Training & Development Associates, Inc.

NSP Procurement Webinar Transcript June 3, 2010

Speakers: Dionne Roberts

William Woodring

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Dionne Roberts:

Good morning and welcome to the webinar on NSP Procurement. In addition to me, we also have

joining us today, William Woodring, who will be doing part of the presentation as well as a number of folks

from HUD. So we have Denise White and we also will have joining us Paul Webster and John Laswick. So,

with that we are going to go ahead and get started. If you have any technology issues or you are having

difficulty getting onto the system, there is a phone number that was provided in HUD information about the

webinar on the NSP Help Site and we would encourage you to call that phone number and get the assistance

that you need in order to be able to participate fully. There is always something extra when you are actually able

to see this live. If you need that phone number, if you’re having difficulty...please call area code 410-547-1825,

again its area code 410-547-1825.

The way that we are going to cover this today is basically in three sections. We are going to start off

talking about the standards and what the requirements are in terms of where they come from and where you can

find additional information. And then we are going to spend really the bulk of the time on this webinar talking

about the options that you have with NSP grantees for your procurement options, as well procurement options

of your subrecipient. So, we know that there have been a lot of questions around this and we are encouraging

you to ask those questions as they come up. Let us know so that we can go ahead and make plans to answer

those. And than finally, after we talk about your options we will also talk about just some basic

recommendations. So, it's based upon things that we’ve seen working out in the field. Both William and I are

working with NSP grantees directly, as well as a lot of questions and issues that have come up that HUD has

addressed directly. So, we really want to encourage – this webinar to really be a conversation where you can ask

any questions that have not already been answered or presenting scenarios as you’re trying to navigate in order

to be able to fully obligate your funds. So, we are to go ahead and start with the Standards portion of this...and

just to be clear about where the rules are coming from...because I think there’s a lot of misunderstanding about

– with much of NSP – is it CBDG...is it something coming from HOME...is it a special requirement as a result

of the notice? And so what’s important to understand is that procurement requirements for NSP are essentially

the same requirements...the Unified Administrative Requirements that cover the other CPD programs that you

may have had experience with CDBG and homes; for example. So, the OMB circular from IG, with the rules

for this...and than HUD also has regulations that implement those rules. And because it goes from...includes

both OMB as well as HUD regulations...we just want to be clear about which ones you should reference back

to, if you have the opportunity to go back and take a look at them. So, when we are talking about the Federal

Procurement Rules and what we call the UAR, Uniform Administrative Requirements...what we are really

talking about is if you are a State or a local government – so if you are a direct recipient of NSP funding under 2

NSP1, we’re talking about 24 CFR, Part 85 and OMB Circular 8102. These are the pieces that have the specific

information related to a number of things that specifically do include the procurement requirements for State

and local government entities. If you have not-for-profits that you are working with as subrecipients, they would

be subject to OMB Circular A110 or 24 CFR, Part 84. Again, it's a different section. Many of the requirements

are similar, but there are differences based upon the types of entities. So, you want to make sure that you are

also referring your not-for-profits that you are working with to the Guidelines that apply to them, as opposed to

the Guidelines that might apply to you as a State or local government. You are required under NSP to adhere to

the Federal Procurement Rules. So, there is nothing in NSP that exempts you as grantees or your sub recipients

from following Federal Procurement when you’re purchasing services, supplies, or equipment. So, essentially

any of the things that you would go through in the process of carrying out your NSP1 Grant, you are going to

see most likely come up as a procurement requirement.

The key thing is that you need to have and this is something that we reiterate with so many things...a

procurement policy that is written down and in place and is something that you go back to at each time you do

procurements, so that you are ensuring that you are being consistent with what you’re doing. And that you are

able to document the fact that you’re not only compliant...but you are consistently in compliance with what the

requirements are. And those requirements really depend upon the type of methods that you use. There are four

options that you have and William is going to more specifically address those, so I am going to turn this over to

him and we will talk more specifically about the four methods. We don’t have any questions in the queue so far,

so we are just going to go ahead and continue. I imagine once we get into methods they will start popping up, I

hope. William do you want to take over, please...William are you there?

Okay, until William joins I am going to go ahead and move forward with this. So, if we can go to the

next slide? Essentially, there are four options and a lot of it depends on two things – how much you anticipate

spending on the goods and services that you are procuring and what specifically they are. And so, in most

instances there are four choices; there are small purchase and we will talk about each of these individually.

There is small purchase. There is sealed bid. There is RFPs and than there are non-competitive. Or what is also

more commonly known as sole source. On small purchase we say that it can be used for purchases below

$100,000, but that is the Federal limit. So, if you’re a government entity, whether State or local government has

a stricter policy that says that small purchases are only up to $25,000 or only up to $50,000...than that is going

to apply. Because the requirement is that you follow whatever is the stricter guideline, whether it's the Federal

guideline or your own local or State requirement. So the Federal requirement is nothing...anything below a

$100,000 can be considered a small purchase, if that is what your own unit of government provides for. 3

Generally, the requirements...if you’re doing small purchase...is that you get three to five competitive quotes

and that can be...years ago it used to be that you would have people fax things in? You can do phone quotes as

long as they are well documented and you have the information. You can receive the information via email...so

the key is to be able to document that you got those quotes and that they were for the same products, so that it is

apples-to-apples and than that the estimates were received at approximately the same time. So there is not a six-

month difference between when you got one quote and than another so that they are a “point in time quote.” If

you have the three to five than you are selecting whatever is the most one of those. And reasonable is one of

those words in the OMB circulars...that’s one of my favorites...because it really means what a prudent person

would believe to be appropriate in that circumstance. And so, what I often say to folks that if you are not known

as the prudent person...than you need to go find the person in your office who is. Because many times many of

us don’t fall into that category, but you’re selecting whatever that most reasonable offer is of the three to

five...but not necessarily the cheapest...but the one that is reasonable, responsive, and meets your needs. It may

cost more, but if the cheapest one is going to take three months for delivery and you don’t really have that three

months...that is the kind of thing that would be taken into consideration. And with small purchases, generally

you are also using other purchase orders or else petty cash in order to purchase. You are usually not going

through a long drawn out finance process. And so, many times your purchase order actually is your contract.

When we get to contracts...it constitutes your contract for that particular purpose. So that is the first option.

