[Federal Register Volume 64, Number 96 (Wednesday, May 19, 1999)]
[Notices]
[Pages 27358-27388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12502]



[[Page 27357]]

_______________________________________________________________________

Part II





Department of Housing and Urban Development





_______________________________________________________________________



Request for Proposals; Contract Administrators for Project-Based 
Section 8 Housing Assistance Payments (HAP) Contracts; Notice

  Federal Register / Vol. 64, No. 96 / Wednesday, May 19, 1999 / 
Notices  

[[Page 27358]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4511-N-01]


Request for Proposals; Contract Administrators for Project-Based 
Section 8 Housing Assistance Payments (HAP) Contracts

AGENCY: Office of the Assistant Secretary for Housing, HUD.

ACTION: Notice of Request for Proposals.

-----------------------------------------------------------------------

SUMMARY: The Request for Proposals (RFP) provided in this notice was 
issued by HUD on May 3, 1999, and is also published in the Federal 
Register to ensure a wider dissemination. Through this RFP, HUD is 
seeking sources interested in providing contract administration 
services for project-based Housing Assistance Payment Contracts under 
Section 8. This solicitation is not a formal procurement within the 
meaning of the Federal Acquisition Regulations (FAR) but will follow 
many of those principles. The Request for Proposals follows this 
Summary.

    Dated: May 11, 1999.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.

Request for Proposals; Contract Administrators for Project-Based 
Section 8 Housing Assistance Payments (HAP) Contracts

Contents

1. Introduction
2. Overview of Contract Administrator's Responsibilities
    2.1  Eligibility for Participation
    2.2  Definition of a Public Housing Agency
    2.3  Instrumentality Entity Eligibility
3. Statement of Work
    3.1  Overview
    3.1.1  Performance based contracting
    3.1.2  Elements of Core Tasks Descriptions
    3.1.3  HUD Regulations and Requirements
    3.1.4  Core Tasks
    3.2  Management and Occupancy Reviews
    3.3  Rental Adjustments
    3.4  Opt-Out and Contract Termination
    3.5  Monthly Vouchers
    3.6  Health and Safety Issues and Community/Resident Concerns
    3.7  Section 8 Budgets, Requisitions, Revisions and Year-end 
Statements
    3.8  Contract Administrator's Audit
    3.9  Deficient Annual Financial Statements (AFS)
    3.10  Renewals of Expiring Section 8 Contracts
    3.11  General Reporting Requirements
    3.12  Physical Inspection
4. Contract Administrator Fee
    4.1  Terms
    4.2  Evaluation of CA Performance
    4.3  Basic Fee
    4.4  Incentive Fee
    4.5  Fee Payment
    4.5.1  Payment of basic fee
    4.5.2  Payment of incentive fee
    4.6  Availability of Funds
    4.7  Use of Fee Income
    4.8  Performance Requirements Summary
5. Guidance for Submitting Proposals
    5.1  Service Area Designation
    5.2  Proposal Organization
    5.3  Proposal Due Date
    5.4  Offeror Questions/Pre-Proposal Conference
    5.5  Amendments and Additional Guidance
    5.6  Contract Term
6. Equal Employment Opportunity Compliance
7. Factors for Award
    7.1  Understanding and Technical Approach--50 Points
    7.1.1  Data systems
    7.2  Management Capacity and Quality Control Plan--50 Points
    7.3  Past Performance--30 Points
8. Proposal Evaluation

Attachments

Attachment I  Voucher and Recertification Review
Attachment II  Proposal Submission Form
Attachment III  Annual Contributions Contract

1. Introduction

    This is the Department of Housing and Urban Development's (HUD) 
Request For Proposals (RFP) to provide contract administration services 
for project-based Housing Assistance Payments (HAP) Contracts under 
Section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) 
(Section 8). Of the approximately 24,200 project-based Section 8 HAP 
Contracts in effect, Public Housing Agencies (PHAs) currently 
administer approximately 4,200. These PHAs will generally continue to 
administer these HAP Contracts until expiration. HUD administers the 
balance of approximately 20,000. This RFP covers contract 
administration for most of these HUD administered contracts.
    When HUD renews the expired project-based HAP Contracts that PHAs 
currently administer, HUD generally expects to transfer contract 
administration of the renewed HAP Contracts to the Contract 
Administrator (CA) it selects through this RFP for the service area 
where the property is located. This RFP does not apply to contract 
administration of Section 8 projects assisted under the Section 8 
moderate rehabilitation program (including the Section 8 moderate 
rehabilitation single room occupancy program) or the Section 8 project-
based certificate program, or to contract administration of Section 9 
projects to be assisted under the Section 8 project-based voucher 
program.
    The successful offerors under this RFP will oversee HAP Contracts, 
in accordance with HUD regulations and requirements. The CAs 
responsibilities will be governed by an Annual Contributions Contract 
(ACC) entered into with HUD (Attachment III). After execution of the 
ACC, the CA will subsequently assume or enter into HAP Contracts with 
the owners of the Section 8 properties. The Contract Administrator will 
monitor and enforce the compliance of each property owner with the 
terms of the HAP Contract and HUD regulations and requirements.
    Proposals in response to this RFP may cover an area no smaller than 
an individual State (or U.S. Territory). Proposals may cover one or 
more HUD Multifamily Hubs or one or more States (or U.S. Territory). 
Geographic Service Area Jurisdiction (Attachment II) describes the 
jurisdictions of the Multifamily Hubs. HUD encourages proposals through 
joint ventures and other public/private partnerships between public 
housing agencies and other private or non-profit entities.
    Under the approximately 20,000 Section 8 HAP Contracts this RFP 
covers, HUD pays billions of dollars annually to owners on behalf of 
eligible property residents. HUD seeks to improve its performance of 
the management and operations of this function through this RFP.
    Specifically, HUD seeks through this solicitation to achieve three 
programmatic and three administrative objectives.

Programmatic Objectives

     Calculate and pay Section 8 rental subsidies correctly.
     Administer project-based Section 8 HAP Contracts 
consistently.
     Enforce owner obligations to provide decent housing for 
eligible families.

Administrative Objectives

     Execute ACCs only with entities that have the 
qualifications and expertise necessary to oversee and manage affordable 
housing and that have the capacity to perform the required services 
with requisite personnel and other resources.
     Get the best value for dollars spent for CA services.
     Encourage the development of joint ventures and/or 
partnerships for contract administration services to obtain the benefit 
of the best practices of both public and private sectors.

[[Page 27359]]

2. Overview of Contract Administrator's Responsibilities

    Contract Administrators must administer Section 8 HAP Contracts in 
accordance with the ACC, Federal law, and HUD regulations and 
requirements, both current and as amended in the future. The ACC with 
the CA will specify the area where the CA is required to provide 
contract administration services (service area). The ACC will specify 
the Section 8 assisted units under HAP Contracts that HUD assigns to 
the Contract Administrator for servicing (covered units). From time to 
time during the term of the ACC, HUD may add or delete covered units 
for contract administration under the ACC. Some units may be assigned 
to Participating Administrative Entities (PAE) by the Office of 
Multifamily Housing Assistance Restructuring (OMHAR) for contract 
administration. On an annual basis, the CA will request funds from the 
HUD Financial Management Center (FMC) to cover the Section 8 funds to 
be disbursed to owners for eligible units under the HAP Contract.
    Under this RFP, the offerors will competitively bid to perform 
contract administration services for properties with project-based 
Section 8 HAP Contracts. A list of the projects which may be assigned 
under this RFP is located at www.hud.gov/fha/mfh/rfp/sec8rfp.html.
    The Statement of Work details core functions (tasks) that the 
Contract Administrator must perform.
    The major tasks of the Contract Administrator under the ACC and 
this RFP include, but are not limited to:
     Monitor project owners' compliance with their obligation 
to provide decent, safe, and sanitary housing to assisted residents.
     Pay property owners accurately and timely.
     Submit required documents accurately and timely to HUD (or 
a HUD designated agent).
     Comply with HUD regulations and requirements, both current 
and as amended in the future, governing administration of Section 8 HAP 
contracts.

2.1  Eligibility for Participation

    By law, HUD may only enter into an ACC with a legal entity that 
qualifies as a ``public housing agency'' (PHA) as defined in the United 
States Housing Act of 1937 (42 U.S.C. 1437 et seq.). However, that does 
not preclude joint ventures or other partnerships between a PHA and 
other public or private entities to carry out the PHA's contract 
administration responsibilities under the ACC between the PHA and HUD.
    Under the law, a public housing agency is defined as a:

    ``* * * State, county, municipality, or other governmental 
entity or public body (or agency or instrumentality thereof) which 
is authorized to engage in or assist in the development or operation 
of low-income housing.'' (42 U.S.C. 1437a(b)(6)).

2.2  Definition of a Public Housing Agency

    To qualify as a PHA that may enter into a Section 8 ACC with HUD, 
the legal entity must be one of the following:
    A general or special purpose governmental entity: Such governmental 
entities include a State, municipality, housing authority, or 
governmental public benefit corporation.
    A multi-state, interstate or regional governmental entity.
    An instrumentality entity: Such instrumentality entity must act as 
an instrumentality of a parent governmental entity, or multiple parent 
governmental entities. The instrumentality entity may be a for-profit 
or not-for-profit entity.
    HUD may require the submission of legal opinions and organizational 
documents needed to determine whether an entity qualifies as a PHA.
    In addition, the PHA and any related entity must obtain clearance 
under HUD Previous Participation procedures (see Form HUD-2530) prior 
to execution of the ACC.

2.3  Instrumentality Entity Eligibility

    An instrumentality entity may be an entity that already exists when 
the offeror submits a proposal to HUD under this RFP, or a legal entity 
specially formed subsequent to proposal submission, and prior to 
execution of the ACC between the entity and HUD, to carry out contract 
administration under the ACC.
    To qualify as an ``instrumentality entity'', the relationship 
between an instrumentality entity and a governmental entity (``parent 
entity'') must include all of the following characteristics:
     The parent entity must have the right to approve the 
corporate charter or other organic documents of the instrumentality 
entity, including the right to approve any amendments.
     The parent entity must have the right to control, direct 
and authorize the execution of the ACC between HUD and the 
instrumentality entity.
     The parent entity must have the right to directly or 
indirectly control operation of the instrumentality entity.
     The parent entity must have the right that upon 
dissolution or termination of the instrumentality entity, title to all 
real or personal property held by the instrumentality entity must be 
transferred to the parent entity or an entity designated by the parent 
entity.
    Before execution of the ACC with an instrumentality entity, HUD 
will, upon submission of appropriate documentation as required by HUD, 
determine whether the private instrumentality entity has been properly 
established, possesses the required power and jurisdiction to carry out 
contract administration in the service area, and qualifies as an 
instrumentality entity as described above.
    The charter or other organic documents of the instrumentality 
entity (e.g., certificate of incorporation, partnership agreement or 
certificate) must provide that the instrumentality entity is authorized 
to ``engage in or assist in the development or operation of low-income 
housing.''
    Governmental parent entities may partner with private for-profit or 
non-profit entities that hold an interest, directly or indirectly, in 
an instrumentality entity so long as such instrumentality entity is 
otherwise in compliance with the above stated requirements for 
eligibility of an instrumentality entity. Private entities may contract 
directly with an instrumentality entity.
    As stated in the evaluation criteria, a proposal for contract 
administration by an instrumentality entity under ACC between HUD and 
such entity shall specify any services or functions to be provided or 
performed by the parent entity, or by any other entity which holds a 
direct or indirect interest in such instrumentality, to carry out or 
support Section 8 contract administration in accordance with the ACC 
and this RFP. If the proposal is accepted, such parent or other entity 
shall enter into a contract with the instrumentality entity, prior to 
execution of the ACC, that specifies all such services or functions, 
and the contract shall obligate the parent entity to provide such 
services or functions. Such contract shall specify that HUD is a third-
party beneficiary of such contract and shall be executed by the parent 
and instrumentality entities and be in the form and substance approved 
by HUD.

