Q A_VI_11.15.13.pdf

HCERA / SAFRA – Not-For-Profit (NFP) Servicer Program Solicitation Number: NFP-RFP-2010 Questions and Answers, Posting #6

November 15, 2013

1. From the November 1st call, FSA stated that NFP Servicers should concentrate on improving our contractual metrics scores to meet FSA’s minimum standard of performance necessary to continue as an active federal servicer. Does FSA have specific benchmark scores for each of the five metrics for servicers to meet the minimum standard of performance? If yes, can you share theses benchmark scores for each of the five metrics?

FSA Response: We have not established specific benchmark scores.

2. FSA originally scheduled a call with NFP Servicers for October 1st to discuss the September 23rd announcement which was cancelled due to furlough of government workers. The November 1st call was the first opportunity that NFP’s had to discuss details on the September 23rd and October 29th announcements with FSA staff. NFP Servicers now have a very short timeline to perform significant diligence on existing contracts, evaluate teaming opportunities and get required approvals from governing boards to meet FSA’s deadline of informing the Department of intentions to cease independent operations and still have the opportunity to join another team by December 1, 2013. Will FSA extend the December 1, 2013 deadline for giving the Department this notification?

FSA Response: We believe the December 1, 2013, deadline provides NFPs with sufficient time to review their options and make a determination regarding teaming arrangements.

3. If an NFP prime servicer elects to become a sub, will its original contract period be honored and will FSA’s monthly servicing fees be based on fee structure (Servicing Fees for Borrowers 1 – 100,000) at the time the prime servicer converts to a sub?

FSA Response: A prime servicer that elects to become a subcontractor on another team would no longer have a direct contract with the Department and would be subject to the performance period established in the agreement between the team’s prime vendor and the Department. The team’s prime vendor will be paid the higher "NFP rate" for 100,000 borrowers multiplied by the total number of eligible NFP entities on the team (i.e. 1 prime + 4 team members= 5 total NFP entities for which the prime would be paid the NFP rate on the first 500,000 borrowers serviced).

4. Will FSA accept the business model of a sub NFP being a satellite call center for a prime NFP Servicer?

FSA Response: Each proposal for modification of an existing contract will be reviewed on its own merits. A prime vendor’s proposal to add a call center would not automatically be approved or rejected due to the addition of an NFP as a subcontractor, but would be evaluated from the perspective of risk/value to the government.

5. Will FSA recognize an NFP prime that converts to a sub as a satellite call center of their new prime contractor?

FSA Response: As noted above, in teaming arrangements the Department’s sole contractual relationship is with the prime vendor. All business and operational communications and interactions flow between the Department and the prime vendor. Business arrangements between the prime vendor and any subcontractors are outside the purview of the Department except to the extent that they affect the prime vendor’s ability to fulfill the requirements of the contract.

6. Would a past occurrence of a Corrective Action Plan or audit findings that have been properly remediated have any impact on an NFP Servicer achieving FSA’s minimum standard of performance?

FSA Response: FSA’s determination of minimum performance will be based on operational requirements and performance on the 5 existing NFP metrics for the year beginning 7/1/13 through 6/30/14. Occurrences prior to that period will not be considered. Severe findings or improper servicing during that period could impact FSA's determination of which NFPs continue to service federal loans.