Q-A M and M 3.5 Industry Day.pdf

M & M Industry Day

Monday, July 18, 2011

Questions for Submission

Monitoring

1. What is HUD doing to monitor the M&M contractors?

ANSWER: There are a series of checks and balances, beginning with the contractors

Quality Control, HUD’s Quality Assurance managed by the Governments Technical

Representative (GTR), Program Management located at Headquarters HUD, and overall contract oversight is the responsibility of the Contracting Officer.

2. Who is responsible for verifying that small business contractors are performing 50% of the work?

ANSWER: The Contracting Officer is responsible for verifying the performance involvement and issuing a responsibility determination in accordance with 13 CFR §

125.6. In making this determination, the Contracting Officer relies on information contained in the contractor’s proposal, subcontract agreements, and observations and reports from the GTR. If the Contracting Officer determines non-compliance, the matter would be referred to SBA for a Certificate of Competency in accordance with 13

CFR § 125.5.

Inventory

3. It was mentioned that there is an average of 6,500 conveyances per month. Are these nationwide foreclosures reverting to HUD?

ANSWER: Estimates provided during the Industry Day were national averages based on current market conditions. Updated estimates specific to the solicited areas will be included with the Request for Proposal upon release.

4. What is the current inventory of Areas 1S, 2S and 3D?

ANSWER: See the answer to question 3 above.

5. How will the inventory be distributed to AM contractors to start? How soon will they be distributed after award?

ANSWER: This information will be included with the Request for Proposal.

Funding

6. Rod Gaston CEO of BLB states that we must have a few million dollars per contract area. Is this true? What are the financial requirements of the prospective contractors?

ANSWER: Mr. Gaston spoke about BLB’s historical experience with the AM contracts under the M&M III Solicitation. The financial requirements for M&M

3.5 may vary from the requirements identified in M&M III, and will be identified upon issuance of the solicitation. HUD recognizes that its AM requirements will continue to impose some financial burden associated with the volume of inventory, and the fact that contractors will be required to maintain startup and operating expenses until property inventory is closed and reconciled. As such, we are seeking industry feedback to help mitigate these risks, and welcome any feedback prior to solicitation.

7. If a small business meets the SBA size standards ($2M), how is HUD planning to accommodate or aid in “scaling” up to cover a five state coverage area?

ANSWER: HUD does not provide contract financing for the Asset Management requirements. Contract financing may be available through SBA or private lenders and will be the responsibility of the contractor. In order to limit the overall risk to

Small Businesses, the Contracting Officer has made the determination based on industry feedback and the identified volumes and geographic areas identified to amend the existing identified NAICS code to 541611, General Management Consulting

Services, which has an established Small Business Size Standard of $7M.

8. The carrying cost for a small business is estimated at $2Million over a 10 month period, does HUD intend to assist in any way with this cost?

ANSWER: See the above answers for questions 6 & 7 above.

9. Would you consider allowing AM contractors to charge real estate agents a referral fee in order to submit a lower per property fee to HUD?

ANSWER: It is unlikely that HUD will allow any AM changes to the fee structure allowed for listing and selling brokers. Further information will be included with the

Request for Proposal.

10. If credentials are upper 10%, and the price bid is too high, will HUD counter the vendor with a price more in line with what HUD will pay?

ANSWER: HUD does have established procedures for “Best Offer” situations, which affords some flexibility to the AM contractor in making offer acceptability decisions in accordance with an approved Marketing Plan. Further information will be included with the Request for Proposal.

Set Asides

11. Will there be specific small business requirements like 8(a), HUBZone, etc?

ANSWER: For the current M&M 3.5 requirements, competition will be restricted as

100% Small Business Set-Asides. Any future competitions will be based on market research specific to the areas solicited.

12. How many of your contracts are set-aside for WOSB certified woman owned companies?

ANSWER: Unfortunately, there will be no WOSB specific set-asides for M&M 3.5.

13. Have you given consideration to a qualified 8(a) with demonstrated ability and resources to perform as a sole source award?

ANSWER: All awards made in support of the identified geographic areas will be conducted on a competitive basis only. Future requirements may be considered for specific set-aside or directed awards. However, it is HUD’s intent to continue with multiple awards per geographic area, so more restrictive set-asides would be determined by the number of interested qualified vendors versus the total number of estimated awards.

14. What is HUD actively doing to enhance and reflect that minority and Hispanic contractors are receiving work within HUD? How does HUD track this?

