subject to drawable equity. A HECM loan does not have a specific maturity date but is predicated on various events that can require the loan to become due and payable. When the loan becomes due and payable, the HECM loan must either be refinanced into a traditional forward mortgage loan, refinanced into a new HECM loan, or the property can be sold, and the proceeds then used to pay off the HECM loan. Any remaining funds will go to the borrower or to their estate.

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FHA provides mortgage insurance to an FHA-approved HECM mortgagee protecting them against losses resulting from non-repayment in full of the loans and making mortgagees more willing to make these loans. Non-repayment of a HECM loan would typically occur if the amount of the debt exceeds the net proceeds from the sale of the property when the loan becomes due and payable. If a loss is the result of non-repayment, the servicer files a claim with HUD for insurance benefits.

One feature that distinguishes the FHA HECM product from conventional reverse mortgage products is an option that the servicer may assign the loan to HUD when the total loan balance grows to equal 98 percent or more of the loans maximum claim amount (MCA). HUD offers this option (1) to increase the liquidity of these loans that have no stated term to maturity and (2) to provide mortgagees with full insurance coverage from losses due to non-repayment. When HUD accepts assignment of a HECM loan, HUD assumes all responsibilities for servicing the loan until final disposition. HUD insures three types of

HECM loan transactions: Traditional, Refinance, and Purchase.

The current HECM loan portfolio is managed via an automated web-based service provider. The current platform is composed of Commercial Off the Shelf (COTS) software that has been modified to include additional HUD and FHA business rules and functionality.

1.3 Constraints

The services identified in this PWS will adhere to the rules, regulations, laws, standards, and conventions identified by HUD as well as within the Federal Government. Constraints include the following:

▪ HUD Mortgagee Letters https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

▪ National Housing Act, 12 U.S.C. 1715z-20, Insurance of Home Equity Conversion Mortgages for Elderly Homeowners https://www.ecfr.gov/current/title-24/subtitle-B/chapter- II/subchapter-B/part-206

▪ 24 CFR 206, Home Equity Conversion Mortgage Insurance https://www.ecfr.gov/current/title- 24/subtitle-B/chapter-II/subchapter-B/part-206?toc=1

▪ Federal Information Processing Standards (FIPS) Publications http://csrc.nist.gov/publications/PubsFIPS.html

▪ HUD Handbook 1325.01, Privacy Act Handbook

▪ HUD Handbook 2400.25, Revision 5.0, IT Security, August 5, 2020

▪ Housing Handbook 4000.1, FHA Single Family Policy Handbook

▪ Housing Handbook 4060.1, Mortgagee Approval Handbook

▪ Housing Handbook 4235.1, Home Equity Conversion Mortgages

▪ Housing Handbook 4330.1, Revision 5, Administration of Insured Home Mortgages, Chapter

13, Home Equity Conversion Mortgages (HECMs)

▪ Housing Handbook 4330.2, Revisions 1 & 2, Mortgage Assignment Processing and Secretary-

Held Servicing

▪ Housing Handbook 4335.2, Secretary-Held Servicing

▪ Housing Handbook 7610.0, HECM Housing Counseling Protocol

▪ Housing Handbook 7610.1, Revision 5, Housing Counseling Program Handbook

▪ Rules, and notices in the Federal Register http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR

6 September 2024

▪ Statement on Standards for Attestation Engagements No. 18 (SSAE 18) Reporting on Controls at a Service Organization https://us.aicpa.org/research/standards/auditattest/ssae

▪ Section 508 of the Rehabilitation Act of 1998 https://www.section508.gov/manage/laws-and-policies/

▪ OMB Memorandums, Bulletins & Circulars https://www.whitehouse.gov/omb/information-for-agencies/bulletins/ https://www.whitehouse.gov/omb/information-for-agencies/circulars/

▪ NIST Special Publications (800 Series) http://csrc.nist.gov/publications/PubsSPs.html

▪ The Federal Information Security Modernization Act (FISMA) of

2014 https://csrc.nist.gov/projects/risk-management/fisma-background

▪ SP 800-171 Rev. 2 Protecting Controlled Unclassified Information in Nonfederal Systems and

Organizations https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final

▪ Federal Information Systems Controls Audit Manual (Government Accountability Office) https://www.gao.gov/fiscam

▪ Statements of Federal Financial Accounting Concepts and Standards https://www.gao.gov/products/aimd-21.1.1

▪ Federal Accounting Standards Advisory Board (FASAB) https://fasab.gov/

▪ Generally Accepted Government Auditing Standards (GAGAS) https://www.gao.gov/yellowbook

▪ Federal Financial Management Improvement Act (FFMIA) https://www.congress.gov/bill/104th-congress/house-bill/4319

▪ Federal Managers Financial Integrity Act (FMFIA) https://www.congress.gov/bill/97th-congress/house-bill/1526

▪ Government Management Reform Act https://www.congress.gov/bill/103rd-congress/senate-bill/2170

▪ Government Performance and Results Act (GPRA) https://www.congress.gov/bill/103rd-congress/senate-bill/20

