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PERFORMANCE WORK STATEMENT
Management and Marketing
Support Services: Field Service Manager (FSM) 3.8
Performance Work Statement
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TABLE OF CONTENTS
SECTION C - DESCRIPTION/SPECIFICATIONS 6
1 GENERAL INFORMATION 6
1.1 BACKGROUND 6
1.2 OVERVIEW OF ASSET DISPOSITION CONTRACT STRUCTURE 7
1.3 OVERVIEW OF THE ASSET DISPOSITION PROCESS (ADP) 8
1.4 ASSIGNMENT OF ASSETS 8
1.5 GEOGRAPHIC AREAS ADMINISTRATION AND OVERSIGHT 9
1.6 PURPOSE AND OBJECTIVES FOR THE FIELD SERVICE
MANAGER 9
2 ABBREVIATIONS, DEFINITIONS, ACQUISITION TYPES 10
2.1 ABBREVIATIONS 10
2.2 DEFINITIONS 11
2.3 ACQUISITION TYPES 17
3 GOVERNMENT PROVIDED GOODS AND SERVICES 18
3.1 INFORMATION SYSTEMS 18
3.1.1 SINGLE FAMILY INSURANCE SYSTEM (SFIS) 18
3.1.2 FHA CONNECTION 18
3.1.3 P260 18
3.1.4 SINGLE FAMILY ACQUIRED ASSET MANAGEMENT SYSTEM (SAMS)
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3.2 ACCESS TO HUD INFORMATION SYSTEMS 18
3.2.1 SECURITY ACCESS 19
3.2.2 SYSTEMS ACCESS AUTHORIZATION 19
3.3 HUD PROVIDED TRAINING 19
3.4 APPLICABLE DOCUMENTS 20
4 CONTRACTOR PROVIDED GOODS AND SERVICES 20 4.1 GENERAL 20
4.2 CONTRACTOR EXPENSES 20
4.3 INTERFACE EQUIPMENT AND SOFTWARE 20
4.4 SYSTEMS SECURITY ADMINSTRATOR 20
4.5 COST ESTIMATING TOOL 21
5 DESCRIPTION OF SERVICES 21
5.1 GENERAL REQUIREMENTS 21
5.1.1 INFORMATION MANAGEMENT 22
5.1.1.1 HUD Provided Information Systems 22
5.1.1.2 Daily Posting of Records 22
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5.1.1.3 Work Orders 22
5.1.1.4 Imaging 23
5.1.1.5Date Stamps 23
5.1.1.6 Physical File Maintenance and Retention 23
5.1.1.7 Delivery of Files Upon Request 23
5.1.1.8 Information Security 23
5.1.2 OFFICE FACILITIES 24
5.1.3 CUSTOMER SERVICE 24
5.1.3.1 Business Hours 24
5.1.3.2 After Business Hours 24
5.1.3.3 Response Time 25
5.1.3.4 Toll Free Phone Number 25
5.1.3.5 Communications Log 25
5.1.3.6 Freedom of Information Act 25
5.1.3.7 Government Inquiries 25
5.1.3.8 Other Correspondence 25
5.1.3.9 Litigation 25
5.1.4 MEETINGS 26
5.1.5 HUDs APPROVAL AND ACCEPTANCE RIGHTS 26
5.1.5.1 WRITTEN APPROVAL 26
5.1.5.2 EFFECT OF APPROVAL 26
5.1.6 COMPLIANCE WITH LEGISLATIVE, REGULATORY AND POLICY
REQUIREMENTS 26
5.1.7 QUALITY CONTROL PLAN (QC) 26
5.1.7.1 Quality Control Plan 26
5.1.7.2 Quality Control Reviews 27
5.1.7.3 Quality Assurance Reviews 27
5.1.8 PROPERTY MANAGEMENT PLAN (PMP) 27
5.1.9 CONTINGENCY PLAN 28
5.1.10 PERFORMANCE AND PAYMENT BOND 28
5.1.11 LIEN RELEASES 28
5.1.12 CONFLICTS OF INTEREST 29
5.1.12.1 General Rule 29
5.1.12.2 Pass-Through 29
5.1.12.3 Kick-backs, Rebates, Referral Fees 29
5.1.12.4 Excluded Purchasers 29
5.1.13 NOTICES 29
5.1.14 ELECTRONIC DISCLOSURES, RECORDS & SIGNATURES 29
5.2 PROPERTY MANAGEMENT 30
5.2.1 Pre-Conveyance 30
5.2.1.1 Inspections 30
5.2.1.1.1 Pre-Conveyance Inspection 30
5.2.1.1.2 Overallowable Inspection 30
5.2.1.1.3 Surchargeable Damage Inspection 30
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5.2.1.1.4 Occupied Conveyance Inspection 31
5.2.2 Acquisition (Post-Conveyance) 31
5.2.2.1 HUD Property Inspection 31
5.2.2.1.1 Part I of the HPIR 31
5.2.2.1.1.1 Cost Estimation 31
5.2.2.1.2 Part II of he HPIR 32
5.2.2.1.2.1 Health & Safety Hazards 32
5.2.2.1.3 Part III of the HPIR 32
5.2.2.2 Initial Securing 32
5.2.2.3 Initial Clean-out Services 33
5.2.2.3.1 Disposal of Debris, Refuse and Personal Property 33
5.2.2.3.2 Post Emergency Signs 33
5.2.2.3.3 Repair Broken Windows and Doors 33
5.2.2.3.4 Ensure Proper Access 33
5.2.2.3.5 Winterization 33
5.2.2.3.6 Prevent Further Moisture Damage 33
5.2.2.3.7 Install Sign-in Sheets 33
5.2.2.3.8 Health &Safety Hazards and Emergency Repairs 33
5.2.3 PROPERTY MAINTENANCE 33
5.2.3.1 Ready to Show Condition 34
5.2.3.2 Routine Inspections 34
5.2.3.3 Quality Assurance 34
5.2.4 UTILITIES 34
5.2.4.1 Utility Liens 35
5.2.4.2 Utility Charges 35
5.2.4.3 Purchaser Testing 35
5.2.4.4 Occupied Properties 35
5.2.5 RENTS, FEES, DUES, AND ASSESSMENTS 35
5.2.5.1 Homeowner’s Association Fees, Dues, Ground Rents and Non-Tax
Assessments 35
5.2.5.1.1 Mortgagee Responsibility 36
5.2.5.1.2 Additional Notifications 36
5.2.6 ENVIRONMENTAL COMPLIANCE 36
5.2.6.1 Lead Based Paint 36
5.2.6.1.1 Lead Based Paint Work Orders 36
5.2.6.1.2 Compliance Requirements 36
5.2.6.1.3 Lead Based Paint Inspections 37
5.2.6.1.4 Stabilization and Clearance 37
5.2.6.1.5 Costs 37
5.2.6.1.6 Philadelphia, PA 37
5.2.6.1.7 Asset Control Areas 37
5.2.6.2 Mold 37
5.2.6.3 Other Environmental Hazards 38
5.2.6.4 CERCLA Compliance 38
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5.2.6.4.1 Lease Restrictions 38
5.2.7 TERMITES AND WOOD DESTROYING ORGANISMS 38
5.2.7.1 Clearance 39
5.2.7.2 Active Infestation 39
5.2.8 VANDALISM 39
5.2.8.1 Other Vandalism Repairs 40
5.2.8.2 Missing Appliances 40
5.2.8.3 GTR Notification 40
5.2.9 RENTAL PROPERTY MANAGEMENT 40
5.2.10 CUSTODIAL PROPERTIES 41
5.2.10.1 Notification 41
5.2.10.2 Ready To Show Condition 41
5.2.10.3 Personal Property 41
5.2.10.4 Rents, Fee, Dues and Associations 41
5.2.10.5 Environmental Compliance 41
5.2.10.6 Rental Property Management 41
5.2.11 HELD OFF MARKET (HOM) CODES 41
5.2.12 VACANT LOTS 42
5.2.13 EVICTIONS 42
5.2.14 DEMOLITIONS 42
5.2.14.1 Historic Reservation Requirements 42
5.2.14.2 Legal Notification Requirements 42
5.2.15 ONAP PROPERTIES 43
5.2.16 TRANSMITTAL PROCESSING 43
5.2.17 COSMETICS ENHANCEMENTS AND/OR REPAIRS 43
5.2.17.1 Cosmetic enhancements and/or repairs requested 43
5.2.17.2 Davis Bacon Wage Determinations 43
5.3 PERFORMANCE REQUIREMENTS SUMMARY (PRS) 44
5.4 REQUIRED REPORTS 46
5.4.1 QUALITY CONTROL REVIEW REPORT 47
5.4.2 AUDITED FINANCIAL STATEMENT 47
5.4.3 AD HOC REPORTS 47
6 TRANSITION 47 6.1 START-UP 47
6.1.1 CONTRACTOR RESPONSIBILITIES 48
6.1.2 HUD RESPONSIBILITIES 49
6.1.2.1 Review of Contractors Plans 49
6.1.2.2 Orientation 49
6.1.2.3 Policy and Procedures 49
6.4.2.4 Systems 50
6.2 RAMP UP 50
6.2.1 TRANSITION SCHEDULE 50
6.2.1.1 61st Day 50
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6.2.1.2 91st Day 50
6.2.1.3 136th Day 51
6.3 TRANSITION OUT 51
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SECTION C: DESCRIPTION/SPECIFICATIONS
1 GENERAL INFORMATION
1.1 BACKGROUND
This Performance Work Statement (PWS) describes the services required to assist the United States Department
of Housing and Urban Development (HUD) with property and preservation services for its Real-Estate Owned
(REO) portfolio.
The Federal Housing Administration (FHA), an organizational unit within HUD, administers the single-family
mortgage insurance program. FHA insures approved lenders against the risk of loss on mortgages obtained with
FHA financing. In the event of a default on an FHA insured loan, the lender acquires title to the property by
foreclosure, a deed-in-lieu of foreclosure, or other acquisition method, files a claim for insurance benefits and
conveys the property to HUD. As a result of acquisitions through the mortgage insurance program and other
programs, HUD has a need to manage and sell a sizable inventory of single-family homes in a manner that
promotes home ownership, preserves communities, and maximizes return to the FHA insurance funds. HUD is
the largest single seller of real estate in the US. In fiscal years 2007 and 2008, the Department sold 49,385 and
46,333 single-family homes respectively.
HUD administers the REO disposition program through four (4) Homeownership Centers (HOCs) located in:
Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California. Each HOC is
responsible for a designated geographic area. Within each HOC there will also be designated contract areas for
Field Service Managers.
Since 1999, HUD has been outsourcing the disposition of its REO inventory to Management and Marketing
(M&M) Contractors. This acquisition is part of the third generation of M&M services (M&M III). Under the
previous generations of M&M contracts, HUD contracted with a single entity to provide all of the
administrative, program support, management and marketing services throughout the United States, the
Caribbean, Guam and the Northern Mariana Islands. The second generation of M&M contracts will expire in
calendar year 2009. To ensure the continued success of its disposition program and to further capitalize on the
private sector’s disposition expertise, in 2007, HUD conducted extensive market research on industry best
practices surrounding the REO asset disposition process to structure the third generation of the contracting
program, herein after referred to as M&M III. Based on market research results for M&M III, HUD developed
a disposition structure for the management and marketing of REO inventory that will streamline its operations,
capitalize on the expertise of its potential Contractors, and provide flexibility to meet changing market
conditions in the REO industry.
Key elements of the disposition structure include:
Centralization of mortgagee compliance functions under a Mortgagee Compliance Manager (MCM) responsible
for pre- and post-property conveyance activity including approval of claims for payment, title reviews, and
inspection reviews.
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Separation of marketing functions Asset Managers (AM) from property management functions Field Service
Managers (FSM).
Creation of an Oversight Monitor (OM), focused on overall portfolio analysis, monitoring, and oversight of the
disposition processes.
1.2 OVERVIEW OF ASSET DISPOSITION CONTRACT STRUCTURE
This section describes the four (4) entities under the M&M III disposition structure and the roles and
responsibilities of each Contractor within the structure.
The entities under the new disposition strategy include:
Oversight Monitor (OM)
Mortgagee Compliance Manager (MCM)
Asset Manager (AM)
Field Service Manager (FSM)
Section 1.6 includes a detailed summary of the purpose and objectives of the FSM Contractor. Below is a
summary of the purpose and objectives of other Contractors in the M&M III asset disposition structure.
Oversight Monitor (OM)
The OM’s primary responsibilities are to inform the government of the performance of its REO portfolio and to
ensure the efficiency and effectiveness of the disposition process. Specifically, the OM shall provide oversight
monitoring; develop and maintain asset allocation; conduct portfolio analysis and reporting; and review the
M&M III business processes.
Mortgagee Compliance Manager (MCM)
The Mortgagee Compliance Manager shall perform a variety of pre- and post- property conveyance services to
ensure that HUD's interests are protected. These services will include: reviewing property inspections to ensure
the property is in conveyance condition; resolving conveyance exceptions; providing guidance to Mortgagees
related to pre-conveyance and post-conveyance responsibilities; and leveraging HUD’s software and information
systems to execute and complete the tasks within its contract.
Asset Managers (AM)
The AMs are responsible for the marketing and sale of REO property. AMs will be contracted to market HUD-
owned properties within their selected geographical area.
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1.3 OVERVIEW OF THE ASSET DISPOSITION PROCESS (ADP)
M&M III consists of the following major processes; (1) Pre-Conveyance Activity; (2) Conveyance Activity; (3)
Claim Review Activity; (4) Management Activity; (5) Marketing Activity; (6) Closing Activity; and (7)
Oversight Monitoring.
1.4 ASSIGNMENT OF ASSETS
Property assignments will begin during the Ramp-up phase of the transition period (See Section C.6.2, Ramp-
up). During this phase, HUD will begin to assign new acquisitions and transfer unsold inventory, held off
market and custodial properties to the Contractor.
Asset Assignments and Performance:
Through the life of the contract, the Government Technical Representative (GTR) will monitor contractor
performance based on HUD’s Quality Assurance (QA) procedures. The Government will issue a Quarterly
Performance Report (QPR) beginning in the 4th month of contract award. Contractors who are performing at a
satisfactory level as indicated on the QPR will continue to receive new property acquisitions within their awarded
geographical area. Contractors who are performing at below a satisfactory level may find their assignments
impacted by the following:
1. Realignment: The Government may unilaterally realign the existing geographic area in accordance
with the clause H.2, Option to Increase/Decrease the Geographic Service Area. After meeting the
guaranteed contract minimum established in Paragraph I.4, the Government reserves the right to non-
competitively increase or reduce the geographic service area of this contract through contract
modification. As previously noted, the resulting modification will realign the geographic area of the
affected contract, but will not increase the original contract ceiling, unless one of the authorities in
FAR Subpart 6.302 is cited. Realignment of the geographic area will become effective for all new
assignments made after the effective date identified on the realignment modification.
