VA119A-17-R-0010_A00001.pdf

5. PROJECT NUMBER (if applicable)

CODE 7. ADMINISTERED BY

2. AMENDMENT/MODIFICATION NUMBER

CODE

6. ISSUED BY

8. NAME AND ADDRESS OF CONTRACTOR

4. REQUISITION/PURCHASE REQ. NUMBER 3. EFFECTIVE DATE

9A. AMENDMENT OF SOLICITATION NUMBER

9B. DATED

PAGE OF PAGES

10A. MODIFICATION OF CONTRACT/ORDER NUMBER

10B. DATED

BPA NO. 1. CONTRACT ID CODE

FACILITY CODE CODE

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers

E. IMPORTANT:

is extended,

(a) By completing Items 8 and 15, and returning __________ copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or electronic communication which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY is not extended.

12. ACCOUNTING AND APPROPRIATION DATA

(REV. 11/2016)

is required to sign this document and return ___________ copies to the issuing office. is not, A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

15C. DATE SIGNED

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or electronic communication, provided each letter or electronic commuication makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER

BY

Contractor

16C. DATE SIGNED

14. DESCRIPTION OF AMENDMENT/MODIFICATION

16B. UNITED STATES OF AMERICA

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER 16A. NAME AND TITLE OF CONTRACTING OFFICER

15B. CONTRACTOR/OFFEROR

STANDARD FORM 30 PREVIOUS EDITION NOT USABLE

Prescribed by GSA - FAR (48 CFR) 53.243

(Type or print) (Type or print)

(Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

(Number, street, county, State and ZIP Code)

(If other than Item 6)

(Specify type of modification and authority)

(such as changes in paying office, appropriation date, etc.)

(If required)

(SEE ITEM 11)

(SEE ITEM 13)

(X)

CHECK

ONE

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

(Signature of person authorized to sign) (Signature of Contracting Officer)

1 155

A00001 02/28/2017

Strategic Acquisition Center - Frederick Department of Veterans Affairs 321 Ballenger Center Drive, Suite 125

Frederick MD 21703

Strategic Acquisition Center - Frederick Department of Veterans Affairs 321 Ballenger Center Drive, Suite 125

Frederick MD 21703

To all Offerors/Bidders

VA119A-17-R-0010

02-08-2017

X

X X

No Later Than 2:00pm EST 03/20/2017

X 1

The purpose of this amendment is to do the following:

1. Extend the proposal due date from 2:00 pm EST March 10, 2017 to 2:00 pm EST March 20, 2017.

2. Answer industry questions recieved on February 15, 2017.

3. Revise the PWS as a result of those questions. All changes have been highlighted for ease of reference.

Tara Flores Contracting Officer

VA119A-17-R-0010 A00001

QUESTIONS AND RESPONSES FROM FINAL RFP

1. Q: How many VA users need access to our information management system? The final RFP states 150 users, however, Question 10 makes reference to 20 users.

A: Total VA users will not exceed 150 across all information management systems.

Question 10 states that 20 users require read/write access to the contractor’s servicing system.

2. Q: Can the VA provide a list of loan servicing related items that will be reimbursable, such as lien releases, eviction expenses, filing of transfer of bankruptcy claims, etc.

A: VA cannot provide a comprehensive list due to differences in how different firms may categorize or define individual reimbursable items. However below is a sample of expense types that VA has previously considered reimbursable.

APPRAISAL

ATTORNEY FEES

AUTOMATED VALUATION MODEL FEES

DOCUMENT RETRIEVAL FEES

COURT COSTS

RECORDING COSTS

BROKER PRICE OPINION

BREACH LETTER

DOOR KNOCKS

ESCROW ADVANCES

FORECLOSURE SALE COSTS

FORCED PLACE INSURANCE

HAZARD ABATEMENT

MEDIATION FEES

PROPERTY INSPECTION FEES

REINSTATE SENIOR LIEN

TITLE SEARCH/REVIEW

PROPERTY MAINTAINENCE FEES

PROPERTY INSPECTION FEES

3. Q: The Government makes reference to negligence penalties. Can the Government provide an example of negligence penalty?

A: This is incorrectly referenced as a penalty and has been updated in the revised RFP.

This is not a penalty and it is an administrative fee to cover VA’s costs in correction of the error or omission. An example would be a tax lien placed on a VA owned property due to non-payment of taxes during the time it was under management of the service provider. A 10% (of the cost to remove the lien) administration fee could be charged to the service provider if it was found to be negligent in not paying the taxes on behalf of the VA. (See question 8 and 52)

4. Q: The SF1449 specifies the NAICS code for this solicitation as 531311 (Residential Property Managers). Due to the different scope of work requirements, will subcontractors within other NAICS codes be acceptable to the government? Specifically, small businesses supporting other NAICS codes?

A: The Government has no privity with subcontractors; therefore, it is up to the prime which NAICS codes are appropriate to accomplish the Government’s requirement.

5. Q: Due to the complexity of this RFP, will the government consider an extension of the March 10th due date for proposals?

A: Yes, please see Amendment SF30. The Government extended the proposal due date from 2:00 pm EST March 10, 2017 to 2:00 pm EST March 20, 2017.