▪ Cash Management Improvement Act https://www.congress.gov/bill/101st-congress/house-bill/4279/all-info

▪ Chief Financial Officers Act https://www.congress.gov/bill/101st-congress/house-bill/5687

▪ Improper Payments Information Act https://www.congress.gov/107/plaws/publ300/PLAW-

107publ300.pdf

▪ Privacy Act https://www.justice.gov/opcl/privacy-act-1974

▪ Debt Collection Improvement Act https://www.congress.gov/bill/117th-congress/house-bill/2547/text

▪ E-Government Act https://www.congress.gov/107/plaws/publ347/PLAW-107publ347.pdf

▪ United States Standard General Ledger https://tfm.fiscal.treasury.gov/v1/supplements/ussgl

▪ Reports Consolidation Act https://www.congress.gov/106/plaws/publ531/PLAW-

106publ531.pdf

▪ Federal Credit Reform Act https://www.congress.gov/bill/101st-congress/senate-bill/584

▪ Information Technology Management Reform Act https://www.congress.gov/bill/104th-congress/senate-bill/946

▪ Government Paperwork Elimination Act https://www.congress.gov/congressional-report/105th-congress/senate-report/335/1

▪ Government Corporation Control Act https://www.congress.gov/bill/104th-congress/senate-bill/2095?s=1&r=2

▪ Treasury Financial Manual (TFM) http://tfm.fiscal.treasury.gov

▪ Policies, procedures, and regulations promulgated by the Bureau of the Fiscal Service https://fiscal.treasury.gov/

▪ 24 CFR Part 203 https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-

203?toc=1

▪ FHA Handbook 4330.1, Revision 5

▪ FedRAMP

▪ Homeland Security Presidential Directive (HSPD) 7

7 September 2024

▪ Executive Order (EO) 13231 and its amendments (i.e., EO 13284, EO 13286, and EO 13316)

▪ 8 U.S.C. 1408

▪ Healthcare Mortgage Insurance Program Handbook 4232

▪ HUD Handbook 732.3, Personal Security Program

▪ HUD Handbook 2225.6, Records Disposition Schedules Handbook

▪ HUD Handbook 2228.1, Records Disposition Management Program

▪ HUD Handbook 3255.1, Enterprise Architecture Policy

▪ HUD Handbook 3410.1, HUD Policy for IT Project Planning and Management (PPM)

▪ OMB Circular A-11, Preparation, Submission and Execution of the Budget https://www.whitehouse.gov/wp-content/uploads/2018/06/a11.pdf

▪ OMB Circular A-123, Managements Responsibility for Internal Control https://obamawhitehouse.archives.gov/omb/circulars_a123_rev

▪ OMB Circular A-125, Prompt Pay

▪ OMB Circular A-129, Policies for Federal Credit Programs and Non-Tax Receivables https://obamawhitehouse.archives.gov/omb/circulars_a129_rev2013

▪ OMB Circular A-130, Management of Federal Information Resources https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/OMB/circulars/a130/a130 revised.pdf

▪ OMB Circular A-136 (Revised), Financial Reporting Requirements https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/OMB/circulars/a136/a136 _revised_2016.pdf

▪ OMB Memorandum M-05-24, Implementation of Homeland Security Presidential Directive

(HSPD) 12

▪ OMB Memorandum M-19-21, Transition to Electronic Records

▪ OMB Memorandum M-03-22, OMB Guidance for Implementing the Privacy Provisions of the

E-Government Act of 2002

▪ OMB Memorandum M-99-20, Security of Federal Automated Information Resources

▪ OMB Memorandum M-06-15, Safeguarding Personally Identifiable Information

▪ OMB Memorandum M-06-16, Protection of Sensitive Agency Information

▪ OMB Memorandum M-06-19, Reporting Incidents Involving PII

▪ OMB Memorandum M-06-20, Reporting Instructions for the Federal Information Security Act and Agency Privacy Management

▪ Homeland Security Presidential Directive (HSPD) 7, Critical Infrastructure Identification, Prioritization, and Protection

▪ Homeland Security Presidential Directive (HSPD) 12, Policy for a Common Identification for

Federal Employees and Contractors United States Standard General Ledger

▪ Move Records Management by Federal Agencies (Title 44, Chapter 31)

▪ Federal Register (44 U.S.C. Chapter 15)

▪ NARA (44 U.S.C. Chapter 21)

▪ Presidential Records (44 U.S.C. Chapter 22)

▪ Records Management NARA (44 U.S.C. Chapter 29)

▪ Records Management/Federal Agencies (44 U.S.C. Chapter 31)

▪ Disposal of Records (44 U.S.C. Chapter 33)

▪ Government Paperwork Elimination Act (5 U.S.C. 3504 note) Government in the Sunshine

Act (5 U.S.C. 552b)

▪ The Contractor shall maintain Housings mortgage/loan records in accordance with HUDs records management schedules.