Assignments/Orders placed prior to a realignment modification being issued under this authority will
remain with the existing contractor, unless the Government invokes a full or partial termination in
accordance with FAR Part 49. The Government intends to utilize this clause as mechanism to
incentivize a high level of performance by rewarding the most highly performing contractors with an
opportunity to expand their geographic service area and provide a disincentive for non-performance
of contract requirements by reducing the geographic service area of contractors who fail to meet
contract expectations.
2. Non-Assignment: The Government may unilaterally stop assigning assets to a Contractor due to non-
performance. Contractors are not guaranteed any new assignments if the Government has stopped
assigning assets. The Government will continue to review and monitor the Contractor’s performance
and if performance has shown improvement, the government reserves the right to make new
assignments of assets to this Contractor after a period of non-assignment.
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Option Periods:
A satisfactory contract year-end performance rating is required for exercise of an option. During the option
period, HUD may, at its discretion, continue to assign assets equally among satisfactory performing Contractors
within a geographic area, may allocate assets based on each Contractor’s quarterly performance results, or may
allocate assets based upon a asset allocation methodology developed by or on behalf of the Government. If assets
are allocated, generally, the best performers will be assigned the highest number of assets within a geographic
area and lower performing Contractors will generally be assigned a lesser number of assets
1.5 GEOGRAPHIC AREAS ADMINISTRATION AND OVERSIGHT
There will be a Contracting Officer (CO) and a Government Technical Representative (GTR) for each of the
entities listed under Section 1.2 of this PWS. The contracts will be administered from the respective
program/geographic areas and the M&M Acquisition Center in Atlanta, Georgia. The program area
administration will be as follows:
OM – HUD Headquarters, Washington, DC
MCM - National Servicing Center (NSC), Oklahoma City, OK
AM/FSM – Designated Homeownership Centers
1.6 PURPOSE AND OBJECTIVES FOR THE FIELD SERVICE MANAGER
The purpose of this contract is to obtain property management services as detailed in Section 5.2. FSMs are
companies that provide property maintenance and preservation services consisting of, but not limited to,
inspecting the property, securing the property, performing cosmetic enhancements/repairs, and providing on-
going maintenance. As part of the FSM 3.8 Solicitation, the government anticipates awarding a single FSM
contract in each of the identified geographic areas. Properties acquired by HUD will be assigned to FSMs as
discussed in Section 1.4.
Offerors will use this information to propose a technical solution for each of the objectives listed below, and
further detailed in Section 5. The technical solution will consist of, but will not be limited to, description of the
procedures, documents, or reports that will be developed to meet the objectives.
HUD has identified six primary objectives for its Field Service Managers. They are to ensure that:
FHA insured properties are maintained in a manner that preserves communities;
HUD has real time access to all property related information;
Properties are secured and safe from hazardous conditions;
Property values are preserved;
Properties are maintained in a manner that reflects a high standard of care;
There is a high level of customer satisfaction with HUD’s property disposition program.
2 ABBREVIATIONS, DEFINITIONS, ACQUISITION TYPES
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2.1 ABBREVIATIONS
ABBREVIATIONS Definition
ACA Asset Control Area
AR Accounts Receivable
ARR Administrative Remedies Report
AM Asset Manager
BPO Broker Price Opinion
CFR Code of Federal Regulations
CO Contracting Officer
COOP Continuity of Operations Plan
FHA Federal Housing Administration
FOIA Freedom of Information Act
FSM Field Service Manager
GNND Good Neighbor Next Door
GTM Government Technical Monitor
GTR Government Technical Representative
HECM Home Equity Conversion Mortgage
HOA Homeowners Association
HOC Homeownership Center
HOM Held Off Market
HSFDS HUD Single Family Disposition Systems
HUD U.S. Department of Housing and Urban Development
HPIR HUD Property Inspection Report
M&M Management and Marketing Contractor
MCM Mortgagee Compliance Manager
MPR Minimum Property Requirements
MPS Minimum Property Standards
MWP Management Work Plan
NSC National Servicing Center
OM Oversight Monitor
PCR Property Condition Report
PIV Personal Individual Verification
P&P Property and Preservation
PGTR Principal GTR
PMM Purchase Money Mortgage
PMP Property Management Plan
PWS Performance Work Statement
QC Quality Control
QCD Quitclaim Deed
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ABBREVIATIONS Definition
QPR Quarterly Performance Report
RDOA Redelegation of Authority
REO Real Estate Owned
SAMS Single Family Acquired Asset Management System
SFB Monthly Billing Fees Transmittal
SFF Pass Through Expense Transmittal
SFIS Single Family Insurance System
SFT Property Tax Payment Transmittal
SPI Special Property Inspection
SSA System Security Administrator
SSC Support Service Contractor sc
2.2 DEFINITIONS
Adverse Occupants – Occupants who are in possession of a HUD owned or Custodial property without the legal
right to be there.
Administrative Contracting Office Staff – After contract award, the HUD official authorized to execute and
administer contractual documents based on this contract and who is also responsible for the day-to-day
administration of this contract and delegating contract administration responsibilities to contracting staff and
Government Technical Representatives.
Acquisition – the process through which a real property or mortgage note secured by a real property is conveyed
to HUD. Properties and mortgage notes are conveyed (acquired) from a number of sources. See Acquisition
Types, Section 2.3.
Affiliated Entity - (a) As to Contractor, any Entity (i) controlling, controlled by, or under common control with the
Contractor, or (ii) whose Management Officials are an Immediate Family member of a Management Official of
the Contractor; or (b) As to Subcontractor, any Entity (i) controlling, controlled by, or under common control with
the Subcontractor, or (ii) whose Management Officials are an Immediate Family member of a Management
Official of the Subcontractor, including any agent or broker, licensed under a listing broker, used to list HUD-
owned properties; or (c) As to any other Entity, any Entity (i) controlling, controlled by, or under common control
with the other Entity, or (ii) whose Management Officials are an Immediate Family member of a Management
Official of the other Entity.
Asset Control Area (ACA) Program – a program for the disposition to eligible participants of HUD-owned
properties and future HUD acquisitions of properties and/or mortgage loans located within HUD designated
revitalization areas.
Asset Manager – a HUD Contractor responsible for the marketing of HUD REO properties.
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Broken Window – a pane of glass that has a visible opening that permits entry or exposure to the elements or
which is so badly cracked as to constitute a hazard, e.g. a window with a crack that divides a single pane into
two or more pieces.
Casualty Damage – is loss or harm to real or personal property that resulted from an accident, negligence and,
or willful destruction, attributed to other than a Contractor, its employees or any affiliated Contractors,
Subcontractors or its employees, or an uncontrollable event such as fire, or some act of nature such as
windstorm, snowstorm, or hurricane.
Contract Award Date - the date upon which HUD and the Contractor have both executed a Contract based on
this PWS.
Contract Effective Date – the date upon which the Contractor begins to perform work under the PWS as
identified in block 3 of form SF-1449.
Contracting Officer - the HUD official authorized to execute and administer a contract based on this PWS on
behalf of HUD and includes any duly appointed successor or authorized representative.
Control - as to any Entity, the power to direct or cause the direction of the management and policies of such
Entity, whether through the ownership of voting securities, by contract, or otherwise. The term “Controlled” shall have a correlative meaning.
Conveyance Condition – Properties that are conveyed free of surchargeable damage (see definition of
surchargeable damage).
Cracked Window – a pane of glass that is still intact but may have slight imperfections that do not amount to an
opening in the glass or do not constitute a hazard, e.g. a pane of glass that has been damaged but not broken and
there is no danger of falling glass or weather damage to the property.
Custodial Property – a borrower owned property that serves as security for a secretary-held mortgage (including a
HECM), which HUD, through the Contractor, has taken possession of following default and vacancy or
abandonment.
Days – Unless otherwise specified in the Request for Quotation (RFQ), all references to days means calendar
days.
Deteriorated Paint - any interior or exterior painted surface that exhibits cracking, scaling, chipping, peeling, or
loose paint.
Defective Service – a service or deliverable that does not meet the performance standard specified in the contract for a specific performance requirement.
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Electronic Data Interchange (EDI) – Software application-to-application communication of data in standard
format for business transactions, EDI is a set of standards for structuring information that is to be electronically
exchanged between and within businesses, and organizations.
Electronic Transmission – a message transmitted electronically in a format displayed on equipment, for
example, a personal computer monitor or facsimile machine. The electronic media used to deliver electronic
messages displayed on a personal computer monitor includes electronic mail or another method acceptable to
HUD.
Emergency Contact Sign - a visible sign on the property that provides a toll free, 24-hour telephone number to
report emergencies.
Entity - any individual, corporation, partnership, joint venture, limited liability company, trust, association.
FHA Connection – an Internet-based system that provides FHA business partners and Contractors secure
interaction with HUD mainframe systems to perform required reporting and research the origination and
servicing history of FHA insured loans.
Field Service Manager – a HUD Contractor responsible for property management, maintenance, and
preservation services.
Financial Control Manual – A manual that describes HUD-Single Family Housing Program's uniform policies
and procedures for processing and approving contractor invoices related to the
Marketing and Management of HUD's properties - It also describes the minimum documentary evidence
required of each type of transmittal.
Government Technical Monitor (GTM) – a HUD employee who assists the GTR in a limited area of expertise
and who may be delegated some duties of the GTR.
Government Technical Representative (GTR) – a HUD employee who acts as the Contracting Officer's
representative in all matters concerning the technical aspects of a contract. The GTR is responsible for giving
Contractors technical advice and guidance related to the work required by the contract. Moreover, the GTR is
the principal judge of a Contractor's performance, including the quality and timeliness of services.
Health and Safety Hazards - Any condition or situation at the property that exposes the government to abnormal
risk, that presents a source of danger, which could cause an accident, or poses the threat of injury, harm to the
public or property that must be corrected within one (1) day of discovery or notification.
Home Equity Conversion Mortgage (HECM) – a specialized mortgage product available only to senior citizens
that allows them to receive cash payments from the equity in their home.
HUDClips – a web-based directory of all of HUD’s official policies and directives including notices, Mortgagee
Letters, Housing Notices, Handbooks, Code of Federal Regulations and US Codes Titles 12 and 24. The
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Internet address for HUD’s Client Information and Policy System (HUDClips) is http://www.hud.gov/offices/adm/hudclips/index.cfm.
HUD-Owned Properties - Those properties that HUD owns by reason of payment of an insurance claim or another
acquisition method. Unless otherwise indicated the term includes vacant land and occupied-conveyance properties.
HUD-owned properties are also referred to as HUD REO or HUD-homes.
Immediate Family - As to any person and whether by blood, law, or marriage, (i) his or her spouse or domestic
partner, (ii) his or her children, siblings, or parents, or (iii) the spouses or domestic partners of his or her
children, siblings, or parents.
Management Official - As to any Entity, its owner, partner, principal, shareholder, director, officer, employee,
agent, representative, or any individual who directs or has the power to direct its daily operations.
Minimum Property Requirements (MPR) – the minimum level of quality for existing single-family 1-4 unit
properties to be considered technically acceptable for insurance under FHA Programs. MPR can be found in
HUD Handbook 4905.1 rev-1 and Mortgagee Letter 2005-48.
Minimum Property Standards (MPS) – a minimum quality level acceptable to HUD for new construction single-
family 1-4 unit properties. MPS can be found in 24 CFR 200.926 through 200.926e and HUD Handbook 4910.1
Appendix K.
Mortgagee - an FHA approved mortgage loan holder or mortgage loan servicer. Mortgagee is also referred to as “Lender”.
Mortgagee Compliance Manager – The Contractor responsible for performing a variety of pre- and post-
property conveyance services on behalf of HUD.
Mortgagee Neglect – for a mortgage insured on or after January 1, 1977, the failure by a Mortgagee to inspect,
or take reasonable action to preserve and protect a property until conveyance to the Secretary securing an FHA
insured mortgage, as required by 24 CFR 203.377. Reasonable action includes initiating foreclosure within the
required time frame pursuant to 24 CFR 203.355(b).
Non-Surchargeable Damage – damage to the property that is not the responsibility of the Mortgagee because it
was not caused by Mortgagee Neglect, fire, flood, earthquake, hurricane, tornado, or for condominiums, boiler
explosions.
Notice of Acquisition – the notice provided to the Contractor that a property has been assigned to them.
Generally, notice is conveyed through P260. However, in some cases notice is delivered by the GTR.
Occupied-Conveyance - a formal process through which a Mortgagee receives permission to convey an
occupied property to HUD. The term may also be used as a noun to refer to a property conveyed in this
manner.
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Pass Through Expense – an actual, out of pocket expense incurred and paid by the Contractor that is not deemed a
Contractor’s expense and which is listed in the attachment as allowable pass-through expense. Performance
Evaluation - the GTR/GTM’s record of the Contractor’s performance under the contract.
Performance Requirement - the service level that separates acceptable performance from unacceptable
performance of a task.
Performance Requirements Summary (PRS) - a listing of the performance requirements under the contract that
the Government evaluates on a regular basis. Performance indicators, standards for these requirements, and
surveillance methods will be used to determine if the Contractor meets performance standards.
Performance Standard - the Contractor’s performance level on any deliverable as required by the Performance
Work Statement.
Personal Identification Verification (PIV) – a process for personnel identification and verification to gain user
approval and access to HUD’s computer systems.
Proposed Rule - proposed changes to the regulations governing HUD policy as published in the Federal
Register.
Quality Assurance (QA) - actions by HUD or its designees to ensure that products or services provided by the
Contractor are within the acceptable quality level for a given performance requirement.
Quality Control (QC) - actions taken by the Contractor to control the production of supplies and services to
ensure that they conform to the performance requirements and standards. Quality control procedures are
outlined in the Quality Control Plan (QCP) developed by the Contractor.
Random Sampling - a quality verification selection method wherein each object in a group has an equal chance
of being selected for quality assurance surveillance.