[[Page 27360]]

3. Statement of Work

3.1  Overview

3.1.1  Performance Based Contracting
    For work performed under ACCs awarded in response to this RFP, HUD 
will use Performance-Based Service Contracting (PBSC). PBSC is based on 
the development of a performance work statement, which defines the work 
in measurable, mission-related terms with established performance 
standards and review methods to ensure quality assurance. PBSC assigns 
incentives to reward performance that exceeds the minimally acceptable 
and assesses penalties for unsatisfactory performance.
    The CA must complete all tasks described in this section of the 
RFP, including both ``Requirements'' and ``Incentive Based Performance 
Standards.'' Failure to complete the tasks will result in default of 
the terms and conditions of the ACC. HUD may terminate the ACC at any 
time in whole or in part if HUD determines that the CA has committed 
any default under the ACC.
    The specified tasks outlined will provide the offeror with the 
necessary information to complete the Submission of Proposal Form 
(Attachment II).
3.1.2  Elements of Core Tasks Descriptions
    The description of each core task contains the following elements:
    Outcome: The required result of the task.
    Requirements: A general description of specific tasks the CA must 
perform.

    Note: CAs must perform each task in accordance with all relevant 
HUD regulations and requirements in effect during the term of the 
ACC. The RFP does not set forth the details of such regulations and 
requirements.

    Reference: Current HUD regulations and other HUD requirements 
related to each task.
    Incentive Based Performance Standards: A description of specific 
elements of each core task. HUD will measure the CA's performance of 
each such element as the performance standard to determine the CA's 
earned Administrative and Incentive Fees.
    Quality Assurance: A listing of the methods and resources HUD will 
use to verify the accuracy of CA's reported performance and 
accomplishments. HUD may use other methods that it deems appropriate to 
assure quality.
3.1.3  HUD Regulations and Requirements
    All references mentioned in the tasks may be obtained through HUD's 
website (http://www.hudclips.org/cgi/index.cgi.) from which interested 
parties may obtain HUD handbooks and other directives or through the 
HUD Multifamily Clearinghouse at 1-800-685-8470. It should be noted 
that the regulations and directives listed are the current instructions 
and requirements and may be updated from time to time.
    HUD does not represent that the references listed in the RFP or on 
the HUD website are a complete listing of current relevant HUD 
regulations and requirements. In addition, HUD regulations and other 
requirements may change from time to time during the term of the ACC.
    HUD's codified regulations are issued as Title 24 of the Code of 
Federal Regulations (CFR). Revisions or additions to HUD regulations 
are initially published in the Federal Register. HUD may also publish 
Federal Register notices. In addition to publication in the Federal 
Register and the CFR, HUD issues additional program requirements as HUD 
``directives'', including HUD notices, handbooks and forms.
    The CA will be required to carry out the tasks described in this 
Section, as well as other responsibilities related to contract 
administration under the ACC, in accordance with all HUD regulations 
and requirements in effect from time to time, as well as other 
responsibilities related to contract administration under the ACC.
3.1.4  Core Tasks
    The RFP describes eleven core tasks that the CA must perform:
    1. Conduct management and occupancy reviews.
    2. Adjust contract rents.
    3. Process HAP contract terminations or expirations.
    4. Pay monthly vouchers from Section 8 owners.
    5. Respond to health and safety issues.
    6. Submit Section 8 budgets, requisitions, revisions and year-end 
statements.
    7. Submit audits of the CA's financial condition.
    8. Monitor owners progress in addressing Annual Financial Statement 
deficiencies.
    9. Renew HAP contracts.
    10. Report on CA operating plans and progress.
    11. Follow up on results of physical inspections of Section 8 
projects.
3.2  Management and Occupancy Reviews
    The CA must conduct an on-site management and occupancy review of 
each Section 8 property, no less than annually. (Some properties may 
have multiple HAP contracts.) The review must be a comprehensive 
assessment of the owner's procedures for directing and overseeing 
project operations, and the adequacy of the procedures for carrying out 
day to day, front line activities. Some examples of the areas that the 
CA must audit are: maintenance, security, leasing, occupancy, 
certification and recertification of family income, and determination 
of the family payments, financial management, Management Improvement 
and Operating (MIO) Plans, and general maintenance practices. The 
results of the on-site review must provide adequate documentation to 
support any enforcement actions proposed against the owner by the CA or 
HUD.
    Outcome: Identify and resolve areas of noncompliance with HUD 
regulations and other requirements.

Requirements

     Schedule and conduct annual reviews of each property, 
using form HUD-9834 or other appropriate documentation.
     Evaluate the owner's operating policies and procedures 
following guidance in the appropriate HUD directives.
     Verify compliance with HUD regulations and requirements 
regarding occupancy issues (e.g., resident eligibility and selection, 
examination and reexamination of family income and assets, household 
characteristics) and verify that correct documentation is contained in 
each resident file to support claims for payment under the HAP 
contract. Use the following resident file random sampling:

------------------------------------------------------------------------
            Number of units                    Minimum file sample
------------------------------------------------------------------------
100 or fewer...........................  5 files plus 1 for each 10
                                          units over 50.
101-600................................  10 files plus 1 for each 50
                                          units or part of 50 over 100.
601-2000...............................  20 files plus 1 for each 100
                                          units or part of 100 over 600.
Over 2,000.............................  34 files plus 1 for each 200
                                          units or part of 200 over
                                          2,200.
------------------------------------------------------------------------

     If the CA's review of the sample indicates a problem, the 
CA must require the owner/agent to conduct a 100% review of the files 
and report the results of the review to the CA. The CA will test the 
review done by the owner/agent to determine its reliability and 
accuracy.
     Verify owner compliance with civil rights regulations, 
including Title VI, Title VIII, the Americans with Disabilities Act, 
and Section 504 of the Rehabilitation Act of 1973.

[[Page 27361]]

     Notify the jurisdictional HUD office by close of next 
business day of any potential fraud or potential violations of law 
identified during the reviews.
     Prepare and submit to the owner/agent and jurisdictional 
HUD office a written report, on form HUD-9834, or other appropriate 
HUD-required documents, within 30 days of review, outlining any 
findings and recommendations for corrective action.
     Monitor implementation of corrective action. Notify 
jurisdictional HUD office within one business day when enforcement 
action is required.
     Enter required information into HUD data systems.

References

HUD Handbook 4350.1
HUD Handbook 4350.3

Incentive Based Performance Standards

    1. The CA must conduct annual Management and Occupancy Reviews in 
accordance with the CA submitted and HUD approved workplan according to 
HUD requirements, document corrective actions taken against Section 8 
owners or families, and monitor implementation of necessary corrective 
action.
    2. CA's review must document on the appropriate form Section 8 
owner compliance with civil rights regulations, including Title VI, 
Title VIII, the Americans with Disabilities Act, and Section 504 of the 
Rehabilitation Act of 1973 and forward to the owner and the appropriate 
jurisdictional HUD office within 30 days.

Quality Assurance

On-Site Reviews
Data Systems Reports
3.3  Rental Adjustments
    Contract rent under each Section 8 HAP contract must be adjusted 
during the HAP contract term in accordance with the HAP contract and 
HUD requirements.
    The CA must process rent adjustments correctly.
    Outcome: Contract rent adjustments are timely and correct.
    Requirements:

A. Budget Based Adjustments

    Where applicable, the budget based rent adjustment method requires 
owners to submit an operating budget and supporting documentation for 
CA review.
    The CA will determine budget based adjustments for contract rent by 
performing the following tasks:
     Analyze the property's operating budget and supporting 
documentation for a rent adjustment to determine reasonableness 
according to guidance in HUD Handbook 4350.1.
     Document rent increases on a Rent Schedule (Form HUD-
92458)
     Analyze adjustments of the owner utility allowance 
schedule if applicable.
     Analyze adjustment to the monthly Reserve for Replacement 
deposit as required and recommend action to HUD.
     Approve/disapprove rent adjustment and provide owners 
written notification.
     Verify accurate, timely completion and submission of 
adjusted rent schedule by owners.
     Enter data into the appropriate HUD data system within 
five business days from completion of action.

B. Annual Adjustment Factor (AAF)/Operating Cost Adjustment Factor 
(OCAF)

    This rent adjustment method requires the CA to apply the AAF/OCAF 
to current contract rents to determine which rents are eligible for an 
adjustment. AAF's are published annually in the Federal Register and 
OCAF's are published annually in a Housing Notice. Refer to the current 
Notice on the HUD Homepage.
    The CA will perform the following tasks:
     Determine the amount annual adjustments in accordance with 
HUD requirements.
     Analyze adjustments of the owner utility allowance 
schedule if applicable.
     Analyze adjustment to the monthly Reserve for Replacement 
Account, if applicable pursuant to the HAP contract and recommend 
action to HUD.
     Approve/disapprove the amount of rent adjustment and 
provide owners written notification.
     Validate comparability study if submitted by owners to 
support rent adjustment request.
     Verify accurate, timely completion and submission of 
adjusted rent schedule by owners.
     Enter data into the appropriate HUD system within five 
business days from completion of action.

C. Special Adjustments

    For those HAP Contracts with AAF adjusted rents, owners may request 
special increases in costs for generally applicable increases items 
such as insurance, taxes and utilities. The appropriate jurisdictional 
HUD office must approve or deny all special adjustments within 30 days 
of receipt of properly documented request from CA.
    The CA will process the owner's request for a special rent 
adjustments to determine if the special adjustment should be granted. 
To accomplish this the CA will perform the following tasks:
     Analyze owners' requests.
     Recommend action to the appropriate jurisdictional HUD 
office.
     Based on notification from HUD, notify the owner of rent 
adjustment approval or disapproval.
     Verify accurate, timely completion and submission of 
adjusted rent schedule by owners.
     Enter data into the appropriate HUD data system within 5 
business days from completion of action.