▪ Electronic Records Management (ERM)Systems requirements

▪ Federal Information Security Management Act

▪ The Clinger-Cohen Act

▪ Office of Management and Budget Circulars A-130, and A-I23

▪ Office of Management and Budget Memorandum 17-12

▪ Federal Financial Manager Integrity Act (FFMIA)

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▪ Federal Information System Controls Audit Manual (FISCAM)

▪ FIPS 191/199/200

▪ PMBok

▪ Capability Maturity Model Integration (CMMI)

▪ Cyber Security Assessment and Management (CSAM) User Guide

▪ HUD IT Security Policy HUD Handbook 2400.25

Compliance with IT Security Requirements - The Contractor shall maintain compliance with all current and future Federal IT security requirements for all data, databases, artifacts, processes, and procedures that the contractor manages, develops, modifies, enhances, releases, and/or upgrades. In order to do this, the Contractor shall:

• Maintain IT security and comply with all terms and conditions of the contract throughout the term of the contract with respect to all data and information technology requirements.

• Use, maintain, enhance, develop, and upgrade all information technology software and system documentation under this Contract in accordance with Federal Laws, best practices, and regulations.

This includes, but is not limited to:

1. Federal Information Security Management Act - https://www.dhs.gov/fisma

2. The Privacy Act - https://www.archives.gov/about/laws/privacy-act-1974.html

3. The E-Government Act - https://www.archives.gov/about/laws/egov-act-section-207.html

4. The Clinger-Cohen Act - https://www.fismacenter.com/Clinger%20Cohen.pdf

5. Government Paperwork Reduction Act - https://pra.digital.gov/

6. Office of Management and Budget Circulars A-130 and A-123 -https://www.whitehouse.gov/omb/information-for-agencies/circulars/

7. Office of Management and Budget Memorandum 17-12 https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2017/m-17-12_0.pdf

8. Department of Housing and Urban Development regulations, Handbooks and Policies -http://www.HUD.gov GAO directives et seq.: https://www.gao.gov/agencies/department-housing-and-urban-development

9. Federal Financial Management Improvement Act (FFMIA):

https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia

10. Follow HUD’s Project Planning and Management (PPM) Life Cycle and industry best practices in the analysis, design, development, testing, and implementation of proposed new systems and/or the enhancement to existing systems. This includes prohibiting live data from being used in any environment other than Production and Disaster Recovery (DR) environments. Specifically, no live data should be used in development, testing, or staging environments.

11. Ensure each financial or mixed financial system that the contractor manages, develops, modifies, enhances, releases and/or upgrades is in compliance with the Federal Information System Controls Audit Manual (FISCAM) methodology that include control families for both General Computer (Security Management, Access Controls, Configuration Management, Segregation of Duties, and Contingency Planning) and Business Process Application controls (Application Security, Business Process Controls, Interfaces, and Data Management).

12. Ensure compliance with identified OMB A-123 Appendix A "Management's Responsibility for Internal Control" and Appendix D "Compliance with the Federal Financial Management Improvement Act of l996 key controls.

13. Maintain Security Assessment and Authorization (ATO) and the Federal Information Security Management Act of 2002 (FISMA) standards in accordance with guidance published by the National Institute of Standards and Technology (NIST); to include the following Special Publications National Institute of Standards and Technology (NIST) Special Publication (SP):

• NIST SP 800-53, Security and Privacy Controls for Federal Information systems and Organizations, Revision 5 (NIST SP 800-53, Rev. 5)

9 September 2024

• NIST SP 800-18 Rev. 5 - Guide for Developing Security Plans for Federal Information systems

• NIST SP 800-23 - Guidelines to Federal Organizations on Security Assurance and Acquisition/Use of Tested/Evaluated Products

• NIST SP 800-30 Rev. 5 - Guide for Conducting Risk Assessments

• NIST SP 800-34 Rev. 5 - Contingency Planning Guide for Federal Information systems

• NIST SP 800-37 Rev. 5 - Guide for Applying the Risk Management Framework to Federal Information systems

• NIST SP 800-47 - Security Guide for Interconnecting Information Technology systems

• NIST SP 800-53A Rev. 5 - Guide for Assessing the Security Controls in Federal Information systems and Organizations, Building Effective Security Assessment Plans

• NIST SP 800-59 - Guideline for Identifying an Information system as a National Security system

• NIST SP 800-60 Rev. 5 - Guide for Mapping Types of Information and Information systems to Security Categories

• NIST SP 800-84 - Guide to Test, Training, and Exercise Programs for IT Plans and Capabilities

• NIST SP 800-161 – Cybersecurity Supply Chain Risk Management Practices for Systems and Organizations

• The system must meet continuous monitoring requirements once the system has been authorized.

• Multifactor Authentication (MFA) will be implemented and encryption at data and at rest in compliance with Federal Information Processing Standards (FIPS) 140 Revision 3.”

• NISP 800-171 - Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations

In addition, the Contractor shall:

• Ensure business services are able to function within the Federal government’s IT protocols and requirements.

