[Federal Register Volume 59, Number 117 (Monday, June 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14946]


[[Page Unknown]]

[Federal Register: June 20, 1994]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 200, 905, 941, and 968

[Docket No. R-94-1724; FR-3645-I-01]
RIN 2577-AB42

 

Amendment to the Participation and Compliance Requirements for 
Public Housing Agencies and Indian Housing Authorities

AGENCY: Office of the Secretary, HUD.

ACTION: Interim rule and request for public comments.

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

SUMMARY: This interim rule deletes the current regulatory requirements 
that public housing agencies and Indian housing authorities (referred 
to as HAs) be subject to HUD's Previous Participation Review and 
Clearance Procedures. The purpose of the amendment is to streamline the 
contracting process for HAs and to enable them to obligate much needed 
development and modernization funding in a more timely fashion.

DATES: Effective date: July 20, 1994.
    Comments due date: August 19, 1994.

ADDRESSEES: Interested persons are invited to submit comments regarding 
this interim rule to the Office of General Counsel, Rules Docket Clerk, 
room 10276, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410. Facsimile (FAX) are not acceptable. 
A copy of each communication submitted will be available for public 
inspection and copying on weekdays between 7:30 a.m. and 5:30 p.m. at 
the above address.

FOR FURTHER INFORMATION CONTACT: William C. Thorson, Director, 
Maintenance and Supply Division, Office of Construction, Rehabilitation 
and Maintenance, Department of Housing and Urban Development, 451 
Seventh Street, SW., room 4124, Washington, DC 20410. Telephone: 
(202)708-4703. This is not a toll-free number.
    Indian housing authorities may contact Dom Nessi, Director, Office 
of Native American Programs, Department of Housing and Urban 
Development, 451 seventh Street, SW. room 4140, Washington, DC 20410. 
Telephone (202) 708-1015. This is not a toll-free number.
    Hearing or speech impaired individuals may contact this Office via 
TDD number (202) 708-9300 (which is not a toll-free number) or 1-800-
877-8339 (which is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

    This interim rule does not impose any information collection 
requirements. Instead, it would eliminate the existing requirement for 
HAs and HA contractors to submit form HUD-2530, Previous Participation 
Certificate, to HUD. As a result of this interim rule, there would be a 
reduction in the information burden on HUD program participants.

II. Background

    Currently, Subpart H of 24 CFR part 200 of the HUD regulations 
makes principals participating in projects financed pursuant to the 
United States Housing Act of 1937 subject to HUD approval under the 
previous participation and review requirements set forth in that 
Subpart. Principals include ``an individual, joint venture, 
partnership, corporation, trust, nonprofit association, or any other 
public or private entity proposing to participate, or participating, in 
a project as sponsor, owner, prime contractor, Turnkey Developer, 
management agent, nursing home administrator or operator, packager, or 
consultant; and architects and attorneys who have any interest in the 
project other than an arms-length fee arrangement for professional 
services.''
    Under Subpart H all principals are requested to sign personally a 
certificate setting forth their record of previous participation in HUD 
programs. These certifications are subject to review and either 
approval or disapproval by the Department. An approval is required as a 
precondition to participation by the principal in a specific project.
    HAs frequently cite the previous participation approval requirement 
as an obstacle to their timely obligation of funds. In reviewing the 
matter, the Department has found that approximately 78,000 principals 
were entered into HUD's previous participation automated system during 
the last year. This figure includes principals from all programs 
administered by the Assistant Secretary for Housing and the Assistant 
Secretary for Public and Indian Housing. The automated system has 
approved over 73,500 principals while approximately 4,500 principals 
were referred to Headquarters for further review. About 1,500 of the 
referrals (less than 2 percent) involved principals in the public/
Indian housing programs. Of the 1,500 public/Indian housing principals, 
the majority were found to be approvable. Only a limited number were 
disapproved, and most of the disapprovals were based on existing 
debarments or suspensions. It should also be noted that HAs already 
have the authority to disqualify contractors who are on the General 
Services Administration Debarred and Suspended List.
    This Departmental analysis of the previous participation process 
raises serious questions regarding the benefits derived vs. the delays 
caused in program implementation. Also taken into account in the 
analysis was the fact that the Department's procurement regulations, at 
24 CFR 85.36, require State and local grantees, including HAs, to award 
contracts only to contractors possessing the ability to perform 
successfully under the terms and conditions of their contract. In 
assessing their ability to perform, consideration should be given by 
grantees to such matters as contractor integrity, compliance with 
public policy, record of past performance and financial and technical 
resources. It was also noted that, in other similar State, local, or 
Indian grant programs administered by the Department, such as the 
Community Development Block Grant program, grantees are not subject, in 
addition to the procurement procedures set forth at 24 CFR part 85, to 
a second previous participation and compliance review by HUD. Instead, 
the grantees are given the responsibility to make their own 
determinations of contractor responsibility and are permitted to 
execute contracts without obtaining prior HUD approval.
    Given the very low number of disapprovals of public/Indian housing 
principals compared to the relatively high dollar value of the program 
(approximately $3 billion annually) and the urgent need to streamline 
HUD procedures, the Department has concluded that the risk to the 
Government of eliminating the previous participation approval for HAs 
is extremely limited. Accordingly, we are amending the existing 
regulations to remove public and Indian housing developments financed 
under the U.S. Housing Act of 1937 from the Previous Participation and 
Compliance Requirements set forth in 24 CFR part 200, Subpart H. HAs 
will still be expected to determine, pursuant to 24 CFR 85.36, if a 
contractor is responsible, based on its own records, the GSA Debarred 
and Suspended list, the HUD Limited Denial of Participation List, and 
any other information available to the HA.