D. Rent Appeals

    Owners may appeal rent adjustment decisions. The first level of 
appeal is to the CA; the second level of appeal is to the appropriate 
jurisdictional HUD office. CA will review appeals.
    The CA will perform the following tasks:

First Level Appeal

     Analyze owner's rent appeal requests.
     Provide owner with written notification of decision and 
justification within 30 days of receipt.
    If appeal is approved:
     Verify accurate, timely completion and submission of 
adjusted rent schedule by owners.
     Enter data into the appropriate HUD data system within 5 
business days from completion of action.
    If appeal is denied:
     Notify owner of Second Appeal rights within 30 days of 
receipt.

Second Level Appeal

    If appeal is approved by HUD:
     Receive approval from jurisdictional HUD office within 30 
days after request for second level appeal.
     Verify accurate, timely completion and submission of 
adjusted rent schedule by owners.
     Enter data into the appropriate HUD data system.

References

    HUD Handbook 4350.1
    Notice: H-98-34
    Notice: H-98-3
    Notice: H-98-27

Incentive Based Performance Standards

    3. CA completes processing of owner's request for rent adjustments 
and all CA approved rent adjustments are executed and finalized within 
30 days of receipt of owner's request for a budget-based rent 
adjustment or on the anniversary date of the HAP contract for an AAF-
based rent adjustment.

Quality Assurance

On-Site Reviews

[[Page 27362]]

Data Systems Reports
3.4  Opt-Out and Contract Termination
    Section 8 Contracts may terminate because:
     An owner may choose not to renew an expiring Section 8 
contract (opt-out); and
     The contract may be terminated by the CA ( with HUD 
approval).
    When Section 8 contracts will be terminated, the CA must work with 
HUD to obtain tenant-based rental assistance for eligible residents by 
notifying the appropriate HUD contact. The CA will coordinate efforts 
with the jurisdictional HUD office to identify a PHA to administer the 
tenant-based assistance.
    Outcome: Provide ongoing rental assistance to eligible residents in 
occupancy at the time of the opt-out

Requirements

A. Notification Requirements

     Inform jurisdictional HUD office by close of next business 
day of notice by owner, that the owner has elected to opt-out of the 
program.
     Inform jurisdictional HUD office of recommendation to 
terminate contracts for cause/default under HAP Contract provisions by 
the close of the next business day.
     Verify owner has complied with HAP and current law on Opt-
outs.

B. CA Must Take the Following Actions When Contracts are Terminated

     Obtain resident payment/unit size data from owners of 
properties.
     Provide resident/unit data to jurisdictional HUD office 
within 3 business days of receipt from the owner for purpose of 
obtaining Section 8 vouchers for residents.
     Coordinate efforts with the jurisdictional HUD to identify 
a local PHA to administer tenant-based assistance and reserve funds to 
cover such vouchers.
     Assist residents who must be relocated.

References

Notice: H-98-34

Incentive Based Performance Standards

    4. CA notifies jurisdictional HUD office, by close of next business 
day of notice by owner, that the owner has elected to opt-out.
    5. CA provides complete resident data to jurisdictional HUD office 
90 days prior to contract expiration.

Quality Assurance

On-Site Reviews
Data Systems Reports
3.5  Monthly Vouchers
    In Section 108 of 24 CFR, Part 208-Electronic Transmission of 
Required Data for Certification and Recertification and Subsidy Billing 
Procedures for Multifamily Subsidized Projects (a/k/a the Automation 
Rule) requires property owners to request HAP payments monthly through 
the Tenant Rental Assistance Certification System (TRACS). Vouchers are 
due the 10th day of the month preceding the month for which the owner 
is requesting payment. CAs may not pay owners until vouchers are 
received and reviewed for accuracy. The Voucher and Recertification 
Review (Attachment 1) lists the tasks and tools associated with review 
of vouchers and certifications/ recertifications.
    Outcome: Payments of Section 8 vouchers and claims are only 
authorized on eligible units. Payments are made to owners by the first 
day of every month.
    Requirements:

A. Verify accuracy of monthly Section 8 vouchers (forms HUD-52670 & 
HUD-52670-A)

    The CA must verify and provide written documentation of the 
accuracy of payment requests by the last day of each month before the 
CA issues payments for the verified request. To accomplish this task, 
the CA must:
     Monitor owners follow-up efforts on discrepancies 
identified as a result of any income matching initiatives. HUD will 
provide discrepancy reports to the CAs.
     Monitor owner's compliance with entry of all resident 
certification and recertification data in TRACS.
     Verify voucher submissions by owner through TRACS system 
by the 10th day of the month preceding the month for which the owner is 
requesting payment.
     Verify through TRACS that the amount of HAP paid on behalf 
of each resident is accurate.
     Verify that all recertifications are completed by the 
owner agent in a timely manner and entered into TRACS.
     Verify that payment request does not include any units 
where Section 8 assistance has been abated.
     Analyze adjustments required to prior month's vouchers to 
determine accuracy and validity.
     Determine if authorized rent or utility allowance 
adjustments have been implemented timely and accurately.
     Verify pre-approval of Section 8 Special Claims (see item 
B).
     Notify the owner, in writing, of any corrections required 
and track corrections.
     Verify that project owners are complying with current HUD 
rules and regulations.

B. Verify and Authorize Payment Only on Valid Section 8 Special Claims 
for Unpaid Rent, Resident Damages and Vacancy Loss

    Property owners may claim reimbursement from the CA for unpaid 
rent, resident damages, and vacancy losses on eligible units. The 
claims must be pre-approved by the CA before being submitted with the 
monthly voucher.
     Analyze, verify and approve/disapprove claims using 
information in handbooks, regulations, Notices, TRACS and information 
provided by the owner.
     Enter data into monitoring program using a HUD compatible 
spreadsheet program.
     Approve/disapprove claims, execute forms and return to 
owner for their submission with next voucher.

C. Disbursement of Section 8 Funds to Owners

    Disburse payments to owners through electronic fund transfer (EFT) 
transaction no earlier than the first of the month or no later than the 
first business day of the month after approval of Section 8 voucher 
(see item A)
    Reference:

HUD Handbook 4350.3

Incentive Based Performance Standards

    6. CA must promptly review each monthly voucher submitted by an 
owner, and agree with or modify it, so the monthly payment to the owner 
is sent no earlier than the first of the month or no later than the 
first business day of the month.
    7. On a monthly basis CAs will provide written formal notification 
of corrective actions including income verification that results in 
overpayment to owners within 10 days of CA's verifying and certifying 
of the vouchers, discrepancies to owners and monitor for adequate 
resolution. Resolution must be completed within 30 days.

Quality Assurance

On-Site Reviews
Data Systems Reports
3.6 Health and Safety Issues and Community/Resident Concerns
    CA must accept resident complaints and follow-up with owners to 
ensure that owners take appropriate action.
    Outcome: Resolved health and safety issues and positive outgoing 
community/resident relations and communications.
    Requirements:

[[Page 27363]]

A. Respond to Life Threatening Health and Safety Issues

     Respond to all life threatening health and safety issues 
immediately.
     Maintain tracking system for inquiries, responses and 
corrective actions and submit log to jurisdictional HUD office with 
monthly invoices.
     Notify owner of all concerns and determine appropriate 
corrective action.
     Monitor owner's response to concerns and implementation of 
corrective actions.

B. Respond to All Non-Life Threatening Health and Safety and Community/
Resident Concerns

     Respond to all non-life threatening health and safety 
issues within 2 business days of notification during normal business 
hours.
     Maintain tracking system for community/resident inquiries, 
responses and corrective actions and submit log to jurisdictional HUD 
office with monthly invoices.
     Notify owner of all concerns and determine appropriate 
corrective action.
     Monitor owner's response to concerns and implementation of 
corrective actions.
    References:

HUD Handbook 4381.5 REV-2

Incentive Based Performance Standards

    8. Respond, document and notify owner of life-threatening health 
and safety issues, inquiries/complaints immediately within an hour or 
prior to close of business day (whichever is sooner).
    9. CA documents their initiatives and actions taken to notify the 
owner of non-life threatening health and safety issues inquiries/
complaints and responds to residents within two business days of 
notification. CA continues to provide follow-up to residents on actions 
taken every two weeks until final resolution is reached. Documentation 
of all action is recorded.

Quality Assurance

On-Site Reviews
Monthly Invoice
3.7 Section 8 Budgets, Requisitions, Revisions and Year-end Statements
    To receive monthly ACC payments, Section 8 budgets and requisitions 
(and revisions as required) must be submitted for each HAP contract at 
least 90 days before the beginning of the fiscal year. Also to receive 
monthly ACC payments, Year-end settlement statements must be prepared 
and submitted at least 45 days prior to the beginning of the CA fiscal 
year.
    Outcome: CA submits financial documents to HUD accurately and 
timely.
    Requirements:
     Prepare and submit annually to HUD (FMC) Section 8 budget 
(HUD Forms 52672 and 52673) at least 90 days prior to the beginning of 
the CA fiscal year.
     Prepare and submit annually to HUD (FMC) Annual 
Requisition for Partial Payment of Annual Contributions (HUD Form 
52663) 90 days prior to the beginning of the CA fiscal year.
     Perform monthly comparison of HAP payments to owners and 
monthly ACC partial payments from HUD.
     Prepare and submit to HUD (FMC) revised Budget and 
Requisition (HUD Form 52663) when/if monthly comparison indicates ACC 
payments will exceed HAP payments by more than 5%. CAs must complete 
submissions by their Fiscal Year End date.
     Prepare and submit to the FMC Year-end Settlement 
Statement (HUD Form 52681) within 45 days of the year end.
    Reference:

HUD Handbook 7420.7, Chapter 8

Incentive Based Performance Standards

    10. CAs must submit to the FMC, acceptable and accurate Budget and 
Annual Requisition for each HAP contract 90 days prior to the beginning 
of CA's FY. Where monthly reviews of HAP payments to owners and ACC 
payments received from HUD indicate that the CA will be overpaid by 
more than 5%, the CA must submit a revised Budget and Annual 
Requisitions to reduce future payments accordingly. The Revisions 
(revised Budget and Requisition) must be submitted no later than the 
1st day of the month following identification of overpayment.
    11. CAs must submit to the FMC, the year-end statement within 45 
days of the end of the CA's fiscal year.