6. Q: Will the VA provide training upon contract award? If so, what type of training will be provided? For example: side by side training at the incumbent’s facilities, webinars, etc.

A: The VA will not provide training and neither will the incumbent. A successful bidder shall demonstrate a current set of capabilities relevant to this solicitation. However, the VA will work collaboratively with the incumbent and the successor to respond to specific questions concerning VA policies or procedures. VA, the incumbent and the successor will participate in meetings to transition this work which is commonplace in the industry.

Please also note that the successor will provide training to VA staff on their information systems such that VA necessary to perform oversight of this program.

7. Q: Can the VA provide the name of the servicing system currently used by the incumbent?

A: VA cannot disclose this information. VA does not have ownership or licensing rights to any contractor system. However, data being transferred from any incumbent system to the successor would be provided in a format acceptable to VA and, most likely, using methods, formatting and mapping commonplace in the servicing industry. (Also see question 21)

8. Q: Sections 5.3 of the PWS provides for a “penalty” or “penalties” in the event of certain errors and omissions. Insurance coverage is not available for penalties. The intent of these provisions, however, does not appear to be to penalize offerors, but instead to compensate the Government for additional risks and other unquantifiable losses associated with errors and omissions. These are risks for which insurance is available in the commercial marketplace. In order to reflect more accurately the VA’s the intent so that contractors can obtain insurance coverage for the fees associated with errors and omissions – which will ultimately lower the price to the Government – we request that the VA amend the solicitation to change “penalty” and “penalties” to “administrative fee(s)” and/or “liquidated damages.”

A: VA agrees that this is not a penalty and it is an administrative fee to cover VA’s costs in correction of the error or omission. Please see revised language in the RFP. (See question 3 and 52)

9. Q: Certain provisions of the RFP could be misinterpreted to require offerors to deliver and grant the government ownership of modifications to the computer software comprising their proprietary information management systems, including, without limitation, commercial computer software and minor modifications thereto (e.g., PWS Sections 10.b, 11, 13). This interpretation would be inconsistent with the guidance in FAR Part 12 directing the government not to require offerors to: (1) deliver commercial computer software or documentation that is not customarily provided to the public or (2) relinquish the right to use, modify, reproduce, release, perform, display, or disclose commercial computer software or documentation except as mutually agreed by the parties. It would also constitute an unauthorized deviation to the standard FAR data rights clauses. Accordingly, we do not believe that the referenced provisions are intended to apply as broadly as they could be interpreted.

§ Please confirm that contractor will not be required to deliver any computer software, including any modifications, relating to its information management system.

§ Please confirm that the Government will not acquire ownership of any computer software, including any modifications, relating to the contractor's information management system.

§ Please confirm that the Government will not acquire any license rights to any computer software, including any modifications, relating to the contractor’s information management system, except the right to access that system during performance of the contract in accordance with the PWS.

A: This solicitation shall not be interpreted to provide VA with any ownership or licensing rights with the respect to the acquisition of ownership of any computer software, including any modifications, relating to the contractor's information management system except the right to access that system during performance of the contract.

10. Q: Regarding the 30 million line of credit, what is the size of the advance the contractor would incur at contract start up and scale over the life of contract?

A: VA will reimburse the incumbent any funds they have advanced on behalf of VA, following VA’s review of that invoice. The successor shall be responsible for any additional advances required during the period of performance. No seasoned advance made by the incumbent will transfer to the successor. VA requires that the successful bidder have access to $30 million in working capital because the amount of advances at any point in time and over the course of the period of performance cannot be guaranteed. Reimbursable cost for FY 2016 (including utilities): Annual cost = $66,267,017; per property = $4,663. (See question 18, 55, 58, and 62)

11. Q: Requesting clarification on the number of assets currently in REO.

A: As of January 31, 2017 there were 6544 REO in inventory.

12. Q: What are the average fees per property incurred for loan servicing by the contractor?

A: The question does not define fees, which could include property inspections, maintenance, escrow advances, forced place insurance, etc. VA Circular 26-09-12 contains a schedule of maximum allowable and reimbursable fees for Property Preservation costs on a loan within the VA portfolio. The contractor cannot exceed the costs on this schedule without providing appropriate documentation and obtaining prior approval from VA.

13. Q: Please confirm the property management flat fee does not include cost associated with bringing properties into compliance to obtain financing, (clearing code violations, system repairs, appliance installation, etc) A: The contractor shall only be responsible for the duties described in the Property Preservation Flat Fee provided in Attachment F. Costs above and beyond those described therein, shall be submitted to VA with supporting documentation for prior approval.

14. Q: If it is determined repairs are required for financing or vandalism occurs, are these costs reimbursed to the contractor or is it included in the flat fee? If it is reimbursed, can you please confirm the timing of reimbursement?

A: Repairs completed to market and sell properties are considered reimbursable expenses and would be included in the After Sale or Supplemental Invoices. The After Sale Invoice is due within 60 days post-close. The Supplemental Invoice is due within 90 days post-closing.

15. Q: From original question and response: Q: On an average, outside of attachment F (Property

Preservation Flat Fee), what was the annual and per asset cost charged to the VA for repairs (ie:

environmental, structural repairs, capital improvements) A: VA does not track the environmental and structural repairs separately, however the capital improvements and reimbursable are provided.