ANSWER:

Minority and Socio-economic status is always a consideration for HUD in conducting acquisition planning. Unfortunately, SBA and FAR Part 19 make no separate provisions for Hispanic or Minority owned firms, unless they also qualify as Small

Disadvantaged Businesses (SDBs). HUD, like most agencies uses FPDS-NG as its reporting/tracking mechanism for Small Business awards. If you have additional Small

Business questions, please direct them to your local SBA office or HUD’s OSDBU office at:

U.S. Department of Housing and Urban

Development Office of Small and Disadvantaged Business Utilization

451 Seventh Street, Room 2200 (SS)

Washington, DC 20410-1000

Telephone: (202) 402-5477

Fax: (202) 401-6930

Teaming

15. Can we, as a joint venture partner, apply with more than one entity for this contract?

ANSWER: Joint Venture relationships are relatively common among interested Small

Business vendors. In order to ensure you meet the qualifying size standard and have the necessary business arrangements in place, please contact your local Small Business

Administration Office for further guidance.

16. Can you provide a website or contact person for more information on teaming agreements and mentorships?

ANSWER: Your local Small Business Administration Office should be able to provide guidance with these type of arrangements, as well as HUD’s OSDBU (see contact information provided in response to question 14 above).

17. How does the prime and subcontractor agreement work as a partnership?

ANSWER: Please note that there are technical differences in the contractual and/or legal use of the term partnership and a typical Prime/Subcontractor relationship. The primary difference being that in a Prime/Subcontractor relationship, only the Prime contractor has what is known as privity of contract, or a legal binding contractual relationship with the Government. The Prime therefore becomes responsible for all subcontractor performance, and is the only interface to the Government. In a

Partnership or Joint Venture that is legally executed, two or more parties may share privity of contract. DoD’s Office of Small Business Programs put out a well written guide on this subject, which is available via the attached link:

http://www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Small_Busi ness_Team_Arrangements.pdf. However, please note that HUD cannot accept responsibility for the accuracy or currency of the information contained in the external link. If you have specific questions, please contact your local Small Business

Administration office.

18. If you are a small business and you partner with a large business to bank roll you, how should it be structured?

ANSWER: The Small Business Administration should be able to provide further guidance as to business structure and financing arrangements.

19. Will teaming, partnering, and mentoring be promoted by HUD or would it not be recommended for a company to participate in?

ANSWER: HUD has no preference on business arrangements. However, any arrangement must meet the standards identified in the Request for Proposal, and meet the legal definitions by business size and structure to maintain eligibility to compete under the 100% Small Business Set-Aside.

Time Frame

20. How or will the U.S. debt/budget issues affect HUD’s releasing or issuing RFP’s for

M&M 3.5?

ANSWER: Unfortuantely, HUD cannot fully anticipate how the current debt/budget issues will impact release of the solicitation and/or award of resulting contracts.

http://www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Small_Business_Team_Arrangements.pdf http://www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Small_Business_Team_Arrangements.pdf

Historically speaking, it likely will not have as big of an impact on the M&M services, which are severable (recurring) in nature, and are typically funded by the FHA fund.

21. When do you anticipate the RFP release date?

ANSWER: On or, about the week of August 15 th

22. Will all three RFP’s go out at the same time?

ANSWER: Not necessarily. HUD continues to monitor the current burn rate against the existing contracts for the areas synopsized, and reserves the right to solicit one or more of the areas independently at a later date.

23. Will all awards go out at the same time or be staggered?

ANSWER: See answer 22 above. Awards may or may not be made with the same effective date, depending on available funding and or the performance period remaining against the existing contracts. Awarded contracts are intended to replace the existing contracts; therefore, start dates may be staggered. However, start dates will be the same for all like contracts awarded in the same geographic area.

HUD Contacts

24. Who are the project leaders within HUD who manage this program?

ANSWER: This information is internal to HUD, and will not be available as part of the

RFP. Specific Government Technical Representatives (GTRs) and Government

Technical Monitors (GTMs) will be identified at award.

Industry Day

25. Could you please post all handouts with inventory stats and SBA handouts on HUD’s website? Will you send them to us directly via email?

ANSWER: All handouts will be posted but should be used as reference only. To ensure accuracy in proposal preparation, please use the reference information included in the

RFP.

SBA

26. SBA requires 23% small business utilization government wide, why is it so much higher for HUD?

ANSWER: Federal agencies are required to have a minimum goal of 23% Prime Small

Business Participation. However, individual agencies may have goals that exceed the minimum 23% goal. The specific agency goals are negotiated on an annual basis between SBA and the individual agencies.

27. Who reviews size standard limitations and affiliate determinations, HUD’s TEP or

SBA?

ANSWER: Both HUD’s Contracting Officer and the SBA share responsibility for reviewing a contractor’s size standard or affiliate determinations. In the event that the

Contracting Officer cannot make a positive responsibility determination, the matter would be referred to the SBA for review and potential issuance of a Certificate of

Competency (CoC). This is one of the core functions of the SBA and any questions concerning size standard should be addressed to them.