Quality Assurance

Monthly Invoice
FMC Status Report
3.8  Contract Administrator's Audit
    CA is required to maintain complete and accurate financial records 
covering the CA's contract administration of covered units under the 
ACC.
    Outcome: Contract Administrator's records are complete and 
accurate.
    Requirements:
     Records concerning contract administration under the ACC 
must be distinct and separate from all other business of the CA.
     Maintain complete and accurate records regarding 
activities relating to each HAP contract for covered units.
     CAs required to submit separate audited financial 
statements under OMB's Circular A-133 shall:
     Provide the FMC with annual financial audit of the CA's 
activities the earlier of 30 days after receipt of the auditors report 
or 9 months after the CA's fiscal year end (FYE) (in accordance with 
OMB Circular A-133). This audit must be performed by an independent 
public accountant (IPA).
     The Contract Administrator shall submit audited annual 
financial statements that fully comply with the requirements of OMB 
Circular A-133 within the earlier of 30 days after receipt of the 
auditor's report(s) or nine months after the end of the audit period. 
However, in cases where a Contract Administrator submits its audited 
financial statements more than 60 days after the end of its fiscal 
year, the CA shall submit all financial reports required by the HUD in 
unaudited form within 60 days after the end of its fiscal year.
     Submission of financial information shall also be in 
accordance with the requirements of HUD's Uniform Financial Reporting 
Standards (24 CFR, Part 5, Subpart H). The audit shall be performed by 
an independent auditor, procured using the standards set forth in 
Circular A-133 and other referenced documents in Circular A-133.
     In accordance with the ACC, CAs not required to submit 
separate audited financial statements under OMB's Circular A-133 shall: 
Submit annual unaudited financial statements within 60 days of the end 
of the CA's fiscal year. For-Profit instrumentality entities shall 
submit audited financial statements within 60 days of the end of the 
CAs fiscal year.
     In the event of audit findings that require corrective 
actions, the CA shall provide HUD with a proposed plan of corrective 
actions as part of the audit submission package. By the first day of 
each month, the CA shall provide HUD with a status report of corrective 
actions being implemented until all actions are completed. Corrective 
actions must proceed as rapidly as possible. Failure to provide the 
required audited financial information and/or timely implementation of 
corrective actions may result in default of the terms and conditions of 
the ACC.
    Reference:

ACC contract
HUD Handbook 7420.7
OMB Circular A-133

[[Page 27364]]

Incentive Based Performance Standards

    12. The CAs that are required to comply with OMB's Circular A-133 
will provide HUD with unaudited financial statements, including 
supplemental data, within 60 days after the CA's FYE and audited 
financial statements no later than 9 months after the CA's FYE. CAs 
that are not required to comply with OMB's Circular A-133 will submit 
annual unaudited financial statements to HUD within 60 days of the end 
of the CA's fiscal year. For-Profit instrumentality entities shall 
submit audited financial statements to HUD within 60 days of the end of 
the CAs fiscal year.

Quality Assurance

100% Review of the Audit
3.9  Deficient Annual Financial Statements (AFS)
    HUD regulations require owners of properties with project-based 
Section 8 contracts to submit Annual Financial Statements to the Real 
Estate Assessment Center (REAC) when required by the HAP contract.
    Outcome: Financial condition of projects is verified.
    Requirements: Where REAC's assessment of AFS reflects unacceptable 
performance and compliance indicators, owners must develop a plan 
outlining specific actions to correct deficiencies.
    CAs must:
     Track the owners' deficiencies and their progress along 
their plan until resolved.
     Submit monthly reports by the first day of each month that 
indicate the owners' progress and activities in the previous month.
     Submit a final report to HUD within 30 days of owners' 
resolution of deficiencies.

Reference

HUD Handbook 2000.04 REV-1
OMB Circular A-133
Federal Register, September 1, 1998

Incentive Based Performance Standards

    13. CA provides HUD with documentation by the first day of each 
month that indicates the owners' progress and activities in the 
previous month.
    14. CA monitors the unacceptable performance and compliance 
indicators. CA provides documentation to HUD within 30 days of 
resolution.

Quality Assurance

On-Site Reviews
Data Systems Reviews
3.10  Renewals of Expiring Section 8 Contracts
    As HAP contracts come to an end, owners must apply for contract 
renewals to have units remain with Section 8 project-based assistance. 
CAs must ensure that owners fulfill their obligations to residents and 
HUD that are commensurate with owner renewal decisions.
    Outcome: Expiring Section 8 contracts are renewed
    Requirements:
     Verify that owners provide the required one-year notice to 
residents of properties with expiring Section 8 contracts.
     Monitor owner actions with regard to providing a minimum 
of 90 days notice to CA of intent to renew or not renew the expiring 
contract, according to current Housing Notices.
     If the owner opts not to renew, take the actions described 
in Task 3.4.
     Maintain copies of owner's notification to residents of 
expiring contracts.
     If the owner chooses to renew, determine which option 
(form of renewal) the owner wishes to use and notify the jurisdictional 
HUD office.
     Prepare HAP renewal contracts.
     After receipt of confirmation of funding for renewal from 
HUD, ensure the HAP contract is executed (signed) by the owner and the 
CA.
     Execute and distribute copies of the HAP within one 
business week to the owner, jurisdictional HUD office, and CA files.

Reference

Notice: H-98-34

Incentive Based Performance Standards

    15. Monitor, process and execute HAP contract documents.

Quality Assurance

On-Site Reviews
Data Systems Reports
Monthly Invoice
3.11  General Reporting Requirements
    To track the performance of the Section 8 program, monitor and 
evaluate CA performance, and identify technical assistance needs, HUD 
requires the CA to regularly report its activities. Consequently, the 
CA shall provide to jurisdictional HUD offices Monthly, Quarterly, and 
Annual reports.
    Outcome: HUD can monitor and evaluate program and CA performance 
from CAs accurate, timely reports.

A. Monthly Reports

    CAs must submit reports and an invoice to the Government Technical 
Representative, or Monitor (GTR/GTM) by the 10th business day of each 
month for the previous month's activities.
     Hot topics--Projects that required special attention due 
to such matters as, abatement actions, excessive resident complaints, 
inquiries from governmental officials or general public.
     Work Plan Status Report that details:
    Number of areas reviewed and services performed, including date of 
review and services; name/s of CA staff performing the review and 
performing the services.
     Any significant administrative actions that could affect 
the contract.
     Quality control activities and results
     Major accomplishments, success stories, etc.
     Noteworthy meetings
     Pending issues

B. Quarterly Reports

    CAs must submit Work Plan (updated) and status reports to the 
designated GTR/GTM.

C. Annual Reports

    By the close of each contract year, CAs must submit to HUD a report 
that details its progress against the Work Plan for that year. The 
report should detail all of the CA actions and services with dates, 
locations, and employee name for that calendar year. Also at the close 
of the contract year, CAs must submit a Work Plan for the following 
year that details its plan to satisfy the ACC's servicing requirements.

Incentive Based Performance Standards

    16. HUD receives CA's (a) Monthly Reports by the 10th business day 
following the end of the month; (b) Quarterly reports by the 10th 
business day following the end of the quarter; (c) Annual reports by 
the 20th business day following the end of the CA's contract year.

Quality Assurance

On-Site Reviews
Data Systems Reports
Review of submitted reports
3.12  Physical Inspection
    The Department is conducting a baseline physical inspection for 
every Section 8 property with a HUD-administered HAP contract. The Real 
Estate Assessment Center's (``REAC'') physical inspection software and 
protocol is being used for all inspections (See http://www.hud.gov/
reac/reaphyin.html). Once this baseline is completed, HUD will 
determine frequency of future inspections. HUD

[[Page 27365]]

may issue a task order under the ACC to have the CA perform physical 
inspections. If such a task order is issued, HUD will negotiate with 
the CA a fixed-price fee for such services at that time.
    Outcome: Verify completion of corrective actions based upon the 
analysis of the results of the physical inspections conducted on 
properties included in the ACC. Take legal actions as directed by HUD 
for enforcement of the HAP contract.
    Requirements:

Post Inspection Activities

     Provide follow-up with owner on violations and corrective 
actions needed.
     Provide owner with time-frame to correct violations.
     Work with owner to eliminate the deficiencies.
     Abate payments when owner fails to correct violations 
within designated time period.
     Notify jurisdictional HUD office of abatement of payments 
and specific reasons for the action.
     Notify jurisdictional HUD office of the completion of 
required actions.
     Take legal action as directed by HUD for enforcement of 
the HAP contract.

Reference

HUD Handbook 4350.1
Federal Register, September 1, 1998

Incentive Based Performance Standards

    17. CA monitors the unacceptable performance and compliance 
indicators. CA continues to provide follow-up to HUD on actions taken 
every 30 days until final resolution is reached.

4. Contract Administrator Fee

4.1  Terms
    Administrative fee. The monthly fee HUD pays the PHA for each 
covered unit under HAP contract on the first day of the month. The 
administrative fee is the total of the basic fee plus the incentive 
fee. The fee amount is detailed in the ACC.
    Basic fee. The basic fee is the agreed fee per unit per month. HUD 
pays the basic fee to the CA for each covered unit under HAP contract 
as of the first day of the month during the ACC term. There is a 
separate basic fee amount for each FMR area in the CA service area. The 
ACC will state the agreed basic fee amount for each FMR area.
    HUD pays the basic fee for performance of tasks described in the 
Statement of Work and in accordance with the CA's annual workplan. Such 
performance is indicated by monthly invoices (and validated through 
HUD's quality assurance). The total amount of the basic fee will vary 
each month depending on the total number of eligible units to which it 
will be applied each month. Of that total, HUD has allocated each task 
to be performed a certain percentage of the total fee available. The 
Performance Requirements Summary (PRS) (see Section 4.8) states the 
basic fee amounts for all portions of the CA service area.
    Incentive fee. An additional fee beyond the basic fee that the CA 
may earn. As reflected in the PRS, HUD will pay an additional payment 
to the CA for performance on specified Statement of Work tasks that 
exceeds HUD acceptable quality level for the IBPS associated with that 
task (see PRS, Section 4.8). HUD will pay up to a maximum 25% of the 
total incentive fee pool at the end of each quarter. Each task which 
has an incentive applied to it also identified the percentage of the 
incentive fee pool that applies to that task. The amount of the 
incentive fee payable to the CA is determined by HUD, based on HUD's 
evaluation of the CA's performance in administration of covered units. 
The amount of the incentive fee per unit per month may not exceed the 
maximum incentive fee stated in the ACC.
    Disincentive. Deductions levied against the basic fee for 
performance that falls below the acceptable quality level. The ACC 
states the disincentive for each Statement of Work task. The PRS 
(Section 4.8) specifies the penalty for each IBPS task as a percentage 
of the basic fee amount.
    Earned basic fee. The basic fee amount per unit per month for each 
IBPS task minus all applicable disincentive fees for any such IBPS 
task.
4.2  Evaluation of CA Performance
    During the ACC term, HUD will conduct a monthly evaluation and 
rating of the CA's performance in contract administration of the 
covered units, and shall issue a performance rating based on such 
performance. As described below, payment of the fees is based on the 
HUD rating of the CA's performance.
    HUD determines the amount of the earned basic fee for each CA per 
unit month by review of data submitted in the monthly invoice. HUD 
determines the amount of the incentive fee earned by the CA per unit 
per month by quarterly scoring of the CA's contract administration 
performance during the ACC term. The monthly review and quarterly 
scoring is based on the CA's performance of the task categories used as 
incentive based performance standards (IBPS), as described in the 
Statement of Work of this RFP. Monthly, HUD rates the CA's performance 
in completion of the IBPS to determine the earned basic fee by 
calculating a ``percentage completed'' for each IBPS task. In a similar 
manner, quarterly HUD rates the CA's performance in completing IBPS 
task to determine the earned incentive fee.
4.3  Basic Fee
    In submitting their proposals, offerors are advised that, during 
the term of the ACC, the basic fee per unit month for each FMR area in 
the CA service area shall not exceed two (2) percent of the local two 
bedroom existing HUD Fair Market Rents (FMR) published in the Federal 
Register on October 1, 1998 (and effective the same date) and any 
revisions to such FMRs published in the Federal Register prior to award 
of the ACC. The entire national listing of the FMRs is located at 
http://www.hud.gov/local/atl/atl42322.html.
    For your information, we have provided a table that lists by state, 
the total number of units by applicable FMRs. You may find this table 
with an explanation at http://www.hud.gov/fha/mfh/rfp/sec8rfp.html.
    In responding to the RFP, the offeror's proposal must specify the 
proposed basic fee per unit per month (for the initial two year term 
and for each of three one year renewal terms. See Proposal Submission 
Form (Attachment II). If the offer is accepted, the ACC with the CA 
will specify the agreed basic fee amount during the ACC term. The fee 
will simply be stated as a percentage of the FMR as described above. 
The amount of fee proposed will be included in the evaluations for 
acceptability and to determine the price proposed reflects the proposed 
technical approach. The CA shall also submit supporting cost data as 
shown on the attachments.
    As an example, if the FMR for a covered unit was $400 and the CA 
had proposed a price of 1.7%, then the basic fee for each covered unit 
would be $6.80. If the CA had an inventory of 10,000 covered units as 
of the 1st of the month, then the total basic fee available for that 
month would be $68,000. Since the PRS indicates that 5% of the fee will 
be applied to IPBS # 1, then $3,400 would be allocated to IPBS #1. The 
CA's performance of IPBS # 1 is evaluated as described to determine if 
the CA is due the full amount of the basic fee for the month.
4.4  Incentive Fee
    In addition to the basic fee, the CA may earn an incentive fee 
awarded by HUD for CA performance of the contract administration 
services for designated

