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Any individual job specification prepared otherwise than in accordance with master specifications is subject to the review and approval of the regional reconditioning supervisor, or persons. appointed by him, before the award of the contract

§ 405.00-12 Execution of forms. The regional manager is authorized to execute on behalf of the Corporation all reconditioning contracts and reconditioning forms in all cases where the expenditure or advance has been authorized in accordance with the regulations. The regional manager may request, in the manner now or hereafter provided, the appointment of deputies to execute forms on his behalf, to exercise any authority, and to perform any duties vested in or required of the regional manager with respect to reconditioning operations; Provided, however, That such deputation is limited to the regional reconditioning supervisor and employees of the Reconditioning Section recommended by him. The foregoing limitations with respect to the persons who may be appointed deputies shall not apply to the appointment of deputies to approve, on behalf of the regional manager, vouchers for reimbursement of travel expense and transportation rental, and shall not be construed as prohibiting the appointment of employees of the Property Management Division to execute, as deputies for the regional manager, reconditioning forms when used by that Division in the performance of maintenance repairs.

§ 405.00-13 Contractors. The performance of all reconditioning under the supervision of the Reconditioning Section shall be conducted through qualified and approved contractors. Upon application by qualified contractors, whether an individual, partnership, or Corporation, the regional reconditioning supervisor is authorized to approve such applicants as contractors to perform reconditioning services, and is authorized to terminate the services of such approved contractors for cause or when no longer required. To qualify as a contractor, the applicant shall be honest, dependable, and cooperative; shall possess experience, financial responsibility, organization, and equipment facilities, and shall comply with other regulations prescribed as necessary to perform the reconditioning services required by the Corporation. $405.00-15 Workmen's compensation. In order to qualify as an approved con..

tractor, an applicant must show evidence of compliance with the State Workmen's Compensation Law when the legal department advises that the compensation law is compulsory and that the contractor is subject to the operation of such law.

§ 405.00-16 Public liability insurance In order to qualify as an approved contractor, the applicant must show evidence of carrying public liability insurance when the legal department advises that the state law imposes upon the owner of a property legal liability to the public for the negligent acts of an independent contractor, his employees, assignees, or agents. In the absence of such legal liability, the regional reconditioning supervisor, with the concurrence of the regional manager, may require the contractor to provide public liability insurance if it is determined that appreciable hazards exist in a particular

case.

Waiver of insurance. The requirements of this section may be waived in any case in which the regional reconditioning supervisor, with the concurrence of the regional manager, determines it is necessary or advisable in the interests of the Corporation.

§ 405.00-21 Job specifications. Upon receipt of instructions to proceed with the approved reconditioning, the regional reconditioning supervisor shall review the file upon which the approval has been based. If the case has been processed previously on a desk estimate or preliminary inspection, or the case is already authorized and the supervisor deems such data sufficient for the preparation of accurate specifications, he may order their preparation, but in those cases where such data is inadequate, a field inspection shall be ordered to procure proper information for the preparation of specifications.

In those cases where plans and specifications are prepared by fee architects or engineers, the regional reconditioning supervisor shall review such plans and specifications before inviting bids, and determine that same have been prepared to include the authorized scope of work in accordance with the minimum standards of the Reconditioning Section, and that the estimated cost thereof is reasonable and within the authorized amount.

§ 405.00-22 Mechanical tests. In certain instances it may be necessary to obtain a mechanical test of the plumbing, heating, or electrical systems. In any case in which the regional reconditioning supervisor deems it advisable, he may order a mechanical test on an approved form from a contractor, inspector, or other qualified person. Wherever feasible, such test should be made prior to the award of contract. In cases under the jurisdiction of the Property Management Division, the expense for such services shall be based upon the approved schedule of costs.

§ 405.00-23 Special services. In certain cases it may be necessary to perform services of a special character, such as termite or pest control, roofing examinations, mechanical tests, orchard pruning, sanitation, and similar inspections or services. In such cases the fees applicable for such service shall be negotiated, based upon the approved schedule of fees and expense.

§ 405.00-24 Bids. It is the general policy of the Corporation to solicit bids only from qualified and approved contractors. In the event such contractors are not available in the locality, or where the Director of Reconditioning otherwise authorizes, the regional reconditioning supervisor may solicit bids and award contract to a contractor other than an approved one.