Reimbursable cost for FY 2016 (including utilities): Annual cost = $66,267,017; per property = $4,663.

Capital Improvement cost for FY 2016: Annual cost = $3,983,729; per property = $280 Additional Question: Does the reimbursable portion cover all REO management activities like excessive debris, etc?

A: Yes, the reimbursable costs above are included in the REO reimbursable activities. Costs exceeding established VA policy require prior VA approval, but remain reimbursable if approved.

16. Q: From original question and response Q: Page 30. Reference Termination - cites “Upload conveyance data to VA within five calendar days of final termination, when VA retains title to the security. Can VA define considerations for "Final Termination"? Does the servicer need to wait for redemption, ratification, and confirmation timeframes to expire?

A: VA has clarified this requirement in the PWS to state: “Upload conveyance data to within five calendar days of loan termination when VA retains title to the security. The conveyance period is subject to the official terminating event in the state for which the property is located be it foreclosure, ratification or confirmation.”

Additional Question: On cases of re-conveyance- does the contractor charge for all property management fees spent if the property is then re-conveyed? If no, what portion of the management fees are able to be charged to the VA? On re-conveyed properties, does the contractor charge the VA for management fees once the property has been conveyed again and marketed? How does the re-conveyance process work specifically in regards to property management and those fees being paid, regardless of the marketing of the property?

A: The contractor is entitled to the Marketing and Management and Property Preservation Flat fee once a property has conveyed. Reconveyence is considered the terminating event and therefor the Contractor shall invoice VA for all fees and reimbursables due. VA will, in turn issue a Bill of Collection to the original holder to recover these expenses. Additional detail concerning the VA’s longstanding policy on this matter may be found in Circular 26- 12-5 located at http://www.benefits.va.gov/HOMELOANS/circulars/26_12_5.pdf.

Please also note the correction to the previous, original question in track changes.

17. Q: From original question and response Q: Attachment F – Please clarify what is meant by “facilitation of field eviction and moving services” (assuming this does not include the standard legal costs, (e.g. court order, etc)?

A: Correct this does not include legal costs, this includes such tasks as obtaining moving vans, removing personal property and properly securing the property, following all state and local requirements for such possession activities.

Additional Question: Please confirm the contractor is responsible for storing personal property during an eviction and is included in the flat fee?

A: The contractor is not responsible for storing personal property during an eviction, unless required by state or local law. Storage of personal property is a reimbursable expense and is not included in the Property Preservation flat fee. This expense is invoiced in the After Sale or Supplemental Invoices and is considered an eviction costs.

18. Q: Technical Evaluation Factor (a) i. states: “The offeror is required to provide a document from a credible financial institution (as determined by VA) demonstrating they have corporate funds or an existing line of credit no less than $30 million available to manage their operation without requiring any financing from VA in advance of the sale of the properties. Pre-approval or contingent approvals of this line of credit will NOT be accepted”. Is a hedge fund considered a credible financial institution?

A: Details concerning the relationship between the firm and the hedge fund were not disclosed. Generally, hedge fund liquidity is subject to redemption periods, market conditions and availability of purchasers. These types of restrictions and or potential risks are not acceptable. The contractor is required to provide a document from a creditable financial institution demonstrating they have corporate funds or an existing line of credit no less than $30 million available to manage their operation without requiring any financing from VA in advance of the sale of the properties. Pre-approval or contingent approvals of this line of credit will NOT be accepted. The intent of the $30 million is to provide instant http://www.benefits.va.gov/HOMELOANS/circulars/26_12_5.pdf and unencumbered liquidity to pay for advances necessary for performance of this contract.

Generally, VA would anticipate either balance sheet liquidity or access to a line of credit from a reputable, FDIC Insured, commercial bank. VA reminds bidders that this requirement is considered critical to the ability to perform and this contract; Bidders shall provide ample evidence of the availability and accessibility of these funds or may be, at the unilateral discretion of the VA, removed from consideration. (See question 10, 55, 58, and 62)

19. Q: Section 5.5.3 of the SOW states: “The VA will unilaterally set the origination fee charged to the borrower in accordance with 38 U.S.C. § 3733. The Contractor shall collect this fee and remit it to VA. The contractor shall then invoice VA for the origination fees agreed upon in this contract.” Is the fee VA will charge separate and distinct from the loan fee collected under 38 U.S.C § 3729? Also - is the contractor expected to collect its origination fees, per contract, out of the origination fee collected by VA in accordance with 38 § 3733 (i.e. the VA collects x% Origination Fee from the borrower and Contractor bids to receive a part of that as it’s Origination fee).

A: 38 U.S.C § 3729 prescribes the funding fee for VA Guaranteed Loans. Any other fee VA charges would be in addition to the funding fee in 38 U.S.C § 3729. The fee established in the bidder’s proposal is directly reimbursable from VA.

20. Q: Aside from the origination fee the contractor invoices VA for per the contract, are there any other fees allowable for the contractor to collect and retain as part of the origination process of the VA Vendee loan?