• Ensure compliance with Federal Information Processing Standards (FIPS) 199/200 Security

Categorization Analysis: FIPS Requirements for Federal Info and Info Systems

• Employ standard network security practices that comply with HUD OCIO’s IT Security Policy

Handbook 2400.25:

https://www.hud.gov/program_offices/administration/hudclips/handbooks/cio/2400.25

• Ensure PCPM business services meet Federal Government Single Sign On requirements:

1. https://playbooks.idmanagement.gov/playbooks/

2. https://playbooks.idmanagement.gov/docs/playbook-sso.pdf

• Employ Transport Layer Security (TLS) transmission protocol.

• Comply with NIST and FISMA standards to safeguard PCPM data that is classified as having a

Moderate information security baseline.

• Support dynamic registration.

• Provide HUD with the attribute/values they need in the assertion to map to the users contained in their user store.

• Provide managed, secure, and controlled access to its application for interfacing with HUD systems and users.

• Make every reasonable effort to deliver information technology products to HUD free of known computer viruses by examining all products prior to delivery to HUD using tools and processes capable of virus detection.

Failure by the Contractor to adhere to the above NIST requirements could result in penalties, to include a contract performance stop-work order until compliance can be demonstrated. Disregard of these NIST requirements could also lead to other criminal, civil, administrative, or contract penalties, including, but not limited to:

• Breach of Contract damages

• False Claims Act damages

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• Termination for Default

• Termination for Convenience

• Poor Past Performance

• Suspension/debarment

Compliance with Privacy Requirements - The Contractor shall maintain compliance with OMB Memorandum 17-12 (Preparing for and Responding to a Breach of Personally Identifiable Information), which requires contractors and sub-contractors (at any tier) to:

• Cooperate with and exchange information with agency officials, as determined necessary by the agency, in order to effectively report and manage a suspected or confirmed breach

• Properly encrypt PII in accordance with OMB Circular A-130 and other applicable policies and to comply with any agency-specific policies for protecting PII

• Provide and participate in mandatory training on how to identify and report a breach

• Report a suspected or confirmed breach in any medium or form, including paper, oral, and electronic, as soon as possible and without unreasonable delay, consistent with the agency's incident management policy and US-CERT notification guidelines

• Maintain capabilities to determine what Federal information was or could have been accessed and by whom, construct a timeline of user activity, determine methods and techniques used to access Federal information, and identify the initial attack vector

• Allow for an inspection, investigation, forensic analysis, and any other action necessary to ensure compliance with OMB M 17-12, the agency's breach response plan, and to assist with responding to a breach

• Identify roles and responsibilities, in accordance with OMB M 17-12 and the agency's breach response plan

• Explain that a report of a breach shall not, by itself, be interpreted as evidence that the contractor or its subcontractor (at any tier) failed to provide adequate safeguards for PII

Data Handling - The Contractor shall follow these rules when handling all data related to this requirement:

• The Contractor and its employees shall not divulge, or release data or information developed or obtained during performance of this contract without written approval of the Contracting Officer.

• Information contained in all source documents and other media provided by HUD is the sole property of HUD.

• Include the following statement on deliveries of hardware, software, and all data media made set forth in this contract: "This product has been scanned for known viruses using [name of virus -screening product, including version number, if any] and is certified to be free of known viruses at the time of delivery.

• Adhere to HUD’s policies for safeguarding sensitive electronically formatted information.

• As expiration of the contract approaches, the contractor must prepare and deliver all PCPM data and code to the government’s designee in a machine-readable format. The PCPM data rights include but are not limited to all versions of the PCPM processes, databases, models, reports, data, and related documentation.

Ownership: Ownership and data rights of all the elements, structures and processes feeding into or produced by the databases or other automated tools developed under this contract will be the property of the government. The Contractor is required to maintain and update the models, data and tools, in a secure location. As expiration of the contract approaches, the contractor must prepare and deliver all PCPM data and code to the government’s designee in a machine-readable format as agreed between the parties. The

PCPM data rights should include but not be limited to all versions of the PCPM processes, databases, reports, data, and related documentation

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The Contractor shall adhere to the Federal General Accepted Accounting Principles (FEDGAAP)

The Contractor shall adhere to the: Mark-to-Market Operating Procedures Guide

The Contractor shall adhere to the: HUD 4350.1 handbook

The Contractor shall adhere HUD’s M2M Accounting Letters

1.3.1 Project Planning and Management

All HUD IT projects, including all information systems acquired, developed, enhanced, or maintained shall follow the policy, procedures, standards, and guidelines set forth within the IT Management

Framework using the Project Planning and Management (PPM) Life Cycle located at HUD’s PPM Life

Cycle Website:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/cio/ppm/PPMV20HOME

PPM was designed based on the best practices from Capability Maturity Model Integration (CMMI) for systems development and PMBok for project management. While at the foundation, PPM is designed as a Waterfall methodology, HUD encourages tailoring the PPM to use the many modern solution development methodologies available to enable the planning, development and delivery of useable functionality within 6-9 month increments.