III. Interim Rule

    Due to the technical nature of this interim rule, the Department 
has determined that a full notice and public comment procedure under 24 
CFR part 10 of the United States Code is unnecessary and is therefore 
issuing this document as an interim rule with public comment requested. 
The interim rule relieves a regulatory restriction that adversely 
affects and has proved to be an undue burden on the public housing 
community. Further, the interim rule supports several of the 
Department's key strategies for improving the way the Department's 
programs operate, including deregulating programs to the extent 
feasible, focusing on risk management and taking actions to speed the 
expenditure of funds. For these reasons, it is desirable to make the 
interim rule effective as soon as possible.

IV. Other Matters

A. Environmental Impact

    The subject matter of this interim rule is categorically excluded 
from HUD's environmental clearance procedures under 24 CFR 50.20(k). 
The interim rule relates to administrative procedures whose content 
does not constitute a development decision but only to the preparation 
of reports and HUD management activities.

B. Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the 
provisions of this interim rule do not have ``federalism implications'' 
within the meaning of the Order. The interim rule does not, in any 
substantive manner, change existing relationships between the Federal 
government and State and local authorities.

C. Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this interim rule before publication and, 
by approving it, certifies that it will not have a significant economic 
impact on small entities. This interim rule only directly affects PHAs 
and IHAs which are State and local governmental entities. The interim 
rule should prove beneficial to PHAs and IHAs and should have no 
negative impact upon their contractors.

D. Executive Order 12606, The Family

    The General Counsel, as the Designated Official for Executive Order 
12606, The Family, has determined that the provisions of this interim 
rule do not have the potential for significant impact on family 
formation, maintenance and general well-being within the meaning of the 
Order.

E. Regulatory Agenda

    This interim rule was listed as item 1677 in the Department's 
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR 
20424, 20467) under Executive Order 12291 and the Regulatory 
Flexibility Act as sequence number 1677 under Office of Public and 
Indian Housing.

F. Catalog of Federal Domestic Assistance Program

    The Catalog of Federal Domestic Assistance Program number is 
14.852.

List of Subjects

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Incorporation by 
reference, Lead poisoning, Loan programs-- housing and community 
development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 905

    Aged, Energy conservation, Grant programs--housing and community 
development, Grant programs--Indians, Indians, Individuals with 
disabilities, Lead poisoning, Loan programs--housing and community 
development, Loan programs--Indians, Low and moderate income housing, 
Public housing, Reporting and recordkeeping requirements.

24 CFR Part 941

    Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.

24 CFR Part 968

    Grant programs--housing and community development, Loan programs--
housing and community development, Public housing, Reporting and 
recordkeeping requirements.
    Accordingly, 24 CFR parts 200, 905, 941 and 968 are amended as 
follows:

PART 200--INTRODUCTION

    1. The authority citation for 24 CFR part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1701-1715Z-18; 42 U.S.C. 3535(d).
    2. Paragraph (a)(1) of Sec. 200.93 is revised to read as follows:


Sec. 200.93  Multifamily Participation Review Committee.