The second option is sealed bid. And sealed bid is really only used for construction to purchase

equipment or supplies. And the reason for that is because you really have to be able to be extremely specific in

your bid document, if you are going to use a sealed bid. A sealed bid basically means that you are not having

any sort of back and forth conversation, with your respondents about what did you mean by this? Or what does

that look like? So, you have to be able to develop in your invitation to bid...a very specific specification for

what you’re looking for so that all of the responses that you receive are giving you a price for the exact same

thing. The reason for that is because when you do sealed bids; the only consideration in awarding the contract is

to what we call the lowest responsive bidder. Now, they have to price out what you asked for and they can’t

turn out to have been debarred or suspended or any of those kinds of things. But, if it's apples-to-apples and

they are the cheapest, than those are the things that you have to go with. So, you want to make sure than when

you are doing sealed bids...you know exactly what you want because that’s exactly what they are going to give

you. So, if you are doing a sealed bid obviously you have to develop that very specific invitation. You have to

go out for public solicitation for that bid. The way that sealed bids are opened is in a public setting. Usually

there is a time start, you know at 5:00 p.m. Friday, June whatever...at our offices...and many times many of the

folks there will show up and actually be there for the opening of the bid. They are reviewed in detailed and than 4

that contract is reviewed and awarded to the winning bidder. So, again the key with sealed bids is specificity...if

you can say exactly what it is that you want and you’re looking at construction or equipment or supplies than it

may be the approach that you want to take. But it is really not something that you want to do otherwise, because

of the fact that you have to be so specific with it. William if you are there I am going to turn it over to you for

the conversation about RP?

William Woodring:

Sorry about that. I just want to make one other comment to the sealed bids...my comments...thank you so

much for covering for me while I was having a technical glitch with the audio here. I just want to make sure that

you keep all of your records from the invitation all the way down through the Affidavit of Publication. Keep a

complete copy of the whole package. Documentation you are going to find is very important all the way

through. Not only for you, but the sub-grantees are also going to be subject to the requirements, so we do

absolutely want them to make sure that there is documentation and you are the grantee, are going to be

requested to do so. For the Request for Proposal or RFP...those are used when we aren’t required to have a

sealed bid or it is not appropriate. A lot of times consulting services and architects...those we will do with an

RFP. Now that process does fall very similar to a sealed bid or quote, where you want to develop that in the

Invitation to Bid...be specific, communicate as much as you can through the process, announce that you are

going to be soliciting bids, and again make sure that you keep the documentation. There will be a point in time

where you will have the opening of the RFQs or sealed bids and you will go through that and announce the

prices and run through that. Typically what is done in the process is that you review those and than award those

bids at a later point in time, but you do want to take a look at the contract. For an RFP it is a little bit more than

specific because you are looking at some intangibles, as well.

Operator:

And William, we have some questions piling up whenever you are ready to start thinking of those.

William Woodring:

Okay. Let’s go see a couple more slides and than we will hit all the questions at one time. So, see if you

can give me another slide...

On the non-competitive awards...those are permitted when it really isn’t feasible to get one of the other

methods involved. It is available for only one source...if you have one source of information. If it is going to

consist of things that we don’t have a lot of time and it also authorizes us in a non-competitive situation...we can 5

go ahead and do those non-competitive awards. But be very cautious with that. We are subject to open

meetings, so you want to make sure that all of that information is readily available and try to do the non-

competitive if it's possible. And do remember back in the cost analysis and written specifications must be in

your house, a really good filing system, and a lot of documentation. The key to this is...document, document,

and document. Since we have some questions cuing up, Lucy why don’t you allow one or two of those

questions through.

Operator: Okay, also I want to let you know that John Laswick and Paul Webster are with us. Their phones

are unmuted, so gentlemen if you would like to join in on any questions or participate as the slides are going

through, please feel free.

We have up, Lois Coleson...Lois I will unmute you and...

Question Coleson:

Hi, this is Lois. I had a couple questions and think the first is – I think I might know the answer, but I

just want to confirm because I detected some other requirements and it is definitely not related to procurement.

The answer has been a little bit different, so I just want to confirm. In this situation, where there is a lead

consortium member who is a government entity, like ourselves, we are following Part 85...ah 84 – I always –

yeah Part 85. But our nonprofit consortium members – they are following Part 84, correct?

Paul Webster: Yes, that’s correct.

Question Coleson: And then my other question and I am glad you are there Paul, because I have one later on

bonding, but I am going to wait until we get to that section, because maybe my question will be answered than.

But my other question is related to what we just went over, which is field bidding? It is pretty specific what you

guys just talked about and Part 84 doesn’t get into the specificity of doing actual sealed bids and opening them

publically, is that correct or do we need to require that the nonprofits follow the same as the government would?

Paul Webster:

You are correct that Part 84 is not as descriptive as Part 85 – for example it does not list the four methods that

we just went over. That was intentional so it gives the nonprofit organization a little bit more flexibility in

dealing with the procurement. So, I guess the short answer is that you’re not constrained to follow those four

methods, but you should follow a method that is appropriate to the circumstances. So if you are talking about a

construction contract, then something like the sealed bid method would be appropriate. If you are talking about

consulting services or other kinds of services, engineering or architectural services or something like; where 6

other factors than just price come into play in the selection process, than you would follow something like that.

But you are not constrained to follow those four methods if you are an entity that is subject to Part 84, rather

than Part 85.

Operator: Okay, thank you. I have a quick email question and than we have two or three other questions in

cue and we will get to those. The email question is; for my NSP2 projects I have a for-profit development

partner to the consortium...does this developer partner need to abide by the grantee’s procurement rules, as well.

Does the contractor need to abide by those rules?

Paul Webster:

If the other entity is not a subrecipient, but is acting in some other capacity, such as a developer, than

they are not subject to the procurement rules. They are not required to follow those procurement rules.

Operator: Okay, thank you. The next question is from Tracy Harvey...Tracy if you can tell us where you

are from and what organization and ask your question.

Question Tracy Harvey: I am from the City of Dover. I have a nonprofit partner that is acting as the

developer. He solicited bids for NSP rehab projects. When the bids were received, one of the bids was late, so

what I did was I rejected that bid. Could I have awarded the bid to the other bidder even though it was higher,

but reasonable?

Paul Webster:

I am not sure that I heard everything that...the party that you’re talking about is a subrecipient, is that correct?

Question Tracy Harvey cont.:

He is actually the developer and he had a bid opening for NSP rehab and what happened is that there

were only two bidders...one of the bidders submitted his bid late, so I was informed by the other bidder that the

other bidder submitted his bid late. So what I did was, I rejected the bid and decided to re-bid the project again.

But my question to you is...did I have to do it? Would it have been legal for me to have accepted the other bid,

even though it was higher, but still reasonable, instead of having to go to bid again?

Paul Webster: In so far as the Federal requirements are concerned...since the developer is not actually

subject to those requirements, than you were not required to follow the sealed bid method...But you are still 7

required to make sure that the costs that are incurred by the developer are reasonable and following a

competitive approach to selecting rehab contractors, which would be a better way to demonstrate when a low

bid is accepted...is a way to demonstrate that the support is reasonable to the costs.

William Woodring:

In response to the questions or all of the questions - the other factor that does come into play is that we

must use business and management practices. Don’t forget to use good business and sound management

practices it’s the prevailing call.

Operator: Okay, I have a question from Blair Shaffer...Blair?

Question Blair Shaffer: Hi, I am calling Neighborhood Housing Services of Orange County. We are part

of a nonprofit consortium and we were wondering if we have small rehabs to do on single family properties and

estimating it to be under ten thousand dollars – would we still have to do competitive awards for the contractors

for those properties?