Contractors are encouraged to propose a preferred methodology whether their solution(s) are for custom development, includes prototypes or pilots, Commercial Off the Shelf (COTS)/ Government Off the Shelf

(GOTS) configuration, or Software as a Services. Working with the HUD Project Manager(s), the

Contractor will tailor PPM to take advantage of contractor proposed expertise in using other methodologies in a manner that will provide HUD the best value and address all of the work necessary for successful project completion, on time, within budget, and delivering intended functionality.

The decisions of PPM tailoring are captured in the Project Tailoring Agreement (PTA), which documents the specific agreement for creating, combining, referring, or omitting specific artifacts applicable to the project, as well as adjust project control gate reviews to be consistent with the tailoring. All tailoring of

PPM must be approved by HUD’s Deputy Chief Information Officer (DCIO) for Business & IT

Modernization. As a default, any project without an approved project tailoring agreement is required to follow all PPM phases and artifacts as presented.

1.4 Non-Personal Services

The Government will neither supervise Contractor employees nor control the method by which the Contractor performs the required tasks. Under no circumstances shall the Government assign tasks to, or prepare work schedules for, individual Contractor employees. It shall be the responsibility of the Contractor to manage its employees and to guard against any actions that are of the nature of personal services or give the perception of personal services.

If the Contractor believes that any actions constitute, or are perceived to constitute personal services, it shall be the Contractor's responsibility to notify the Contracting Officer (CO) immediately. These services shall not be used to perform work of a policy, decision making or management nature, i.e., inherently

Government functions. All decisions relative to programs supported by the Contactor shall be the sole responsibility of the Government.

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1.5 Period of Performance

The period of performance shall be for one base period of 12-months and four 12-month optional periods, if exercised.

1.6 Place of Performance

The services shall be performed at the contractor’s facility.

1.7 Hours of Operation

The Contractor shall maintain an adequate workforce for the uninterrupted performance of all tasks defined within the contract. When hiring personnel, the Contractor shall keep in mind that the stability and continuity of the workforce is essential.

1.8 Special Qualifications

The Contractor personnel management staff shall possess and maintain a current Project Management Professional (PMP) certification during the execution of this contract and a Certified Public Accountant (CPA) certification.

1.9 Post Award/Kickoff Conference

The Contractor shall attend any post award conference convened by the contracting activity or contract administration office in accordance with FAR Subpart 42.5 and HUD Acquisition Regulation (HUDAR) clause 2452.237-79 - Post Award Conference.

1.10 Status Meetings

The Contracting Officer, Contracting Officer’s Representative (COR), and other Government personnel, as appropriate, may meet periodically with the Contractor to also review Contractor performance, requirement status, etc. At these meetings, the Contracting Officer will apprise the Contractor of how the Government views the Contractor's performance or progress of the requirement. The Contractor will apprise the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings shall be at no additional cost to the Government. Post Award Conference and subsequent meetings may be held via teleconference at the Contracting Officer's discretion.

1.11 Contractor Travel

No travel is anticipated; however, if travel is needed the Contractor shall coordinate with and receive Government authorization from the COR for all travel. Reimbursement of travel costs will be in accordance with the Federal Travel Regulation and in accordance with FAR 31.205 -46.

1.12 Transition-In

N/A

1.13 Transition-Out

To minimize any decrease in productivity and to prevent possible negative impacts on additional services, the Contractor shall have sufficient personnel on board during the 180 day Transition-Out period. The incumbent Contractor shall ensure a smooth transition with the successor Contractor during the Transition-Out period, prior to completion of contractual performance. The incumbent Contractor shall aid the successor in the development of plans, procedures, and methods for the assumption of all on going work. The Contractor shall provide an orderly transition of work acceptance and accomplishment, such that full control by the successor contractor is achieved by the end of the new contract Transition -In period.

2 Definitions and Acronyms

Assignments - Loans assigned by Lenders to the Secretary of HUD for servicing.

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Acceptable Quality Level - The level of acceptable performance required by the Government.

Calendar Day - Any day of the week..

Contractor - A supplier or vendor awarded a contract to provide specific supplies or service to the

Government. The term used in this contract refers to the prime.

Contractor-Acquired Property - Items acquired or otherwise provided by the Contractor for performing a contract, to which the Government takes ownership. All Government-owned items shall be clearly labeled ”Property of Department of Housing and Urban Development”.

Contracting Officer (CO) - A person with authority to enter into, administer, and/or terminate contracts and make related determinations and findings on behalf of the Government. Note: the only individual who can legally bind the Government.

Contracting Officer Representative (COR) - An employee of the U.S. Government appointed by the

Contracting Officer to perform contract administration activities regarding technical issues. This individual has authority to provide technical direction to the Contractor if direction is within the scope of the contract, does not

Service - A service output that does not meet the standard of performance associated with the

Performance Work Statement.

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

FHA Connection - HUDs interactive internet system that provides approved Federal Housing

Administration (FHA) lenders the ability to process loan information.

Government Furnished Property (GFP) - Government-furnished property means property in the possession of, or directly acquired by, the Government and subsequently furnished to the Contractor for performance of a contract. Government-furnished property includes, but is not limited to, spares and property furnished for repair, maintenance, overhaul, or modification. Government-furnished property also includes contractor-acquired property if the contractor-acquired property is a deliverable under a cost contract when accepted by the Government for continued use under the contract.