[[Page 27366]]

IBPS items that exceeds acceptable quality levels of performance. 
Determination of the amount of the incentive fee payment is specified 
in the PRS (Section 4.8).
    The maximum incentive fee per covered unit per month HUD will 
evaluate the CA's performance in providing contract administration 
services for all covered units under the ACC for earned incentive fee 
quarterly. This evaluation will determine the portion of the incentive 
fee that the CA has earned for that quarter. As an example, if the FMR 
for a covered unit is $400, then 1% would be $4. If a CA had 10,000 
covered units as of the 1st of the month, then the total incentive pool 
would be $40,000 for that month. Due to changes in the number of 
covered units, the subsequent two months may have provided $38,000 and 
$41,000, which would result in a total of $119,000 for the quarterly 
incentive pool. If one IPBS item was to cover 25% of the pool, then up 
to $29,750 in incentive fees could be earned for that specific IBPS 
factor.
    HUD may add or modify performance standards during the ACC term, 
may add or modify the factors used to measure performance, and may 
specify the amount of the incentive fee for a specified level of 
performance. However, HUD must notify the CA of any such changes before 
the rating period for which such changes are used to rate CA 
performance.
4.5  Fee Payment
    Each month, the CA shall determine the number of eligible units 
that were being managed as of the 1st day of the month. The CA shall 
then apply the accepted basic fee percentage to the covered number of 
units to establish the total available basic fee and the 1% to 
determine the amount of the incentive fee pool for that month.
4.5.1  Payment of Basic Fee
    For tasks that are indicated as being paid annually, the CA shall 
apply the percentage of the IPBS factor to that monthly payment and 
deduct that from the total available fee. The CA shall then determine 
their compliance with the acceptable quality levels established in the 
ACC for tasks to be paid monthly and apply any appropriate reductions 
to the available fee. The CA must invoice HUD by the 5th day of each 
month for the amount of the basic fee earned for the month. For tasks 
for which annual payments of ongoing basic fees apply, the monthly 
amounts will be pooled into a total amount available for application of 
the AQL and the CA must invoice HUD by the 5th day of the 12th month of 
the ACC performance period. Each invoice shall be fully supported by 
documentation of the CA's achievements relating to the required AQL of 
each IPBS factor. In the event that subsequent HUD quality assurance 
reviews determine the CA did not meet the AQL established, HUD may 
adjust the payments of subsequent invoices to reflect the amounts that 
should have been withheld.
    Notwithstanding the reductions in the fee for failing to meet the 
AQL, failure to complete the tasks may result in default of the CA for 
failing to comply with the terms and conditions of the ACC. HUD may 
terminate the ACC at any time in whole or in part if HUD determines 
that CA has committed any default under the ACC.
4.5.2  Payment of Incentive Fee
    HUD will pay the incentive fee on a quarterly basis. HUD will base 
the amount of the incentive fee on the CA's performance against the 
Incentive Based Performance Standards listed in the Statement of Work.
    HUD will review the CA's performance relative to its annual work 
plan and progress reported in the monthly invoices for the applicable 
quarter. The HUD findings will be compared to the CA invoice for the 
incentive fee and adjustments may be made to reflect the results of the 
HUD findings.
4.6  Availability of Funds
    The award of the ACC and subsequent performance periods as well as 
all fee payments are subject to the availability of appropriated funds 
on an annual basis.
4.7  Use of Fee Income
    The CA may use or distribute payments for the monthly on-going 
administrative fee that they earn under the ACC for any purpose apart 
from the use of these fees to reimburse, compensate or transfer any 
fees to the owners or management agents (or their affiliates) of the 
projects being serviced by the CA. HUD may reduce or request 
reimbursement of administrative fees paid if subsequent quality 
assurance indicates the performance indicated by the CA was not 
attained.
4.8  Performance Requirements Summary
    Each task of the Statement of Work has at least one IBPS standard 
associated with it. These IBPS are central to the determination of 
earned basic and incentive fees.
    The table below details for each performance standard:
     The IBPS number.
     The task and SOW requirement to which the IBPS applies.
     The acceptable quality level.
     The percentage of the basic fee that applies to the 
standard.
     Any applicable incentive fee and it method of calculation.
     Any applicable disincentive and its method of calculation.
     The method that HUD will use to assure the quality of the 
CA's reported performance.
     The frequency of payments for the basic fee.
    The information in the table below will govern HUD's payment of CAs 
for all work performed under the ACC.

BILLING CODE 4210-27-P

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[GRAPHIC] [TIFF OMITTED] TN19MY99.001



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[GRAPHIC] [TIFF OMITTED] TN19MY99.002



BILLING CODE 4210-27-C

[[Page 27370]]

5. Guidance for Submitting Proposals

5.1  Service Area Designation
    Proposals in response to this solicitation must clearly designate 
the intended service area. Offerors must bid to provide contract 
administration services for areas no smaller than an individual State 
(or U.S. Territory). HUD will accept proposals covering the entire 
nation, multiple Multifamily Hubs, individual Multifamily Hubs, or any 
combination of states, but no smaller than an individual State (or U.S. 
Territory). All multi-state proposals must provide a separate cost 
proposal for each state within the proposed service area (see 
Attachment II.B). HUD will evaluate proposals for areas larger than an 
individual State on a state by state basis.
    The information in this section governs the procedures Offerors 
must follow to submit proposals in response to this RFP. Failure to 
comply with the guidance of this section will disqualify an Offeror's 
proposal from consideration by HUD.
5.2  Proposal Organization
    Offerors must submit one original and three (3) copies of their 
proposals. All proposals must contain two volumes: a technical proposal 
that explains the offeror's technical capacity to perform the tasks of 
the RFP and a cost proposal that indicates the offeror's price and 
supporting documents to provide CA services. Submit technical and cost 
proposals as separately bound volumes. Offerors must divide and tab 
technical proposal into three sections, limited by the specified number 
of pages:

1. Understanding and Technical Approach--20 pages
2. Management Capacity and Quality Control--20 pages
3. Past Performance--10 pages (Total)
    (a) Key Personnel--5 pages
    (b) Firm--5 pages

    Proposals exceeding the allowable page limits will only have the 
number of pages specified evaluated (e.g. Factor 1 will only have the 
first 20 pages evaluated; remaining pages will not be reviewed). Page 
limits refer to one side of an 8\1/2\ x 11 piece of paper using 
standard 10 pitch font.
    Offerors shall include with the technical proposal an appendix 
which includes the following:
    (1) Resumes of the project team.
    (2) A statement of possible conflict of interest in the appendix. 
This statement should identify properties in the proposed coverage area 
of the offeror in which the offeror has a financial interest.
    (3) A copy of the offerors' (the PHA and all organizations that 
form the instrumentality entity) most recent audit of the offeror's 
financial records. The appendix does not count toward the page 
limitation.
    Offerors are advised that different technical evaluation panel 
teams will review proposals. The Technical proposal shall be divided 
according to the stated evaluation factors and shall be submitted in 
physically distinct sections by each evaluation factor. Individual 
panel members may review only one evaluation factor; therefore, 
offerors should be careful to fully respond to each factor separately, 
and not rely on information in another factor to be a part of the 
response. Pages with each factor shall be numbered consecutively, 
including any appendixes.
    The cost proposal shall include the CA's proposed percentage of the 
FMR for covered units on the sheet provided herein. The cost proposal 
shall also provide supporting cost data to ensure the evaluation panel 
can determine the prices proposed are reasonable for the technical 
approach proposed. Failure to adequately explain the price proposed may 
result in a determination the CA is unable to perform at the stated 
price or that the price is unreasonable based upon the technical 
approach described. Sample forms for providing cost data are attached 
and should be supported by a narrative to the extent necessary. 
Offerors are not required to follow the samples completely, but shall 
provide the information requested to the extent possible.
5.3  Proposal Due Date
    Offerors must submit proposals no later than 5:00 PM EDT, Friday, 
July 15, 1999. Offerors must submit proposals to: U.S. Department of 
Housing and Urban Development, 451 7th Street, SW, Office of the Deputy 
Assistant Secretary for Multifamily Housing Programs, Room 6106, 
Washington, DC 20410.
    Offerors must clearly mark packages containing proposals ``Proposal 
for Section 8 Contract Administration Services.''
    The Department will not accept proposals that arrive after the 
above date and time or at any other address. HUD will not be 
responsible for proposals lost or misdirected due to improper labeling.
5.4  Offeror Questions/Pre-Proposal Conference
    HUD will conduct a Pre-Proposal Conference to discuss this request 
for proposals at length and answer questions. The agenda for the 
conference will include time for those potential respondents' 
interested in forming partnerships with other entities to meet.
    Date: June 3, 1999.
    Time: 9:30 a.m. to 3:00 p.m. EDT.
    Location: To Be Announced at http://www.hud.gov/fha/mfh/rfp/
sec8rfp.html.
    HUD encourages potential Offerors who plan to attend the Pre-
Proposal Conference to submit questions in advance, by sending an e-
mail to ``Prebiddersconf__S[email protected]''. All questions and the 
responses will be posted at the RFP website, www.hud.gov/fha/mfh/rfp/
sec8rfp.html. At the Pre-Proposal Conference HUD will be sure to 
discuss the questions that have generated the most interest.
    If attendees raise additional questions as a result of the 
discussion at the pre-proposal conference, HUD will respond to the 
questions at the conference as time permits. However, if time has 
expired and/or if HUD must obtain additional information to provide an 
appropriate response, HUD will post a transcript of the conference and 
the answers to any unanswered questions at the RFP website.
    In addition to a copy of the transcript, the RFP web site currently 
contains a database of current properties with Section 8 assisted units 
and a description of the Section 8 program. After the conference, the 
RFP website will provide a tool for offerors to pose and for HUD to 
answer any further questions.
5.5  Amendments and Additional Guidance
    HUD may amend this RFP. All amendments or additional guidance will 
be posted on the website. Offerors should check the website regularly 
for any amendments to the RFP.
5.6  Contract Term
    HUD will award an ACC pursuant to this RFP for an initial term of 
two (2) years. The CA is reminded however, that continued performance 
beyond the first year of the ACC is contingent upon the availability of 
appropriated funds.
    HUD may unilaterally renew the ACC for up to three (3) additional 
one-year terms. Each such renewal shall be at HUD's sole discretion. 
The Department will use performance as a paramount factor in renewal 
determinations.