Paul Webster: Well, I think you are still required to...if you are a subrecipient or a grantee...you’re still

required to try to follow a competitive process to the extent practical. So, you are talking about extremely small

contracts and so – and you are talking about something that would follow a small purchase procurement

method, so I don’t know that you would have to get three to five necessarily for such small contracts, but you

should try to ensure that you’ve gotten bids or quotes from the contractors – enough contractors so that you

know that what you’re awarding is the lowest price, based on the competitive process, even though it could be

an informal competitive process...you still have some evidence of documentation that you tried to select the best

contractor for the least price.

Question Blair Shaffer: Okay. Because we had written our Rehab Manual so far – I think it was under five

thousand – we weren’t going to take bids because it almost didn’t make sense to use that time to get bids on

such a small contract.

Paul Webster: Do you have contractors that you have screened for use?

Question Blair Shaffer: Yep, we have a vendor pool.

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Paul Webster: And if you have gone through a competitive process in selecting entities to be in the

vendor pool, than you would have more flexibility in deciding whether you want to just select from among that

pool.

Question Blair Shaffer: So, do you think in the case that if it is under five or ten thousand and than...get

them out of your pool – we may not have to use – I mean we may not have to get bids.

Paul Webster: Five thousand dollars is not mentioned in the – a five thousand dollar threshold is not

mentioned in the regulations, so there is nothing magically about that versus ten thousand. The small purchases

threshold is a hundred thousand dollars...but what I guess I am trying to say is to the extent possible you should

follow a competitive process. You have to take into account what is practical under the circumstances and you

should not have to go through a long drawn out process to award a contract for five thousand dollars. But, if you

have a vendor pool that you compiled through some competitive process, than if you select from among that

group than I think you have some flexibility in deciding whether you need to go for additional quotes or not.

You have some flexibility to do that.

Question Blair Shaffer: Thank you.

Operator: Thank you. We have one more hand raised and an email question and than we will go back to the

presentation. I have C. Everett, Mr. or Ms. Everett would you like to ask your question? Okay, I am going to

assume that we have either lost them or they are waiting for another chance. The email question..”if you are

using non-NSP funds in an NSP project...other non-Federal funds/foundation funds to cover some of your

project costs, do you need to follow the procurement process for the non-NSP funded activities; such as hiring a

spec writer, funding under fifteen thousand.” Thank you.

Paul Webster: No these requirements only are going to be paid with NSP funds or other Federal

program funds. So, if a contract is entered into with someone and the payments for those contracts are not

coming from Federal grant sources, than there is no Federal requirement that applies. However, if one dollar of

Federal funds goes into that payment on a contract, than all of the requirements apply.

Operator: Okay, thank you. William would you like to start again?

William Woodring:

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On to contracts. On contracts we have got two basic types of contracts that we can use (00:32:31). The

fixed priced contracts and you are going to put those out for bid...those fixed price contracts are those where

you have actually agreed upon a price and it doesn’t really matter what the actual costs are...we are going to fix

the price for the tract and however the subs or whatever will fill that agreement, based on a fixed price. The

second type is a cost disbursement, where we actually establish a costs and we put a ceiling on that so it doesn’t

get carried away or out of hand with what the ceiling the might. And there are some restrictions on those cost

plus percentages for that cost. When we are opening those sealed bids on the fixed priced contracts, we have to

go through the normal bidding process and make sure that you document everything along the way and have all

of your processes documented and you have a good file on that. You open those bids in a public session with

all of the others. I think we’ve probably beat up that portion and we will move to the next slide.

I know there are some questions coming up for bonding so we will do this and than take a few questions

at that point. On the contracts that are for one hundred thousand dollars or more...we need to have assurance

that that project will be completed and typically through the bond and/or insurance. Those are required...all of

the performance bonds are required for the contracts over one hundred thousand dollars.

The requirements in addition to the completion that are required would include the normal good prudent

business policies. We want to make sure that those people who are working for us have Worker's Compensation

insurance that their employees are covered for liability. That they have automobile insurance in case there are

any injuries on the job site, and that could also include on the way to the job site. That they have comprehensive

public liability and that they have property damage policies in place as well. That would be evidenced by

having the vendors provide an insurance binder to you and you want to keep that on file. Most of the accounting

software for my particular system makes you aware of when insurance policies may have expired for one of

your contractor. Keep those reminders turned on and running on your software, so that you are aware and we

found that sometimes we need to supply them in advance. Bonding is a really important issue. There were some

questions. Would this be an appropriate time to field a few of those questions related to insurance and bonding?

Operator: Sure. I did want to make an announcement though in terms of housekeeping. If you raise your

hand, we are not taking chat questions. What I can do is go through and read those, which I can do now. But, if

you will please use the “raise your hand button,” the little icon and that will allow you to ask your question over

the phone, if you have that connection. I am going to check to see who we have with their hand raised. I have

Laura.

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Question Laura:

Okay, it's a two-fold question. One, we’re a subrecipient where we are partnering with a nonprofit. Our

State administrators have asked us to enter into a contract, with that nonprofit and will be rolling over some of

our funds to them to execute the construction. Do there need to be any performance bonds and insurance

attached to that contract with the not-for-profit, since they are essentially our construction arm or who we’re

using in lieu of a private contractor. And than also we’re purchasing modular housing that they are going to be

installing on foundations for us. And again, that’s a large contract...what would be the bonding and insurance

requirements or are there none because it's a fabricator? Just curious.

Paul Webster: Well on the first part, it depends on what the not-for-profit in what capacity it's operating

as. Is it a subrecipient...are you entering into an agreement with this entity to act as a subrecipient of yours?

Question Laura:

Yeah, I guess so since we are rolling the funds over. They would be like a third or fourth tier

subrecipient.

Paul Webster: Okay, and now are they in turn hiring contractors or doing anything like that?

Question Laura:

They will be yes...or they will be continuing to keep our hands in to make sure that those contracts are

appropriate.

Paul Webster: So any contract that they enter into with a third party for services, would be subject to the

procurement rules that we have been talking about. If the contract is less than a hundred thousand dollars, than a

selection could be made through a less formal process, but...

Question Laura:

I am talking about their own Habitat for Humanity folks that are on site or anything as far as their insurance that

they would need to have or anything for their on site construction that they are going to be doing for us. You

know, if they were a regular contractor, we would make sure that they had all that stuff, but they are not-for-

profit who are having their own workers on the job site.

Paul Webster: I thought you said that they entered into contracts with third parties. 11

Question Lura:

Not all of the work, some of the work that their volunteers can’t perform, such as electrical and you

know any technical stuff. The majority of the work will be done by their own volunteers.

Paul Webster: Okay, so of course the work done by their own volunteers isn’t governed by the

procurement rules. But if they do enter into contracts with third parties, than they would invoke the procurement

requirements including the bonding requirements that are specified in both Part 84 and Part 85. So...