Key Personnel - Personnel specifically considered being essential to the work being performed under this contract, pursuant to HUDAR 2452.237-70, Key Personnel.

Performance Evaluation - The COR’s record of the Contractor’s performance, under the contract, will be used for consideration of exercising an option and future source selection purposes by other Federal departments and agencies.

Performance Requirements Summary (PRS) - A listing of the performance requirements under the contract that are to be evaluated by the Government on a regular basis, performance indicators for these requirements, performance standards for these requirement and surveillance methods to be used to determine if performance standards are met.

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Performance Standard - The Contractor's performance level required by the Government.

Performance Work Statement (PWS) - A statement of work for performance-based acquisitions that describe the required results in clear, specific and objective terms with measurable outcomes.

Physical Security - Actions that prevent the loss or damage of Government property.

Program Office - For the purposes of this contract, the Office of Single Family Housing under the

Assistant Secretary for Housing/FHA Commissioner.

Quality Assurance (QA) - Policies and procedures adopted by the Government to ensure that supplies and services acquired under Government contracts conform to the contracts quality requirements.

Quality Assurance Surveillance Plan (QASP) - A plan describing how the agency will survey, observe, test, sample, evaluate and document the Contractor's performance in meeting critical performance standards identified in the contract.

Quality Control (QC) - All necessary measures taken by the Contractor to assure that the quality of an end product of service shall meet contract requirements.

Secretary-Held - Any mortgage or property owned by the Department of HUD

Servicer – an FHA-approved Mortgagee performing servicing actions on FHA-insured Mortgages on its behalf or on behalf of or at the direction of another FHA-approved Mortgagee.

Short Sale - The offer by a third party to purchase a property secured by a Secretary-held mortgage for the market value where that value is less than the total amount owed on the mortgage.

Subcontractor - Any person , other than the prime Contractor, who offers to furnish or furnishes any supplies, material, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract, and any person who offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor. The Government does not have privity of contract with a subcontractor.

Treasury Report on Receivables A report that captures information onnon-tax receivables owed by the the public to the federal government.

Work Week - Monday through Friday, unless specified otherwise.

2.1 Definitions

2.2 Acronyms

AOP - Advice of Payment ATO - Authority to Operate AQL - Acceptable Quality Level CFO or OCFO - Office of the Chief Financial Officer of HUD CFR - Code of Federal Regulations CIO or OCIO - Office of the Chief Information Officer of HUD CO - Contracting Officer COOP - Continuity of Operations Plan COR - Contracting Officer Representative COTS - Commercial Off-the-Shelf

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CPO - Office of the Chief Procurement Officer of HUD FAC/PM Federal Acquisition Certification Program Manager FHA - Federal Housing Administration FHAC - FHA Connection FOIA - Freedom of Information Act GAO - U.S. General Accounting Office HECM Mortgages - Home Equity Conversion Mortgages HUD - U.S. Department of Housing and Urban Development HUDAR - HUD Acquisition Regulation ICD Interface Control Document IIF Insurance-In-Force IMIP – Initial Mortgage Insurance Premium or Upfront Mortgage Insurance Premium IRS - Internal Revenue Service ISCM – Information Security Continuous Monitoring IT - Information Technology MIC - Mortgage Insurance Certificate MIP – Mortgage Insurance Premium MIP REFUNDS - Mortgage Insurance Premium Refunds ML - Mortgagee Letter MMIP – Monthly Mortgage Insurance Premium MOU - Memorandums of Understanding NARA - National Archives and Records Administration NSC - HUD National Servicing Center, Oklahoma City and Tulsa, OK OA Ongoing Authorization OCPO - Office of the Chief Procurement Officer OIG - Office of Inspector General OMB - Office of Management and Budget PII - Personally Identifiable Information PL Public Law PLF – Principal Limit Factor PM - Project Manager POC - Point of Contact PPM - Project Planning and Management QA - Quality Assurance QASP - Quality Assurance Surveillance Plan QCP - Quality Control Plan SA&A – Security Assessment & Authorization TROR Treasury Report on Receivables U.S.C - United States Code

3 Government-Furnished Property and Services The Contractor shall ensure accurate control and accountability of all Government-Furnished Property in accordance with the terms and conditions of this contract. The Government will furnish, at no cost to the Contractor, the GFP shown below.

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3.1 Government Services

The Government will not provide facilities.

3.2 Facilities

The Government will not provide facilities.

3.3 Equipment

The Government will not provide equipment.

3.4 Materials and Information

See HUDAR 2452.227-70, Government Information The Government shall provide the following materials and information within 45 days of contract award:

Data Tables

HECM user guides

Related ICD’s

Data Dictionary

Housing Handbook 4000.1, FHA Single Family Policy Handbook

3.5 Quality Assurance (QA)

The Government shall evaluate the Contractor's performance under this contract in accordance with the Quality Assurance Surveillance Plan. This plan is primarily focused on what the Government must do to ensure that the Contractor has performed in accordance with the performance standards. It defines how the performance standards will be applied, the frequency of surveillance, and the minimum acceptable quality level.