Ready to Show condition - means the property is free of debris, visible insect/rodent infestations and health and
safety hazards. All cabinets, refrigerators, freezers, counter tops, and windows must have been wiped clean and
the house must be free of bad smells. All floors and carpets must be clean. All repairs required to correct safety
hazards and any approved repairs to be done prior to listing the property must be completed in order for the house
to be in ready to show condition. The yard must be free of trash and debris. The grass must be cut, bushes trimmed
and holes patched, and or properly secured to protect the public. Swimming pools and wells must be properly
secured to protect the public.
Real Estate Owned (REO) – an industry term used to describe properties acquired through foreclosure of a
mortgage note, or deed of trust. Single-family properties owned by HUD may be referred to as HUD REO.
Reconveyance - the process of returning a property to a Mortgagee by recording a deed in Mortgagee's name
and seeking reimbursement for claims paid plus expenses.
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Revitalization Area – an area that has been designated by HUD as exhibiting some or all of the following
characteristics: a high concentration of HUD-Owned Properties, low income or low homeownership rates or
any other criteria HUD designates. HUD homes within revitalization areas are eligible for discounted sales to
certain purchasers.
Revitalization Area Locator (RAL) - a web-based geo-mapping tool that is HUD’s official source for
determining whether a property is located in a revitalization area.
Rework - corrective actions taken, or to be taken by the Contractor at its own expense and at no additional cost
to HUD to rectify defects identified.
Secretary-Held Properties – borrower owned properties that are the security for mortgage loans held and
serviced by HUD either through assignment or origination. Vacant or abandoned secretary-held properties will
become Custodial Properties.
Secured Properties – a property where all windows, doors and openings are locked, boarded (where authorized), or
otherwise secured to prevent unauthorized entrance by person or animal into any portion of the dwelling,
including exterior entrances to crawl spaces, and any other structures on the property, e.g. garages and sheds.
Special Property Inspections (SPIs) – quality assurance inspections of HUD properties performed by HUD contract inspectors.
Subcontractor - a person or entity that enters into an oral or written contract or agreement with the prime
Contractor to perform services, including a listing broker used by the Contractor to list HUD-Owned properties.
Support Services Contractor (SSC) – Contractor responsible for performing financial transmittals, reconciliation
of closings, and broker registration services on behalf of HUD.
Surchargeable Damage – damage to the property (1) by fire, flood, earthquake, hurricane, tornado, or, for
condominiums, boiler explosion; or (2) for mortgages insured on or after January 1, 1977, damage caused by a
Mortgagee’s failure, as required by 24 CFR 203.377, to inspect or take reasonable action to preserve and protect
vacant or abandoned properties.
Targeted Sampling - use of risk based factors rather than random sampling to select properties, files or other
subjects for quality assurance or quality control review.
Transition Period – a period of time following contract award when a new Contractor develops the
infrastructure necessary to perform contractual responsibilities and when those contractual responsibilities are
transferred from a Former Contractor to a new Contractor.
Transmittal – Standard form required under HUD’s Financial Control Manual that Contractors must use to
request payment of expenses associated with mortgagee compliance, management and the marketing of HUD-
owned properties.
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Utilities - gas, electricity and water/sewer services.
Contractor – the individual, partnership, corporation or other entity, which is the party subject to the terms and
conditions of this contract.
2.3 ACQUISITION TYPES
The vast majority of acquired properties are conveyed to HUD by a Servicing Mortgagee following foreclosure
of an FHA insured mortgage and the filing of a claim for insurance benefits. However, HUD also acquires
properties from a variety of other sources. The type of acquisition may impact the method by which the
Contractor is informed of the new assignment and the scope of services required. A listing of possible acquisition
sources follows:
Conveyance Foreclosures - properties conveyed to HUD by a Mortgagee following foreclosure, or deed-in-lieu of
foreclosure of an FHA insured mortgage, and the filing of a claim for insurance benefits.
Custodial Properties - properties secured by a Secretary-Held mortgage or HECM, which are in default and
upon inspection by HUD’s servicing Contractor determined to be vacant or abandoned. Title is not yet in
HUD’s name. Upon receipt of notification from the GTR, the Contractor shall take possession to protect and
preserve the property until title is acquired. Custodial properties are not marketable until foreclosure is
completed and title is vested in the Secretary of HUD. These properties will be assigned by the GTR.
Mortgagee compliance and marketing and sales tasks are not required for these properties. There is limited
property management tasks associated with these properties.
Foreclosed Secretary Held Mortgages (SHMs) - properties acquired as the result of the foreclosure of a
mortgage serviced by HUD including assigned and purchase money mortgages. These properties will be
assigned by the GTR. Mortgagee compliance tasks are not required for these properties.
Home Equity Conversion Mortgages (HECM) - a property acquired as the result of foreclosure of a reverse
mortgage insured by FHA. These properties will be assigned by the GTR and will not be in SFIS.
Legal Settlement - properties that are not FHA-insured but were acquired as a result of a lawsuit or for other
reasons such as to accommodate another Federal agency. These properties will be assigned by the GTR.
Repurchases/ Buy Backs – properties repurchased by HUD to resolve a post sale claim by the purchaser of a
HUD-Owned Property. The HUD GTR must approve all repurchase requests.
184s – properties on Indian or tribal lands acquired as a result of foreclosure of a loan guaranteed by HUD’s
Office of Native American Programs under the Section 184, Loan Guarantee for Indian Housing Program of the
Housing and Community Development Act of 1992. These acquisitions may be lease-holds and have tribal
specific resale restrictions.
312s - Properties acquired as a result of foreclosure of a HUD Community Planning and Development’s
Rehabilitation Mortgage. Notification of acquisition is provided by memorandum from the current servicer
through the GTR.
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3 GOVERNMENT PROVIDED GOODS AND SERVICES
3.1 INFORMATION SYSTEMS
The Contractor shall use the systems made available by HUD to perform on-going disposition activities as a
source of data for the performance of this contract The systems include all HUD provided systems that are used by
contractors engaged in the disposition of HUD’s REO portfolio, including any systems used by the MCM, AM
and FSM Contractors. The HUD provided systems are as follows:
3.1.1 SINGLE FAMILY INSURANCE SYSTEM (SFIS)
The Single Family Insurance System (SFIS) is HUD’s primary system of record for insurance and claim
payment status of all FHA insured single family loans. SFIS also includes the Single Family Insurance Claims
Subsystem, A43C. Upon notification of an acquisition resulting from an insurance claim, the Contractor may
access SFIS to review insurance and claim data to meet the requirements of this PWS.
3.1.2 FHA CONNECTION
The FHA Connection is an Internet based system through which Mortgagees report the status of insured loans. Additionally, the FHA Connection allows HUD to post information of interest to Mortgagees.
3.1.3 P260
P260 is an Internet based system that will serve as the primary system of record for all REO case management
transactions. This system will assign each HUD-owned property for Contractors to track the disposition activity
from conveyance to sale. This system integrates data from SFIS, FHA Connection, and SAMS Accounting.
3.1.4 SINGLE FAMILY ACQUIRED ASSET MANAGEMENT SYSTEM (SAMS)
The Single Family Acquired Asset Management System (SAMS) is HUD’s primary system of record for
tracking financial and accounting data for HUD-Owned properties.
3.2 ACCESS TO HUD INFORMATION SYSTEMS
Contractor employees (including Subcontractors) who will need to have access to HUD information systems
must undergo a background investigation. See Clause HUDAR 2452.239-70.
3.2.1 SECURITY ACCESS
Due to the sensitivity of property and contractor profile data, access to HUD systems will be limited to individuals
based upon their specific duties and the security of the system. As a condition of obtaining access, Contractor
employees requiring access to HUD systems will submit to the GTR an original and one copy of completed
Standard Form 85P, Questionnaire for Public Trust Positions, Optional Form 306 and FD-258 Finger
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Print Chart. Contractor must submit required forms for staff requiring system access within 30 days of contract
award. Contractor staff may be required to provide other background information as deemed appropriate for the
requested security access level. HUD may grant, deny, or revoke an individual’s access rights to a HUD system
based upon the results of the security background check of the individual. The Contractor shall provide written
notification to the GTR no later than one (1) business day of termination or resignation of any employee granted
HUD systems access or when there is no longer a need for access to HUD systems by any Contractor employee.
The Contractor shall maintain an up-to-date list that identifies contract employees with access to each of the
information systems described in Section 3.1 and the justification for each employee’s level of access. The
Contractor shall not provide access to individuals until HUD provides written authorization.
3.2.2 SYSTEMS ACCESS AUTHORIZATION
Subject to any necessary security clearances, HUD will grant the Contractor authorization to access the HUD
information systems, described in Section 3.1.
3.3 HUD PROVIDED TRAINING
During the Transition Period, HUD will provide training for the Contractor to include key personnel and staff as
approved by HUD. The training will be on policy, processes and systems usage. There will be no cost for the
training except that the Contractor shall be responsible for travel and lodging expenses incurred by its staff
attending the training. HUD will bear the cost for all training materials provided. The training will be provided
during the Transition Period to ensure that the Contractor shall be familiar with all relevant systems and
processes. The training will be held at the HUD/HQ location or at one of the 4 HOC areas and will involve the
following, as applicable:
P260 Training: Training on the P260 and system data usage.
SAMS Training: Training on SAMS and system data usage.
FHA Connection: Training on system usage.
SFIS: Training on system usage.
Policies and Procedures: Training on HUD policies and procedures surrounding the asset disposition process.
3.4 APPLICABLE DOCUMENTS
Many of the applicable documents, handbooks, forms, user guides, and other policy documents referenced in
this PWS are publicly available on the internet at the sites identified in Attachment 2 – Applicable Documents.
4 CONTRACTOR PROVIDED GOODS AND SERVICES
4 . 1 GE N E R A L
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Except as otherwise expressly provided in this PWS, the Contractor shall provide everything required to perform
the services under a contract based on this PWS. The Contractor shall be responsible for knowing what items to
furnish in the accomplishment of all tasks.
4.2 CONTRACTOR EXPENSES
All costs of performance under a contract based on this PWS are at the expense of the Contractor unless
otherwise specifically identified in this contract.
4.3 INTERFACE EQUIPMENT AND SOFTWARE
To provide capability for direct data entry and data review from the designated HUD systems, the Contractor
shall provide equipment that meets the minimum requirements discussed in this section.
All personal computer configurations shall be in accordance with HUD’s minimum personal computer system
configurations in effect at the time of contract award. Also all parties will ensure compatibility with the HUD
network.
If such configurations change during the term of this contract, HUD must notify the Contractor by letter of
subsequent configurations and the effective date of any such change.
4.4 SYSTEMS SECURITY ADMINISTRATOR
The Contractor shall designate a Systems Security Administrator (SSA) no later than ten (10) days of the
effective date of the contract and provide this information to the GTR within this timeframe. SSA must complete
the mandatory HUD specialized on-line security training course designed for this position. The SSA shall use
forms provided by HUD to initiate requests for user access to HUD IT systems and to request access
modifications and deletions. The Contractor shall certify, not later than twenty (20) business days from the
effective date of the contract that all staff has received instruction in system security issues, are familiar with the
contents of the current version of HUD Handbook 2400.25 Rev. 2, Information Security Program.
Additionally, this certification must be made within seven (7) days for any new hires.
The SSA will also be subject to HUD’s IT General Controls and Monitoring of Contractors security policy. The
SSA shall conduct annual security-self assessments and content will be subject to verification by facility
inspections to ensure compliance with all HUD’s IT security policies.
4.5 COST ESTIMATING TOOL
The Contractor shall use a comprehensive cost estimation and valuation tool during the base period that is
designed to provide replacement or improvement costs for property preservation and repair, provide damage
estimates, and validate bids submitted for repairs. The tool should be an industry standard application such as
Marshall & Swift or Xactimate. Repair, replacement or improvement cost estimates will consider labor,
material, equipment, productivity rates, mark-up and taxes for reconstruction work. The Contractor shall use
the cost estimating tool to validate the reasonableness of bids submitted for repairs and improvement costs.
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After the expiration of the base period, HUD will identify an industry standard cost estimation tool, to be used
by all FSM contractors.
5 DESCRIPTION OF SERVICES
The tasks under this PWS, whenever necessary, have been described as outcomes and the Contractor may
determine the most efficient method for accomplishing the task in accordance with HUD’s purposes and
objectives in Sections 5.1 and 5.2. Some tasks are prescribed in part by regulation and legislation and specific
process steps have been identified.
5.1 GENERAL REQUIREMENTS
The purpose of this performance based contract is to obtain property management and preservation services to
achieve the outcomes described in Section 1.6. In general, the contractor shall perform inspections, preservation,
maintenance, and property management services for HUD-Owned properties.
Property management responsibilities under this PWS include:
Initial inspections to confirm whether property meets conveyance conditions;
Preservation of property from conveyance to sale;
Maintenance and preparation of properties intended for sale;
Management of rental properties;
Management and maintenance of properties in the custody of, but not owned by HUD.
Regardless of the type of acquisition or the property management services required, the Contractor
shall maintain all properties in a manner that results in properties that are clean, safe, secure and sanitary and
preserves property value. As described in Section 5.1.9, the Contractor shall prepare, maintain and implement
a comprehensive Property Management Plan consistent with the preliminary Property Management Plan
submitted during the bid process. In performing the tasks required under this section, the Contractor shall
image and/or upload all required reports, documents, inspections and information about property condition,
management and maintenance into P260.
5.1.1 INFORMATION MANAGEMENT
The Contractor shall meet the information management and information transfer requirements in this PWS. The
Contractor shall have access to HUD owned or HUD designated central information management systems. These
system(s) will be the central and primary sources of information for the execution of the Contractor’s
responsibilities.
5.1.1.1 HUD Provided Information Systems
The Contractor shall use the systems made available by HUD, as described in Section 3.1, to perform on-going
activities related to execution of the tasks within the contract. Contractor employees shall complete HUD PIV
process for security clearances and annual security training.
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5.1.1.2 Daily Posting of Records
The Contractor shall update P260 with all records of actions taken for property management consisting of, but
not limited to, the HUD Property Inspection Report, before and after pictures and supporting documentation for
cost estimates. HUD will have the ability to view daily activity associated with property management activities.
5.1.1.3 Work Orders
Work orders for repairs, lead based paint inspections, stabilization, termite inspections and treatment shall be
ordered via P260. The Contractors shall verify the accuracy and validity of all work orders before submission in
P260.
5.1.1.4 Imaging
The Contractor shall scan and upload electronic images of all required property related documents that have not
been electronically transmitted by other parties to P260 no later than one (1) calendar day following receipt or
creation by the Contractor.
