[Federal Register Volume 60, Number 183 (Thursday, September 21, 1995)]
[Proposed Rules]
[Pages 48951-48956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23491]



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LEGAL SERVICES CORPORATION
45 CFR Part 1634


Competitive Bidding for Grants and Contracts

AGENCY: Legal Services Corporation.

ACTION: Proposed Rule.

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SUMMARY: The Corporation anticipates that Congress will adopt 
legislation requiring the Corporation to utilize a system of 
competitive bidding for the award of grants and contracts. This 
proposed rule is intended to implement such a system of competitive 
bidding for the award of grants and contracts for the delivery of legal 
services to eligible clients. The competitive bidding system would be 
structured so as to meet the primary purposes of the Legal Services 
Corporation Act as amended--to ensure the economical and effective 
delivery of high quality legal services to eligible clients and improve 
opportunities for low income persons. Competitive bidding is also 
intended to encourage recipients to improve their performance in 
delivering legal services.

DATES: Comments must be submitted on or before October 23, 1995.

ADDRESSES: Comments should be submitted to the Office of General 
Counsel, Legal Services Corporation, 750 First Street NE., 11th Floor, 
Washington, DC 20002-4250.

FOR FURTHER INFORMATION CONTACT:
Victor M. Fortuno, General Counsel, at (202) 336-8810.

SUPPLEMENTARY INFORMATION: On June 25, 1995 the LSC Board of Directors 
(``Board'') adopted a resolution requiring Corporation staff to prepare 
a regulation on competition in the delivery of legal services. On 
September 8 and 9, 1995, the Board's Operations and Regulations 
Committee and the provision for the Delivery of Legal Services 
Committee (``Committee'') held public hearings on a draft proposed 
rule, 45 CFR part 1634. After adopting several changes to the draft 
proposed rule, the Committees voted to publish a proposed rule in the 
Federal Register for notice and comment.
    Generally, the proposed rule is intended to set out the framework 
for a system of competitive bidding that would be structured so as to 
meet the primary purposes of the Legal Services Corporation Act, that 
is, to ensure the effective and efficient delivery of high quality 
legal services to eligible clients and to improve opportunities for 
low-income persons. Through the proposed competitive bidding system, 
qualified attorneys and entities would be provided an opportunity to 
compete for grants and contracts to deliver a full range of high 
quality legal services in service areas determined by the Corporation. 
Competitive bidding is also intended to encourage recipients to improve 
their performance in delivering legal services.
    The competitive system envisioned in this regulation is intended to 
encourage realistic and responsible bids aimed toward the provision of 
quality legal services. Applicants should submit proposals that favor 
cost-effectiveness rather than cost and a system that provides a full 
range of legal assistance rather than fragmented services.

[[Page 48952]]

    Finally, the rule provides authority for the Corporation to modify 
the timetables and other provisions of the system to conform to 
requirements imposed by law.
    A section-by-section discussion of the proposed rule is provided 
below.

Section 1634.1  Purpose

    This section sets out the purpose of the proposed rule, which is to 
encourage the efficient and effective delivery of high quality legal 
services to eligible clients through an integrated system of legal 
services providers by providing opportunities for qualified attorneys 
and entities to compete for grants and contracts and by encouraging 
recipients to improve their performance in delivering legal assistance. 
The section also indicates that the system of competition will preserve 
local control over resource allocation and program priorities, and 
minimize disruptions when there is a change in providers in the 
delivery of legal services to eligible clients within a service area.

Section 1634.2  Definitions

    This section defines key terms used in the regulation. A ``review 
panel'' is defined to include, at a minimum, lawyers experienced in and 
knowledgeable about the delivery of legal assistance to low-income 
persons and eligible clients or representatives of low-income community 
groups. The definition prohibits any person from membership on a review 
panel that has a financial conflict of interest with or has, within the 
last five years, been employed by or has been a board member of the 
applicant being reviewed. The definition also contemplates that the 
Corporation would spell out in greater detail what constitutes a 
conflict of interest. Although Corporation staff should not be part of 
review panels, they may facilitate the work of the panels by providing 
planning and administrative services.
    ``Qualified applicants'' is defined to include recipients and other 
lawyers or entities qualified to compete.
    ``Service area'' is defined as an area over which there is to be 
competition and could include all or part of a current recipient's 
service area or be larger than an area served by a current recipient. 
The determination of particular services areas for any particular 
competitive process would be determined by the Corporation.
    Finally, ``subpopulation of eligible clients'' is defined as 
population groups, such as Native Americans and migrant farm workers, 
who have been historically recognized as requiring a separate system of 
delivery in order to provide legal assistance effectively.