Invitation to bid. In all cases where the Corporation engages the contractor, the invitation to bid shall be in rotation as to class or type of contractor so as to provide equitable distribution of reconditioning cases among all contractors: Provided, however, That this practice may be waived by the regional reconditioning supervisor in those localities where the number of contractors is limited, or where an emergency condition exists where contractors are not available, or refuse or are unwilling to submit bids. In mortgagor cases, the invitation to bid shall be obtained from qualified and approved contractors selected by the home owner. The Corporation reserves the right to reject any or all bids, and in cases where the bid submitted appears unreasonable or excessive, the regional reconditioning supervisor, where he deems it to the best interests of the Corporation, may solicit additional bids without the necessity of rejecting former bid or bids. A statement shall accompany the voucher dis

closing the reason for soliciting the additional bids thus obtained.

Competitive bids. On jobs in excess of $50, competitive bids shall be solicited from two or more contractors, except in cases of emergency repairs or where it is impossible or impracticable to obtain bids or where necessary to effect an immediate sale or tenancy, or in any other cases authorized by the regulations. A statement shall accompany the voucher, disclosing the reason and justification for waiver of competitive bids.

§ 405.00-25 Award of contracts. It is the general policy of the corporation to award reconditioning contracts to the lowest acceptable bidder. In cases where the Corporation engages the contractor, a contract may be awarded to a higher bidder when authorized under the regulations or when, upon the written recommendation of the regional reconditioning supervisor, the regional manager determines that it is advantageous for the Corporation to accept a higher bid. In home owner cases, a contract may be awarded to a higher bidder if the home owner deposits with the Corporation the difference between the lowest bid and the higher bid.

Separate contracts. Due to climatic and other justifiable conditions, a separate contract may be awarded for that portion of the reconditioning which can be performed immediately, and an additional contract may be awarded later for the remainder. Where it is to the Corporation's interest, the regional reconditioning supervisor may recommend the award of a separate contract for work of a particular trade or for the purchase and installation of refrigerators, ranges, shades, linoleum, and other fixtures or equipment.

§ 405.00-26 Reconditioning extras and credits. Where the need for extra reconditioning arises subsequent to the award of contract and during the progress of the reconditioning, the regional manager, within the limitations hereinafter prescribed, may authorize generally, or in specific cases, regional reconditioning supervisors, or salaried or fee reconditioning inspectors, to award supplementary contracts for extras or credits, providing the total amount of the original and supplementary contracts shall not exceed the sum authorized for reconditioning in any case unless a greater amount than originally authorized is approved.

When authorized, the regional reconditioning supervisor or inspector may direct the contractor to begin the performance of the extra reconditioning immediately after obtaining a supplemental contract executed by the contractor. Such extra reconditioning shall be evidenced on the supplemental contract form or approved substitute and shall be transmitted to the regional manager or the deputized regional reconditioning supervisor for execution. Competitive bids are not required in the award of extra contracts.

Acquired property cases. On properties under the jurisdiction of the Property Management Division or on properties upon which a sale is completed and reconditioning was previously authorized, the regional manager may authorize generally, in writing or verbally in specific cases, reconditioning supervisors or reconditioning inspectors to award a contract for extra reconditioning, provided that the cost thereof shall not exceed $100 in those cases where the amount originally authorized was $500 or less, and Provided, That the cost of such items or extras shall not exceed $200 in those cases where the amount originally authorized exceeded $500. These amounts are in addition to the amount originally authorized.

Extras; home owner cases. On properties securing liens of the Corporation or sold by the Corporation where the sum of the original reconditioning contract amount, together with the cost of the extra, does not exceed the amount of the original authorization, the regional manager may authorize such extra reconditioning. If the sum of the original contract amount, together with the cost of the extra, exceeds the amount of the original authorization, the regional manager may authorize such extra reconditioning with the concurring approval of the home owner. Authorized extra reconditioning shall be evidenced on an approved supplemental contract form. Competitive bids are not required.

Credits. Where the need arises for the omission from the contract of certain reconditioning in connection with prop- · erties securing liens of the Corporation, or properties acquired or sold by the Corporation, the regional manager may authorize the regional reconditioning supervisor, either generally in writing or verbally in specific cases, to effect a credit

in a fair and reasonable amount. The agreement for the omission of reconditioning shall be evidenced on an approved supplemental contract form and shall be signed by the home owner and contractor.