A: No, the Contractor shall bid a single origination fee that shall be invoiced to VA for every Vendee origination. No other fees (i.e. underwriting, processing, mail, etc.) may be charged to the borrower or VA.

21. Q: What is the name of the servicing system platform the current contractor is utilizing?

A. VA will not disclose this information. VA does not have ownership or licensing rights to any contractor system. However, data being transferred from any incumbent system to the successor would be provided in a format acceptable to VA and, most likely, using methods, formatting and mapping commonplace in the servicing industry. (Also see question 7)

22. Q: Is there government furnished technology that the Offeror is required to utilize or integrate with their servicing system platform?

A: No Government Furnished Equipment (GFE) or technology will be provided or is required to integrate with VA systems.

23. Q: Is the loan servicing and REO property management portfolios contracted to a single provider or multiple providers?

A: The current RPSC contract is awarded to a single prime contractor.

24. Q: Who is the current document custodian for the loan servicing portfolio?

A: VA cannot disclose this information. However, VA does not require the use of any particular document custodian.

25. Q: Are custodial documents and loan files in hard copy or electronic format? If both, please provide the anticipated volumes for each format.

A: All custodial documents are available in hard copy and electronic form. The contractor shall board all active and inactive custodial loan files and data, as appropriate. Please see PWS requirement 5.6.4.8. The incumbent contractor has 5,140 hard copy files for active loans and approximately 3,100 hard copy files for inactive loans. Every file contains one or more documents per file. Electronic images of these files currently occupy approximately 1TB of storage.

26. Q: Please provide the required format for digital images of custodial documents e.g., Adobe Portable Document Format (PDF).

A: All custodial documents shall be available in Adobe Portable Document Format (PDF) format. Prior documents may contain other, common formats such as *.img and *.bmp.

These documents may continue in that format or may be converted to PDF.

27. Q: What is the anticipated annual volume (#UPB and Loan Count) of Vendee loans originated?

A: At full performance, VA anticipates originating up to 500 Vendee loans per month at an average loan amount of $114,925. This estimate is not a guarantee of future volume.

28. Q: What is the anticipated volume of Loan Trust Sales?

A: VA cannot anticipate the volume of Loan Trust Sales. However given the limited scope of what is required by the awardee, as described by the PWS, VA does not believe this to be overly burdensome. Below is a list of all Vendee Mortgage Trust Issuances listed by year.

The first Vendee Mortgage Trusts issuance was in 1992 and the last in 2011.

1992 VMT 92-1 VMT 92-2

1993 VMT 93-1 VMT 93-2 VMT 93-3

1994 VMT 94-1 VMT 94-2 VMT 94-3

1995 VMT 95-1 VMT 95-2 VMT 95-3

1996 VMT 96-1 VMT 96-2 VMT 96-3

1997 VMT 97-1 VMT 97-2 VMT 97-3

1998 VMT 98-1 VMT 98-2 VMT 98-3

1999 VMT 99-1 VMT 99-2 VMT 99-3

2000 VMT 00-1 VMT 00-2 VMT 00-3

2001 VMT 01-1 VMT 01-2 VMT 01-3

2002 VMT 02-1 VMT 02-2 VMT 02-3

2003 VMT 03-1 VMT 03-2

2008 VMT 08-1

2010 VMT 10-1

2011 VMT 11-1 VMT 11-2

29. Q: How many Redemptions have been completed in the last 5, 3 and 1 year(s)?

A: VA averages less than 80 redemptions per year.

30. Q: Please provide the volumes for demolition of property.

A: VA averages less than 20 demolitions per year. VA prior approval is required and the expenses are reimbursable. (Please see question 32)

31. Q: Please provide the volumes for sale of property where offer was not obtained through normal marketing process, i.e., sale to a tenant.

A: VA averages less than 10 non-traditional sales per year.

32. Q: Please provide the volumes for demolition of property.

A: VA averages less than 20 demolitions per year. VA prior approval is required and the expenses are reimbursable. (Please see question 30)

33. Q: Please provide the volumes for repairs and capital improvements in excess of VA guidelines.

A: VA had 6 instances where repairs and/or capital improvements were in excess of VA guidelines from 10/1/16 – 12/31/16.

34. Q: Please provide the volumes of opinion of title, if applicable.

A: VA National Practice Group (NPG) provides an opinion of title on every property. There may be cases where we have not received a title package yet where VA sells with a Quit Claim Deed.

35. Q: Please provide the volumes of Acquiring title.

A: The previous servicer is required to provide a title package on every property transferred to VA. Volumes match the inventory as disclosed on Table 1: VA Acquired Properties Sold with Average Sale Price by State in the PWS.

36. Q: Please provide the volumes of donation of property.

A: VA does not donate properties.

37. Q: Please provide the volumes for release of rights (such as mineral release, partial release of security, easement, etc.).

A: VA does not track this information. However, these instances are extremely rare and are dealt with on a case by case basis.

38. Q: Please provide the volumes for filing legal actions in the name of the Secretary.

A: In fiscal year 16, the incumbent contractor subcontracted with fee attorneys to conduct approximately 66 foreclosures and approximately 4,366 ejectment actions on behalf of the Secretary. Changes in market conditions, as well as future direction and supervision from the Department of Justice, could affect foreclosure and ejectment rates.