Section 1634.3  Competition for Grants and Contracts

    This section sets out the framework for competition for grants and 
contracts awarded under section 1006(a)(1)(A) of the LSC Act and is 
based on the provisions in HR 1806, the McCollum-Stenholm Bill of 1995, 
and the language in the House appropriations bill, HR 2076. Paragraph 
(a) provides that, as of a date certain, all grants and contracts for 
the direct provision of legal assistance will be awarded by 
competition. Paragraph (b) provides that the Corporation will determine 
the service areas or the subpopulations of clients to be served within 
service areas. Paragraph (c) states that the use of a competitive 
process for the awarding of the grant or contract for a particular 
service area, consistent with HR 1806 and HR 2076, will not constitute 
a termination or denial of refunding pursuant to parts 1606 and 1625 of 
the Corporation regulations. Paragraph (d) authorizes the Corporation 
to award more than one grant or contract for all or part of a service 
area but paragraph (e) states that no grant or contract may be awarded 
for terms more than five years. Paragraph (e) also clarifies that, if 
the amount of funding during the period of the grant or contract is 
reduced as a result of changes in Congressional appropriations, such 
reductions will not be considered to be the terminations or denials of 
refunding under Corporation regulations.

Section 1634.4  Announcement of Competition

    Paragraph (a) of this section requires the Corporation to publicly 
announce a competition within a particular service area to current 
recipients, appropriate bar associations and other interested groups. 
The Corporation must also publish an announcement in periodicals of 
State and local bar associations and at least one daily newspaper of 
general circulation in the area to be served. The timing of the 
announcements may be dependent upon Congressional directions. Paragraph 
(b) sets out the general contents for the request for proposals (RFP), 
but leaves to the Corporation the details of what the RFP will include. 
The Corporation is required by paragraph (c) to send a copy of the RFP 
to any person or entity requesting one.

Section 1634.5  Identification of Qualified Applicants for Grants and 
Contracts

    This section lists types of applicants that would qualify to 
compete under HR 1806 and HR 2076. These include current recipients and 
other non-profit organizations that have as a purpose the furnishing of 
legal assistance to eligible clients, private attorneys, groups of 
private attorneys or law firms, state or local governments and substate 
regional planning and coordination agencies which are composed of 
substate areas and whose governing boards are controlled by locally 
elected officials. The rule proposes that in order to received an award 
of a grant or contract, all of the above entities would be required to 
have, depending on the type of applicant, a governing or policy body 
that is consistent with the provisions of 45 CFR part 1607, the 
Corporation's regulations on governing bodies. Such a board or policy 
is not necessarily mandated by law for Sec. 1634.5(a) (3), (4) and (5). 
Much will depend on the legislation finally enacted. However, the 
Corporation seeks comments on whether, as a matter of policy, some 
governing or policy body should be required for all types of grantees 
so that all grantees are accountable to and guided by the policy 
decisions of such bodies.

Section 1635.6

    This section contemplates that all applicants, including current 
recipients, who intend to compete for a grant or contract for a 
particular service area, will file a notice of intent to compete along 
with any other additional information determined to be necessary and 
appropriate by the Corporation. Filing deadlines for the notices shall 
be specified in the RFP. The information requested will give the 
Corporation notice of the level of competition and some indication as 
to whether applicants may need assistance in order to complete a full 
application.