At a minimum, the Contractor shall image and scan the following documents:
1. HUD Property Inspection Report (HPIR) & FSM Property Inspection Form– only pictures and supporting
documentation of the HPIR shall be scanned. The actual report shall be uploaded into P260 as part of the daily
posting of records. During the first half of the base year of the contract, the FSM will have to enter the
inspector’s basic inspection data and scan the actual inspection report into P260. Thereafter, the inspector
himself will have the ability to electronically complete the inspection forms through a portal. The FSM must
then review and accept the inspector’s data (submitted electronically) by populating such data into P260.
2. Municipal or association notices, citations, or demands.
3. Repair photographs and supporting documentation showing property before and after Contractor repairs to
remove health or safety hazards, and or other repairs conducted as a result of a work order issued via P260.
4. Other Regulatory Required Inspections and related documents (Lead Based Paint and Termite Only).
5.1.1.4 Imaging
The Contractor shall scan and upload electronic images of al required property related documents that have not
been electronically transmitted by other parties to P260 no later than one (1) calendar day following receipt or
creation by the Contractor.
At a minimum, the Contractor shall image and scan the following documents:
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1. HUD Property Inspection Report (HPIR) and FSM Property Inspection Form – only pictures and
supporting documentation of the HPIR shall be scanned. The actual report shall be uploaded into P260
as part of the daily posting of records.
2. Municipal or association notices, citations, or demands.
3. Repair photographs and supporting documentation showing property before and after Contractor repairs
or removes health and safety hazards conducted as a result of a work order issued in P260.
4. Other regulatory required inspections and related documents (Lead Based Paint and Termite).
5.1.1.5 Date Stamps
The Contractor shall date stamp all incoming correspondence with the date the document was received in the
Contractor’s office.
5.1.1.6 Physical File Maintenance and Retention
The Contractor shall establish and maintain a physical property file that contains all documents and records that
pertain to the disposition process until expiration of the contract. Additionally, the Contractor shall keep the
individual physical files updated.
5.1.1.7 Delivery of Files Upon Request
Unless otherwise specified, the Contractor shall, no later than five (5) days from receipt of a written request
from the CO or GTR, deliver to HUD complete, accurate, legible, and accessible copies of any requested
physical files.
5.1.1.8 Information Security
Neither the Contractor nor any of its employees or affiliates will disclose or cause to be disseminated any
information relating to the services hereunder to any person not entitled to receive it. Failure to safeguard any
sensitive information that may come to the Contractor or any person under his/her control in connection with
work under this PWS, may subject the Contractor or its agents or employees to criminal liability or termination
for default.
5.1.2 OFFICE FACILITIES
The Contractor shall maintain a fully staffed and equipped office in the awarded HOC geographic area (s). The
Contractor shall maintain the physical property files referenced in Section 5.1.1.6 in that Office. Any changes or
exceptions in the location of performance must be approved in advance by the GTR and may not impact
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customer service. The Contractor shall have a minimum of one key personnel in that office with full direct
authority over all critical operations of the work required.
5.1.3 CUSTOMER SERVICE
The Contractor shall ensure that all contact with the public and HUD employees promote HUD’s objectives
under this PWS, encourage participation by industry professionals and potential purchasers, and result in a
high level of customer satisfaction. Customers for the purpose of this PWS include: potential purchasers, real
estate brokers, contractors, HUD employees and HUD Contractors under the M&M III structure. Customer
service includes, but is not limited to: answering questions; resolving complaints; providing property
information and status; crafting remedies and solutions, and providing copies of property related documents in
a prompt, professional and courteous manner. The Contractor shall respond to any general inquiries or
requests for information about a HUD property, even for properties not in their inventory, and refer customers
to HUD or appropriate parties, when necessary.
The Contractor shall foster a good working relationship with other M&M III Contractors, specifically Asset
Managers, by working together to make seamless those mutual processes, such as, but not limi ted to,
purchaser testing, HOA fee payments, WDO inspections, etc, to ensure such items do not cause delays in
closings and/or increased holding times, and to ensure that any misdirected calls are referred to the proper
Vendor and noted in the Communication Log of P260, and to ensure that any misdirected calls are referred to
the proper Contractor and noted in the Communication Log of P260. The Contractor should anticipate the
volume of calls to be in direct proportion to their assigned inventory volume and be prepared to handle walk in
and email communications. The Contractor shall ensure they have adequate staff that is properly trained on
how to handle REO related calls.
5.1.3.1 Business Hours
The Contractor shall maintain regular office hours for the HOC geographic area eight (8) hours a day during the
standard work week (Monday through Friday), and include on-call emergency response within a specified time
frame as discussed in Section 5.1.3.2 below.
5.1.3.2 After Business Hours
The Contractor shall be available to respond to and resolve property related emergencies after regular business
hours. The Contractor shall maintain and monitor a phone number and an e-mail address that are available
twenty-four (24) hours a day, seven (7) days per week, 365 days a per year.
5.1.3.3 Response Time
The Contractor shall provide prompt, courteous and accurate response to all inquiries regarding both individual
properties and the disposition program in general. The Contractor shall respond to all inquiries no later than one
(1) business day of the date the inquiry was placed to the Contractor’s office or the expiration of such shorter or
longer period of time expressly authorized or required by this PWS.
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5.1.3.4 Toll Free Phone Number
The Contractor shall maintain a toll free telephone number available for use by HUD employees and customers.
5.1.3.5 Communications Log
The Contractor shall track and monitor property management related communications in P260. The Contractor
shall indicate the source, subject, date received, response and resolution date of each written, email or telephonic
communication.
5.1.3.6 Freedom of Information Act
The Contractor shall be familiar with the Freedom of Information Act (FOIA) (Title 5 U.S.C. Section 552) and
the Privacy Act (5 U.S.C. § 552a) and will assist HUD in responding to requests for information. The Contractor
shall forward all requests for information that are subject to FOIA or the Privacy Act to their GTR within two
(2) business days. In the case of a FOIA request that involves costs to the requestor, the Contractor shall provide
a cost breakdown to the GTR.
5.1.3.7 Government Inquiries
The Contractor shall notify the GTR within one (1) business day following receipt of any request for
information from an elected or public official and will, no later than one (1) business day of said request,
provide written information to assist HUD in preparing a response.
5.1.3.8 Other Correspondence
The Contractor shall provide written information to the GTR, or other designated HUD representative, no later
than two (2) business days from HUD's request for information required to respond to any contract related
issues.
5.1.3.9 Litigation
The Contractor shall not represent that it is authorized to accept service of process on behalf of HUD. However,
if the Contractor receives any pleading naming HUD as a party, the Contractor shall provide the GTR or other
designated HUD representative, with a copy of such pleading no later than one (1) business day after receipt of
the pleading.
5.1.4 MEETINGS
As requested by HUD, the Contractor shall participate in meetings, conference calls, working sessions and any
other discussions relative to the property management process. This shall include, but shall not be limited to,
answering questions, addressing processes and performance issues, and advising HUD on other concerns.
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5.1.5 HUD’s APPROVAL AND ACCEPTANCE RIGHTS
5.1.5.1 Written Approval
In general, the appropriate HUD official will provide electronic approval of Contractors’ requests through the
applicable HUD information systems. Where approvals are not provided through the system, the GTR will
provide approval in writing unless otherwise stated in this PWS. Unless the PWS specifically authorizes oral
communications, the Contractor acknowledges that oral communications do not constitute approval, consent or
authorization and if it proceeds without written or electronic approval, it accepts the risk of proceeding.
5.1.5.2 Effect of Approval
Notwithstanding the rights of approval and acceptance reserved to HUD, the Contractor shall be solely and
primarily responsible for the performance of every requirement in this PWS. Neither the reservation nor the
exercise of HUD’s approval or acceptance rights will be deemed to relieve the Contractor from its responsibility
or to create any liability by HUD to the Contractor or third parties, with respect to the performance of the PWS
requirements.
5.1.6 COMPLIANCE WITH LEGISLATIVE, REGULATORY AND POLICY REQUIREMENTS
The Contractor shall comply with all Federal, state or local laws or regulations pertaining to the activities
described in this PWS. When local laws and regulations conflict with HUD requirements, the Contractor shall
notify the GTR and the Contracting Officer.
5.1.7 QUALITY CONTROL PLAN (QC)
5.1.7.1 Quality Control Plan
The Contractor shall update, maintain, and implement a comprehensive QC Plan consistent with the Quality
Control Plan submitted during the RFQ process. Following contract award, the Contractor shall provide to the
GTR and CO hardcopy and electronic copies of the final QC Plan incorporating all GTR comments and
changes. See Section 6, below.
The Contractor’s QC Plan will ensure that all aspects of this PWS, in accordance with the performance
standards listed herein, are performed completely and appropriately, and will contain a plan for corrective
action when deficiencies or insufficient performance are identified by either HUD or the contractor. The QC
Plan will be designed and implemented to result in quality and timely contract performance.
The QC Plan will, at a minimum, include: a detailed inspection oversight program covering all general and
specific tasks; specify tasks or areas to be inspected on either a scheduled or unscheduled basis including the
manner in which inspection is to be conducted; a description of the techniques to be employed for producing and
validating services and deliverables that conform to the acceptable quality standards in the contract; a
description of the “checks and balances” that will be used to ensure an acceptable level of quality; provisions for
responding to technical directions and comments; and provisions that will be used to prevent and eliminate
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the potential for fraud, waste and abuse of HUD funds or other funds and resources received in the performance
of this contract.
5.1.7.2 Quality Control Reviews
The Contractor shall conduct regular quality control reviews in accordance with its QC plan and, no later than the
tenth (10th) calendar day of each month provide the GTR with a monthly report summarizing the results of its
QC actions and findings including any policy, procedural, personnel or system changes or corrective actions
taken as a result of the QC findings.
5.1.7.3 Quality Assurance Reviews
When defective performance is noted through HUD’s quality assurance activities, HUD may request that the
Contractor correct the defective performance. The Contractor shall, no later than five (5) business days
following receipt of HUD’s notice of defective performance, respond in writing to this request, describing the
corrective actions taken, or to be taken, and when any outstanding corrective actions will be completed. If
corrective action is not possible, HUD reserves the right to take other remedies permitted by the contract.
5.1.8 PROPERTY MANAGEMENT PLAN (PMP)
The Contractor shall develop and implement a comprehensive Property Management Plan (PMP) that fully
describes how the Contractor intends to meet or exceed the performance objectives of this PWS. The PMP
shall address, at a minimum, the methodology and/or standards for:
Maintenance and level of care;
Conducting and uploading inspection data into P260;
Validating work performed at a satisfactory level;
Subcontracting control and oversight;
Emergency response;
Utilizing construction/improvement cost estimating application;
Ensuring compliance with local and state laws and regulations regarding evictions; vacancies and any other property related compliance issues;
Servicing properties across geographic areas and in varying ranges of property value.
Following contract award, the Contractor shall provide to the GTR and CO hardcopy and electronic copies of
the final Property Management Plan incorporating all GTR comments and changes. See Section 6, below.
5.1.9 CONTINGENCY PLAN
The Contractor shall develop, maintain and implement a Contingency Plan that addresses the gravest as well as the
most likely problems that might arise and the Contractor’s planned response to these adverse events. At a
minimum, the plan will cover: Subcontractor default; recovery from serious natural disaster as it affects the
Contractor’s operation; employee strike; and civil disorder. Following contract award, the Contractor shall provide
to the GTR and CO hardcopy and electronic copies of the final Contingency Plan incorporating all GTR
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comments and changes. If an event covered by the Contractor’s contingency plan occurs, the Contractor shall
promptly initiate, within any applicable time periods in the plan and this PWS, and diligently conduct the
responses outlined in the plan. Changes to the Contingency Plan must be accepted in writing by the GTR in
advance of implementation. See Section 6, below.
5.1.10 PERFORMANCE AND PAYMENT BOND
HUD is entrusting the Contractor with the care of valuable government property. Therefore, for the protection of
the Federal Government and persons supplying labor or materials for the work under this PWS, the Contractor
shall furnish a performance bond and a payment bond, or the Contractor may furnish the alternatives to
performance bond and payment bonds described in FAR 28.204. Examples of these alternatives include United
States bonds or notes, certified or cashier’s checks, bank drafts, money orders, currency, or irrevocable letter of
credit. This bonding requirement and alternatives are more fully described in Attachment 6.
5.1.11 LIEN RELEASES
The Contractor shall not, in connection with any work done or claimed to have been done by or on behalf of the
Contractor, create, place, permit to be created or placed, or allow to remain any mechanic’s, laborer’s, or material
man’s lien (collectively, a mechanic’s lien) against any property. If a mechanic’s lien is filed, within ten (10)
business days of such filing or such shorter time period necessary to meet any scheduled closing on a property,
the Contractor shall cause the mechanic’s lien to be discharged of record by payment, deposit, bond, order of
court, or otherwise.
The Contractor shall implement procedures, as described in its QC Plan, to minimize the opportunity for a
property to become subject to a mechanic’s lien and to promptly cause any mechanic’s liens to be discharged of
record. At a minimum, the Contractor shall include in its QC Plan the following procedures to minimize the
opportunity for a property to become subject to a mechanic’s lien: (1) incorporate an express provision in each
subcontract for lienable work whereby the Subcontractor waives its rights to a mechanic’s lien and agrees to not
file a lien; (2) obtain waivers and releases of liens from Subcontractors who performed lienable work; and (3)
adopt an early-warning system to identify when bills or claims which may become liens against a property are
not promptly paid, settled, or compromised. If any of the QC procedures listed in the foregoing sentence are not
permitted by law, the Contractor shall expressly state in its QC Plan the legal authority for the prohibition and
the alternative procedures the Contractor shall employ to minimize the opportunity for a property to become
subject to a mechanic’s lien. It is the Contractor’s responsibility to determine what “lienable work” in each
jurisdiction is. For example, some jurisdictions may permit liens for professional services such as appraisals and
inspections whereas other jurisdictions may not permit liens for such services. The QC Plan will identify what is
lienable work within each jurisdiction.
5.1.12 CONFLICTS OF INTEREST
5.1.12.1 General Rule
The Contractor shall not engage in, or permit, any conflict of interest. In addition to any other conflicts of
interest prohibited under applicable law, each of the following situations will constitute a conflict of interest.
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5.1.12.2 Pass-Through
The Contractor cannot purchase or obtain services from an Affiliated Entity of the Contractor for which HUD
makes pass-through reimbursement under this PWS.