6. Equal Employment Opportunity Compliance

    The CA shall not discriminate against any employee or applicant for 
employment because of race, color,

[[Page 27371]]

creed, religion, sex, handicap or national origin. The CA shall take 
affirmative action to ensure that applicants and employees are treated 
without regard to race, color, creed, religion, sex, handicap, or 
national origin. Such action shall include, but not be limited to, the 
following: employment, upgrading, demotion, or transfer; recruitment or 
recruitment advertising; layoff or termination; rates of pay or other 
forms of compensation; and selection for training, including 
apprenticeship.
    The CA shall post in conspicuous places, available to employees and 
applicants for employment, notices to be provided by HUD setting forth 
the provisions of this nondiscrimination clause. The CA shall assure in 
all solicitations or advertisements for employees placed by or on 
behalf of the CA that all qualified applicants will receive 
consideration for employment without regard to race, color, creed, 
religion, sex, handicap or national origin. The CA will incorporate the 
foregoing requirements of this paragraph in all of its contracts for 
project work, except contracts for standard commercial supplies or raw 
materials, and will require all of its contractors for such work to 
incorporate such requirements in all subcontracts for project work.

7. Factors for Award

    Proposals cannot merely offer to provide services in accordance 
with the requirements of the RFP, rather, they must provide a detailed 
and concrete description of how the offeror will perform these 
requirements in operation under the ACC.
    HUD will evaluate proposals according to the following:
7.1  Understanding and Technical Approach--50 Points
    Offeror's proposal must include a demonstrated understanding of the 
role of the CA and the full range of the work to be performed. The 
proposal also must describe the Offeror's plan and approach to perform 
the tasks of the statement of work. The proposal shall specify any 
services or functions to be provided or performed by the parent entity, 
or by any other entity which holds a direct or indirect interest in 
such instrumentality, to carry out or support Section 8 contract 
administration in accordance with the ACC. The proposal should detail 
the Offeror's automated systems that will support it in the performance 
of SOW tasks (including information technology (IT) support, 
accessibility, documentation, security, and flexibility). In addition, 
the offeror must describe the automated system that it will use to 
provide contract administration services for project-based HAP 
contracts under Section 8.
    The proposal must provide a proposed plan for the transfer of 
responsibility for contract administration from HUD to the CA that 
includes, but need not be limited to, how the offeror will be prepared 
to begin operations within 60 calendar days after award of the ACC.
7.1.1  Data Systems
    Offerors must demonstrate their ability to comply with all 
processing and reporting requirements applicable to CA functions 
contained in this RFP, including requirements for contract 
administrators outlined in Section 108 of 24 CFR, Part 208)--Electronic 
Transmission of Required Data for Certification and Recertification and 
Subsidy Billing Procedures for Multifamily Subsidized Projects (a/k/a 
the Automation Rule). CAs are expected to have Internet Service 
Provider access for communication with HUD. (At this time, HUD plans 
for most data entry and data transfer with CAs to occur over the 
Internet).
    CAs must be capable of implementing revisions in processing and 
reporting, as specified by HUD, to conform to changes in present or 
future policy and procedures pertaining to CA functions. With respect 
to data systems and automated reporting requirements, HUD will provide 
reasonable advance notice of the need for such change a minimum of 90 
days before CA compliance will be required.
    CAs must provide HUD with data on HAP contracts, rent adjustments, 
contract renewal processing, management and occupancy reviews, annual 
financial statements and other documents and information relevant to 
the tasks and responsibilities outlined in this RFP. Where automated 
reporting tools do not already exist, HUD intends to develop 
specifications for receiving a substantial portion of these data 
electronically. CAs must have the capability to transmit such data to 
HUD via the Internet as prescribed by HUD.
    Offerors must demonstrate that they have the facilities to receive 
resident certification and recertification data (form HUD 50059) and 
voucher data (form HUD 52670) electronically from the owners or 
management agents in a form consistent with reporting requirements 
specified by HUD for the HUD TRACS System. Offerors must also 
demonstrate the ability to transmit HUD 50059 data to the HUD TRACS 
Tenant System and HUD 52670 data to the HUD TRACS Voucher/Payment 
System, and to receive the messages transmitted in return from TRACS. 
As part of these requirements, the CA must have an ability, acceptable 
to HUD, for communicating errors in HUD 50059 and HUD 52670 submissions 
to the owners or management agents. CAs are expected to comply with 
requirements applicable to contract administrators in the Automation 
Rule (24 CFR 208).
    HUD currently receives data submissions to the TRACS Tenant System 
and the TRACS Voucher/Payment System via SprintMail, but there are 
plans to accept these transmissions via the Internet. Internet access 
also provides the CA with the ability to review the resident and 
voucher data it has transmitted to HUD to ensure that it is correct and 
consistent with the data maintained in its own files.
    CAs will be required to accept and forward to the owners or 
management agents the Benefit History Reports from HUD that provide 
confirmation of Social Security and Supplemental Security Income. 
Alternatively, the CAs may require the owners or management agents to 
obtain Internet access to retrieve their own Benefit History Reports 
from HUD.
    Resident reporting requirements specified for HUD's TRACS Tenant 
System and voucher reporting requirements specified for the TRACS 
Voucher/Payment System are published on the TRACS Documents Page on the 
world wide web. The CAs are responsible for meeting the requirements 
specified in these documents. Offerors can access the TRACS Documents 
Page at http://www.hud.gov/fha/mfh/trx/html/trxdocs.html.
    Offerors must demonstrate that they have an account with a 
federally insured financial institution capable of receiving and 
sending electronic fund transfer (EFT) transactions.
    CAs must have facilities acceptable to HUD for making timely and 
accurate HAP subsidy payments to project owners with HAP contracts 
under an Annual Contributions Contract (ACC) contract. CAs also will be 
required to transmit budget, requisition, and year-end settlement data 
to HUD via the Internet, as specified by HUD.
7.2  Management Capacity and Quality Control Plan--50 points
    The offeror shall fully demonstrate a superior detailed quality 
control program to (1) ensure the contract performance requirements are 
met, (2) provide specific internal control programs to provide 
accountability and

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separation of duties to detect and prevent potential fraud, waste, and 
abuse of funds, and (3) identify processes/procedures to prevent, 
detect, and resolve actual, or appearances of, conflicts of interest of 
any staff working with the contract or associated with the entity. This 
QC Plan must include, but not be limited to
    1. A Work Plan including all contract administrative services 
breaking down each task/sub-task. The Work Plan shall:

--Specify all areas and services that the CA will review.
--Include a timeline (duration, start, finish) the CA will review 
areas/services.
--Depict the resource name/s and task usage for each task/s.
--Include an example of the CA's Work Plan quarterly report Identify 
the methodology CAs will use to conduct reviews.

    2. The name(s) and qualifications of the individual(s) responsible 
for performing the quality control reviews and the specific areas/
services these individuals will inspect.
    3. A method to identify performance deficiencies and to take 
corrective action to ensure against unsatisfactory performance.
    4. A means to document all quality control reviews and any required 
corrective action. The CA shall establish and maintain files for such 
documentation through the term of this contract. The filing method 
shall be such that all information relative to quality control 
inspections is logically grouped together and readily accessible. The 
files shall be the property of HUD and be made available to HUD upon 
demand during the CA's regular business hours. The files shall be 
turned over to HUD within 10 business days after completion or 
termination of the ACC.
    5. Workflow and organizational charts that describe the processes 
and controls that the offeror will to implement and operate its 
technical approach and to execute the QC plan.
7.3  Past Performance--30 Points
    Offerors' proposals must provide documented evidence that, during 
the last two years immediately prior to the deadline for receipt of 
proposals, the Offeror or related entity has successfully performed 
duties substantially similar to the core functions that the CA will 
perform under this RFP. Offerors should give special emphasis to past 
performance with compliance with and reviews of Multifamily Housing's 
occupancy requirements, reviews of property physical condition, and 
problem resolution activities with property owners. (``Related entity'' 
means any entity that will perform services or functions to carry out 
or support Section 8 contract administration under the ACC, including 
the PHA, a parent entity of the PHA, or partners who are affiliated 
with the PHA.)
    HUD will give greater weight to proposals that cite recent 
experience (the past two years) that is most similar to the 
requirements of the RFP.
    The proposal must include sufficient information on the relevant 
experience, special training and education of proposed personnel 
related to the tasks of the SOW.
    HUD will allocate points based upon the demonstrated record. 
References of successful past performance of the same or similar work 
as described in the SOW and in the ACC shall confirm offerors' 
demonstrated record. HUD will consider available information, such as 
reviews of PHAs.
    Offerors' proposals must provide at least five references (not 
letters of recommendations) that document past experience. These 
references must include:

Project name
Period of performance
Description of the work performed
Contact person information:
Name
Title
Address
Telephone numbers
The relationship of the contact person to the offeror.

    Only information that is submitted directly to HUD in the offeror's 
proposal package will be considered unless HUD seeks additional 
information during the evaluation process.
    HUD reserves the right to review and consider the past performance 
the offeror may have had with the Department.

