[Federal Register Volume 60, Number 132 (Tuesday, July 11, 1995)]
[Rules and Regulations]
[Pages 35691-35692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16935]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 / Rules
and Regulations
[[Page 35691]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Parts 200, 905, 941, and 968
[Docket No. R-95-1724; FR-3645-F-02]
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: Final rule.
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SUMMARY: This final 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.
EFFECTIVE DATE: August 10, 1995.
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, Room B-133, 451 Seventh Street, SW, Washington, DC 20410.
Telephone (202) 708-0032. 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 final rule does not impose any information collection
requirements. Instead, it would eliminate the requirement for HAs and
HA contractors to submit form HUD-2530, Previous Participation
Certificate, to HUD. As a result of this final rule, there would be a
reduction in the information burden on HUD program participants.
II. Background
Formerly, subpart H of 24 CFR part 200 of the HUD regulations made
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 included ``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 had any interest in the project other
than an arms-length fee arrangement for professional services.''
Previously under subpart H, all principals were requested to sign
personally a certificate setting forth their record of previous
participation in HUD programs. These certifications were subjected to
review and either approval or disapproval by the Department. An
approval was required as a precondition to participation by the
principal in a specific project.
HAs frequently cited the previous participation approval
requirement as an obstacle to their timely obligation of funds. In
reviewing the matter, the Department found that approximately 78,000
principals were entered into HUD's previous participation automated
system during 1993. This figure included principals from all programs
administered by the Assistant Secretary for Housing and the Assistant
Secretary for Public and Indian Housing. The automated system 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
raised 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 Tribes grant programs administered by the Department, such as
the Community Development Block Grant program, grantees are not subject
to a second previous participation and compliance review by HUD.
Instead, grantees, pursuant to the procurement procedures set forth at
24 CFR part 85, 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, the Department issued an interim
rule on June 20, 1994 amending the existing regulations to remove
public and Indian housing developments financed under the U.S. Housing
Act of 1937 from the
[[Page 35692]]
Previous Participation and Compliance Requirements set forth in 24 CFR
part 200, Subpart H. HAs are still expected, however, 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. HUD is now issuing a final rule to complete this regulatory
action.
III. Public Comment on Interim Rule
Seven written comments were received from the public on the June
20, 1994 interim rule. All were from public housing authorities. Six of
the commenters strongly endorsed the rule.
One commenter (Town of Rampano Housing Authority) objected to the
rule's elimination of the previous participation certificate
requirement for HAs. It argued that ``* * * without the necessity of a
contractor completing HUD 2530, the Authority has no way of verifying
whether or not the contracting firm is both ethical and/or viable. Said
unethical company might start out in Texas, however, by the time it
reaches New York--other than through the use of the 2530, the Authority
has no way of making the appropriate determination. Certainly, you must
agree that the aforementioned will not be indicated on either the GSA
Debarred list.''
As noted above, HAs are required by the Department's procurement
regulations at 24 CFR 85.36 to determine contractor responsibility. As
a part of that determination, HAs can and should obtain a list of
references indicating the contractor's past experiences. HAs should
check those references to verify that the contractor's past performance
was acceptable. The Department does not believe that it should continue
to maintain this additional approval level which only serves to delay
contract award and the completion of much needed work.
IV. Other Matters
A. Environmental Impact
The subject matter of this final rule is categorically excluded
from HUD's environmental clearance procedures under 24 CFR 50.20(k). It
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 final rule do not have ``federalism implications''
within the meaning of the Order. This final 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 final rule before publication and,
by approving it, certifies that it will not have a significant economic
impact on small entities. This final rule only directly affects PHAs
and IHAs which are State and local governmental entities. The final
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 final
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 rule was listed as item 1529 in the Department's Semiannual
Agenda of Regulations published on May 8, 1995 (60 FR 23368, 23402)
under Executive Order 12866 and the Regulatory Flexibility Act.
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, Home improvement, 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, Homeownership, 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, parts 200, 905, 941, and 968 of title 24 of the Code
of Federal Regulations are amended by adopting the interim rule
published in the Federal Register June 20, 1994 (59 FR 31521) as final,
without change.
Dated: July 3, 1995.
Henry G. Cisneros,
Secretary.
[FR Doc. 95-16935 Filed 7-10-95; 8:45 am]
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