5.1.12.3 Kick-backs, Rebates, Referral Fees
The Contractor, a Management Official of the Contractor, an Immediate Family member of a Management
Official of the Contractor, or an Affiliated Entity of the Contractor may not directly or indirectly receive any
form of payment, income, revenue, compensation, or anything else of value from any person or entity, other
than HUD or the Contractor, for performance of the Contractor’s responsibilities under this PWS.
5.1.12.4 Excluded Purchasers
The Contractor, Subcontractor, a Management Official, their immediate family members, or any affiliated
Entity under contract with HUD who has involvement in the management, marketing, or oversight of HUD-
Owned Properties under HUD’s M & M III contracts, are prohibited from purchasing or leasing a HUD-
Owned Property.
5.1.12.5 Prohibition on Pre-Conveyance Preservation and Protection Work
The Field Service Manager or its agent is prohibited from performing both pre-conveyance work on FHA
Single Family Insured properties. In the event that the a Field Service Manager or its agent performs pre-
conveyance work, the fees associated with post-conveyance work are expressly unallowable and will not be
paid. The Field Service Manager must obtain written certification on an annual basis from its subcontractors
affirming that they do not perform pre-conveyance work on FHA Single Family Insured properties. Deleted: ¶
5.1.13 NOTICES
The Contractor shall immediately notify the GTR of any actual or suspected conflict the Contractor becomes
aware of by any Entity under contract with HUD.
5.1.14 ELECTRONIC DISCLOSURES, RECORDS AND SIGNATURES
With respect to Federal law, the Contractor shall comply with the Electronic Signatures in Global and National
Commerce Act, 15 USC §§ 7001-7006, (ESIGN), including the requirements to, prior to electronically
delivering information to a consumer, provide the consumer with certain disclosures and obtain the consumer’s
consent to electronically receive information. The Contractor shall provide consumers with the option of
requesting a paper copy of an electronic record and will not charge any fee for such copy. The Contractor shall
not use 15 USC § 7001(c)(3) to evade compliance with 15 USC § 7001(c)(1)(C)(ii). With respect to State law,
the Contractor shall comply with ESIGN or, if a State has enacted a statute, regulation, or other rule of law
preempting ESIGN pursuant to 15 USC § 7002, the State statute, regulation, or other rule of law governing the
use or acceptance of electronic records or signatures. This section does not constitute consent by HUD to the
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use of electronic records as a substitute for paper records or the use of electronic signatures as a substitute for
ink signatures.
5.2 PROPERTY MANAGEMENT
5.2.1 Pre-Conveyance 5.2.1.1
Inspections
The Contractor shall perform pre-conveyance inspections as described below upon notification through
automatic assignment via a work notification in P260 or by the GTR.
5.2.1.1.1 Pre-Conveyance Inspection
The Contractor shall perform three types of pre-conveyance inspections when notified property is assigned: 1)
Overallowable Inspection; 2) Surchargeable Damage Inspection and/or 3) Occupied Conveyance Inspection.
5.2.1.1.2 Overallowable Inspection
No later than two (2) days after notification of a request from the MCM to perform an inspection for a
Mortgagee’s requests for P&P overallowable expenses, the Contractor shall perform an Overallowable
Inspection and submit the results to the MCM. The Contractor shall perform an on-site inspection to verify the
necessity, cost and reasonableness of a Mortgagee’s overallowable requests using the information submitted
with the request. At the completion of the inspection, the Contractor shall provide the MCM with a P&P cost
estimate using its standard industry cost estimating application to prepare the estimate; a determination of
whether the expenses are justified; and a recommendation to either approve the requests for the amount
requested, approve it for a different amount, or reject the request in its entirety and the basis for that
determination.
5.2.1.1.3 Surchargeable Damage Inspection
No later than two (2) days after notification of a request from the MCM to perform an inspection for a
Mortgagee’s request for surchargeable damage, the Contractor shall perform a Surchargeable Damage
Inspection and submit the results to the MCM via P260. The Contractor shall perform an on-site inspection to
determine whether the damage is surchargeable and the proposed cost is reasonable using the information
submitted with the Mortgagee’s surchargeable request. At the completion of the inspection, the Contractor
shall provide the MCM with a surchargeable damage cost estimate using cost estimating tool application to
prepare the estimate; a determination of whether the expenses are surchargeable; and a recommendation to
either approve the requests as is; approve it for a different amount; or reject the request in its ent irety and the
basis for the determination.
5.2.1.1.4 Occupied Conveyance Inspection
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No later than two (2) days after the MCM’s request to have an inspection performed, the Contractor shall
schedule an inspection to determine habitability. The inspection shall be completed as soon as possible but no
later than 7 days after the MCM’s request. The purpose of this inspection is to determine whether the property
contains hazardous materials and is in compliance with HUD regulatory requirements. See 24 C.F.R. § 203.670
through §203.681.
5.2.1.2 Properties Conveyed Occupied without Approval – If a Mortgagee conveys a property occupied without
prior approval or contrary to regulatory requirements, the FSM on their initial inspection will determine if
occupied.
(1) Adverse Occupants - If the Contractor determines the occupant is an adverse occupant, then the
Contractor must notify the MCM who will obtain authorization from the GTR to evict in accordance with
the local laws governing evictions.
(2) Non-Adverse Occupants - If the Contractor determines the occupant is not an adverse occupant,
the Contractor must determine if the Mortgagee provided the occupant with the required Notice of Pending
Acquisition.
5.2.1.3 Properties Conveyed Occupied with Proper Notification to the Occupant - If the Mortgagee did provide
the Notice to Occupant of Pending Acquisition and the MCM Contractor denied the Request for Occupied
Conveyance during pre-conveyance, the FSM Contractor must request MCM approval to re-convey the
property. If the MCM GTR does not approve re-conveyance of the occupied property, the MCM Contractor
must instruct the FSM to initiate an eviction in accordance with local laws governing evictions in accordance
with HUD Handbook 4330.4 Rev l., Chapter 2-2, D2 (with local laws governing eviction). The FSM Contractor
must obtain approval from their GTR to begin eviction. The MCM contractor must also check claim for any
eviction charges claimed and offset, if applicable.
5.2.1.4 Properties Conveyed Occupied Without Proper Notification - If the Mortgagee failed to provide the
Notice to Occupant of Pending Acquisition, the FSM Contractor must request GTR MCM approval to
reconvey in accordance with Section C-5.2.3.2. If the MCM GTR approves a reconveyance, the MCM
Contractor must instruct the Mortgagee to provide the occupant with a modified version of the Notice to
Occupant of Pending Acquisition as required in 24 CFR 203.675, providing the occupant with an opportunity
to request continued occupancy. If the MCM GTR does not approve reconveyance of the occupied property,
the MCM Contractor must be required to provide the occupants with a modified version of the Notice to
Occupant of Pending Acquisition. If an occupant requests continued occupancy within twenty (20) days after
the date the MCM Contractor mailed its modified Notice to Occupant of Pending Acquisition, the MCM
Contractor must process the request based upon the eligibility requirements in 24 CFR 203.670 through
203.681 and Chapter 2 of HUD Handbook 4310.5, Rev-2. If continued occupancy is approved by the MCM
GTR, the MCM Contractor must instruct the FSM to enter into a rental agreement. If continued occupancy is
denied, the MCM Contractor must instruct the FSM to initiate an eviction in accordance with the guidance in
HUD Handbook 4310.5 Rev 2, Chapter 7 or any subsequent policy guidance. The FSM Contracto r must
obtain approval from their GTR to begin eviction. The MCM contractor must also check claim for any
evictions charges claimed and offset if applicable.
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5.2.2 Acquisition (Post-Conveyance)
5.2.2.1 HUD Property Inspection
The Contractor shall complete a comprehensive (thorough and complete) property inspection to include
conveyance condition items, initial inspection items, systems check, Lead Based Paint (LBP) considerations
and any other items HUD requires. From the results of this thorough inspection, the Contractor shall complete
the HUD Property Inspection Report (HPIR) (see Attachment 7) that includes three (3) parts: Part I - Property
Conveyance Condition Report; Part II - Initial Inspection Report; and Part III - Property Condition Report
(PCR). The Contractor shall upload Part I and Part II of the completed HPIR data into P260 within two (2) days
of assignment. The Contractor shall complete any additional data field requirements in P260 to generate a
Property Condition Report (PCR) within five (5) days of completion of Parts I and II of the HPIR. The
Contractor shall be responsible for ensuring that all required data fields in the HPIR and the generated PCR are
complete and accurate.
5.2.2.1.1 Part I of the HPIR: Conveyance Condition – Part I of the HPIR defines what is required for a property to
be in conveyance condition at the time it was conveyed to HUD. The Contractor shall determine if the property is
in conveyance condition, as defined in Part I by inspecting the property components identified in Part I of the
report and answering the questions related to their condition. This process requires the Contractor to identify
damage to basic property components for habitability and occupancy.
5.2.2.1.1.1 Cost Estimation to Replace or Repair Basic Components- If the property has damaged or missing
basic components, the Contractor shall estimate the cost to replace or repair the missing or damaged components,
using the cost estimating tool described in Section 4.5. The cost estimate is to be included in Part I of the HPIR.
Within 2 days of assignment of the property, the Contractor shall upload Part I of the HPIR, the cost estimates,
and any other relevant information, including pictures, into P260 for review by the MCM.
Upon receipt of the HPIR, the MCM shall make a conveyance decision for damaged properties. The MCM can
reconvey properties that are not in conveyance condition back to the Mortgagees or accept the conveyance and
issue a demand for the costs to repair the damages. In order to make this determination, the MCM shall generate
its own cost estimate and compare it to the cost estimate the Contractor submitted on the HPIR. If there are
differences greater than a +/- 10% between the Contractor’s estimate and the MCM estimate, the MCM shall make
the final determination of the costs to repair the damages. If the MCM decides not to reconvey the property, it will
proceed to follow through with the Collection Process.
5.2.2.1.2 Part II of the HPIR: Initial Inspection – Part II of the HPIR details property conditions that may be
found at the property during the inspection beyond those conditions identified to determine conveyance
condition. The Contractor shall complete this part of the HPIR to determine compliance with HUD Minimum
Property Requirements or Minimum Property Standards (MPR/MPS) as appropriate. The Contractor shall be
knowledgeable of MPR/MPS requirements as described HUD Handbook 4905.1 Rev-1 and Mortgagee Letter
2005-48.
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5.2.2.1.2.1. Health and Safety Hazards and Emergency Repairs: If the inspection identifies any health and safety
conditions, or there is a need for any emergency repairs, the Contractor shall remedy those conditions within 1 day
of the inspection and update P260 with work orders and before and after photographs within 2 days of completion
of the remedial action.
The Contractor shall upload the completed Part II of the HPIR into P260 as described in Section 5.1.1.2.
5.2.2.1.3 Part III of the HPIR: Property Condition Report - Part III of the HPIR is a complete systems
functionality test to ascertain the functionality of all heating, cooling, plumbing, gas and electrical systems,
appliances, the condition of the septic system or well and existence of any transferable warranties. Part III of the
HPIR should also include any outstanding code violations, pending litigation, demolition orders, other legal
actions that may impact the property. In preparing this portion of the HPIR, if the utilities are not activated, the
Contractor shall use alternative means to conduct the systems and appliance functionality. The Contractor shall
complete the required data fields in P260 for the PCR systems functionality and other items.
No later than twenty-four (24) hours after the Contractor, a Subcontractor, or any Management Official of any of
the foregoing acquires knowledge that renders the contents of a previously prepared Part III of the HPIR,
inaccurate or incomplete, the Contractor shall update the HPIR, Part III, and place the update into P260 with the
most current information.
5.2.2.2 Initial Securing
Concurrent with the completion of Parts I and II of the HPIR, the Contractor shall ensure that all properties
conveyed to HUD are properly secured against unauthorized entry in accordance with instructions outlined in
Mortgagee Letters 2002-10, 2003-05 and any subsequent policy directives from HUD or the GTR. The
Contractor shall perform the initial securing services and routine inspections every two weeks for those
properties that do not meet conveyance condition unless the Contractor is notified by the MCM via P260 that
reconveyance is complete.
5.2.2.3 Initial Clean-out Services
The Contractor shall perform initial services as discussed below. Initial services shall be completed within five
(5) days after completion of Parts I and II of the HPIR.
5.2.2.3.1 Disposal of Debris, Refuse, and Personal Property – The Contractor shall remove and properly dispose
of all debris, refuse and personal property from both the land and structures at HUD-Owned Properties. In some
states, an eviction of personal property may be required. If required, the Contractor shall initiate the action.
5.2.2.3.2 Post Emergency Signage – The Contractor shall post an emergency contact sign on the property
providing a name and toll free, 24-hour phone contact for emergency response.
5.2.2.3.3 Repair Broken Windows and Doors - Repair all broken doors and replace broken windows unless the
property is in an approved boarding area or as directed by the GTR. Approved boarding areas are listed in
Mortgagee Letter 2002-10. Unless otherwise directed by the GTR, if properties are conveyed to HUD with
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boarding but are not located in approved boarding areas, then the Contractor shall remove the boarding, repair
any broken doors and replace broken windows.
5.2.2.3.4 Ensure Proper Access – In accordance with HUD guidance, the Contractor shall ensure that properties
are re-keyed at assignment with a locking mechanism that provides access to HUD employees and
Contractors..Upon assignment to an Asset Manager (AM), the Contractor shall ensure that the AM has access to
the property.
5.2.2.3.5 Winterization - The Contractor shall perform winterization of all operating systems and equipment
including, but not limited to, shutting water off for external spigots and filling internal water systems with anti-
freeze in accordance with the requirements of Mortgagee Letters 2002-10, 2003-05 or any subsequent policy
directives.
5.2.2.3.6 Prevent Further Moisture Damage – Contractor must stop active leaks that may cause deterioration of
the property or pose an imminent health or safety hazard.
5.2.2.3.7 Install Sign-In Sheets – Contractor must place and maintain a sign-in sheet in the property. A separate
sign in sheet will be required in each unit of a multi unit property. The Contractor and all Subcontractors and
workmen shall sign-in each time they enter the property.
5.2.2.3.8 Health and Safety Hazards and Emergency Repairs - the Contractor shall remedy any health and safety
conditions and make any emergency repairs within 1 day of notification and update P260 with work orders and
before and after photographs within 2 days of completion of the remedial action.
5.2.3 PROPERTY MAINTENANCE
The Contractor shall maintain properties in a manner that is clean, safe, sanitary and secure. The Contractor shall
be liable for damages to all acquired properties due to failure to inspect or secure property or other act, neglect,
failure, or misconduct of the Contractor, a Subcontractor, or any Management Official of any of the foregoing.
