Post Closing Portfolio Management (PCPM) and Surplus Cash Analysis (SCA)

The U.S. Department of Housing and Urban Development (HUD) intends to negotiate and award a sole source contract to MacArthur & Baker International, Inc. (d/b/a MBI Consulting, 7200 Wisconsin Ave Suite 702, Bethesda, MD 20814-4891under the statutory authorities 41 USC 3304 (a)(1) (see FAR 6.302-1) to provide Post Closing Portfolio Management (PCPM) and Surplus Cash Analysis (SCA) for the support HUD-held debt generated by several HUD programs. HUD requires support for HUD's Project Managers (PMs) nationwide in analyzing certain unique loans that have been and will be created and held by HUD under: The M2M Program. Portfolio Re-Engineering Demonstration Program (or "Demo Program") and the Partial Payment of Claim (PPC) Program. The M2M Program was established in the Multifamily Assisted Housing Reform and Affordability Act (MAHRA) was created to restructure the FHA-insured or HUD-held mortgage loans on a large number of privately-owned properties with above-market rents and expiring project-based Section 8 Housing Assistance Payment (HAP) Contracts. The PPC Program is conducted pursuant to authority found at the Code of Federal Regulations (CFR), Title 24, and Section 207.258(b). When the expiring Housing Assistance Payment (HAP) Contracts for a property are determined to be above the market rate, the property owner is required to participate in the Mark-to-Market Restructuring Program in order to receive a new project-based HAP Contract. Generally, as a result of participation in the M2M Program or the Demo Program, the above market rate subsidized rents are reduced to market rate and the existing property debt is restructured to a size supportable by the cash flow generated at the market rate rent level. The expected cash flow is determined by a re-underwriting, which analyzes and evaluates the property's capital needs and operating expenses to ensure that the property can be financially viable and remain in good physical condition based on projected net income at market rents. A partial payment of claim against the Federal Housing Administration (FHA) Insurance Fund is made for any difference between the total sources at closing (the new first mortgage proceeds, together with any required Owner funds and eligible property accounts) and total uses (payoff of the existing FHA-insured mortgage and funding for all eligible uses, including rehabilitation escrows, initial deposit to replacement reserves, approved closing costs, etc.) In the M2M Restructuring process, the partial claim amount is not forgiven, but is captured in a new mortgage note or notes payable to HUD and secured in a subordinate lien position to any new first-mortgage financing on the property. A payment may be due annually on these new notes as defined in the legal documents arising from the restructuring transaction. The payment for each of these HUD-held notes (if required) is calculated at a specific fixed percentage of the property's annual surplus cash and is calculated and shown in the year-end financial statements for a property. HUD is restructuring another group of loans, known as PPC Loans, using a process similar to a M2M restructuring. However, they are not part of the M2M Program and are governed by different rules and requirements under the Code of Federal Regulations (CFR), Title 24, Section 207.258(b). In a PPC restructuring, the existing property debt is restructured to an amount the property can sustain with the cash flow after operating expenses and contributions to the reserve for replacements account. In addition, capital needs and operating expenses are analyzed and are underwritten to ensure that the property is financially and physically sound. In the PPC Program there is no programmatic requirement to reduce the rents, but the property's physical requirements and financial viability are considered when determining the amount of the Partial Payment of Claim (PPC). Once the PPC amount is determined and the property Owner agrees to repay that amount to HUD by executing a new HUD-held note. The M2M rules for determining the amount of annual payment due is applied unless unique circumstances require a different treatment. The period of performance is for a 6-month base period plus a 6- month option periods. The NAICS code is 532920 Portfolio Management and the size standard is 38.5. This notice is not a request for competitive quotations. However, any firm that believes it can meet these requirements may submit a written response via email to Brenda Lee at the email address below by 12:00 PM Eastern Standard Time on February 26, 2019. Supporting evidence must be furnished in sufficient detail to demonstrate the ability to comply with the above requirement. Information received will be considered; however, a determination by the Government not to compete the proposed acquisition based on responses to this notice is solely within the discretion of the Government. If no responses are received, HUD will proceed with the sole source award to MacArthur & Baker International, Inc. (d/b/a MBI Consulting. The anticipated award date of this requirement is on or around February 28, 2019. No calls will be accepted. If you have any questions regarding this announcement, please contact Brenda K. Lee at [email protected].