Section 1634.7

    This section sets out the application process and the basic 
requirements that applicants will have to meet in order to compete for 
a grant or contract to deliver services in a particular service area. 
The Corporation is given broad discretion to determine what information 
is needed to complete a particular application.
    Pursuant to paragraph (e), the Corporation may require each 
applicant to agree in writing that, if the applicant is not selected 
for the award of a grant or contract, the applicant would not 

[[Page 48953]]
institute a court action regarding the denial of an award until the 
applicant has participated in a mediation with the Corporation on the 
matter. The inclusion of this provision in the rule should not suggest 
that applicants have any property or hearing rights. It is well 
established that, absent express statutory language to the contrary or 
a showing that the applicant's statutory or constitutional rights have 
been violated, pre-award applicants for discretionary grants have no 
protected property interests in receiving a grant and thus have no 
standing to appeal the funding decision by the grantor. See Cappalli, 
Federal Grants and Cooperative Agreements, Sec. 3.28 and Legal Services 
Corporation v. Ehrlich, 457 F. Supp. 1058, 1062-64 (D. Md. 1978). 
Nevertheless, the Corporation could decide that it is productive to 
mediate a particular matter with the applicant so that the applicant 
might submit a better application the next time around or at least have 
a better understanding of the process.

Section 1634.8

    This section sets out the selection process to be used by the 
Corporation when deciding what grants or contracts are to be made to 
service areas. It requires the Corporation to review all relevant 
information for each applicant, request any necessary additional 
information, conduct on-site visits if appropriate to fully evaluate an 
application and summarize in writing any information not contained in 
an applicant's application. Monitoring and Compliance reports for 
current or former grantees that are older than five years would not be 
reviewed by the Corporation because they would lack relevance to the 
grantee's current status and would create too great an administrative 
burden on the Corporation and review panel members.
    This section also requires the Corporation to convene a review 
panel if there is more than one applicant for a particular service area 
although it could choose to convene a panel when there is only one 
applicant. Review panels would review the applications and any 
summaries prepared by the Corporation and would make recommendations to 
the Corporation regarding awards for particular service areas. This 
section then requires that the Corporation staff consider the review 
panel's recommendation and forward a staff recommendation to the 
Corporation President for a final decision. If the staff recommendation 
differs from that of the review panel, the staff's written 
recommendation must include the recommendations of the review panel as 
well as an explanation of why the recommendations differ.
    The Corporation staff could recommend that the President make an 
award up to five years or, if there is no applicant for a service area 
or no applicant meets the criteria to receive a grant, paragraph (c) 
makes it clear that the Corporation has discretion to determine how to 
provide for the provision of legal assistance to the service area. 
Among other choices, the Corporation could put a current grantee on 
month-to-month funding in order to conduct a new competition or enlarge 
the service area of a neighboring grantee.
    Finally, this rule provides that the President is to make final 
decisions of what grants will be awarded and for how long (although not 
exceeding five years). The Corporation is then required to notify all 
applicants in writing of the President's decisions.
    Paragraph (d) provides that the Corporation shall not give any 
preference to current or previous recipients of funds when awarding 
grants and contracts under the competitive bidding system.

Section 1634.9

    This section sets out the selection criteria that the Corporation 
will use in selecting recipients for the service areas subject to 
competition. These criteria include those specified in HR 1806 and HR 
2706 as well as additional criteria taken from the provisions of the 
LSC Act and regulations and from the Performance Measures which the 
Corporation has developed to measure the performance of recipients.
    Subsection (a) requires each applicant to demonstrate an 
understanding of the basic legal needs of the eligible clients in the 
area served.
    Subsection (b) requires each applicant to demonstrate that its 
delivery approach adheres to the Corporation's Performance Criteria and 
the American Bar Association's Standards for Providers of Civil Legal 
Services to the Poor. Among other things, applicant's ability to meet 
this criterion could be demonstrated by information regarding the 
applicant's experience with the delivery of the type of legal 
assistance contemplated under the grants or contracts.
    Subsection (c) requires that, where applicable, the applicant's 
governing board or policy body meets or will meet all applicable 
statutory, regulatory or other legal requirements.
    Subsection (d) requires that the applicant demonstrate how it will 
comply with applicable provisions of the law and LSC regulations. Among 
other things, the applicant's past experience of compliance with the 
Corporation or other funding sources or regulatory agencies would be 
evidence of the applicant's ability to comply with this criterion.
    Subsection (e) is taken from HR 1806 and requires that the 
Corporation consider the reputations of the applicant's principals.
    Subsection (f) requires applicants to demonstrate their capacity to 
provide high quality, effective and effective legal services through an 
integrated delivery system, such as a capacity of the applicant to 
develop non-Corporation funds and to engage in collaborative efforts 
with other organizations involved in serving or assisting eligible 
clients.
    Subsection (g) requires that applicants who are not current 
recipients demonstrate how they will continue service to clients with 
pending matters.
    Subsection (h) focuses on institutional conflicts of interest of 
the applicant with the client community. Institutional conflicts could 
prevent applicants from being able to deliver the full range of legal 
services necessary to address the basic legal needs of clients. 
Applicants must show that they would not be required by such conflicts 
to refuse to provide representation on particular cases that are of 
high priority to the client community because the applicant is not 
permitted by a funding source independent of LSC to provide such 
assistance.