4 Contractor-Furnished Items and Services The Contractor shall furnish, all facilities, equipment, and supplies required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

4.1 Facilities

The Contractor shall furnish all facilities required to perform the services identified within the PWS.

4.2 Equipment

The Contractor shall furnish all equipment required to perform the services identified within the PWS.

4.3 Materials

The Contractor shall furnish all materials required to perform the services identified within the PWS.

4.4 Contractor Responsibilities

The Contractor shall only conduct business with designated Government personnel listed as points of contact (POCs). Names of authorized personnel shall be provided to the Contractor by the Government, in writing, and updated as necessary throughout the contract period of performance.

U.S. Government records, copies of original results and reports, verified original data, corrected data, and corrected supporting final reports which are maintained by the Contractor remain the property of the U.S.

Government. These files/results must be surrendered to the COR.

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4.5 Contractor Personnel

See HUDAR clause 2452.237-70 - Key Personnel in the Key Personnel section of the contract.

4.6 Identification of Contractor Employees

All Contractor/subcontractor personnel shall wear company picture identification badges so as to distinguish themselves from Government employees. When conversing with Government personnel during business meetings, over the telephone, or via electronic mail, Contractor/subcontractor personnel shall identify themselves as such to avoid situations arising where sensitive topics might be better discussed solely between Government employees.

Contractors/subcontractors shall identify themselves on any attendance sheet or any coordination documents they may review. Electronic mail signature blocks shall identify their company affiliation.

Where practicable, Contractor/subcontractors occupying collocated space with their Government program customer shall identify their workspace area with their name and company affiliation, or at a minimum, "Contractor" after name.

5.0 Specific Tasks

The contractor shall provide a HECM Accounting Business System that provides financial transactions for Initial Mortgage Insurance Premiums (IMIP), Annual Mortgage Insurance Premiums (MIP), Claims, Notes Disbursements and all activity to support its HECM loan portfolios and insurance program.

The HECM Accounting Business System shall work in tandem with the HECM Software as a Service (SaaS) module and exchange data pertaining to receivables and collections, payables and daily disbursements. The HECM Accounting Business System shall interfaced with key legacy systems such as Computerized Home Underwriting Management System (CHUMS) for loan setup, Treasury (Pay.gov) for collections and disbursements, and FHA’s Subsidiary Ledger (FHASL) for the recording of General Ledger entries amongst other systems.

The current HECM system incorporates both a Servicing Module and Accounting Module.

5.1 HECM Accounting Business System

The Federal Housing Administration (FHA) is seeking contractor support to provide a HECM Accounting

Business System that meets the demands of accounting for HECM loans and related transactions such as:

IMIP and MMIP Collection, Notes disbursements, Claims and refunds processing. The system shall maintain accounting records of HECM transactions, complying with Accounting Standards set by the

Federal Accounting Standards Advisory Board (FASAB) and in accordance with Federal Accepted

Accounting Principles (FAAP), and Credit Reform. The records shall be in a form that supports audits, provides full disclosure and ensures transactions are complete; reflecting the full cycle of HECM transactions and using the accrual method as required by the FHA general ledger. IAW PWS 1.3.1 the contractor shall development and delivery of useable functionality in 6-9 month increments.

Performance Standards

a) Standard: Develop and maintain an automated web-based (end-to-end) HECM Accounting Business System to manage HUDs HECM portfolio with operational readiness and performance 24 hours a day ,7 days a week; excluding periods of approved and documented scheduled maintenance.

AQL: Zero deviation

Deliverables A001 HECM Accounting Business System A002 Operational Readiness and Performance Status Report

5.1.1 IMIP and MMIP Functions

18 September 2024

The HECM Accounting Business System shall provide and support all functions and activities associated with the remittance of initial mortgage insurance premiums (IMIP) and monthly mortgage insurance premiums (MMIP), to include:

• Payment and collection of IMIP

• Monthly accruals

The HECM Accounting Business System shall capture and display HECM case-level data received from

CHUMS and entered by originators and servicers to initiate the collection of IMIP Collection.

• The HECM Accounting Business System shall display the IMIP amount owed to HUD and the

MIP factor received via the interface with CHUMS and provide receipt confirmation back to

CHUMS.

• The HECM Accounting Business System shall maintain and use a HECM MIP Factor Reference

Table.

• The HECM Accounting Business System shall notify CHUMS if the amount of IMIP collected from the originator is less or greater than the amount billed.

• The HECM Accounting Business System shall record and notify CHUMS once the IMIP has been received via Pay.gov.

• The HECM Accounting Business System shall record the IMIP and MMIP received date and the confirmed deposit date of IMIP and MMIP collection.

• The HECM Accounting Business System shall provide a CHUMS interface report at the close of business every day.

• The HECM Accounting Business System add the IMIP financed amount to the outstanding loan balance if the IMIP was not paid in cash at closing.