Current AM’s

28. What has been the contractor spend (awards), so far, i.e., - How much have they received? How much has each area awarded to contractors?

ANSWER: This information can only be provided by submitting a Freedom of

Information Act (FOIA) request to the office below. It should be noted that proprietary information and unit pricing that is not publicly available will likely be withheld under

Exemption 04, which restricts the release of “trade secrets and commercial or financial information obtained from a person that is privileged or confidential.” If you would like to submit a request for the existing total contract values, please contact:

U.S. Department of Housing and Urban Development

Freedom of Information Act Office

451 7th Street, SW, Room 10139

Washington, DC 20410-3000

Facsimile: (202) 619-8365

29. Can you disclose how much current AM’s are receiving per file?

ANSWER: See answer 28 above.

30. Based on performance, if a company is terminated, how do you replace them immediately? Do you have companies on deck as an alternate?

ANSWER: The Federal Acquisition Regulation (FAR) Part 49 covers the options available to HUD in the event of a termination. Typically, HUD would conduct limited

Market Research to identify alternate service providers.

31. Are contract ceilings due to the GSA solicitation for AM’s?

ANSWER: The ceiling constraints identified are not unique or inherent to GSA

Schedules. HUD is running into ceiling constraints under both its GSA Schedule

Awards (AM), which were awarded under FAR 8.4 procedures, and its FSM awards, which utilized open market IDIQ procedures under FAR 16.5.

32. What is the current maximum of the AM contracts?

ANSWER: The AM contracts were awarded as definitive task orders against the GSA

Schedules, rather than Blanket Purchase Agreements (BPAs); therefore, the contract maximum specified at award for the base and all option periods was the contract maximum. The amount was unique to each task order award, and is available through the FOIA process explained in response to question 28 above.

33. Would you consider giving each current AM one geographic area rather than three or four?

ANSWER: Yes. HUD’s intent is to award the Best Value to the Government in consideration of both price and technical factors. The number of awards is not a consideration for award. In fact, the only reason M&M III resulted in more contractors receiving multiple geographic areas under the AM contracts was due to the limited number of contractors who responded with qualifying GSA Schedule 520 awards.

34. What is causing the increase in the burn rate?

ANSWER: Increases in the total number of FHA foreclosures in given geographic areas were the prime contributor to the increased burn rate. However, low initial estimates also contributed to the ceiling values being exhausted early.

FSM

35. Is FSM being procured?

ANSWER: HUD has identified that the FSM contracts are also running up against their existing ceilings in some geographic areas. The specific areas and a schedule for re-procurement will be issued separately at a later date.

36. Are FSM’s in jeopardy of hitting the same ceilings and should we look for M&M-

FSM 3.5?

ANSWER: See answer 35 above. Any future requirements will be posted on

FedBizOps.

37. Do you have an asset disposition flow chart, particularly as it relates to the Field

Service Managers?

ANSWER: This information will be included in the respective RFP.

38. A $500,000 line of credit was required within ten days of contract award. What small business would be able to obtain this?

ANSWER: If this is a requirement, it will be identified in the corresponding RFP.

However, it should be noted that HUD conducted an extensive market analysis in support of this requirement prior to release of the M&M III FSM solicitation. As a result, a total of 8 FSM awards were issued to qualifying Small Business firms, including 4 qualified 8(a) SDBs. All of the Small Business FSM awardees were required to post the $500K line of credit and were able to comply with this requirement under the existing size standard.

Geographic Location

39. Is there a requirement to have a physical office within the market area?

ANSWER: This requirement will be identified in the respective AM or FSM RFP.

40. Would businesses currently operating outside of the solicited areas be less likely to receive an award in those areas?

ANSWER: No, as long as the businesses can demonstrate that they have the technical capacity to perform in the identified area, the fact that they do not currently operate in the identified area will not preclude them from receiving an award.

MCM

41. What are the mortgagee compliance contract requirements?

ANSWER: This information can only be provided by submitting a Freedom of

Information ACT request to HUD’s FOIA Officer.

Please contact:

U.S. Department of Housing and Urban Development

Freedom of Information Act Office

451 7th Street, SW, Room 10139

Washington, DC 20410-3000

Facsimile: (202) 619-8365

42. What is the NAICS code for the mortgagee compliance manager?

ANSWER: The currently identified NAICS code is 541214, Payroll Services.

M&M 3.5-AM

43. Are the current M&M contractors being replaced or are you adding to the current list of contractors?

ANSWER: We are competitively replacing contracts in which the maximum ordering amounts have been reached. Re-procurement is not an indicator of performance. Any existing firms who maintain status as an eligible Small Business under the corresponding NAICS codes will be eligible to recompete.

44. How will the AM contracts be structured? 5 years, 1 year with 4 option years?

ANSWER: HUD anticipates a 12 month base period, and 4 – 12 month option years, for a total maximum period of performance of 5 years. Specific requirements will be addressed in the respective RFP.