Section 1634.10

    This section provides for transition steps that the Corporation may 
take when a current recipient is replaced by another applicant. Under 
subsection (a)(1), funding can be provided to enable a current 
recipient to complete cases, or withdraw or transfer such cases to the 
new recipient or other appropriate legal services provider. Subsection 
(a)(2) authorizes the Corporation to ensure the appropriate disposition 
of real and personal property of the current recipient which was 
purchased in whole or in part with Corporation funds. Subsection (b) 
provides that the Corporation can use slope funding if necessary to 
ensure effective and efficient use of Corporation funds during the 
early months of its grant. Such funding was used effectively in past 
years when new grantees were funded and helped prevent the accumulation 
of excessive fund balances.

Section 1634.11

    This section provides that the President may waive or amend certain 


[[Page 48954]]
parts of the regulations, including the timetables established 
thereunder, in order to comply with requirements imposed by law on the 
awards of grants and contracts for a particular fiscal year. This is 
necessary, for example, because HR 2076 requires that LSC use a 
competitive bidding system for grants and contracts to be awarded for 
1996. It will be impossible for LSC to comply with all of the 
provisions of this part and still issue grants by January of 1996. For 
example, if the House requirements remain in the appropriation 
legislation, it will be impossible to use review panels or require a 
notice of intention to compete. The Corporation seeks comments on 
whether any other sections of the rule should be waived.

List of Subjects in 45 CFR Part 1634

    Contracts, Grants, Legal services.

    For the reasons set out in the preamble, LSC proposes to amend 45 
CFR Ch. XVI by adding part 1634.

PART 1634--COMPETITIVE BIDDING FOR GRANTS AND CONTRACTS

Sec.
1634.1  Purpose.
1634.2  Definitions.
1634.3  Competition for grants and contracts.
1634.4  Announcement of competition.
1634.5  Identification of qualified applicants for grants and 
contracts.
1634.6  Notice of intent to compete.
1634.7  Application process.
1634.8  Selection process.
1634.9  Selection criteria.
1634.10  Transition provisions.
1634.11  Emergency procedures and waivers.

    Authority: 42 U.S.C. 2996e(a)(1)(A).


Sec. 1634.1  Purpose.

    This part is designed to improve the delivery of legal assistance 
to eligible clients through the use of a competitive system to award 
grants and contracts for the delivery of legal services. The purpose of 
such a competitive system is to:
    (a) Encourage the effective and efficient delivery of high quality 
legal services to eligible clients that is consistent with the 
Corporation's Performance Criteria and the American Bar Association's 
Standards for Providers of Civil Legal Services to the Poor through an 
integrated system of legal services providers;
    (b) Provide opportunities for qualified attorneys and entities to 
compete for grants and contracts to deliver high quality legal services 
to eligible clients;
    (c) Encourage ongoing improvement of performance by recipients in 
providing high quality legal services to eligible clients;
    (d) Preserve local control over resource allocation and program 
priorities; and
    (e) Minimize disruptions in the delivery of legal services to 
eligible clients within a service area during a transition to a new 
provider.


Sec. 1634.2  Definitions.