Question Laura:

The not-for-profit is not required to carry any insurance or any bonding?

Paul Webster: For the work that it does itself?

Question Laura:

Yes.

Paul Webster: No, it's not required. That’s not procurement. When you selected that not-for-profit you

selected or designated another subrecipient...that’s not procurement and not governed by Part 84 or Part 85.

But if they do in turn procure services or goods themselves from some third party to perform part of the project

work, than that procurement would be governed by Part 84, since they are a nonprofit organization.

Question Laura:

Okay.

John Laswick: So would that same requirement hold if they had a relationship as a developer instead of a

subrecipient?

Paul Webster: Not a not-for-profit.

John Laswick: So they don’t have to follow procurement procedures, they don’t have to have bonding,

and insurance either?

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Paul Webster: That’s right. If they are a developer they are not subject to these procurement

requirements. So, if you know...the first tier organization designates somebody to actually do some work and

this is rehabilitation that is done pursuant to 57202 and that entity qualified as a developer than they are not

subject to the procurement requirements.

William Woodring: And I would point out that with many cases in Habitat affiliates around the country, if

they are going to be doing the financing through their own purchase money mortgage procedure the way they

typically do, you would probably want to have them in a relationship where they are considered a developer, as

opposed to being a subrecipient, because it makes it easier for them to do that as there is no requirement for

them to repay program income either. We have some guidance up on this and you can find it on the Resource

Exchange. We used to call it acquisition rehabilitation, but we have some charts up there that show you what

applies to which kind of organization in which situations.

Operator: Okay thank you. Lois Coleson, you have a question again? Oh, Lois, I am sorry.

Question Lois: I am still wrangling with that last question and the answer, which surprised me but that’s

good, but can I guess add one more thing on it and get confirmation about it? We have again a nonprofit

consortium member who will be doing the rehab themselves similar to what it sounds like Habitat is doing in

that last case. So, they do not have to have the bonding and the insurance and all that stuff for their workers that

are volunteering. Is that correct? And of course they are a nonprofit.

Paul Webster: Yeah, a consortium member nonprofit doesn’t describe it precisely enough, if it is a

consortium member nonprofit and it's a subrecipient...or as part of the consortium it is considered to be part of

the grantee...than they are subject to the applicable requirements – procurement requirements. If they are not

deemed to be part of the grantee or subrecipient, than they can be treated as a developer as long as they are

undertaking rehabilitation or acquisition for the purpose of rehabilitation. Now, if they are a developer they are

not subject to the procurement requirements, so they wouldn’t have to have a – wouldn’t have to comply with

all of the bonding requirements for example that a contractor – or that they would if they were acting as a

subrecipient. So it just depends on what capacity they are acting under. If they are acting as a subrecipient and

they comply with each requirement or if they are acting as the developer, than they don’t have to comply with

these requirements.

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Question Lois: Okay I know – I appreciate that you appreciate a little bit where I am coming from and

some of us with where the line is drawn when you are a subrecipient or you’re a consortium member, because

the two are sometimes spoken interchangeably. So, sometimes our consortium members are told to be following

all the same rules and refer to the subrecipient handbooks to find check lists and how to deal with some of these

questions. So, even though they are not procuring anyone to do the work, because they are a consortium

member in the application – they are considered a grantee that has to be bonded.

Paul Webster: No, the bonding requirements apply to the contractors that they...

Question Lois: Right.

Paul Webster: So, unless they are procuring a contract from a third party, than these bonding

requirements that we are talking about don’t apply. It's only if they are doing a procurement that they would

apply. If they are talking about work that they would perform themselves through volunteers or otherwise and

they are not going out and hiring somebody else to do it through a procurement process, than they are not

subject to the bonding requirements either, because the bonding...

Question Lois: Right, okay. That was my initial question. So, they are a consortium member who is not

procuring a third party. They will be doing rehab work through their own volunteers. They are not going out

and procuring anyone, so they will not have the bonding requirements that we just went over.

Paul Webster: That’s correct...that doesn’t change the management practices that a consortium – all

consortium members want to employ and that is having other kinds of insurance so that if someone is injured on

the job that...they are covered by that, but as far as the bonding requirements that apply to contractors, no they

are not subject to that.

Question Lois: Okay and that’s why it threw me the first time when you said that, but that is what you’re

saying and understand those good management practices, because that would be cause for concern if all of your

consortium members are able to do their own work with volunteers...

Female Question: The question I originally had was...I don’t know if you recall a couple emails of mine that

I sent to you from the consortium here in New Orleans...we like everybody else have a huge – are putting a

huge effort into to trying to hire local small contractors to get onboard with all this work that we have coming 14

forward from NSP to help build capacity. One of the issues as you might imagine coming up is the bonding and

how much flexibility we have to make – have alternatives to that. I know that in Part 84 it discusses how if you

want to try something different to talk to HUD and they approve different thresholds. I sent one previously in

April to you and I don’t want to go over it here, because it's probably too detailed for everybody else to care

about – but is there any...I guess the question is, is there any precedence in the past that you would like to share

with us of alternative bonding that you would accept? That is lower threshold.

Paul Webster: Well the primary – there are different kinds of bonding requirements. First of all, you are

talking about performance bonds, payment, and bid guarantees are the main one. So, each one has to be looked

at separately. But, there are alternative approaches, particularly where those alternatives are being applied to

nonprofit organizations, HUD has more flexibility in permitting alternatives. So, you might look at letters of

credit that would be issued by a bank and that would be payable to the entity that is doing the procuring, the

subrecipient, or the grantee. Cash, escrow deposits, things like that to ensure payment performance...these are

alternatives that can be looked at. SBA also has a small business or used to have a small business contract and

performance bond program that I think is still in existence. So, those are alternatives that you can look at. But

usually in a situation where you want to use an alternative...you just have to come to HUD and propose exactly

what you want to do and we will have to make a determination on that.

Female Question: Okay and is that person new at HUD or...

Paul Webster: Well, you normally start with a field office on something like that, because they have

responsibility for the basic CBDG program. And than if they are not comfortable answering it than they will

buck it up to headquarters and it will either be me or somebody under my SP team that will take it and get an

answer for you.

Question Lois: Okay, is that something that I should start over with my field officer, or did you already

buck that back to the field office? Do you remember?

Question Lois: I don’t remember to be honest.

Female Question: Okay, I will start over with the field...

15

Paul Webster: why don’t you do this...why don’t you contact me separately after the webinar. I am out

of the office today, but send me something again and than we will make sure the response gets made.

Question Lois: Okay.

Operator: Okay, I am going read one of the chat questions...”24CRF85.36 requires competitive

procurement of contractors. However, a subrecipient does not need to be competitively procured. If a for-profit

entity is not procured competitively are they than a subrecipient and subject to those requirements? If a

developer is “contractor,” what is the basis for noncompetitive procurement?” And this is coming from Jeanine

Russell.