39. Q: Please provide the volumes for loan modification decisions or termination without foreclosure.

A: VA has provided prior approval on 40 non-HAMP loan modifications in the prior 12 month period. VA does not track terminations without foreclosure, but estimate receiving less than 12 per year.

40. Q: Please provide the volumes for proposed settlements or write-offs in excess of VA guidelines.

A: VA does not track this information. Reimbursables exceeding VA policy require prior VA approval and therefore should not result in any write-off by the Contractor. VA does not track or assume it receives notification of write-offs made by third parties.

41. Q: Please provide the volumes for substantial legal issues (such as the construction or constitutionality of federal statues, or issues of enforcement or issues that have significance for the government as a whole).

A: The RPSC contractor provides legal services with respect to individual loans and REO.

Matters concerning constitutionality of federal statues, or VA’s systemic authority to meet its statutory or regulatory obligations will be addressed by VA counsel or it’s designate.

42. Q: Please provide the volumes of counterclaims involving claims arising under other federal programs.

A: VA is unclear on why this is relevant to the RPSC contract. The Department of Justice represents the United States.

43. Q: Please provide volumes for attempts to file counterclaims as class actions.

44. Q: Please provide the volumes for orders or judgments adverse to the government.

45. Q: Please provide the volumes for filing or responding to a suit where another federal agency would be or is a proper party or has an interest in the property or action or any other party files a notice of appeal.

46. Q: Please provide the number of evictions.

A: In FY16, VA averaged 324 evictions per month.

47. Q: Please provide the number of rental properties.

A: VA currently has 10 properties that are being rented.

48. Q: Please provide the volumes for mortgage servicing customer service calls.

A: Between September 1, 2016 and January 31, 2017, there were 7,619 inbound calls received for an average of 1524 per month.

49. Q: Please provide the number of loans in bankruptcy.

A: As of 1/31/17, there are 288 National Portfolio loans in bankruptcy.

50. Q: Historically, what has been the amount of funds advanced by the current contractor?

A: Reimbursables represent those funds that are advanced by the Contractor and collected after disposition. Reimbursable cost for FY 2016 (including utilities): Annual cost = $66,267,017; per property = $4,663.

51. Q: Please provide any statistics on advances that were not reimbursed back to the servicer.

A: Of the advance reimbursement requests submitted to the VA, less than $10k per year has been rejected by the VA. Rejection of these requests are typically due to failure of the Contractor to adhere to PWS requirements, including VA policy such as the failure to 1) ensure VA is not charged for penalties and interest on taxes; 2) ensure that VA limits for preservation and legal expenses have been adhered to; and 3) ensure that VA guidance with respect to valuation products have been followed.

52. Q: Please provide any statistics for penalties that have been charged to the servicer.

A: There have been $0 penalties charged to the servicer during the current contract. The use of the word penalty was incorrect. VA does not charge penalties for the services provided. Rather VA charges administrative fee to cover VA’s costs in correction of the error or omission. (See question 3 and 8)

53. Q: Please provide any statistics on losses that have been charged to the servicer?

A: Servicer charges have been minimal. For example, VA losses charged to the servicer could relate to an improper foreclosure resulting in the withdrawal of an asset that had moved to REO status. Any fees associated with the REO work would have been charged back to the servicer.

54. Q: What is the required insurance that VA requires i.e., E&O, Fidelity Bond, etc.?

A: Please refer to the PWS, including PWS requirement 5.3.12, 5.3.13, 5.6.4.7(c), and 11.12, (Also reference question 3, 8 and 52)

55. Q: Is the $30 million advance facility for both loan originations and also loan servicing advances?

A: The $30 million advance facility is for all services provided under this contract including, but not limited to, REO, Origination and Servicing functions. (See question 10, 18, 58, and

56. Q: Other than the fields provided in section 5.6.3. what other data will be sent to the contactor and the timing of these items e.g., loan files, escrow funds, ACH information etc.?

A: Servicing data, electronic instances of custodial documents and escrow funds for loans being transitioned from the incumbent to a successor will take place within 90 days of award. The plan to transfer hard copy custodial files will be collaboratively developed with the incumbent, the successor and overseen by VA.

57. Q: Does the current contractor provide internet\web portal access to VA mortgage servicing customers?

A: The current contractor’s capabilities will not be disclosed by VA. Please refer to PWS requirement 5.8.1.

58. Q: Would the government accept a major Subcontractor's corporate funds/line of credit to perform the tasks under this contract in lieu of the Prime Contractor?

A: VA assumes that the subcontractor is a separate and unique company and that the Prime Contractor has no ownership interest in that company. Given this assumption, the Prime Contract may not use a subcontractor’s corporate funds or lines of credit to satisfy the requirement. The contractor is required to provide a document from a creditable financial institution demonstrating they have corporate funds or an existing line of credit no less than $30 million available to manage their operation without requiring any financing from VA in advance of the sale of the properties. Pre-approval or contingent approvals of this line of credit will NOT be accepted. The intent of the $30 million is to provide instant and unencumbered liquidity to pay for advances necessary for performance of this contract.