8. Proposal Evaluation

    HUD will establish one or more panels to review the proposals 
received. HUD will only evaluate, rate and rank complete proposals 
submitted.
    HUD will evaluate each proposal based on the factors for award and 
the proposed fees to determine which offerors represent the best 
overall value, including administrative efficiency, to the Department. 
While the cost or price factor has no numerical weight in the factors 
for award, it is always a criterion in the overall evaluation of 
proposals. HUD may ask any offeror considered to be among the highest 
rated technically acceptable for additional information to assist HUD 
in selecting among proposals submitted. HUD may also negotiate the fee 
with the highest technically acceptable offerors, one or all, to obtain 
high quality at a better value.
    HUD shall have discretion to determine the process for evaluation, 
rating and ranking of proposals received and for selection of the 
contract administrator pursuant to the RFP and for award of ACCs.
    Proposals to provide contract administration services for project-
based HAP contracts will be accepted on an individual state, 
combination of states, individual Hubs, multiple Multifamily Hubs, and 
the entire nation, however, the Department will evaluate proposals 
state by state. Therefore, the offeror must complete and submit the 
``Proposal Submission Form'' (Attachment II) for each state the CA is 
offering a bid.
    If there are areas of the country for which HUD does not select a 
CA during the above process, either because there were no proposals 
covering that area, or none of the proposals were acceptable, HUD may 
negotiate with one or more selected offerors to expand the service area 
in which the selected offeror will provide contract administration 
services.
    Before execution of the ACC, each selected PHA must submit a 
Previous Participation Certification, Form HUD-2530 and any additional 
documentation required by HUD within 10 calendar days of request by 
HUD. The PHA and related parties must be cleared through HUD's previous 
participation procedure.

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Attachment III  Annual Contributions Contract

Annual Contributions Contract

Definitions
    ACC. Annual Contributions Contract. This contract between HUD and 
the PHA.
    Administrative Fee. The monthly fee HUD pays the PHA for each 
covered unit under HAP contract on the first day of the month. The fee 
amount is determined in accordance with Exhibit E. The administrative 
fee is the total of the basic fee plus the incentive fee.
    Basic Fee. The amount of the basic fee per unit per month as 
specified in Exhibit E for each FMR area. HUD may reduce the basic fee 
if HUD determines that the PHA performance of contract tasks is below 
the minimum acceptable quality level. HUD determines the amount of such 
reduction. Earned basic fees are paid monthly.
    Budget Authority. The maximum amount of funds available for payment 
to the PHA for each HAP contract. Budget authority is authorized and 
appropriated by the Congress. The amount of budget authority for each 
HAP contract is listed on Exhibit C.
    Covered Units. Section 8 assisted units under HAP contracts 
assigned to the PHA for contract administration under the ACC. Covered 
units are listed on Exhibit B.
    Fiscal Year. The PHA fiscal year. Exhibit C states the last month 
and day of the PHA fiscal year.
    Funding Increment. Each commitment of funding (budget authority) by 
HUD to the PHA for a HAP contract under the ACC. The funding increments 
are listed on Exhibit C.
    HAP Contract. A Section 8 Housing Assistance Payments Contract.
    HUD. The United States Department of Housing and Urban Development.
    Incentive Fee. A per unit per month administrative fee in addition 
to the basic fee. The incentive fee is paid if HUD determines that PHA 
performance of contract tasks is above the minimum acceptable quality 
level. HUD determines the amount of the incentive fee. The maximum 
incentive fee per unit per month is specified in Exhibit E for each FMR 
area. Earned incentive fees are paid quarterly.
    PHA. Public Housing Agency.
    Portfolio Reengineering. FHA-insured multifamily housing mortgage 
and housing assistance restructuring of an eligible multifamily 
project.
    Program Expenditures. Amounts which may be charged against program 
receipts in accordance with the ACC and HUD requirements.
    Program Property. Program receipts, including funds held by a 
depository, and PHA rights or interests under a HAP contract for 
covered units.
    Program Receipts. Amounts paid by HUD to the PHA under the ACC, and 
any other amounts received by the PHA in connection with administration 
of the Section 8 program under the ACC.
    Project Reserve. An unfunded account established by HUD for a HAP 
contract from amounts by which the amount of budget authority available 
for payment under the HAP contract during the owner's fiscal year 
exceeds the amount actually approved and paid by HUD. HUD may use this 
account as the source for additional payments under the program.
    Public Housing Agency. The agency that has entered the ACC with 
HUD. Such agency is a ``public housing agency'' as defined in Section 3 
of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)(6)).
    Section 8. Section 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f).
    Service Area. The area where the PHA provides contract 
administration services under the ACC. The PHA service area is 
described in Exhibit D of the ACC.

ACC

Purpose
    This ACC is a contract between the PHA and HUD. The ACC was awarded 
by HUD pursuant to a proposal submitted in response to HUD's published 
Request for Proposals for PHAs to provide contract administration 
services for units receiving project-based Section 8 housing 
assistance. (The Request for Proposals was published on May 19, 1999. 
Under the ACC, the PHA will provide contract administration services 
for dwelling units in the service area receiving project based 
assistance under Section 8 of the United States Housing Act of 1937 (42 
U.S.C. 1437f).

Exhibits. This ACC Includes the Following Exhibits

    1. Exhibit A: Request for Proposal
    2. Exhibit B: Covered Units
    3. Exhibit C: Funding
    4. Exhibit D: Service Area
    5. Exhibit E: PHA Administrative Fees
    6. Exhibit F: ACC Contract Term

HUD Revision of ACC Exhibits

    1. HUD may amend Exhibit B:

--To add covered units.
--To withdraw covered units for which the HAP contract has expired or 
been terminated, or for which assistance payments are abated.
--To withdraw covered units in connection with portfolio reengineering.

    2. HUD may amend Exhibit C:

--To add a funding increment, or
--To remove a funding increment for which the HAP contract has expired 
or been terminated, or for which assistance payments are abated.
--To remove a funding increment in connection with portfolio 
reengineering.

    HUD may amend Exhibit B or Exhibit C of the ACC by giving the PHA 
written notice of the revised exhibit. The HUD notice constitutes an 
amendment of the ACC.
ACC Term
    The ACC term is specified in Exhibit F of the ACC. The PHA shall 
provide contract administration services for the covered units during 
the ACC term.

PHA Contract Administration Services

Coverage
    1. The PHA shall enter into or assume HAP contracts with owners of 
covered units to make assistance payments to the owners of such units 
during the HAP contract term.
    2. During the ACC term, the PHA shall provide contract 
administration services for covered units in the service area.
    3. HUD will assign to the PHA existing HAP contracts for covered 
units. Upon such assignment, the PHA assumes all contractual rights and 
responsibilities of HUD pursuant to such HAP contracts.
PHA Services
    1. The PHA shall comply, and shall require owners of covered units 
to comply, with the United States Housing Act of 1937, applicable 
Federal statutes and all HUD regulations and other requirements, 
including any amendments or changes in the law or HUD requirements.
    2. The PHA shall perform all the core tasks specified in the 
Statement of Work contained in the Request for Proposals in accordance 
with the law and HUD requirements.
    3. The PHA shall perform services under the ACC in accordance with 
the HUD-approved proposal submitted in response to the HUD Request for 
Proposals, and any HUD-approved modifications of the HUD-approved 
proposal.
    4. The PHA shall require owners to comply with HUD requirements for 
occupancy of covered units, including requirements governing 
eligibility for assistance, resident contribution to rent,

[[Page 27380]]

and examinations and reexaminations of family income.
    5. The PHA shall determine the amount of housing assistance 
payments to owners in accordance with the terms of the HAP contracts 
and HUD requirements, and shall pay owners the amounts due under such 
HAP contracts.
    6. The PHA shall require owners to comply with the terms of HAP 
contracts for covered units, and shall take prompt and vigorous action 
to enforce the terms of such contracts.
    7. The PHA shall take appropriate action, to HUD's satisfaction or 
as required or directed by HUD, for enforcement of the PHA's rights 
under a HAP contract. Such actions include requiring actions by the 
owner to cure a default, termination, or abatement or other reduction 
of housing assistance payments, termination of the HAP contract, or 
recovery of overpayments.

Fees and Payments

HUD Payments
    1. HUD will make payments to the PHA for covered units in 
accordance with HUD requirements.
    2. For each PHA fiscal year, HUD will pay the PHA the amount 
approved by HUD to cover:

--Housing assistance payments by the PHA for covered units.
--PHA fees for contract administration of covered units.
    3. The amount approved for housing assistance payments shall be 
sufficient to pay owners the amount of housing assistance payments due 
to the owners under HAP contracts for covered units.
    4. The amount of the HUD payment may be reduced, as determined by 
HUD, by the amount of program receipts (such as interest income) other 
than the HUD payment.

Fees

    1. HUD may approve administrative fees for either of the following 
purposes:

--Basic fees.
--Incentive fees.

    2. The monthly administrative fee is composed of the basic fee and 
the incentive fee. The administrative fee shall be paid (subject to 
availability of appropriated funds) for each covered unit under HAP 
contract on the first day of the month.
    3. The amount of the administrative fee shall be determined in 
accordance with Exhibit E.
    4. For covered units in each FMR area, Exhibit E states the amount 
of the basic fee and the amount of the maximum incentive fee. Basic 
fees earned by the PHA shall be paid on the first day of each month. 
Incentive fees earned by the PHA shall be paid at the end of each 
quarter.
    5. If HUD determines that the PHA has performed above the minimum 
acceptable quality level in a quarter, the PHA may award an incentive 
fee per unit per month in addition to the basic fee. If HUD determines 
that the PHA has performed below the minimum acceptable quality level 
in any month, HUD may charge a penalty against the basic fee per unit 
per month.
    6. HUD will not pay an administrative fee for any covered units for 
which the HAP contract has expired or been terminated.
    7. If HUD determines that the PHA has failed to comply with any 
obligations under the ACC, HUD may reduce the amount of any 
administrative fee.

Limit on Payments for Funding Increment

    The total amount of payments for any funding increment over the 
increment term shall not exceed budget authority for the funding 
increment.

Reduction of Amount Payable by HUD

    1. If HUD determines that the PHA has failed to comply with any 
obligations under the ACC, HUD may reduce to an amount determined by 
HUD:

--The amount of the HUD payment for any funding increment.
--The contract authority or budget authority for any funding increment.

    2. HUD shall give the PHA written notice of the reduction.
    3. The HUD notice may include a revision of the funding exhibit 
(Exhibit C) that reduces the amount of contract authority or budget 
authority for a funding increment. The notice of a revised funding 
exhibit, or of revisions to the funding exhibit constitutes an 
amendment of the ACC.

Project Reserve

    HUD may establish and maintain a project reserve account for a HAP 
contract administered by the PHA under the ACC. The amount in the 
project reserve is determined by HUD. The project reserve may be used 
by HUD to pay any portion of the payment approved by HUD for a fiscal 
year.