John Laswick: Well to be a subrecipient you have to be either a nonprofit or a unit of government, so a

developer for-profit is always going to be a developer. You could also have a nonprofit developer, but any for-

profit has to be a developer, they can’t be a subrecipient. But, than the CBDG regulations allow you to select

both subrecipients and developers, without a selection process. However, once selected subrecipients must

follow a procurement process. Developers are not required to.

Operator: Okay thank you.

John Laswick: I just had a follow-up on Lois’ point too. A lot of time when you are working with these –

you want to work with local contractors and build-up capacity...I think there is quite a bit of room there up to a

hundred thousand dollars in which these bonding requirements don’t apply. So, you know...and the chance are

with these smaller contracts that they are not ready for million dollar contracts anyway. So, I think you might

just want to be thinking about you move up over time starting people out with smaller jobs and than working up

and having them gain capacity and financial resources to be able to get the larger credit or the bonds or

whatever to assure you that they have the capacity for the larger projects. So, I am not sure that those

requirements are really going to limit you extremely because the folks that you are working with are probably

more comfortable doing smaller jobs in the beginning.

Operator: I am going to move on to the next question...we will have time at the end of the overall session

for more questions and follow-up. Sage Hallis, are you with us?

16

Question Sage: I just had a question regarding whether you could point us to something in the regulations

of FAQ that state that developers don’t have to follow procurement standards.

Paul Webster: There was just the one that I mentioned...the Acquisition and Rehabilitation Policy

Guidance...we wrote that about one year ago and it's on there. I think if you search under...if you go to “find a

resource,” and search under HUD guidance and put in Acquisition and Rehabilitation, it should come up. It's

about a five-page piece, I think.

Operator: I have a quick question from Kim Murphy...Is there a specific dollar amount that must be

reached before the one month follow requirement?

Paul Webster: No there is no specific dollar amount. Assuming that the procurement requirements

apply, because the entity that is doing the procuring is a grantee or a subrecipient than they still apply, but there

is a small purchases threshold of one hundred thousand dollars that provides the grantee or subrecipient with

more flexibility and selection in the first place...so there is some more flexibility for contracts under a hundred

thousand dollars, but there is no threshold for the applicability of these requirements per se. The requirements

apply if procurement is being undertaken by either a grantee or a subrecipient.

Operator: I will take one of the chat questions. “Is a request for qualification that includes a competitive

proposal for general requirements and builder fee, an acceptable contractor selection method under NSP2

criteria?”

Paul Webster: Well I don’t think we have quite enough information to answer the question. Let me just

put it this way, if a grantee or a subrecipient has gone through a process under which they are procuring...if they

are governmental grantees one of the four methods and if they are not a governmental grantee, some other

method that is appropriate to the specific circumstance that provides for competition, than that’s permissible.

But I am not quite sure exactly what the questioner has in mind or that question, so I can’t give a more specific

answer to that.

Operator: It is Juan Cardona and Mr. Cardona if you want to try raising your hand or submitting more

information. He does have a second question here so...”Is a guaranteed maximum price an acceptable contract

price for projects using NSP2 funds?”

17

Paul Webster: A guaranteed maximum price for one procurement...the selection should be based if it's a

construction-type contract...than it should be based primarily on price and there is – if you are talking about a

guaranteed maximum price, you are usually talking about something that is cost reimbursement type contract,

where there is a maximum amount set for the payment under the contract. That’s okay, as long as there is no

cost plus percentage of cost, where the fee is based...that the contractor will earn...based on a percentage of the

actual cost. That is prohibited. But, otherwise you can do a cost reimbursement-type contract, as long as the fee

for that is fixed. And it is not uncommon to have cost reimbursement contracts with a ceiling on it, but you

know again I am not quite sure exactly...

Operator: I will ask via the chat if perhaps he can elaborate, and so perhaps we can return to that later. I

have a question from Mr. Barbie. “We are a subrecipient and a Habitat affiliate. We sometimes contract with

sole proprietor subcontractors. Unless they pay themselves a salary they are not covered under Worker's

Compensation. Are they not eligible under the insurance requirement?”

Paul Webster: That doesn’t disqualify them eligibility, no. So, the bonding requirements that we are

talking about under procurement are basically the payment bond, the bid guarantee bond, and a performance

bond. So, the Worker's Compensation or other types of insurance that might be desirable, would be just that –

desirable, but not necessarily a requirement.

William Woodring: I would like to weigh in on that too. Many states, even though they are self-employment

provision does not pay themselves a salary, many states still require Worker's Compensation policies to

arbitrarily establish a fixed amount, so we would caution you to explore the local State just because they do not

draw a paycheck as a self-employed, does not alleviate them or eliminate them necessarily from the Worker's

Compensation insurance requirement.

Paul Webster: That’s a good point. It is a State requirement that should be looked at. But again, the

requirement that someone has a Worker's Compensation policy is a good management practice anyway.

John Laswick: Could I make sort of a point that is similar to that, Paul. We have the hundred thousand

dollar small purchase limit, but many states have a much lower value...twenty thousand, twenty-five thousand

dollars so I think that grantees and the subrecipients need to be aware of that. If they are working in that range,

than they may be constrained by that lower limit. But a question that came up last week was...I don’t think those

limits...those state limits apply to nonprofits who may be working under Part 84. Is that or do you know if that 18

is true? You Paul...I mean if their a nonprofit that is covered by Part 84 and their state small purchase limit is

twenty-five dollars, but it only applies to units of government than...they would be under our hundred thousand

dollar figure.

Paul Webster: Yeah, they would at least be subject to the hundred thousand dollar figure. Whether they

are subject to a state requirement or not is something they would have to have the grantee or subrecipient

determine itself. Obviously, we can’t give advice on state requirements and they probably vary fairly

significantly from state-to-state on matters like this.

Operator: I have Mr. Cardona unmated so he can perhaps clarify his question that he asked before.

Question Cardona: So yeah, thank you so much for the clarification and I guess that some of the information

that was not clear is...this is a two-phase project, so the first stage of the project...we completed a while before

the NSP funds were available and we had selected a contractor. And the contractor was selected through a

Request for Qualification, where we actually asked for a competitive proposal for general requirements and

builder fee only, because we did not have a full scope of work outlined through the architectural work, so we

did not have all of the information for a sealed bid. So, I guess my question is...since this is the second phase

and we’re trying to use NSP2 funds to go through the second phase and we already have a contractor whose

familiar with the project...would we have to go through a new competitive procurement process since we

already went through this before in phase one and we did a partly competitive without a cost-based competitive

proposal, but more so toward the general requirement builder fee.

Paul Webster: Well, if the project has not changed...if it is just a continuation of the same project and it

fits within the scope of work under the original contractual arrangement, than you wouldn’t have to go back and

procure again, unless you increased the amount to a level that would trigger – that would be above the small

purchases threshold. Now, whether the initial selection process...the Request for Qualification isn’t usually a

procurement transaction per se, it's just a way to screen and get some screening done of potential contractors.