Generally, VA would anticipate either balance sheet liquidity or access to a line of credit from a reputable, FDIC Insured, commercial bank. VA reminds offerors that this requirement is considered critical to the ability to perform and this contract; Offerors shall provide ample evidence of the availability and accessibility of these funds or may be, at the unilateral discretion of the VA, removed from consideration. (See question 10, 18, 55, and

59. Q: Please clarify if the government's use of the term 'Offeror' constitutes a Prime contractor and its Subcontractors?

A: The ‘Offeror’ is the company submitting the proposal and the company that will serve as the Prime Contractor. The Prime Contractor’s solution may, or may not, include the use of sub-contractors as a part of its solution.

60. Q: Can the government please quantify, e.g., express as the number of points or a percentage of the evaluation factor assigned to 'full evaluation credit' and 'partial evaluation credit' as described in the Socio-Economic Considerations Evaluation Factor. Also, will Offerors that propose subcontracting work to non-SDVOSB or VOSB small businesses be evaluated more favorably? If so, please quantify.

A: In accordance with VAAR 852.215-70, SDVOSB, and VOSB Evaluation Factors, the Government will assign full evaluation credit for an Offeror (Prime Contractor) which is a

SDVOSB or VOSB. Non-Veteran Owned Offerors proposing to subcontract 7% or more of the contract value to a SDVOSB or 12% or more of the contract value to VOSB will receive partial evaluation credit. Those offerors who propose using a non-SDVOSB or VOSB will NOT be given a credit.

61. Q: To ensure the VA obtains favorable competition, we recommend that the proposal due date be extended a minimum of two weeks.

A: The proposal due date has been extended from 2:00 pm EST March 10, 2017 to 2:00pm EST March 20, 2017.

62. Q: Related to the $30 million line of credit requirement, would a firm commitment issued by our bank be sufficient to meet the $30 million requirement.

A: The contractor is required to provide a document from a creditable financial institution demonstrating they have corporate funds or an existing line of credit no less than $30 million available to manage their operation without requiring any financing from VA in advance of the sale of the properties. Pre-approval or contingent approvals of this line of credit will NOT be accepted. The intent of the $30 million is to provide instant and unencumbered liquidity to pay for advances necessary for performance of this contract.

Generally, VA would anticipate either balance sheet liquidity or access to a line of credit from a reputable, FDIC Insured, commercial bank. VA reminds offerors that this requirement is considered critical to the ability to perform and this contract; Offerors shall provide ample evidence of the availability and accessibility of these funds or may be, at the unilateral discretion of the VA, removed from consideration. (See question 10, 18, 55 and 58)

Please note that question 37 from the questions and answers issued during the pre-solicitation has been revised below. For convenience, that question, including the revision has been included here.

37. Q: Page 8 & 36. Reference Section 5.9 Customer Service to VA, VA Customers, and Constituents

- cites offshore customer service is prohibited, however in Section 1.4 Contract Administration Oversight cites "No VA sensitive personal information (SPI), Personally Identifiable Information (PII), or Protected Health Information (PHI) may be stored, sent to, or accessed from outside the Continental United States. A breach of this condition shall be considered a material breach that may warrant a termination for default." These two sections seem to indicate that no segment can be performed offshore, however there are areas of the portfolio (e.g. Alaska, Hawaii, Guam, and Virgin Islands) that are not within the Continental United States and could be prohibited for work being perform there. Can VA offer more clarity around these expectations?

A: Upon further review, VA has revised Section 5.9. With VA prior approval, operations not within the Continental United States, and its possessions and territories may be allowed.

Proposals shall include detailed information concerning what operations will be offshored, if applicable, include control plans to mitigate risks associated with that model.

ORIGINAL QUESTIONS AND RESPONSES FROM DRAFT RFP

1. Q: General: Has VA considered making the solicitation more accessible to small firms by unbundling the requirements. There is precedence which has been set by agencies like HUD, which not only has separated the contracts to allow small firms to compete but has also made the contract regional instead of national. I understand that this might cause the agency more work on the front end but would reduce VA's risk in terms of vendor compliance. Where there is only one firm responsible for providing all of the required services, VA is subject to additional risk and cost if the awarded firm fails to comply with the terms of the contract. I look forward to hearing your feedback and hope that you will seriously consider an alternate solicitation strategy.

A: This is not bundled requirement; it is a re-compete of a contract for the same services. VA has thoroughly considered splitting the requirements; however, VA has chosen to ameliorate the risk by managing a single contract. In order to provide opportunities, there is a socio economic factor included in the solicitation and there are small business goals.

2. Q: General: Is this contract currently being managed by Ocwen?

A: No. The current RPSC Contractor is Vendor Resource Management (VRM).

3. Q: General: Can you advise what the current contract price is being paid for each property?

A: Unfortunately, the Government cannot provide the current contract price being paid for each property.

4. Q: General: When will the RFP be released?

A: The final RFP will be released to www.fbo.gov, estimated January 2017.

5. Q: General: Is there an initial inspection fee per house?

A: No, the property preservation fee includes such costs. B.6 Price Cost Schedule CLIN 0001 provides a field for the offerors to complete for property preservation. What is included in property preservation can be found in Attachment F Property Preservation Flat Fee.