§ 405.00-27 Partial payments. Where the amount of a reconditioning contract is substantial, or where full performance of the contract is delayed or prevented because of conditions beyond the control of the contractor, such as weather, strikes or other exceptional circumstances, the regional manager is authorized to effect partial payment to the contractor in an amount not to exceed 85% of the fair and reasonable cost of the completed reconditioning. In any such case, the regional manager may require a performance and payment bond or other acceptable indemnity, at the contractor's expense, in such form as prescribed by the Legal Department. In the event such indemnity is not required, the prescribed evidence for avoidance of mechanics' liens shall be obtained.

§ 405.00-33 Chattels. When requested, the reconditioning section shall inspect and determine the value of any chattels used in connection with any property upon which the Corporation holds a mortgage or other lien, or in connection with any property under the jurisdiction of the Property Management Division. The regional reconditioning supervisor shall make recommendations as to whether it is to the Corporation's interest to permit removal or to settle or acquire any lien upon or interest in any such chattel as provided in Part 406.

ACQUIRED PROPERTY CASES

§ 405.01-4 Work order cases. In maintenance cases referred to the Reconditioning Section, where the estimated cost of maintenance, reconditioning materials, or services does not exceed $50, the regional reconditioning supervisor may contact a qualified contractor, mechanic, or material dealer by telephone or other means and negotiate a reasonable price within the amount authorized for such work, materials, or services, and may undertake to have it performed or delivered immediately. In such cases, a description of the work, materials, or services, and the cost thereof shall be prepared on a form approved for such purpose.

§ 405.01-6 Receivership cases. Receivership cases of reconditioning will arise on properties under the jurisdiction of a local court, wherein the court has appointed a receiver to assume custody of the property. In such cases, the technical assistance and facilities of the Reconditioning Section may be made available to receivers by the regional manager with the advice of regional counsel.

§ 405.01-7 Manager's approval. After approving the required reconditioning, the regional manager shall direct written authorization with appropriate instructions to the regional reconditioning supervisor on an approved form, advising him of the scope of work to be undertaken and the amount approved therefor, with instructions to proceed with the reconditioning. Such authorization, when received by the reconditioning section, shall constitute full authority for the regional reconditioning supervisor to proceed with the preparation of specifications, obtaining bids, and awarding reconditioning contracts.

§ 405.01-11 Reconditioning by purchaser. In cases where the agreement for sale provides for reconditioning to be performed by the purchaser at his expense, inspection of the property shall be made as may be determined necessary by the regional manager. In such cases where the nature and scope of work are minor repairs or maintenance items, the inspection may be made by a representative of the Loan Service Division, but in cases where the work is technical or of a structural nature the inspection shall be made by a reconditioning inspector. In the event the work is not being satisfactorily performed or has not been satisfactorily completed, such fact, together with recommendations, shall be reported promptly to the regional manager.

MAINTENANCE PERFORMED BY CONTRACT
BROKERS

§ 405.01-15 Assistance by reconditioning section. In the performance of authorized maintenance repairs and purchase of equipment incidental thereto by contract brokers for properties in their charge, the regional reconditioning supervisor shall provide the broker with technical advice, the technical facilities and all required forms and instructions of the Reconditioning Section, in order to assist contract brokers in the preparation of suitable specifications, awarding of contracts, and su

pervision of work in accordance with established reconditioning practices, and the procurement of contractors' receipts, releases, and waivers of lien, as required.

§ 405.01-16 Obtaining of bids by brokers. Contract brokers shall prepare suitable specifications on Form R-26 in those cases which must be submitted for the approval of the regional manager. At least two competitive bids shall be obtained for the work, except where the cost thereof does not exceed $50 or where it is not practicable to secure such bids because of the urgency of the situation, the limited number of available contractors willing to submit bids, or for other reasons. The contract broker shall forward the bids, together with his recommendations through the Reconditioning Section to the regional manager for consideration.

§ 405.01-17 Review by reconditioning supervisor. The recommendation of the contract broker respecting maintenance repairs or equipment incidental thereto shall be referred to the Reconditioning Section. The regional reconditioning supervisor shall review and approve such recommendations as being in conformance with minimum standards and adequate to meet the requirements of the case, both architecturally and structurally, and, in the case of mechanical equipment, as adequate for the purpose intended; and the estimated costs or bids as being fair and reasonable.