    (a) Qualified applicants are those persons, groups or entities 
described in Sec. 1634.5(a) of this part who are eligible to submit 
notices of intent to compete and applications to participate in a 
competitive bidding process as described in this part.
    (b) Review panel means a group of individuals who are not 
Corporation staff but who are engaged by the Corporation to review 
applications and make recommendations regarding awards or contracts for 
the delivery of legal assistance to eligible clients. Review panels 
must include, at a minimum, lawyers experienced in and knowledgeable 
about the delivery of legal assistance to low-income persons, and 
eligible clients or representatives of low-income community groups. No 
person may serve on a review panel for any applicant with whom the 
person has a financial interest or ethical conflict; nor may the person 
have been a board member of or employed by such applicant in the past 
five years.
    (c) Service area is the area defined by the Corporation to be 
served by grants or contracts to be awarded on the basis of a 
competitive bidding process. A service area is defined geographically 
and may consist of all or part of the area served by a current 
recipient, or it may include an area larger than the area served by a 
current recipient.
    (d) Subpopulation of eligible clients includes Native Americans and 
migrant farm workers and may include other groups of eligible clients 
that, because they have special legal problems or face special 
difficulties of access to legal services, might better be served by a 
separate system to deliver legal assistance in order to serve that 
client group effectively.


Sec. 1634.3  Competition for grants and contracts.

    (a) After the effective date of this part, all grants and contracts 
for legal assistance awarded by the Corporation under section 
1006(a)(1)(A) of the LSC Act shall be subject to the competitive 
bidding process described in this part. No grant or contract for the 
delivery of legal assistance shall be awarded by the Corporation for 
any period after ______\1\ unless the recipient of that grant has been 
selected on the basis of the competitive bidding process described in 
this part.

    \1\The date will depend upon the appropriation or 
reauthorization provisions that are enacted into law.
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    (b) The Corporation shall determine the service area to be covered 
by grants or contracts and shall determine whether the population to be 
served will consist of all eligible clients within the service area or 
a specific subpopulation of eligible clients within one or more service 
areas.
    (c) The use of the competitive bidding process to award grant(s) or 
contract(s) shall not constitute a termination or denial of refunding 
of financial assistance to a current recipient pursuant to parts 1606 
and 1625 of this chapter.
    (d) The Corporation may award more than one grant or contract to 
provide legal assistance to eligible clients or a subpopulation of 
eligible clients within a service area, provided that, to the maximum 
extent possible, such grants and contracts are awarded so as to ensure 
that all eligible clients within the service area will have access to a 
full range of legal services in accordance with the LSC Act.
    (e) In no event may the Corporation award a grant or contract for a 
term longer than five years, and the amount of funding provided 
annually under each such grant or contract is subject to changes in 
Congressional appropriations or restrictions on the use of those funds 
by the Corporation. A reduction in a recipient's annual funding 
required as a result of a change in the law or a reduction in funding 
appropriated for the Corporation shall not be considered a termination 
or denial of refunding under parts 1606 or 1625 of this chapter.


Sec. 1634.4  Announcement of competition.

    (a) The Corporation shall give public notice that it intends to 
award a grant or contract for a service area on the basis of a 
competitive bidding process and shall take appropriate steps to 
announce the availability of such a grant or contract in the 
periodicals of State and local bar associations and shall publish a 
notice of the Request For Proposals (RFP) in at least one daily 
newspaper of general circulation in the area to be served under the 
grant or contract. In addition, the Corporation shall notify current 
recipients, other bar associations, and other interested groups within 
the service area of the availability of the grant or contract and shall 
conduct such other outreach as the Corporation determines to be 
appropriate to ensure that interested parties are given an opportunity 
to participate in the competitive bidding process.

[[Page 48955]]

    (b) The Corporation shall issue an RFP which shall include 
information regarding: Who may apply; application procedures; the 
selection process; selection criteria; the service areas that will be 
the subject of the competitive bidding process; the amount of funding 
available for the service area, if known; applicable timetables and 
deadlines; and the LSC Act, regulations, guidelines and instructions 
and any other applicable federal law. The RFP may also include any 
other information that the Corporation determines to be appropriate.
    (c) The Corporation shall make available a copy of the RFP to any 
person, group or entity that requests a copy in accordance with 
procedures established by the Corporation.