6. Q: General: What is the number of properties nationwide? (Estimate)

A: For an estimate of active properties, please see charts under 1.5 REO and Portfolio Servicing Profile and Data, Table 2: Number of VA Acquired Properties Being Managed by State. As of 6/30/16 there were 6,994 active properties in the inventory. Please also see Question 88 below which provides updated loan counts for all loan types, by state, as of 12/1/16.

7. Q: General: How many regional offices are there and what states does each cover. (ex.

Cleveland covers Indiana, Michigan, Ohio etc.) Is there a schematic that shows this information?

A: There are 9 VA Regional Loan Centers. Please visit http://www.benefits.va.gov/HOMELOANS/contact_rlc_info.asp for more information.

8. Q: The following functions are listed in section 1.2: escrow management, loan servicing, custodial duties, loan sale processing, document procurement and approval and completion of loan terminations. Please detail any other servicing functions expected of the Service Provider under Nation Portfolio Servicing.

A: VA is unclear on the specific question. All servicing functions required are stipulated and detailed in the RFP.

9. Q: Please define expectations for the following:

a. Custodial Duties

b. Document procurement and approval

A: The Contractor will be responsible for the storage, maintenance and retrieval of all hard copy and imaged copies of custodial documents associated with all loan and property assets managed under this contract in accordance with VA’s Record Control Schedule (RCS). The Contractor http://www.fbo.gov/ http://www.benefits.va.gov/HOMELOANS/contact_rlc_info.asp shall image and store all documentation in electronic format that is indexed to simplify searches.

This has been updated in the solicitation paragraph 5.6.3(8)

10. Q: According to Table 5, VA provides supplemental servicing on defaulted (Native American

Direct Loans) NADL. Does this mean that servicer transfers NADL loans delinquent loans back to VA or will the VA be using the vendors servicing system to service and thus requires access?

A: No, there is no transfer of loans between VA and the Contractor. The Contractor’s servicing system will store all NADL information regardless of loan status (i.e. performing, delinquent, foreclosure, bankruptcy, etc). The Contractor and VA will continually and regularly update loan data/information in the vendors system throughout the life of the loan. In the event that a NADL foreclosure is being processed by The Department of Justice, updates provided will be manually copied into the awardee’s system by VA staff and/or awardee staff. The Service Provider shall provide read/write access to that servicing system for up to 20 VA employees.

11. Q: How many NADL loans are in the population?

A: Please see “Table 3: Number of Loans Currently Being Serviced & UPB by Loan Type”;

charts under 1.5 REO and Portfolio Servicing Profile and Data. In the table where it lists Direct loans those are the NADL loans in the portfolio. Per that table, the portfolio contains 509 NADL loans as of 6/30/2016. Please also see Question 88 below which provides updated loan counts for all loan types, by state, as of 12/1/16. Please note that as of 12/1/16 there are 504 NADL loans in inventory.

12. Q: General: Does the VA handle loss mitigation and [Foreclosure] (FC) negotiations on NADL loans?

A: VA currently facilitates default servicing for NADL loans, but may elect to transfer this responsibility to the Contractor leveraging the terms established in the contract with the Contractor. With VA pre-approval, the Contractor is responsible for coordinating with the Department of Justice Intake Center to initiate foreclosure actions on NADL loans.

13. Q: Section 1.6.4. Please clarify “improve reporting”?

A: The Contractor shall take a proactive posture in assisting VA improve its reporting capabilities. The Contractor shall continually evaluate and improve reports produced under this award. VA will partner with the Contractor to review their recommendations concerning the consolidation of reports, improvement of formats, reliability, consistency, standardization, availability, provision of pivot tables, filters, etc, and ease of use. Over time, VA anticipates that additional data and technology advancements will become available. The Contractor shall incorporate industry standards and best practices throughout the period of performance.

Recently, and at the recommendation of the Contractor, VA approved the consolidation of reports and redefined the logic used to generate a specific report based on a recommendation from the vendor.

14. Q: Section 5.0. Does the contract require separate dedicated supervisors for FC, LIT and Loss Mitigation?

A: Yes, the Contractor and the Contractor’s fee Attorneys at a minimum must provide full-time resources tasked with this program working within the following functions/departments.

Section 5.c states “Supervisory staff for all foreclosure, litigation, and loss mitigation activities.”

Therefore, the contract requires separate dedicated supervisors for FC, Litigation (LIT) and Loss Mitigation.

15. Q: Section 5.3.1. Does the 30 million collect interest for the contractor? When does this get returned?

A: These funds are not collected by the VA. These funds substantiate contractor liquidity necessary to fund property management activities since the contractor will not be reimbursed for costs incurred until after sale of the property. The contractor will be reimbursed throughout contract performance.

16. Q: Section 5.3.2. iii. What kind of penalties have been charged in the past and for how much?

A: To date VA has not levied penalties in connection with this section. However, VA reserves the right to levy the penalties as described in the solicitation should VA determine such are warranted.

17. Q: Section 5.3.2. iii. Who sets the initial list price that the 10% penalty is based off of? Why would this not be the actual list price at time of penalty?