But, if included in that Request for Qualifications you outlined the factors that you would use to evaluate the

winner and one of those was the fee that would be charged and you enter into something like a cost

reimbursement contract, where you are going to pay this entity the cost of the project, plus a fixed fee...than it

could well qualify or could well comply with the procurement requirements. Notwithstanding that you

characterized it as a request for qualifications. So, if that’s the approach that you used to select a contractor and

it was a competitive process and one of the factors was the amount of the fee involved...it will qualify as an 19

acceptable method of procurement. But, you still have to look to see whether or not the amount of the

contractor is going to increase to a level that it would fall out from the under the small purchases threshold. Do

you know whether that’s the case, if you are going to increase funding, than it is quite possible that the

contractor amount is going to go up, as well.

Question Cardona: Well the original contract – it was a two-phase project, as these are two sister buildings

and one was already completed. So, we are trying to renovate the second building. However, the construction

costs for the second phase will be lower than the first phase. But, the fee is expected to be exactly the same, so

general requirement and builder fees would be exactly the same as it was in the first contract.

Paul Webster: And do you have a cost reimbursement contract with this entity to get paid?

Question Cardona: Yes, yes we do have – well for the first building because we had to separate the two

phases, we did one contract...one lump sum contract for the first building and we are thinking of using the same

type of contract for the second building...a lump sum or we were thinking maybe a GMT is acceptable, but if

not we would be available to use a lump sum, as well.

Paul Webster: Well when you say a lump sum that means that you’re treating this as a fixed-price

contract?

Question Cardona: Yes, yes. And what we wanted to do was...I guess my question is could we do a

reimburse-type contract, where we...

Paul Webster: I think we’re getting off to a level of detail for a specific project that is going to be hard

to answer in this setting. I think...what I would suggest that you do is just give me a call directly and let’s go

over the facts and then we can give you answer based on exactly what’s being. But this sounds like very neutral

type of arrangement and I think we need to know more about the actual facts of the first procurement

transaction and how that will change with the additional funding that you are providing.

Operator: Thank you very much. We are going to move on now with our presentation and than be assured

that we will have plenty of time at the end for questions. If you’ve already asked your question, please un-raise

your hand and if you have any new questions, again please raise your hand and when we stop, we will get back

to everybody that we can. Thank you. 20

William Woodring:

Basically, one of the requirements or one of the overall emphasis for the Neighborhood Stabilization

Grant is to revitalize neighborhoods obviously. And one of the ways to do that is by reaching out to the minority

and women-owned businesses. There is that requirement within NSP and we have to take affirmative action

steps to try and reach out and involve the minority business enterprises that are within our community. So

please do include that and make sure that you do document your efforts in reaching out for the minority and

women-based enterprises. Now in Section 3, it does apply to the construction contracts so you want to make

sure that you are documenting that along the way, as well. There are certain goals within Section 3 that requires

training and hiring low income residents in the area to do the work that is possible. Habitat is doing an excellent

job of including local residents, as well as their volunteers as are most of the subgrantees that we have looked at

in similar programs that we are looking at. And there are goals for using contractors in your areas and we would

encourage and remind you to maintain and keep working within the Fair Housing and Equal Opportunity rules.

Ethics is an area, as a CPA I am especially attuned to and sensitive with the contract. We do want to

make sure that there is no conflict of interests. The requirements are pretty clear within the Guidelines.

Obviously, I am speaking to the choir here...you know that gratuities are not allowed. Confidential information

isn’t to be used for anyone’s personal gain within the program and influence peddling, which means influencing

contracts and so forth is also prohibited. Be aware in the compliance that that will be an area that is looked at,

not with a great deal of scrutiny, but do understand that it will be looked at. This will conclude of the methods

presentation and we will now go into recommendations and Dionne and I will both assist and walk through that.

I will turn the speaker microphone back over to Dionne.

Dionne Roberts: I think what you are going to find is that many of the things that show up on the slides for

recommendations are items that have been covered through process of talking through some of the questions

that have come up during the presentation. So they are more just reminders and this is really the opportunity

where we want to take the time to get into the questions that you’ve not yet had an opportunity to ask and make

sure that we really do have clarity on some of the key things like the differences between developers and

subrecipients and what different types of procurement look like. We stated earlier and I think I actually made

the comment that you may have a more restrictive state or local procurement requirement as grantee or

subrecipient and if those are in fact the case, than you are required to follow whatever is the more stringent. So,

if it's the Federal that is the more stringent, than you would follow that, but otherwise you are going to follow

whatever is the most restrictive process, as well as numbers. So, sometimes it's not so much about the dollar 21

amount, but it may be about how far out you have to publically notice or where specifically you may have City

requirements for example in your local government that require you to advertise fairly specifically. So, if you

have those types of pieces of requirement and you do have to follow those, as well as also follow the Federal

procurement requirements. And so, even though there are multiple standards, as with everything else with

Federal programs that overlap with some of your own requirements, you have to manage both of those.

In terms of sub recipients and developers, I think that we have covered this pretty thoroughly, but I

know that it is something that continues to come up, especially because in many instances...folks have made

some choices related to written agreements and so we understand that some subrecipients do have to adhere to

the same procurements requirements that apply to the grantee that is funding them, whereas developers

generally do not. The thing that I just want to caution you about though is that we have seen in a number of

circumstances where units of government have procured the developers who would not be subject to

procurement, but their written agreement identifies them as a subrecipient and than because that is a legally

binding agreement that they have with that entity, they have ended up imposing requirements on them that they

otherwise would not have had to follow. So you just want to be really clear about what the role is on the front

end and make sure that your written agreement...that you enter into with these entities reflects appropriately

whether they are truly are a subrecipient or a developer...because in some circumstances folks have ended up

having to adhere to requirements that otherwise they would not have had to, because they did qualify as a

developer. There are a couple of other considerations on the following slide.

The reality and I think Paul made this point really clearly earlier, is that especially when we are talking

about not-for-profit where Part 84 is less explicit, but also when we talk about even Part 85, you really have to

think this through in terms of not only are the rules, but what makes that. Given the size of your community,

given the amount of money that you’re talking, and the kind of program that you are running...you know the

conversation that we were just having a few minutes ago related to encouraging small business opportunities in

New Orleans. I think John made a really good point about the fact that do they really have the capacity to

exceed that hundred thousand threshold at the beginning anyway. So, perhaps sometimes it's not as much as an

issue. So, just thinking about what really makes sense and I think that is the over arching conversation that we

continue to have as these questions come up.

And than finally, in terms of suggestions...again written procedures and expectations, especially because

if you have subrecipients you need to be able to provide them with that guidance and so it is very helpful to be

able to give them something to be able to follow and than obviously, the consistency, which we have talked 22

about previously...including the same types of purchases in the same way every time that they are done by the

same type of entity. Those are the general recommendations.