45. Will the maximum change for M&M 3.5?

ANSWER: The contract maximum or contract ceiling will be unique for each area based on a current analysis of inventory volumes for that particular area. Specific ceiling amounts will be addressed in the respective RFP.

46. How will the technical “grade” be considered with certifications and qualifications?

ANSWER: Any evaluation methodology will be addressed in Section M of the corresponding RFP.

47. Will HUD continue new 3.5 procurements in the Atlanta and Philadelphia HOC areas? If so, when might that occur?

ANSWER: No specific schedule is available at this time. Any future requirements will be posted on FedBizOps.

48. Will the AM contractors be solely responsible for selecting individual brokers with no HUD oversight?

ANSWER: AM contractors are solely responsible for selecting local listing brokers as subcontractors with no external interference by HUD. As such, the AM contractors will remain fully responsible for the performance of their subcontractors. Specific requirements will be addressed in the respective RFP.

49. Will the AM’s be required to create their own technology for tracking properties or will they use an internal system provided by HUD?

ANSWER: The current AM requirements call for use of the HUD provided P260 system for tracking of properties. The Performance Work Statement does not specifically preclude the use of external systems. However, the use of any external systems will be the sole responsibility of the contractor, and will not fulfill HUD’s reporting requirements for mandatory entry into the P260 system. Further details will be addressed in the respective RFP.

50. Is there a conflict of interest between the Asset Manager and the local area listing broker?

ANSWER: The current requirements provide that the AM cannot operate as a local listing broker in the area it is currently performing AM services. However, no COI has been identified for AMs seeking to provide local listing broker services in areas that they are not operating as one of HUD’s AM contractors. Further details will be addressed in the respective RFP.

51. Were minority firms notified of the sources sought notice beyond FedBizOpps?

ANSWER: Those companies who previously responded to HUD’s sources sought notice, including minority firms, were notified of the synopsis posting in FedBizOpps.

Otherwise, no separate announcement was made outside of the FedBizOpps posting.

M&M 4

52. Do you anticipate M&M IV soon for larger sized businesses?

ANSWER: HUD will continue to conduct market research and encourage Small

Business participation to the maximum extent practicable. Any geographic areas that do not generate sufficient Small Business interest from responsible/qualified Small

Business firms will be solicited under full and open competitive procedures. Any future requirements will be posted on FedBizOpps.

53. If we joint venture with a SBA on the M&M III.5 contract, and if it is awarded would we be able to apply for new M&M contract solo?

ANSWER: Competition on any of HUD’s AM or FSM requirements will be based on market research, which may result in set-aside determinations for Small Business. To the extent that a business structure (JV, Mentor Protégé, Partnership, etc.) maintains eligibility under the selected NAICS code and set-aside restrictions, that firm will continue to be eligible to re-compete for future work.

MISC

54. Will there be a forum where the local listing brokers can give feedback directly to

HUD? Example-An online website to really inform HUD what is going on in our specific areas?

ANSWER: HUD certainly welcomes candid feedback regarding its requirements, challenges, etc. If you have specific questions or feedback that you would like to share regarding HUD’s M&M contracts, please send it to morecontractingquestions@hud.gov.

55. I have had a NAIDS number for twenty-two years and I am dissolving that company, can I move my NAIDS number to my new company?

ANSWER: Please refer to the NAID application, or contact the specific Home

Ownership Center (HOC) office responsible for receiving that application.

56. Inasmuch as this procurement is a small business set aside for a NAICS code industry where a qualified small firm must have under $2 million in annual revenue, it appears that it would be very difficult, if not impossible, for such a small firm to have the reach into all the states/regions where property disposition services are required. As we understand the SBA regulations, the small business could not subcontract more than 49% to a teaming partner that is larger (and either has existing offices in the states/regions or has the resources to reach into this wide geographical area using a more cost effective model). Would you consider either:

mailto:morecontractingquestions@hud.gov

1. Making this procurement a “full and open, non-restricted” solicitation so that the

Government can acquire services of firms that have a very broad reach and extensive operations in all the states/regions where you need services; or,

2. Making this procurement a “partial set-aside” for small business with the intention to make one award in each region to a qualified small business under

NAICS code 531210 and the other to a large business; or,

3. Making this procurement a “total small business set-aside” with the intention to make one award in each region to a qualified small business under NAICS code

531210 and the other to a small business that meets the $7 million annual revenue standard that has been used by HUD in the past?

ANSWER: In order to limit the overall risk to Small Businesses, the Contracting

Officer has made the determination based on industry feedback and the identified volumes and geographic areas identified to amend the existing identified NAICS code to

541611, General Management Consulting Services, which has an established Small

Business Size Standard of $7M.