[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
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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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