William Woodring: One thing that we’ve discovered, this is William...as a recommendation is

communication is always the devil within the detail. Please do communicate with your sub-grantees what your

expectations are. Communicate and review with them all the way along. Use checklists that help with your

requirement to be uniform and consistent. It's also a good business practice. Keep logs, do cross-referencing,

make sure that you have a very comprehensive system of cross-reference, and I can’t say it enough

times...document, document, and document more.

Operator: That’s the CPA in you coming out.

William Woodring: That is absolutely correct and just remember call that CPA...everybody up and down the

line is going to be monitored at some point, so the information that we get from our developers even though

they may not be required to adhere to some of the procurements, we have a reporting requirement that is going

to follow us. And we will need information from them. So, communication, documentation, and checklists will

all be very important to you, as well.

Operator: Okay, I had a couple of email questions that we’ve gotten and bare with me...Ian Chaney...”If a

subcontractor or I am sorry...a subrecipient has entered into a development contract with a nonprofit housing

development organization...the organization will serve as developer and general contractor. For example;

identify, obtain, and manage subs, etc. The rehab contract between the subrecipient and the developer will

exceed one hundred thousand, therefore payment and performance bonding will be required. Does the developer

have to get bonding for it's organization for 100% of the contract price? Or may it get bonded for the difference

between the total contract price and the bonding amount provided by the sub? And I have an example if you

need clarification.”

Paul Webster: First of all if this other entity is a developer than the development agreement between the

grantee and the developer is not subject to Part 84 or Part 85 requirements. But be careful about whether the

entity is truly a developer or not. If it's an entity that is not going to have or be acquiring property in it's name or

developing it and taking the risk of a developer in connection with a rehab project...but simply is providing

services to the grantee, than it's more in the nature of a contractor, not a developer. So, the first question that

would have to be answered is whether or not this entity is truly a developer or not. If it is a developer than the 23

selection of this entity is simply not subject to Part 84 or Part 85, nor would the agreement between the...nor

would the entity have to provide any of the bonding that would otherwise apply to a contractor. Make sure that

what we’re talking about is a true developer, but if it's not a true developer than the selection of this entity

would have had to occurred pursuant to a procurement transaction that complies with either Part 84 or Part 85.

Operator: Okay, thank you. Okay, I am going to go to Kim Murphy?

Question Murphy: Yes, thank you. If we are following the guidelines of the state, is it the state that the

grantee is actually working in or the state where the grantee is headquartered in?

Paul Webster: Well, unusual question. If your receiving funds...is this entity...are you a...

Question Murphy: We’re a nonprofit.

Paul Webster: You’re a nonprofit what...subrecipient or developer? What is your role that you’re

playing?

Question Murphy: We were awarded, we’re the grantee.

Paul Webster: So you’re the grantee and are you operating within one state?

Question Murphy: We are headquartered in one state, but we were awarded funds for multiple states, under

NSP2.

Paul Webster: Hmm. That’s a new on me. I am not sure. My first reaction is that it would depend on

where the project is being carried out that you’re working on. But, if you’re procuring services from some third

party, than I think it's...you would be governed by the state in which the activity is going to be carried out.

Question Murphy: Okay.

Paul Webster: But that’s such an unusual question. I don’t think we’ve dealt with that before. You might

want to put that in the NSP Question Box and maybe run that by the attorneys.

Question Murphy: Okay. And where is the NSP Question Box? 24

John Laswick: Okay, click your heels together.... www.HUD.gov/NSPTA and than you just go into

“Ask a Question.”

Operator: I have also put up a link for the HUD Help Site and that will get you there also, on the screen.

We have a couple chat questions. “As a municipality, we are self-insured. What evidence is acceptable when

this situation arises?”

Paul Webster: Well, I guess evidence for what purpose. If you are a municipality and you are going to

contract with a third party to provide services, than it's the third party that’s required to have the bonding and

comply with the bonding requirements, not the entity doing the procurement. But, if a questions comes up as to

whether or not this question comes up, than it would be based on – there must be some policy or some action

that was adopted by the governing body that indicates that your self-insured and so you would have...you would

just site that...if it's a resolution or if there is some policy statement that covers it you would just put that in the

files, if necessary. But, just remember that these requirements that we’ve have been talking about in the context

of procurement, apply to the third party that you’re selecting to do the work. So, if it's ABC Construction

Company, than that’s the entity that has to come up with the bid guarantee bond, the performance bond, and the

payment bond, not the grantee that is doing the actual selection.

Operator: Okay, Thank you...another chat question. “If NSP2 funds are only used for procurement, do bids

need to be solicited/obtained for the rehab of the foreclosed or abandoned property that are purchased using

NSP2 Grant Funds?”

Paul Webster: Again, it depends on what’s being done and whether and whose doing it. If the money is

going to a developer to do this work, than the developer and selection of the developer is not governed by the

procurement requirements. If you are talking about the grantee itself doing work than and hiring contractors,

than you are required to follow the procurement requirements under Part 84 or Part 85 as applicable;

depending upon whether you are a governmental entity or a nonprofit organization. But, if the entity doing the

selecting of the contractor is a governmental entity or a subrecipient, than it's subject to the procurement

requirements...if it's a developer than it's not subject to the procurement requirements.

25

Operator: I have two more short chat questions that I am going to ask and than we will go to folks who still

have their hands raised. “Please clarify...did you say that developers do not have to repay programming

income?”

Paul Webster: That’s correct. The developer again, is acting as a private third party and if it acquires

property and rehabs property and sells that property, than it's not required to return that program income...that’s

really not the right term. He is not required to return that revenue to the grantee. Now, I will repeat what we

have said in the NSP Bridge Notice that was published last year...which is that we want to avoid situations

where developers are being unduly enriched. So, if NSP funds are being used to acquire property and if they are

being used to rehabilitate the property, than and the developer sells the property and pockets the revenue,

without any obligation to pay it back to the grantee, than that sort of fits the mode of undue enrichment. So, we

encourage grantees and subrecipients when they are dealing with developers and the development agreement to

where ever possible cover what happens to the revenue generated by the project. And you know...you can make

the assistance available in the form of a loan that has to be repaid and you can have in your loan the agreement

with the developer or the requirement that they only have to repay to the extent and that they realize proceeds

for the sale are use of property, but at least the money will be coming back to the grantee as program income.

But, that’s not a firm requirement and if the development agreement doesn’t provide otherwise, than any

income earned by the developer can be retained.

William Woodring: Just a follow-up on that...we have a kind of a new service that we’ve mentioned a couple

times called “Financial Analysis and Structuring Techniques or FAST,” which would allow you to use a

consultant provided by our program through the website to help you underwrite these deals. We recognize that a

lot of folks don’t have deep underwriting experience, so what is “undue enrichment” and how much is too much

of a developer’s fee and so forth. It's hard for us to answer those questions without a significant amount of

analysis, we’ve engaged some consultants to help you go through that. So, if you’re stuck in the middle of

project or you are thinking about particularly a multiple channeling-type of project, you can now go to the TA

part of the website and request TA and mention the FAST Program and that you need underwriting assistance.

Thanks.

Operator: Okay, next question...I am just looking here. Lois, do you have a question?