• The HECM Accounting Business System capture and display the IMIP amount paid in cash by the Borrower, lender, or interested party contribution.

• The HECM Accounting Business System shall use the received date from Pay.gov to calculate the timeliness of the IMIP payment and to determine if the payment is made within designated time period from closing date. (per FHA Mortgagee Letter or HUD handbook).

• The HECM Accounting Business System shall record and notify CHUMS of any subsequent changes that affect the IMIP including any debit vouchers and refunds.

• The HECM Accounting Business System shall ensure that IMIP is not refunded except under the following conditions:

o The lender remitted too much money.

o The mortgage was never endorsed and is not eligible for endorsement.

o An appeal of late charges, interest, and/or administrative fees was approved.

o An erroneous closing date was entered and later corrected.

• The HECM Accounting Business System shall automatically refund IMIP for a case that is not insured and a cancellation notification is received from CHUMS.

• The HECM Accounting Business System shall provide, support, adjust and recalculate all loan balances, including set aside accounts, when servicers enter/submit reconciliation data corrections or subsequent data is received via CHUMS interface files that may increase or decrease the initial

Principal Limit amount, including but not limited to the IMIP/MMIP and Mandatory Obligations

• The HECM Accounting Business System shall provide outstanding debit voucher notification at the close of business everyday

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• The HECM Accounting Business System shall calculate MMIP late charges, interest, and administrative fees as appropriate for any payment received after the established due date or date established by HUD per Mortgagee Letter or HUD Handbook.

• The HECM Accounting Business System shall receive and process cancellation records from

CHUMS that will result in automatically refunding MIP to the lender of record for a case that is not insured by HUD.

• The HECM Accounting Business System shall have the ability to recollect premiums for reinstated loans and properly account for it (applies to both IMIP & MMIP).

• The HECM Accounting Business System shall provide HUD with the ability to add/remove lender or case to/from the Do Not Pay List (applies to both IMIP & MMIP).

• The HECM Accounting Business System shall not process refunds for lenders in a Do Not Pay status (applies to both IMIP & MMIP).

• The HECM Accounting Business System shall allow the ability to adjust or forebear premiums, late charges and/or penalties due to natural disasters or other reasons at the case and lender level and by location (applies to both IMIP & MMIP).

• The HECM Accounting Business System shall give HUD and lenders the ability to initiate collection (IMIP, MMIP, late charges and/or penalties) for debit vouchers and properly account for them.

• The HECM Accounting Business System shall establish, capture, and display Debit Voucher information including amount, date, and reason codes.

• The HECM Accounting Business System shall provide daily, weekly, monthly, quarterly, yearly, and cumulative IIF, Premiums Receivable, Collection, and Debit Voucher reports for Mortgage

Insurance Premiums to include separate fields for IMIP, MMIP, Refunds, late, interest, administrative fees, reversals, adjustments, and debit vouchers by transaction date, case, SOA, lender, and cohort.

• The HECM Accounting Business System shall alert the Single Family Premium Manager and the

HECM Accounting staff of outstanding debit vouchers via an electronic notification. This electronic notification shall contain a link to the HECM debit voucher report.

• The HECM Accounting Business System shall give HUD the ability to offset at case level MIP, late charge, and penalty amounts owed against pending HECM Claims to be refunded and properly account for these offsets.

• The Accounting Business System shall have the ability to recollect IMIP, MMIP, and write-offs if a case are reinstated.

• The Accounting Business System shall have the ability to adjust IMIP & MMIP at case level, lender, or location (i.e., case prefix, zip codes, state) and properly account for these types of transactions.

• The HECM Accounting Business System shall automatically refund MMIP for a case that is not insured by the day following the six-month anniversary and properly account for this type of transaction upon the cancellation notification from CHUMS.

Performance Standards

a) Standard: The Contractor shall provide a CHUMS interface report at the close of business every day.

AQL: Zero deviation

b) Standard: outstanding debit voucher notification at the close of business everyday AQL: Zero deviation

Deliverables A003 CHUMS interface report

20 September 2024

A004 Outstanding debit voucher notification

5.1.2 Claims Type 21, 22, 23, and 24 Processing

The HECM Accounting Business System shall perform claims processing, including submission, review, release tracking, etc., for Claim Type (CT) 21 (Deed-In-Lieu/Foreclosure), CT 22 (Assignment), CT 23 (Short Sale), and CT24 (HECM Supplemental). HECM Accounting Business System shall:

• Provide the ability to edit claim form data fields with varying security levels of update access available to both HUD staff and Servicers

• Provide the ability to make and track post claim payment adjustments at a case level basis.

• Provide the ability to query/display all individual claim related transactions, including funds returned to HUD by the servicer and the net total disbursement amount on a case level basis.

• Provide Repurchase processing capability.

• Provide HECM claim payment offset capability.

• Track and verify claim information that is entered and submitted by the mortgagee.

• Provide for reviewing allowable expenses by the mortgagee and HUD/FHA staff.

• Generate an advice of payment as well as reports of all paid claims.

• Require an approval/certification code, for assignment claims, from the HECM Notes…