A: The Contractor sets the initial list price. The initial list price establishes the Contractor self-determined opinion of the initial price of the property. VA considers the initial list price a valid bench mark for this penalty because it does not change, whereas there may be a series of subsequent list prices which could lead to conflict over which was the appropriate choice.

18. Q: Section 5.6.3 # 7. Requires transferable life of loan flood service contracts within 45 calendar days of assignment. To whom is the assignment being made?

A: The Contractor.

19. Q: Section 5.6.2 indicates data received for boarding. Is this list inclusive of the data we will receive? For example, property address is missing from the list in the RFP.

A: The list is not inclusive. The Contractor will receive everything they need to board a loan upon contract award. The data previously collected, and that will be subsequently boarded, by the Contractor, will include data and standards that are commonplace in the industry.

20. Q: Section 5.6.2. Is the 7 day boarding requirement as of the date of the final data received?

A: The 7 day boarding requirement is as of the date of the initial data feed from VA.

21. Q: Section 5.6.3 requires full tax search within 30 days of board. Our vendor performs searches within 45 days. Does this present a problem?

A: Yes, that would fail to comply with the requirements of the PWS. VA has determined that a 30-day window to complete tax searches is in the best interest of the Government to ensure that tax issues are addressed timely and in order to prevent any subsequent penalties, delinquencies, etc.

22. Q: Section 5.8. Why does the VA require administrator access and access to production environment to the vendor’s system?

A: VA has removed the requirement to have administrative access to administer VA-Access and replaced it with the following: The contractor shall implement changes to VA-access, such as the addition, modification or termination of access, within 1 business day of receipt.

23. Q: Section 5.8. Provide VA employees with capability to create on demand, ad hoc reports for any data element. Can VA provide a list of data elements?

A: Please refer to Attachment D, Reporting Library for a list of data elements for specified reports. These data elements should also be available for ad hoc reports. However, VA cannot provide a complete report of data elements as new elements may become necessary.

24. Q: Section 5.8. Is the VA seeking full system access to production environment in order to provide loan servicing on certain VA loans within the vendor’s loan servicing system? If so, what triggers a loan to be serviced by the VA?

A: VA requires access to the Contractors system of record so that the record can be updated to reflect any action VA took on the loan. VA makes every effort to enable the Contractor to service loans, however escalated cases, NADL delinquencies, politically sensitive cases and any/all borrower contact must be recorded directly into the system. VA will not accept a solution whereby updates are emailed, or otherwise transmitted, to the system. VA shall have direct access to the system. The “trigger” for the servicing of a VA loan is instruction from VA to the Contractor to board a loan.

25. Q: General: Do customer service reps need special training on VA suicide prevention?

A: Yes, the Contractor will need to train their customer service reps in regard to crisis escalation situations and/or suicide prevention. VA does provide access to certain network sites to facilitate support in these situations. Please review the following site: VeteransCrisisLine.net.

26. Q: General: What is the average duration of time a loan is serviced?

A: The National Portfolio is comprised of four different loan types. VA originates Vendee loans, which are the overwhelming majority of the portfolio, and holds those loans until they are securitized, so duration is dependent upon the timing of that transaction. (Note: VA suspended the origination of Vendee loans in 2012, but expects origination to resume in 2017. Similarly, VA suspended the securitization of Vendee product. The last Vendee securitization transaction occurred in 2011.) VA also originates NADL loans, but holds those until termination. VA acquires Repurchased loans, which are seasoned. Refunded loans are also acquired by VA, are at varying stages of seasoning, and are held to termination.

27. Q: On an average, outside of attachment F (Property Preservation Flat Fee), what was the annual and per asset cost charged to the VA for repairs (ie: environmental, structural repairs, capital improvements) A: VA does not track the environmental and structural repairs separately, however the capital improvements and reimbursable are provided.

Reimbursable cost for FY 2016 (including utilities): Annual cost = $66,267,017; per property = $4,663.

Capital Improvement cost for FY 2016: Annual cost = $3,983,729; per property = $280

28. Q: Given this is a best value award; is there a weighted percentage allocation for Technical, Past Performance, Socio-economic and price?

A: No, there is no weighted percentage that provides a numeric value for each rating factor.

Rating factors, listed in descending order of importance, will be used to evaluate offers:

Technical Approach, Past Performance, Socioeconomic Considerations, and Price. The non-price factors when combined are significantly more important than the Price Factor. Please reference Section E Instructions to Offers.

29. Q: What type of title package is required and how is timing determined?

A: VA periodically reviews and updates evidentiary requirements. Currently title packages include all documents specified in VA Circular 26-16-14 and Exhibit A. The circular can be found at http://www.benefits.va.gov/homeloans/resources_circulars.asp.

30. Q: General: What are the breakdowns by asset type - in particular mobile home properties?

A: The breakdown by asset type may be found in Table 3: Number of Loans Currently Being Serviced & UPB by Loan Type; please see charts under 1.5 REO and Portfolio Servicing Profile and Data. Mobile homes are not considered an asset type.

31. Q: General: What percentage of the assets are BIA (Bureau of Indian Affairs) properties?

http://www.benefits.va.gov/homeloans/resources_circulars.asp

A: As of December 1, 2016, there are 504…