    (a) Members. (1) The Director, Office of Lender Activities and Land 
Sales Registration serves as Chairman and does not vote. The Committee 
is composed of the following voting members or their designees 
representing the Assistant Secretary for Housing- Federal Housing 
Commissioner: the Director of the Office of Insured Multifamily Housing 
Development; the Director of the Office of the Elderly and Assisted 
Housing; the Director of the Office of Multifamily Housing Management; 
the Director of the Office of Multifamily Preservation and Property 
Disposition; the Director of the Previous Participation and Compliance 
Division; and a designee of the Director of the Office of Lender 
Activities and Land Sales Registration.
* * * * *


Sec. 200.213  [Amended]

    3. Section 200.213 is amended by removing paragraph (d) and by 
redesignating paragraph (e) as paragraph (d).


Sec. 200.217  [Amended]

    4. Section 200.217 is amended by removing paragraph (a)(3), and by 
redesignating paragraphs (a)(4) through (a)(8) as paragraphs (a)(3) 
through (a)(7), respectively.

PART 905--INDIAN HOUSING PROGRAMS

    5. The authority citation for 24 CFR part 905 continues to read as 
follows:

    Authority: 25 U.S.C. 450e(b), 42 U.S.C. 1437a, 1437aa, 1437bb, 
1437cc, 1437ee, and 3535(d).
    6. Paragraph (a)(3)(ii)(C) of Sec. 905.160 is revised to read as 
follows:


Sec. 905.160  Procurement standards.

    (a) * * *
    (3) * * *
    (ii) * * *
    (C) That the contractor is not on the GSA List of Parties Excluded 
from Federal Procurement and Nonprocurement Programs.
* * * * *
    7-8. Section 905.642 is amended by removing paragraph (d)(4), and 
by revising paragraph (g) to read as follows:


Sec. 905.642  Contracting requirements.

* * * * *
    (g) Previous participation. An IHA shall ensure that the contractor 
is not on the GSA List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.
* * * * *
    9. Paragraph (c)(2) of Sec. 905.681 is revised to read as follows:


Sec. 905.681  Conduct of modernization activities.

* * * * *
    (c) * * *
    (2) Previous participation. An IHA shall ensure that the contractor 
is not on the GSA List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.
* * * * *

PART 941--PUBLIC HOUSING DEVELOPMENT

    10. The authority citation for 24 CFR part 941 continues to read as 
follows:

    Authority: 42 U.S.C. 1437b, 1437c, 1437g, and 3535(d).

    11. Paragraph (a) of Sec. 941.502 is revised to read as follows:


Sec. 941.502  Project design and execution of contracts.

    (a) General. The PHA, unless otherwise authorized by the field 
office, shall submit interim or preliminary design documents for field 
office approval prior to preparing and submitting the detailed 
construction documents. The field office shall review both the design 
documents and the construction documents for consistency with the 
proposal, to determine that all HUD design and construction standards 
have been met, and to ensure that the project development costs are 
reasonable and are within the applicable cost limitations. Prior to 
executing any contract, a PHA shall ensure that the contractor is not 
on the GSA list of Parties Excluded from Federal Procurement and 
Nonprocurement programs.
* * * * *

PART 968--PUBLIC HOUSING MODERNIZATION

    12. The authority citation for 24 CFR part 968 continues to read as 
follows:

    Authority: 42 U.S.C. 1437d, 1437l and 3535(d).

    13-14. Section 968.235 is amended by removing paragraph (d)(4), and 
by revising paragraph (g) to read as follows:


Sec. 968.235  Contracting requirement.

* * * * *
    (g) Previous participation. A PHA shall ensure that the contractor 
is not on the GSA List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.
* * * * *
    15. Paragraph (c)(2) of Sec. 968.335 is revised to read as follows:


Sec. 968.335  Conduct of modernization activities.

* * * * *
    (c) * * *
    (2) Previous participation. A PHA shall ensure that the contractor 
is not on the GSA List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.
* * * * *
    Dated: June 13, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-14946 Filed 6-17-94; 8:45 am]
BILLING CODE 4210-32-P