§ 405.01-20 Work authorized on bids. Upon authorization of maintenance repairs or the purchase of equipment, a copy of the contract shall be forwarded to the regional reconditioning supervisor, and the appropriate authorization forms, together with two approved copies of the contract, shall be forwarded to the contract broker, who shall deliver one copy of the contract to the contractor with instructions to proceed with the work.

§ 405.01-21. Work authorized on estimates. In cases where the regional manager's authority to proceed with the work was predicated on estimates submitted by the contract broker, the broker shall be instructed to obtain bids, and forward same through the Reconditioning Section to the regional manager for approval and signature.

§ 405.01-22 Completion report. Upon completion of the repairs, the broker shall inspect the property and

if completed to his satisfaction, shall indicate his approval on one of the executed copies of the contract form, and shall forward the file, including the copy of the contract certified as to completion and the contractor's combination receipt and mechanics' lien release on the approved form, to the regional reconditioning supervisor for review, to determine compliance with prescribed procedure, verification of cost, and for the preparation of vouchers and assembly of all final papers.

RECONDITIONING ADVANCES

§ 405.02–1 Inspections. When an application for an advance for reconditioning is referred to the regional reconditioning supervisor, he shall cause an inspection of the property to be made by an inspector, who shall indicate the extent, necessity, estimated cost, including incidental expenses, and other technical or pertinent information. He also shall obtain from the home owner, if available, the names of the contractors to be used for bidding purposes.

§ 405.02-3 Reconditioning authorized. After approval of the advance, the case shall be returned to the regional reconditioning supervisor, who shall authorize the preparation of specifications and soliciting of bids from approved contractors selected by the home owner, if he so desires. When bids are obtained, the case shall be referred to the legal department, if required. When so required, the legal department shall cause to be executed and recorded, if necessary, the appropriate debt and lien instruments and the appropriate contract forms. In cases not required under the regulations to be referred to the legal department, the Reconditioning Section shall obtain the execution of all required forms.

Before the reconditioning contract is awarded, the contractor and the home owner shall execute the approved contract forms unless the regional manager has been authorized to sign a contract with the contractor on behalf of the Corporation. Upon execution of all required forms, the contract shall be awarded and notice forwarded to the Accounting Division on an approved form, and the regional reconditioning supervisor shall make assignment of the case to a salaried or fee inspector for intermediate and final inspections.

$405.02-4 Completion. Upon completion of the reconditioning and its ac

ceptance by the home owner and by the Corporation, the case, including all necessary forms, shall be forwarded for payment, after review by the legal department if required.

§ 405.02-6 Home owner providing labor. When an advance for necessary repairs or other reconditioning has been approved in accordance with the regulations of the Corporation, and the home owner requests permission to provide the labor in connection therewith, the regional reconditioning supervisor shall investigate the qualifications and reliability of the person who is to perform the labor and make recommendations to the regional manager. If the regional manager determines to permit the home owner to provide the labor, a contingency allowance shall be included in the advance to assure the Corporation of satisfactory performance of the reconditioning by the home owner, and the regional manager, on behalf of the Corporation, may enter into a contract with the home owner on a form approved for the purpose. The home owner, where practicable, should be required to submit bids for all materials in accordance with the bid requirements of the regulations.

Completion. The reconditioning work shall be performed under the supervision of the Reconditioning Section. When the work has been completed to the satisfaction of the Reconditioning Section, and the home owner has satisfactorily complied with the provisions and covenants contained in the contract, the bills for materials and all costs other than labor shall be paid in compliance with the regular procedure for reconditioning and the Reconditioning Section, through the regional manager, shall notify the regional accountant of the amount of the unexpended portion of the advance, which shall be credited to the home owner's account. The total cost of labor and materials shall not exceed the advance authorized. The regional manager, with the advice of the regional counsel, at his discretion, may authorize payment of material bills prior to the final completion of the work when the circumstances justify.

Default. In the event the home owner fails or refuses to provide the labor to complete the reconditioning, he may contract with persons acceptable to the Corporation to perform the remainder of the labor, which shall be paid for by the home owner from his personal funds

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