The Contractor shall indemnify HUD for losses due to any act, neglect, failure, or misconduct of the Contractor, a
Subcontractor, or any Management Official of any of the foregoing. The Contractor shall not be held liable for
casualty damage as long as, before and after such casualty, the Contractor takes immediate and reasonable action
to protect the property.
5.2.3.1 Ready to Show Condition
Prior to the AM listing any HUD-owned property for sale, the Contractor shall ensure that it is in Ready to Show
Condition which means the property is free of debris, visible insect/rodent infestations and health and safety
hazards. All cabinets, refrigerators, freezers, counter tops, and windows must have been wiped clean and the
house must be free of bad smells. All floors and carpets must be clean. All repairs required to correct safety
hazards and any approved repairs to be done prior to listing the property must be completed in order for the house
to be in ready to show condition. The yard must be free of trash and debris. The grass must be cut, bushes
trimmed and holes patched, and or properly secured to protect the public. Swimming pools and wells
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must be properly secured to protect the public. The Contractor shall also ensure that the property remain in the
ready to show condition until sold.
5.2.3.2 Routine Inspections
The Contractor shall routinely inspect and take all actions necessary to ensure that properties are free from
health and safety hazards, free of debris, refuse, and personal property, that corrective actions are taken on
broken windows and doors, that properties are properly secured, that winterization is maintained, and active
leaks are promptly addressed. At a minimum, the Contractor shall inspect the property once every two weeks
and report data on FSM Property Inspection Form (Attachment 8). Based on geography, climate, age and
community needs, some properties may require more frequent inspections and a higher level of maintenance
than others. Upon HUD’s request, the Contractor must provide within 2 business days the routine inspection
forms used by the Contractor to perform the inspections.
5.2.3.3 Quality Assurance
A property may be subject to quality assurance inspections by HUD, its Contractors or agents to verify that the
Contractor shall perform the level of property management required under this PWS. The HPIR form will be used
for this verification. HUD staff may conduct property inspections or HUD may employ a SPI Contractor.
Property selection may be based on a combination of random and risk based targeting methods and may include
properties that are in Custodial (Section 5.2.10) and Held Off Market (Section 5.2.11) status.
5.2.4 UTILITIES
Immediately upon assignment, the Contractor shall notify the local utilities of HUD’s ownership of a property
and shall order a final utility bill to determine if there are unpaid utility charges for the period prior to HUD’s
acquisition. The Contractor shall ensure that HUD only pays those costs it is legally obligated to pay.
5.2.4.1 Utility Liens - In areas where under local laws a utility lien was not wiped out at the mortgagee’s
foreclosure, the Contractor shall pay the outstanding utility bill for the period prior to acquisition by HUD. HUD
will only reimburse, as a pass-through expense, those payments made to satisfy utility liens incurred prior to
acquisition.
5.2.4.2 Utility Charges – In accordance with ML 2010-18, the Contractor shall turn on the utilities for
properties in areas where they determine it is necessary to have the utilities remain on to preserve the property
from freeze or moisture damage. The Contractor shall be liable for any damages incurred as a result of a failure
to do so. Utility expenses will be an accepted pass-through expense to HUD. When utility charges include late
fees or penalties, the Contractor shall determine if these penalties or late fees were incurred by a mortgagee
prior to conveyance of the property. If so, the Contractor shall notify the MCM via the administrative remedies
report in P260. If not, the Contractor shall reimburse HUD for any late fees or penalties incurred while
maintaining the property.
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5.2.4.3 Purchaser Testing – The Contractor shall allow purchasers under contract the opportunity to activate and
deactivate utilities for the purpose of performing a systems check prior to purchase. The Contractor shall not
charge the purchaser a fee for the Contractor's efforts to facilitate this process. However, the purchaser is
responsible for the actual costs to activate, deactivate and, when necessary, re-winterize the property and the
Contractor may require that the purchaser deposit an amount sufficient to cover these costs.
5.2.4.4 Occupied Properties – In instances where HUD does, as a matter of policy, agree that utilities be
activated in HUD’s name and provided that HUD-owned properties are occupied, the Contractor, with GTR
approval, will be reimbursed the utility costs as a pass-through expense for the period of occupancy.
5.2.5 RENTS, FEES, DUES, AND ASSESSMENTS
The Contractor shall research and process for payment, those expenses that HUD is legally obligated to pay,
regardless of when incurred, including: ground rents, condominium or homeowner’s association fees, and dues or
assessments in accordance with the requirements of Housing Notice 2002-20, HUD Handbook 4310.5 Rev 2,
Chapter 5, and any subsequent policy directive. Any penalties or interest charges incurred by HUD as a result of
late payment of ground rents, condominium or homeowner’s association fees, dues or assessments incurred during
the period from assignment to settlement will be the responsibility of the Contractor. If the Contractor erroneously
receives a tax bill and/or tax lien from a taxing authority or any third party, the Contractor shall forward it to the
AM within two (2) business days of receipt.
5.2.5.1 Homeowner’s Association Fees, Dues, Ground Rents and Non-Tax Assessments
Payment of homeowner’s association fees, condominium dues, ground rents and non-tax assessments will be a
pass-through expense. The Contractor shall obtain and pay all applicable Homeowner’s Association fees,
condominium dues, ground rents and non-tax assessments. The Contractor shall submit a transmittal that meets
Financial Control Manual (FCM) Guidelines. Any penalties or interest charges incurred by HUD as a result of late
payment of HOA or condominium fees or ground rents during the period from assignment to settlement will be the
responsibility of the Contractor. Any penalties or interest charges incurred prior to the assignment to the
Contractor shall be the responsibility of the Mortgagee.
5.2.5.1.1 Mortgagee Responsibility – Mortgagee Letter 2002-19 describes the responsibilities of Mortgagees for
payment of ground rents, condominium or homeowner’s association fees, and dues or assessments that accrue
prior to foreclosure and during the period from foreclosure to conveyance of the property to HUD. The amount of
any penalties or interest charges incurred by HUD as a result of a Mortgagee’s failure to comply with the
requirements of Mortgagee Letter 2002-19 is the responsibility of the Mortgagee. The Contractor shall notify the
MCM via the administrative remedies report in P260.
5.2.5.1.2 Additional Notifications – Within seven days, the Contractor shall, in addition to the notifications
listed above, notify the local police, HOA, local jurisdictions as related to property registration ordinances where
registration of vacant properties are required, and any other appropriate parties of HUD’s ownership of the
property and include contact information for delivery of notices and invoices.
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5.2.6 ENVIRONMENTAL COMPLIANCE
HUD properties will be managed in compliance with applicable environmental laws and regulations.
5.2.6.1 Lead Based Paint
Lead-Based Paint Hazard Reduction Act of 1992 (Title X of the Housing and Community Development Act of
1992) and the lead-based paint regulations (the Lead Safe Housing Rule) at 24 CFR Part 35, Subpart F,
eliminate as far as practicable lead-based paint hazards in single-family properties built before 1978 and sold
with FHA-insured mortgages. For properties that were built prior to 1978 and are not being sold with FHA-
insured mortgages, the Contractor shall not obtain a LBP inspection and only disclose that there is chipping and
peeling paint if it is found.
5.2.6.1.1 Lead Based Paint Work Orders – A lead based paint inspection work order will be generated in P260 by
the AM for properties that were built prior to 1978 and are being sold with FHA-insurance. When a work order is
generated in P260, the Contractor shall verify that the year built is prior to 1978 using public records or other
credible means. The Contractor shall order a lead based paint inspection consistent with the requirements and
have necessary stabilization performed for properties that are being sold FHA-insured only if the cost of the
stabilization does not exceed $4,000, consistent with Attachment 3. For stabilization cost exceeding $4,000, the
Contractor shall notify the GTR and only proceed with the stabilization if directed by the GTR.
5.2.6.1.2 Compliance Requirements – Upon receipt of the work order, and prior to commencing work, the
Contractor shall, using its own records, verify that the year of construction entered into P260 is accurate. When
discrepancies are noted, the Contractor shall immediately notify the AM in P260 asking for clarification. Upon
receipt of a clarified work order, the Contractor shall proceed within one (1) day to order the inspection and have
necessary stabilization performed for properties that are being sold FHA-insured if the cost of the stabilization
does not exceed $4,000, unless notified of sales cancellation.
5.2.6.1.3 Lead Based Paint Inspections – Lead Based Paint inspections must be ordered from HUD’s Lead Evaluation Contractor (LEC). For all properties where an inspection has been requested, the Contractor shall
comply with the requirements discussed in Section 5.2.7 and in Attachment 3. Within one (1) day of receipt of
the inspection and stabilization report, the Contractor shall upload the information in P260 for use by the AM to
prepare the necessary disclosures. When the cost of the stabilization exceeds $4,000, the Contractor shall notify
the AM via P260. For stabilization cost exceeding $4,000, the Contractor shall notify the GTR and only proceed
with the stabilization if directed by the GTR. The Contractor shall receive, review, inspect, verify, and submit
for approval the invoices for the services rendered by the LEC. The LEC will invoice monthly. Upon recept of
an invoice from the LEC, the Contractor shall, within three (3) business days, submit the invoice for GTR
approval and prepare and submit a transmittal to the designated HOC GTR for payment. The Contractor shall
include a signed certification with each transmittal, stating that an acceptable lead-based paint inspection was
completed on each property contained in the transmittal. The Contractor shall also include a statement
indicating that the LEC performed in accordance with the timeframes stated in the LEC's contract.
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5.2.6.1.4 Stabilization and Clearance – The Contractor shall fully comply with HUD’s policy for elimination of
lead-based paint hazards in HUD homes built before 1978, as described Housing Notice 2003-30, Elimination of
Lead-Based Paint Hazards in HUD Owned Single Family Properties, and in accordance with the procedures
described in Attachment 3.
5.2.6.1.5 Costs – As further described in Attachment 3, costs for inspection, visual assessment, paint
stabilization and clearance of lead-based paint or lead-based paint hazards will be reimbursable by HUD as an
allowable pass-through expense. Stabilization cost exceeding $4,000 must have prior approval by the GTR.
5.2.6.1.6 Philadelphia, Pennsylvania – HUD owned properties located within the City of Philadelphia are subject
to complete inspection and elimination of lead-based paint hazards in all properties constructed before 1978. HUD
currently has a contract with the City of Philadelphia for inspection and clearance testing and has an approved list
of Contractors who perform lead-based paint abatement services. Clearance must be obtained prior to closing.
Costs of lead inspection and clearance testing are paid directly by HUD. The entire cost of abatement is a pass-
through expense.
5.2.6.1.7 Asset Control Area (ACA) Properties –The Contractor shall not be responsible for lead-based paint
inspections, stabilization or clearance for properties sold under an Asset Control Area Agreement.
5.2.6.2 Mold
The Contractor shall notify the GTR of any property with obvious evidence of mold or organic growth that, in the
opinion of the Contractor, poses a potential health or safety hazard or inhibits marketing. At the direction of the
GTR, the Contractor may be required to provide mold testing and abatement or to provide property access to a
Contractor. All associated costs of testing or abatement pre-approved by the GTR and will be reimbursed as a
pass-through expense.
5.2.6.3 Other Environmental Hazards
Within two (2) business days of completion of the HPIR, the Contractor shall conduct a search of information
in its possession, including but not limited to, information obtained from the HUD Property Inspection Report,
Property Condition Report, appraisal, BPO and any other available information to determine if environmental
hazards exists at the property. Examples of environmental hazards include, but are not limited to, the presence
of noxious fumes, radiation, underground storage tanks and chemical spills as well as the hazardous
substances. If the search reveals any record of environmental hazards at the property, the Contractor shall
immediately notify the GTR and shall disclose that information in P260 and on the HUD Property Inspection
Report. At the direction of the GTR, the Contractor may be required to provide environmental testing and
remediation or work with a Certified Environmental Contractor. All costs of testing and remediation pre-
approved by the GTR and will be reimbursed as a pass-through expense. The Contractor shall not offer a
property with known environmental hazards for lease until so authorized in writing by the GTR. If, after
occupancy of a leased property, the search reveals a record of environmental hazards, the lease agreement will
be amended to include notice of the hazards. The Contractor shall obtain written approval of the lease
provisions from the GTR and shall consult with the GTR on whether termination of the lease or
discontinuation of the occupancy is warranted.
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5.2.6.4 CERCLA Compliance
Under Section 120(h) of the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) (42 USC 9620(h)), HUD may not transfer title to a property on which any hazardous substance was
stored for one year or more or known to have been released, or disposed of until the contamination has been
remediated. The meanings of the terms hazardous substances, storage, release and disposal are defined in the
implementing regulations for section 9620(h)(l) at 40 CFR Part 373.
5.2.6.4.1 Lease Restriction – The Contractor shall not knowingly enter into a lease for a property with a record of
hazardous substances. If, after occupancy, the search reveals a record of the storage for one year or more, release,
or disposal of hazardous substances at the property, the lease agreement must be amended to include the same
information described above under Deed Provisions with the exception that the lease provision will not contain the
covenant warranting that remediation has occurred. The Contractor shall obtain the prior written approval of the
GTR for these lease restrictions and shall consult with the GTR on whether termination of the lease or
discontinuation of the occupancy is warranted.
5.2.7 TERMITES AND WOOD DESTROYING ORGANISMS
The Contractor shall order a Wood Destroying Organisms (WDO) inspection within one (1) business day of
receipt of work order issued by the AM via P260 and upload to P260 the WDO inspection report within one (1)
day of receipt for properties that meet the following conditions:
Properties mandated by the state or local jurisdiction;
The property is sold with FHA insurance; or
GTR approval is granted to perform the inspection for customary seller concessions for the area.
If the property indicates the presence of pest/organisms but Wood Destroying Organisms (WDO) inspections are
not mandated by the state or local jurisdiction, the property is not being sold FHA insured, or GTR approval has
not been granted, the Contractor shall not perform a WDO inspection. In this instance, AM shall disclose this
information to a purchaser and the purchaser has the right to order an inspection and treatment at their own
expense.
5.2.7.1 Clearance – For properties, which require a WDO inspection, the AM may be required to provide a
current termite/WDO clearance letter at closing if requested by the purchaser. In some areas this will require a
re-inspection no earlier than thirty (30) days prior to closing. For these properties, the Contractor shall conduct
an additional WDO at the AM’s direction. The additional WDO inspection will be reimbursable by HUD as an
allowable pass-through expense.