Question Lois: Hi it's me again...yeah real quick. Is a developer able to be selected in other...I mean in

the other regular entitlement CBDG Program? I will tell you why I am asking that...a couple of our consortium 26

members are using mixed funding from either the Home Program or a different CBDG Program and they have a

developer...I am just wondering if the payment to the developer...if they are selected through a procurement

process through those other programs...how does that affect this one?

Paul Webster: Well, under the CBDG Program I can’t really speak definitively about the Home

Program, but I think this is also the case. If the developer is...if you are selecting someone to do rehabilitation

work – you are selecting a private third party entity – it could be an individual or it could be a corporation or it

could be an LLC or something like that – to act as a...to acquire property the rehab property for either it's own

use, such as for rental to lower to moderate income households or for resale...development and resale. Now

that’s the authority for treatment of these entities as developers under NSP. We follow basically the same rules

at the regulatory CBDG Program. So, the answer to your question as far as NSP and CBDG is concerned...yes

the same rules apply. The Home Program I just can’t answer definitely on that, but I think they have the same

kind of flexibility that designates a third party entity to be a developer, as opposed to having to select them

through a competitive process.

Question Lois: Okay, good. Thank you.

Operator: Okay, another chat question. “Are nonprofit developers required to follow MVE and WVE and

Section 3 requirements/”

Paul Webster: Well the grantee is required to follow these requirements and if it's giving money to a

third party, like a developer than I think that it would...should look at Section 3, but that’s kind of a technical

question that I don’t...that I can’t answer definitively here. I am just not familiar enough with all of the Section

3 Rules to answer that. But, I think that it would certainly be something that the grantee could do and satisfy the

Section 3 requirements...but I don’t know John do you have another take on that?

John Laswick: No, only to say that we will be having a webinar on that and I am looking for the date on

that...well in the next month or so. I think possibly in July on Fair Housing Requirements. But, oh yes it's July

13, 2010, Tuesday July 13, 2010, that we will go into that. I think that the way we have heard it talked about

is...here from our directors Yolanda Chatos and others is...you know... they look at this as something that should

be sort of program-wide and you look at...as a whole for your program, rather than trying...it might really fit one

contract and it might poorly fit another one. So, I think as Paul said, if you are thinking about it sort of from the

standpoint of your NSP Program, you are going to be better served and you will probably be more successful in 27

meeting those requirements because some arms will be able to do things that others can’t. But, we are looking

for you as a whole to do that and for those of you who have been at our last couple of training sessions...I think

we have an opportunity with this program to get more people involved either as laborers or as contractors from

these project areas. So, we think that with a little bit of effort you can all break some new ground.

Paul Webster: If you need to know to before the next webinar....I mean if you are entering into an

agreement with a developer and this is something you need to know, than you should give us the question and

we will answer on that.

Operator: Okay, Eric Herman, do you have a question?

Question Herman: Yes, hello. I wanted to know if a nonprofit grantee is carrying out an activity through a

for-profit affiliate that is acting as the developer...is the for-profit developer still not subject to the procurement

regulations?

Paul Webster: No, their not.

Question Herman: They are not subject.

Paul Webster: No. The developer could be working for anybody. The requirements do not apply to

developers and whoever they are under contract with or have an agreement with.

Operator: Okay. A chat question. “What are the requirements that allow an NSP2 grantee to use their

procurement process, RFP and agreements from NSP1? For example an NSP2 grantee procured appraisers

through NSP1. Their RFP and agreement identified the program as Neighborhood Stabilization Program,

without mentioning 1 or 2. The RFP and agreement last through December 31, 2010. May they use these

contracted appraisers through 2010, for NSP1 and NSP2 targeted property?”

Paul Webster: I think the answer to that question is yes, so long as the original scope of work was broad

enough to cover the services they would provide under either NSP1 or NSP2. So, I think it depends again on

whether when the selection was made originally...was the scope of work that was described sufficiently broad

that it would cover both...so that the funding source didn’t make any difference. So, I think that the answer to

the question is yes, if that is the case. 28

Operator: Okay, having read that...I believe we have reached all the questions that we are able to. There

may be some people that haven’t been able to get through one way or the other with their questions. I encourage

you to email that question in to us or use the website. And Dionne do you want to take back over?

Dionne Roberts: Yeah, before we close up, I just wanted to give an opportunity to the folks at HUD to

make any closing comments that they might want to related to this or to other resources that they might want to

refer folks to?

Paul Webster: I really don’t have anything that really hasn’t been said. I will emphasize as has been

emphasized all during this presentation and the slides...that it's particularly important that you maintain

documentation for the steps that you have taken, so that it provides a clear trail for HUD monitors or auditors to

follow, to make sure that the procurement transactions were done in accordance with the applicable

requirements. So, it's widely important that that documentation can be maintained.

William Woodring: I would just add that there’s two factors that are at work here...that go maybe I think

beyond the Federal requirements in the sense that other contractors who don’t get the work are always going to

be looking over your shoulders to make sure you do it right. So, it's not just...we know you want to do it

perfectly just to please us, but beyond that if you do these things properly you are going to buy yourself a lot of

piece of mind. Those people will create much more work than you think you saved by cutting a corner and

making a selection too early or something like that. And these things have a way of getting into the local

newspapers and that is just more headaches for you. So, if you don’t for any other reason, just do it to avoid

problems like that, because there is a lot more eyes out there than we have...who have an interest in these things

and they are going to be giving you headaches if you don’t do it right.

Dionne Roberts: Well if there aren’t any other questions, than we would like to go ahead and wrap this up.

Obviously, we thank all of you for participating and joining us, as well as most especially the HUD folks and

pneumonia Paul, who we will forever thank for [Laughter] somehow managing to participate in this. I think

Paul that your feedback was invaluable. If you do have additional questions that you want to send in to the “Ask

a Question site.” The website for that is on this last slide, http://HUDNSPhelp.info and you can just click on

“Ask a Question,” and provide the question. Those questions are answered fairly quickly and depending upon

the level of complexity...many times end up with the exact same HUD folks who were on this call. So, it's a real

easy way to get your questions in front of the right folks. And just so you know, you will be receiving by email 29

a request to fill out...an evaluation form on this webinar that will come through Survey Monkey and if you want

to the link to go directly to that is on this slide, but otherwise everybody who logged in this morning/this

afternoon will be receiving that email. We really ask you to complete that so that we can continue to provide

feedback in terms of what additional questions and concerns that you have. The HUD NSP Help Info site

always includes the “Learning Center,” and if you go to the “Learning Center,” probably in the next 48 hours or

so, you will be able to link into the information for this particular webinar, both the audio, the Power Pointe,

and at some point after that...the transcript of it will also be available. So, we encourage you to go back and

refer folks from your program who weren’t able to attend today. That being said, if there are no other

comments, I just want to thank everybody and have a great afternoon.

Paul Webster: Thank you.

Dionne Roberts: We are done, thank you so much.

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