Budget and Requisition for Payment

    1. For each fiscal year, the PHA shall submit to HUD an estimate of 
the HUD payments for the program and any supporting data required by 
HUD. The budget estimate and supporting data shall be submitted at such 
time and in such form as HUD may require, and are subject to HUD 
approval and revision.
    2. The PHA shall requisition periodic payments on account of each 
annual HUD payment. Each requisition shall be in the form prescribed by 
HUD. Each requisition shall include certification that:

--Housing assistance payments have only been paid in accordance with 
HAP contracts for covered units, and in accordance with HUD 
requirements; and
--Covered units have been inspected by the PHA in accordance with HUD 
requirements.

    3. If HUD determines that payments by HUD to the PHA for a fiscal 
year exceed the amount of the annual payment approved by HUD in the 
budget for the fiscal year, the excess shall be applied as determined 
by HUD. Such applications determined by HUD may include, but are not 
limited to, application of the excess payment against the amount of the 
annual payment for a subsequent fiscal year. The PHA shall take any 
actions required by HUD respecting the excess payment, and shall, upon 
demand by HUD, promptly remit the excess payment to HUD.

Financial Management

Use of Program Receipts
    1. The PHA shall use program receipts in compliance with the U.S. 
Housing Act of 1937 and all HUD regulations and other requirements.
    2. Program receipts may only be used to pay program expenditures, 
including administrative fees payable to the PHA, and housing 
assistance payments for covered units. The PHA shall not make any 
program expenditures, except in accordance with the HUD-approved budget 
estimate and supporting data.
    3. The PHA may use or distribute any earned administrative fee 
income, including basic fees and incentive fees, for any purpose. 
However, the PHA may not use or distribute administrative fee income to 
reimburse compensate or transfer any such income, directly or 
indirectly, to the owner of covered units, agents or affiliates.
    4. If required by HUD, program receipts in excess of current needs 
shall be promptly remitted to HUD or shall be invested in accordance 
with HUD requirements.
    5. Interest on the investment of program receipts constitutes 
program receipts.
Depository
    1. Unless otherwise required or permitted by HUD, all program 
receipts shall be promptly deposited with a financial institution 
selected as

[[Page 27381]]

depository by the PHA in accordance with HUD requirements.
    2. The PHA shall enter an agreement with the depository institution 
in the form required by HUD.
    3. The PHA may only withdraw deposited program receipts for use in 
connection with the program in accordance with HUD requirements, 
including payment of housing assistance payments to owners and payment 
of ongoing administrative fees to the PHA.
    4. The agreement with the depository institution shall provide that 
if required under a written notice from HUD to the depository:

--The depository shall not permit any withdrawal of deposited funds by 
the PHA unless withdrawals by the PHA are expressly authorized by 
written notice from HUD to the depository.
--The depository shall permit withdrawals of deposited funds by HUD.

    5. If approved by HUD, the PHA may deposit under the depository 
agreement monies received or held by the PHA in connection with any 
contract between the PHA and HUD.

Fidelity Bond Coverage

    The PHA shall carry adequate fidelity bond coverage, as required by 
HUD, to compensate the PHA and HUD for any theft, fraud or other loss 
of program property resulting from action or non-action by PHA officers 
or employees or other individuals with administrative functions or 
responsibility for contract administration under the ACC.

Management Requirements

    1. The PHA shall (without any compensation or reimbursement in 
addition to ongoing administrative fees in accordance with Sec. IV.B of 
the ACC) perform all PHA obligations under the ACC, and provide all 
services, materials, equipment, supplies, facilities and professional 
and technical personnel, needed to carry out all PHA obligations under 
the ACC, in accordance with sound management practices, Federal 
statutes, HUD regulations and requirements and the ACC.
    2. The PHA shall:

--Maintain telephone service during normal and customary business 
hours;
--Design and implement procedures and systems sufficient to fulfill all 
PHA obligations under the ACC.
--Take necessary actions to maintain good relations with owners, 
residents and their representatives, neighborhood groups, and local 
government agencies.
--Respond fully and promptly to inquiries from assisted residents, and 
from Congress or other governmental entities.

Program Records

    1. The PHA shall maintain complete and accurate accounts and other 
records related to operations under the ACC. The records shall be 
maintained in the form and manner required by HUD, including 
requirements governing computerized or electronic forms of record-
keeping. The accounts and records shall be maintained in a form and 
manner that permits a speedy and effective audit.
    2. The PHA shall maintain complete and accurate accounts and 
records for each HAP contract.
    3. The PHA shall furnish HUD such accounts, records, reports, 
documents and information at such times, in such form and manner, and 
accompanied by such supporting data, as required by HUD, including 
electronic transmission of data as required by HUD.
    4. The PHA shall furnish HUD with such reports and information as 
may be required by HUD to support HUD data systems.
    5. HUD and the Comptroller General of the United States, or their 
duly authorized representatives, shall have full and free access to all 
PHA offices and facilities, and to all accounts and other records of 
the PHA that are relevant to PHA operations under the ACC, including 
the right to examine or audit the records and to make copies. The PHA 
shall provide any information or assistance needed to access the 
records.
    6. The PHA shall keep accounts and other records for the period 
required by HUD.
    7. The PHA shall comply with Federal audit requirements. The PHA 
shall engage an independent public accountant to conduct audits that 
are required by HUD. The PHA shall cooperate with HUD to promptly 
resolve all audit findings, including audit findings by the HUD 
Inspector General or the General Accounting Office.

Default by PHA

    Occurrence of any of the following events will constitute a default 
by the PHA in performance of its obligations under the ACC:
    1. The PHA has failed to comply with PHA obligations under the ACC, 
or
    2. The PHA has failed to comply with PHA obligations under a HAP 
contract with an owner, or
    3. The PHA has failed to take appropriate action, to HUD's 
satisfaction or as required or directed by HUD, for enforcement of the 
PHA's rights under a HAP contract, or
    4. The PHA has made any misrepresentation to HUD of any material 
fact.
    5. HUD's exercise or non-exercise of any right or remedy for PHA 
default under the ACC is not a waiver of HUD's right to exercise that 
or any other right or remedy at any time.
    6. HUD may terminate the ACC at any time in whole or in part if HUD 
determines that the PHA has committed any default under the ACC.
    7. HUD shall terminate the ACC by written notice to the PHA, which 
shall state:

--The reason for termination.
--The date of termination.

    8. HUD may take title or possession to any or all program property:

--Upon occurrence of a default by the PHA, or
--Upon termination of the ACC in whole or in part, or
--Upon expiration of the ACC term.

Conflict of Interest

    1. Neither the PHA, nor any PHA contractor, subcontractor or agent 
for operations under the ACC, nor any other entity or individual with 
administrative functions or responsibility concerning contract 
administration under the ACC, may enter into any contract, subcontract, 
or other arrangement in connection with contract administration under 
the ACC in which any covered individual or entity has any direct or 
indirect interest (including the interest of any immediate family 
member), while such person is a covered individual or entity or during 
one year thereafter.
    2. ``Immediate family member'' means the spouse, parent, child, 
grandparent, grandchild, sister, or brother of any covered individual.
    3. ``Covered individual or entity'' means an individual or entity 
that is a member of any of the following classes:

--A present or former member, officer or director of the PHA, or other 
PHA official with administrative functions or responsibility concerning 
contract administration under the ACC.
--If the PHA is an instrumentality of a governmental body:
--A present or former member, officer or director of such governmental 
body.
--A present or former member, officer or director of any entity that 
holds a direct or indirect interest in the instrumentality entity.
--An employee of the PHA.
--A PHA contractor, subcontractor or agent with administrative 
functions or

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responsibility concerning contract administration under the ACC, or any 
principal or other interested party of such contractor, subcontractor 
or agent.
--An individual who has administrative functions or responsibility 
concerning contract administration under the ACC, including an employee 
of a PHA contractor, subcontractor or agent.
--A public official, member of a governing body, or State or local 
legislator, who exercises functions or responsibilities concerning 
contract administration under the ACC.

    4. The PHA shall require any covered individual or entity to 
disclose his, her or its interest or prospective interest to the PHA 
and HUD.
    5. During the term of the ACC, the PHA shall not own or otherwise 
possess any direct or indirect interest in any covered unit (including 
a unit owned or possessed, in whole or in part, by an entity 
substantially controlled by the PHA), and shall not claim or receive 
any administrative fee for contract administration of a unit in which 
the PHA has any such interest.
    6. HUD may waive the conflict of interest requirements for good 
cause. Any covered individual or entity for whom a waiver is granted 
may not execute any contract administration functions or responsibility 
concerning a HAP contract under which such individual is or may be 
assisted, or with respect to a HAP contract in which such individual or 
entity is a party or has any interest.
    7. No member of or delegate to the Congress of the United States of 
America or resident commissioner shall be admitted to any share or part 
of the ACC or to any benefits which may arise from it.

Equal Opportunity

    1. The PHA shall comply with all equal opportunity requirements 
imposed by Federal law, including applicable requirements under:

--The Fair Housing Act, 42 U.S.C. 3610-3619 (implementing regulations 
at 24 CFR parts 100 et seq.).
--Title VI of the Civil rights Act of 1964, 42 U.S.C. 2000d 
(implementing regulations at 24 CFR part 1).
--The Age Discrimination Act of 1975, 42 U.S.C. 6101-6107 (implementing 
regulations at 24 CFR part 146).
--Executive Order 11063, Equal Opportunity in Housing (1962), as 
amended, Executive Order 12259, 46 FR 1253 (1980), as amended, 
Executive Order 12892, 59 FR 2939 (1994) (implementing regulations at 
24 CFR part 107).
--Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 
(implementing regulations at 24 CFR part 8).
--Title II of the Americans with Disabilities Act, 42 U.S.C. 12101 et 
seq.

    2. The PHA must submit a signed certification to HUD of the PHA's 
intention to comply with the Fair Housing Act, Title VI of the Civil 
Rights Act of 1964, the Age Discrimination Act of 1975, Executive Order 
11063, Section 504 of the Rehabilitation Act of 1973, and Title II of 
the Americans with Disabilities Act.
    3. The PHA shall cooperate with HUD in the conducting of compliance 
reviews and complaint investigations pursuant to applicable civil 
rights statutes, Executive Orders, and related rules and regulations.

Communication With HUD

    The CA shall communicate with HUD through the official or officials 
designated by HUD.

Exclusion of Third Party Rights

    1. A family that is eligible for housing assistance under the ACC 
is not a party to or a third party beneficiary of the ACC.
    2. Nothing in the ACC shall be construed as creating any right of 
any third party to enforce any provision of the ACC, or to assert any 
claim against HUD or the PHA.

Public Housing Agency

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Signature of authorized representative

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Name and official title (print)

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Date
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Secretary of Housing and Urban Development

Signature of authorized representative

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Name and official title (print)

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Date

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[FR Doc. 99-12502 Filed 5-18-99; 8:45 am]
BILLING CODE 4210-27-C