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5.2.7.2 Active Infestation – All WDO inspections must be completed by a pest control officer. The inspection
report, including any required treatment and/ or repairs necessitated by the infestation, must also be uploaded in
P260. If a property is sold using FHA insurance and the WDO inspection indicates active infestation and the cost
of the treatment and any necessary repairs is less than $1,000, the Contractor shall order the treatment/repair
within five (5) days of WDO inspection.
For properties that are sold with FHA insurance and the cost of treatment and repair exceeds $1,000, Contractor
shall notify the AM and GTR of the cost of required treatment and any repairs necessitated by the infestation. The
Contractor shall order/complete the treatment and any necessary repairs only after receiving approval from the
GTR.
For properties where inspections are mandated by the state or local jurisdiction or were approved by the GTR
and the inspections results shows active infestation, the Contractor shall notify the AM and GTR, and
order/complete the treatment and any necessary repairs after receiving GTR approval.
The Contractor shall inspect the work (treatment and repairs) after completion and ensure that the person who
completed the inspection do not perform the treatment and/or any necessary repair. The cost of approved
treatment and repairs will be reimbursed as a pass-through expense. For properties that require a WDO
inspection as indicated in Section 5.2.7, all approved repairs shall be completed prior to listing.
5.2.8 VANDALISM
Vandalism may occur prior to or after acceptance of a sales contract. In the event a property is vandalized prior to
or after acceptance of a sales contract, the Contractor shall, once vandalism is discovered: (1) remove all graffiti
from private and public surfaces on the property even if the graffiti was present at acquisition; (2) repair to its
prior condition any damaged locks, doors or windows; and (3) immediately repair any health or safety hazard.
These repairs will be completed at the Contractor’s expense.
5.2.8.1 Other Vandalism Repairs - If the damage is not a type which the Contractor shall be responsible for
repairing at its own expense, see Sections 5.2.8 and 5.2.3, the Contractor shall provide an estimate, using its
cost estimating tool, with a repair recommendation to return the property to its condition at time of acceptance
of the sales contract to the GTR. If the completion of repairs has been granted by the GTR, the AM will issue
repair work orders in P260. The Contractor shall order repairs within five (5) days of repair work orders. HUD
shall reimburse the Contractor for the cost of the approved repairs as a pass-through expense provided that
HUD does not determine that the vandalism is due to the Contractor’s failure to properly secure the property
against unauthorized entry or that the Contractor has engaged in (or permitted) a pattern or practice of failing to
secure properties.
5.2.8.2 Missing Appliances – If appliances are removed from the property due to vandalism prior to acceptance
of a sales contract, the Contractor shall not be required to replace them. If appliances are damaged or removed
from the property due to vandalism after acceptance of a sales contract, the Contractor shall, with GTR approval
and a work order issued in P260, replace or repair the missing or damaged appliances. HUD, based on the
following schedule, will reimburse the Contractor as a pass through expense or credit the purchaser on the HUD-
1 Settlement Statement for the installation or repair of new appliances: $200 for a range; $250 for a
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refrigerator; $150 for a dishwasher and $500 for a central air conditioner compressor. Appliance repair or
replacement actually completed by the Contractor shall be reimbursed as a pass-through expense based on
actual costs not to exceed the replacement allowance, provided that HUD does not determine that either the
damage is due to a failure to properly secure the property against unauthorized entry or the Contractor has
engaged in (or permitted) a pattern or practice of failing to properly secure properties against unauthorized
entry.
5.2.8.3 GTR Notification - Each occurrence of vandalism must be documented within P260 and the GTR shall
be notified via email no later than two (2) business days after discovery.
5.2.9 RENTAL PROPERTY MANAGEMENT
When HUD-owned properties are tenant occupied, the Contractor shall provide rental management services
including, but not limited to, preparing and executing lease agreements, collecting rents, completing repairs and
maintenance and, if requested by the GTR, conducting evictions. In performing rental property management the
Contractor shall comply with the requirements of Attachment 4, and any subsequent policy directive as well as
the environmental review and disclosure requirements of Section 5.2.6. The Contractor shall use the standard
lease forms in the appendices to HUD Handbook 4310.5 Rev-2, without alteration, except as necessary to
complete the forms. Only those individuals specifically named in the Redelegation of Authority (Section 5.1.5)
may sign leases on behalf of HUD. Reasons why properties may be tenant occupied include, but are not limited
to, an approved occupied conveyance or occupancy in conjunction with disaster relief efforts or other special
programs.
5.2.10 CUSTODIAL PROPERTIES
Custodial properties are vacant properties secured by a secretary-held mortgage, including a HECM. By virtue
of its security interest, HUD has certain rights and responsibilities to ensure that the property is preserved and
protected. HUD does not hold title to custodial properties and therefore they are not offered for sale. Custodial
properties will be assigned to the Contractor through the GTR. Within two (2) calendar days of notification of
assignment the Contractor shall complete the HPIR, secure the property, and perform initial services in
accordance with Section 5.2.2.2 to the extent that such requirements can be met without constituting an illegal
trespass, and upload the HUD Property Inspection Report in P260. If the property is occupied, the Contractor
shall immediately notify the GTR and await instructions prior to taking further action. The Contractor shall
maintain vacant custodial properties in accordance with the Contractor’s Property Management Plan and at the
direction of the GTR, subject to the following conditions:
5.2.10.1 Notifications – The Contractor shall not be required to provide notifications of ownership to police,
utility companies, HOA’s, and non-tax assessment entities.
5.2.10.2 Ready to Show Condition – The Contractor shall not be required to keep the interior of the property
clean and ready to show as described in Section C-5.2.3.1, unless the unclean condition constitutes a health or
safety hazard.
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5.2.10.3 Personal Property – The Contractor shall not remove any personal property unless it constitutes an
imminent health or safety hazard (Section 5.2.2.1.2.1 and Definition of Health and Safety Hazard).
5.2.10.4 Rents, Fees, Dues and Assessments – The Contractor shall not be responsible for payment of ground rents, fees, condominium or homeowner’s association (HOA) dues or special assessments (Section 5.2.5).
5.2.10.5 Environmental Compliance – Unless otherwise directed by the GTR, the Contractor shall not be
responsible for the environmental compliance requirements identified under Section 5.2.6 unless the
environmental condition is an imminent health or safety hazard to the public or is contributing to the
deterioration of the property.
5.2.10.6 Rental Property Management –The Contractor shall not rent custodial properties.
5.2.11 HELD OFF MARKET (HOM) CODES
Properties that are assigned to the Contractor may have a condition such as a pending eviction, reconveyance,
tenancy or unusual condition. These properties will be identified by a Held Off Market (HOM) code. Some HOM
codes, including “ACA Awaiting Contract” or “Offered for Direct Sale”, describe the status of a property that
will not be offered on a competitive basis. Other codes such as “Adverse Occupant” denote a temporary delay in
marketing unless otherwise directed; the Contractor shall manage properties with HOM codes in accordance with
the applicable requirements of Section 5.2.
5.2.12 VACANT LOTS
Vacant lots are to be maintained at all times in a manner that result in properties that are clean, safe and
sanitary.
5.2.13 EVICTIONS
The Contractor shall initiate and administer eviction actions consistent with state and local laws after having
obtained GTR approval. Legal expenses associated with eviction actions, including relocation payments to
tenants in those jurisdictions where HUD, as a matter of policy has determined to pay relocation, will be
reimbursed on a pass-through basis when approved in advance by the GTR. The Contractor shall not incur any
legal expenses for which reimbursement is expected without prior GTR approval. The Contractor shall
conduct evictions in accordance with the guidance in HUD Handbook 4310.5 Rev 2, Chapter 7 or any
subsequent policy guidance.
5.2.14 DEMOLITIONS
At the direction of the GTR, the Contractor shall obtain bids, select, contract for and oversee the demolition of
property improvements, removal of debris and cleaning of the vacant lot. HUD will reimburse the costs of
approved demolitions as a pass-though expense. The Contractor shall not perform any Lead Based Paint
inspections for properties that are approved for demolition.
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5.2.14.1 Historic Preservation Requirements - Prior to demolition of the improvements on any HUD-owned
property, the Contractor shall comply with Section 106 of the National Historic Preservation Act (NHPA) (16
USC 470f) and the implementing regulation for Section 106 at 36 CFR Part 800. Compliance includes
determining if the property is on the National Register of Historic Places, and if it is not listed on this register,
consulting with the State or Tribal Historic Preservation Officer to determine whether the property is eligible
for inclusion on the register. If the property is on the register or is eligible for inclusion on the register, th e
Contractor shall consult with the State or Tribal Historic Preservation Officer and other consulting parties to
resolve the adverse effects of demolition and shall prepare any required documentation or memorandum of
agreement for review and execution by HUD. The Contractor shall include in P260 all actions taken with
respect to compliance with NHPA.
5.2.14.2 Legal Notification Requirements – In communities where demolitions actions are frequent, the
Contractor may be instructed to market properties with pending demolition orders while HUD’s legal
representative contests the demolition. In these communities, the Contractor shall provide a weekly email
notification to HUD’s Designee of all properties with accepted contracts that have pending demolition orders.
HUD’s legal representative will notify the purchaser and provide copies of applicable legal documents.
Currently, this practice is in effect in the City of Chicago and may be implemented in other communities.
5.2.15 ONAP PROPERTIES
Properties located on Indian or tribal lands, and acquired as a result of foreclosure of a loan guaranteed under
the Section 184 Loan Guarantee for Indian Housing Program may have specialized property management
requirements. The GTR will provide the Contractor with written instruction to the extent the property
management requirements of Section 5.2.3 are not applicable, or additional property management tasks are
required.
5.2.16 TRANSMITTAL PROCESSING
The Contractor shall be responsible for creating and submitting transmittals (Form 1106) in P260 for payment of
pass-through expenses. The Contractor shall submit a transmittal, along with supporting documentation (i.e.
invoices, receipts) for all Allowable Pass-through expenses identified in Attachment 5. Pass-through expenses
consist of, but are not limited to, repairs, inspections, and record retention.
The Contractor shall refer to the Financial Control Manual, see Attachment 2 - Applicable Documents, for more
detailed information on how to process transmittals. The Financial Control Manual for HUD's Real Estate Owned
Division provides instructions and guidance for processing and monitoring all financial transactions associated
with the disposition of HUD-owned single family properties. This ensures that during HUD's ownership or
custody, all REO disbursements are valid, reasonable, sufficiently documented, appropriately authorized, and
comply with contracting and program guidelines, regulations, and/or statutes as appropriate.
5.2.17 COSMETIC ENHANCEMENTS AND/OR REPAIRS
5.2.17.1 Cosmetic enhancements and/or repairs may be requested by the Asset Manager (AM) to increase
marketability and/or the net return to HUD. The AM shall create a work order in P260 for the required repairs
4 5
Formatted Table
Formatted Table
and submit it for approval to the AM GTR. When repair work orders are advanced in P260 by the AM upon
AM GTR approval, the Contractor shall carefully review the work orders and estimate the costs to complete
the repairs utilizing an industry accepted cost estimating tool. If there are any questions regarding the extent
or type of the repairs, the Contractor shall communicate with the AM (through P260) and resolve the
questions. After all issues have been resolved, the AM shall update the work order and the Contractor shall
complete the cost estimate. Prior to completing the repairs, the Contractor shall order bids from
Subcontractors to complete the work. The Contractor shall review the bids to make sure they are in-line with
the work specifications as outlined on the work order and that the Subcontractors’ cost estimates are supported
by Contractor’s own cost estimates. Where bids exceed the estimates generated by the industry accepted cost
estimating tool, the AM shall submit the final work order and associated bids to the AM GTR for approval
prior to completion of the requested repairs.
5.2.17.2 Davis Bacon Wage Determinations- For repairs in excess of $2,000, the Contractor shall obtain
prevailing wage determinations from http://www.access.gpo.gov/davisbacon, obtain and review weekly
Subcontractor payroll records, and assure compliance will all applicable Davis-Bacon Act and other
requirements.
5.3 PERFORMANCE REQUIREMENTS SUMMARY (PRS)
The PWS specifies performance requirements that the Contractor must meet. All of the requirements in the
PWS are critical to the successful attainment of the objectives as outlined in Section 1.6. To ensure that PWS
requirements and HUD’s objectives are being met, the government will conduct regular quality assurance
surveillance. The Performance Requirements Summary (PRS), identified in the table below, are those that the
government will evaluate each month to quantify Contractors’ performance on these requirements. The table
includes information about the frequency of surveillance and the minimum satisfactory rating that the
Contractor must meet.
Performance Requirements Summar
Requirement
Performance Measure
Quality Assurance Procedure
Frequency Minimum Satisfactory Rating
ONE-TIME REQUIREMENTS
3.1 Contractor has systems capability to perform required contract functions
Computer systems substantially meet PWS requirements for functionality and user accessibility by the 45th day following contract award
Review of Contractor’s systems
by GTR
One time 100%
5.1.2 Contractor has
adequate
facilities and
staff
Contractor’s facilities
and equipment are
substantially complete
and sufficient staff
have been hired to
Contractor
certification to HUD,
possible onsite
inspection by HUD
staff
One time 100%
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Contractor
exhibits
responsiveness,
submits accurate
invoices and
submits monthly
Timely submission of
monthly QC report,
accuracy of billing,
adequacy of updates
to property management plan.
5 . 2 Contactor can assume full responsibility for property preservation and management
perform initial contract responsibilities by the 45th day following contract award
Contractor is able to
take over full contract
responsibilities by the
90th day following
contract award
Performance assessment by GTR
One time 1 0 0 %
Pre-conveyance Formatted Table
Acquisition (Post-conveyance)
5.1, 5.2.4,
5.2.5,
5.2.2.1,
5.2.2.3
5.2.2.1,
5.2.2.3
5.1, 5.1.3,
5.1.3.3,
5.1.3.5, 5.4
Properties are put into ready to show condition in a timely manner
Average days between assignment and Ready to Show Condition
100% Sample of P260
case data for the
reporting period.
GTR reporting based
on verified complaints
and review of monthly
quality control report
Quarterly
Quarterly
Quarterly
Conforms with relevant
industry
standards or
peer
comparison.
Within 7
calendar days
Fewer than 3
verified
complaints
pertaining to
responsiveness
and accuracy
5.2.1.1 Pre-Conveyance Inspections and supporting documentation are submitted timely, complete, and legible.
Percentage of Pre-inspections submitted timely, complete and legible.
10% random sample of Pre-conveyance Inspection and supporting documentation images and reports on P260 reviewed by the GTR
Monthly 9 5 %
Contractor ensures closings occur in a timely manner
Average days between Ratified contract and Closing date (Step 8 to Step 9).
100% Sample of P260 case data for the reporting period.
ON-GOING REQUIREMENTS
Performance Measure Frequency Min imu m Sa t i s fa c to r y Ra t in g
Quality Assurance Procedure
Requirement
Formatted Table
Formatted Table
Deleted: ¶
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quality control
review report in
a timely fashion
and timeliness
of responses;
fewer than 3
delayed
closings due
to Contractor
failure to pay
rents, fees,
dues or
assessments
5.2.2.1 HUD Property
Inspections and
supporting
documentation
are submitted
timely,
complete, and
legible.
Percentage of HUD
Property inspections
submitted timely,
complete and legible.
10% random sample
of HUD Property
Inspections and
supporting
documentation images
and reports on P260
reviewed by the GTR
Monthly 95%
5.2.2.2 Initial Securing Percentage of Asset GTR review of Initial Monthly 95% 5.2.2.3 and Initial Manager Initial services costs by
Clean-out
Services are
completed, at a
high standard
and at a ready to
list condition.
Inspections reviewed
where property met
ready to list
conditions.
Contractor within a
contract area
5.2.3 Properties are
free of health
and safety
hazards
Percentage of
inspected properties
where hazards are not
observed
100% of initial
inspections completed
by the AM and scored
in P260
Monthly 95%
5.2.3 Identified
imminent health
and safety
hazards are
abated
immediately
Percentage of hazards
that are abated within
24 hours of discovery
or notification
GTR comparison of
100% of AM reports
with identified H&S
hazards and work
orders and photos on
P260
Monthly 95%
5.2.3 Properties are
maintained in
clean, safe,
sanitary
condition
Average score of all
AM inspections
completed during
period
100% of initial
inspections completed
by the AM and scored
in P260
Monthly 95%`
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5.2.3.2 Contractor
performs bi-
weekly
inspections as
required
At a minimum,
Contractor shall
inspect the property
once every two weeks
100% Sample of P260
case data for the
reporting period
Quarterly 100%
5.2.6 Other Percentage of Other 10% random sample Monthly 95% 5.2.7 Environmental Environmental of Other
Inspections
(Lead Based
Paint and
Termite and
Wood) and
supporting
documentation
are submitted
timely,
complete, and
legible.
Inspections submitted
timely, complete and
legible.
Environmental
Inspections and
supporting
documentation images
and reports on P260
reviewed by the GTR
5.2.17 Repairs and/or
cosmetic
enhancements
are completed
timely, at a high
standard, and
within the
approved cost
estimate.
Percentage of work
orders completed
timely and within the
approved cost estimate
GTR review of Work
Order reports in P260
Quarterly 95%
5.4 REQUIRED REPORTS
Reviewing the periodic reports that the Contractor submits provides the GTR with regular, standardized
information about specific performance matters. Reviewing these reports will be the first means of monitoring
the Contractor's adherence to the PWS and of measuring its performance against the Performance Requirements
Summary (PRS). The GTR will review these reports when they are submitted and, as appropriate, request
supporting or clarifying information. The required reports are inclusive of, but not limited to, the following:
5.4.1 QUALITY CONTROL REVIEW REPORT
A monthly report summarizing, at a minimum, the results of the Contractor’s QC actions and findings for QC
reviews conducted during the prior month and including corrective actions planned to address those findings.
This report must be forwarded electronically via email to the GTR by the tenth (10th) day of the month,
following the month of activity covered in the report.
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5.4.2 ANNUAL AUDITED FINANCIAL STATEMENT REQUIRED
Each year, no later than one hundred and twenty (120) days before the expiration of the base year and each
option year, the Offeror shall deliver to the CO an original hard copy of the Offeror’s current audited financial
statement.
5.4.3 AD HOC REPORTS
As required from time to time by the GTR or Contracting Officer, the Contractor shall provide information
necessary to satisfy program inquiries from Federal and non-federal agencies, entities, and individuals. For
example, the Contractor may be asked to prepare a report on HUD properties damaged by a natural disaster. Ad
Hoc report requests will specify the required format, content, distribution, and due date.
6 TRANSITION
To ensure a smooth transfer of property and preservation responsibilities from the existing M&M
contractors(s), herein after called "Former Contractors", to the Contractor, HUD has provided for a Transition
Period. The Transition Period will run from the effective date of the Contract and will not exceed the
timeframes established herein or as set forth by the Contracting Officer. During the Transition Period, the
Contractor shall establish or adapt its physical infrastructure, retain qualified staff and develop or obtain
necessary hardware, software, Internet applications and information technology. The Contractor shall also:
attend HUD provided training, provide training to its workforce to enable them to provide required services
under this PWS; obtain all required licenses, permits, bonds and legal permissions required to transact business
within the geographical area; and develop and implement quality assurance programs, assuming contract
responsibilities as described in this section.
The Transition Period shall have two (2) phases, the Start-Up and the Ramp-Up. The activities and timeline for
each phase are described below.
6 .1 STAR T-UP
The Start-Up Phase begins on the effective date of the contract and continues for no more than sixty (60) calendar
days. During this period the Contractor shall complete preparation activities, including but not limited to:
attending post award conferences and meetings with HUD staff, attending specialized training provided by HUD;
establishing its physical infrastructure; ensuring that a qualified and trained workforce of employees or
Subcontractors is in place; obtaining all licenses, permits, bonds and qualifications, required to transact business
in the geographic area; and implementing the information technology and support necessary to fully perform the
requirements contained in this PWS.
6.1.1 CONTRACTOR RESPONSIBILITIES
Post Award Conference – Within the first week following the effective date of the Contract, the GTR will notify
the Contractor of the date and location of the post award conference. The Contractor and key personnel shall
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attend the post award conference. Contractor orientation as set forth in Section 6.1.1.7 will be provided at the
post award conference.
Quality Control, Contingency, and Property Maintenance Plans (collectively, the Plans) – Within ten (10)
calendar days after the post award conference, the Contractor shall submit a Quality Control Plan (QCP) and a
Property Maintenance Plan (PMP) to the GTR and CO. Plans shall be submitted electronically. The GTR will
review and acknowledge receipt of the QCP and PMP within thirty (30) calendar days. Upon receipt of
comments from the GTR, the Contractor shall submit to the GTR within 10 business days, a revised QCP and
PMP incorporating all comments. The QCP and PMP will be revised as circumstances dictate, to reflect
necessary changes throughout the term of the Contract. Prior to implementing changes, the GTR must receive
all changes to the QCP and PMP Plan in writing for review and comment. The Contractor shall maintain the
QCP and PMP Plan throughout the Contract or as otherwise required in transfer to HUD or another contractor,
if needed.
The Contingency Plan shall be submitted no later than forty-five (45) days after the post award conference to
the GTR and CO. The Plan shall be submitted electronically. The GTR will review and acknowledge receipt
of the Contingency Plan within thirty (30) calendar days. Upon receipt of comments from the GTR, the
Contractor shall submit to the GTR, for their approval, a revised Contingency Plan all comments within 10
business days. The Contractor must implement the Contingency Plan prior to completing the Start Up phase
of the transition. The Contingency Plan may be revised as circumstances dictate, to reflect necessary changes
throughout the term of the contract. The GTR must approve all changes prior to implementation. The
Contractor shall maintain the Contingency Plan throughout the contract or as otherwise required in transfer to
HUD or another contractor, if needed.
Office Space – No later than the tenth (10th) business day following the effective date of the Contract, the
Contractor shall secure any and all office space required under Section 5.1.2 and notify the GTR via electronic
transmission of the address.
Systems Security - No later than the tenth (10th) business day after the effective date of the Contract, the
Contractor’s System Security Administrator (SSA), shall obtain the necessary forms from the designated HUD
Security Administrator for each staff person who will need access to HUD systems. The SSA shall arrange for
completion of the forms and shall transmit the completed forms to HUD’s Security Administrator no later than
the fourteenth (14th) calendar day after the contract award date.
Performance Bond and Payment Bond–The Contractor shall deliver to the CO a performance bond and a
payment bond or acceptable alternative in an amount and timeframe as required by Attachment 6.
Phone Service - No later than the fifteenth (15th) business day following the effective date of the contract, the
Contractor shall contract for phone service and notify the GTR via electronic transmission of the phone
number(s).
Orientation – Within 60 days of the effective date of the contract, the Contractor shall attend the HUD provided
orientation described in Section 6.1.2.2. The orientation will be held at HUD designated locations. HUD
reserves the right to limit the number of trainees who may attend. The Contractor shall be required to train
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those members of its workforce that do not attend HUD provided orientation, as well as new employees as they
are hired, to enable them to provide required services under this PWS.
Facilities, Staffing and Equipment – No later than the forty-fifth (45th) calendar day after the effective date of the
contract, the Contractor shall notify the GTR in writing that it has adequate facilities, staff, subcontract support,
equipment and supplies to perform all of the tasks required under the PWS and shall provide a final list of key
staff, office locations, address and phone numbers and emergency contact information to the GTR.
Transition Coordination - The Contractor shall meet with the GTR and the Former Contractor and cooperate in
good faith to develop a detailed protocol for transfer of ongoing contract activities in order to ensure a continuity
of service to external customers.
6.1.2 HUD RESPONSIBILITIES
6.1.2.1 Review of Contractor’s Plans - No later than thirty (30) calendar days after receipt of the
Contractor’s Quality Control and Property Maintenance Plans, the GTR will review these plans and provide
comments to the Contractor for incorporation in each Plan. No later than thirty (30) calendar days after
receipt of the Contingency Plan, the GTR will notify the Contractor whether HUD accepts or rejects each
Plan. The Contractor shall incorporate HUD comments into the Plans and issue revised Plans within ten (10)
business days after receipt of the GTR’s comments. The Contractor shall satisfy the requirements of HUD
for acceptance of each Plan. These requirements include consistency with the Plans presented as part of the
Contractor’s proposal and HUD’s regulatory and statutory authorities.
6.1.2.2 Orientation –HUD GTR will notify the Contractor of the time and location of HUD provided training.
6.1.2.3 Policy and Process - This training will include an overview of HUD and the policies and procedures
related to property management, including but not limited to: processing homeowner’s association dues
payment; lead based paint requirements; interaction with other HUD Contractors; quality assurance and
compliance monitoring activities; and Contractor invoicing procedures.
6.1.2.4 Systems – HUD will provide training to Contractor staff on the use of HUD systems identified in
Section 3.1.
6 . 2 R AMP UP
The Ramp Up Phase of the Transition Period shall begin on the sixty-first (61st) calendar day after the effective
date of the contract, unless otherwise extended by the Contracting Officer and will end on the expiration date of
the final option year of the contract with the Former Contractors, or such later date as determined by the CO.
During the Ramp Up Phase, the Contractor shall assume responsibility for specific tasks in the order described
below.
6.2.1 TRANSITION SCHEDULE
6.2.1.1 61st Day - On the sixty-first (61st) calendar day after the effective date of the contract, the Contractor
shall begin performance of property and preservation services.
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Assignments – HUD will assign assets within the geographic area in a random, yet even distribution
without regard to property characteristics.
.Custodial Properties – The Former Contractor shall transfer case files for each custodial property
under management to the Contractor. These properties will be transferred randomly, yet evenly
without regard to property characteristics. The case files will contain all available documents,
including the Former Contractors’ inspections and copies of work orders, if any. The files will arrive
in standard record boxes via overnight delivery. Each box will include a file inventory pulled from
P260, listing the FHA Case Number, property address and date the property was assigned to the
Former Contractor. The Contractor shall perform a property inspection of each property no later than
five (5) business days following receipt of the shipment and, no later than twenty-four (24) hours
from inspection or notification of hazard, shall immediately secure the property and make required
health and safety repairs or any emergency repairs.
Repair Expenses due to Former Contractors’ Non-Performance. The Contractor shall track any
emergency repairs or health and safety hazards in order for HUD to request reimbursement amounts
from Former Contractors.
6.2.1.2 91st Day – On the ninety-first (91st) calendar day after the effective date of the contract, the Contractor
shall begin performance of all property and preservation services related to Held Off Market Properties
and unsold inventory.
Held Off Market (HOM) Properties - The Former Contractor shall transfer to the Contractor case files
for each property currently in a held off market status (Section 5.2.11). The case files will contain all
available documents, including the Former Contractor’ inspections and copies of work orders, if any. If
the property is occupied, the file will contain lease information and payment history. The files will
arrive in standard record boxes via overnight delivery. Each box will include a file inventory pulled
from P260, listing the FHA Case Number, property address and date the property was assigned to the
Former Contractor. The Contractor shall perform a property inspection of each property no later than
five (5) business days following receipt of the shipment and, no later than twenty-four (24) hours from
inspection or notification of a hazard shall immediately secure the property and make required health
and safety repairs.
Unsold Inventory - The Former Contractor shall transfer to the Contractor all remaining properties in
their inventory that are not under contract for sale A case file will be provided for each property
containing all available documents including the Former Contractor’s inspections and copies of work
orders, if any. The files will arrive in standard record boxes via overnight delivery. Each box will include
a file inventory pulled from P260, listing the FHA Case Number, property address and date the property
was assigned to the Former Contractor. The Contractor shall perform a property inspection for each
property no later than fifteen (15) business days following receipt of the shipment and, no later than
twenty-four (24) hours from inspection or notification of a hazard shall immediately secure the property
and make required emergency or health and safety repairs.
5 3
6.2.1.3 136th Day – Transfer of Pending Contracts –The Former Contractor shall retain custody of properties in
their inventory that are under contract for sale as of the 91st day after the effective date of the contract.
Any property that has not closed by the 135th day after the effective date of the contract will be assigned
to the M&M III Contractor.
Property Management – The provisions of Section 5.2.3 apply to properties subject to transferred
pending sales except that the Contractor shall not be required to begin inspection of properties with a
scheduled closing date within fifteen (15) calendar days of the date of transfer, unless the pending sale
is postponed or terminated or the Contractor shall be notified of an imminent health or safety hazard on
the property.
Terminated Sales – If, after transfer, a pending sale is terminated and the property is returned to the
market for sale the Contractor shall manage the property in accordance with Section 5.2.3. The
Contractor shall perform a property inspection for the property within five (5) business days after
termination of the pending sale.
6.3 TRANSITION OUT
Upon expiration or termination of this contract, contract services shall be assigned to the new Offerors
beginning the first day following expiration or task order termination. Prior to beginning a Transition Out,
the Contracting Officer will provide the FSM Offeror the specific requirements for transition via a bi -lateral
modification.