Sec. 1634.5  Identification of qualified applicants for grants and 
contracts.

    (a) The following persons, groups and entities are eligible to 
submit a notice of intent to compete and an application to participate 
in the competitive bidding process:
    (1) Current recipients;
    (2) Other non-profit organizations that have as a purpose the 
furnishing of legal assistance to eligible clients;
    (3) Private attorneys, groups of attorneys or law firms (except 
that no private law firm that expends 50 percent or more of its 
resources and time litigating issues in the broad interests of a 
majority of the public may be awarded a grant or contract under the LSC 
Act);
    (4) State or local governments;
    (5) Substate regional planning and coordination agencies which are 
composed of substate areas and whose governing boards are controlled by 
locally elected officials.
    (b) All persons, groups and entities listed in paragraph (a) of 
this section must have a governing or policy body consistent with the 
requirements of part 1607 of this Chapter or other applicable law.
    (c) Applications may be submitted jointly by more than one 
qualifying individual, group or entity.


Sec. 1634.6  Notice of intent to complete.

    (a) In order to participate in the competitive bidding process, an 
applicant must submit a notice of intent to compete on or before the 
date designated by the Corporation in the RFP. The Corporation may 
extend the date if necessary to take account of special circumstances 
or to permit the Corporation to solicit additional notices of intent to 
compete.
    (b) Either at the time or prior to the filing of the notice of 
intent to complete, each applicant must provide the Corporation with 
the following information as well as any additional information that 
the Corporation determines is appropriate:
    (1) Names and resumes of principals and key staff;
    (2) Names and resumes of current and proposed governing board or 
policy body members and their appointing organizations;
    (3) Initial description of area proposed to be served by the 
applicant and the services to provided.


Sec. 1634.7  Application process.

    (a) The Corporation shall set a date for receipt of applications 
and shall announce the date in the RFP. The date shall afford 
applicants adequate opportunity, after filing the notice of intent to 
compete, to complete the application process. The Corporation may 
extend the application date if necessary to take account of special 
circumstances.
    (b) The application shall be submitted in a form to be determined 
by the Corporation.
    (c) A completed application shall be include all of the information 
requested by the RFP. It may also include any additional information 
needed to fully address the selection criteria, and any other 
information requested by the Corporation. In complete applications will 
not be considered for competition by the Corporation.
    (d) The Corporation shall establish a procedure to provide 
notification to applicants of receipt of the application.
    (e) The Corporation may require that, as a condition of being an 
applicant, an applicant must agree in writing that, prior to 
instituting any court action regarding a dispute with the Corporation 
or its employees arising from the application or the Corporation's 
action regarding the application, the applicant will participate in 
mediation with a representative of the Corporation. Mediation 
procedures shall be designed by the Corporation to provide for the 
convenience of the parties and to encourage the expeditious resolution 
of the applicant's concerns. The use of such mediation procedures 
should not be interpreted to suggest that applicants have any property 
or hearing rights pursuant to the competitive process.


Sec. 1634.8  Selection process.

    (a) After receipt of all applications for a particular service 
area, Corporation staff shall:
    (1) Review each application and any additional information that the 
Corporation has regarding each applicant, including for any applicant 
that is or includes a current or former recipient, past monitoring and 
compliance reports, performance evaluations and other pertinent records 
for the past five years;
    (2) Request from an applicant and review any additional information 
that the Corporation determines is appropriate to evaluate the 
application fully;
    (3) Conduct one or more on-site visits to an applicant if the 
Corporation determines that such visits are appropriate to evaluate the 
application fully;
    (4) Summarize in writing information regarding the applicant that 
is not contained in the application if appropriate for the preview 
process; and
    (5) Unless there is only one applicant for a particular service 
area and the Corporation therefore determines that use of a review 
panel is not appropriate, convene a review panel to:
    (i) Review the applications and the summaries prepared by the 
Corporation staff. (The Corporation staff shall also identify other 
information reviewed by the Corporation and which the review panel may 
request in order to evaluate the applications fully); and
    (ii) Make a written recommendation to the Corporation regarding the 
award of grants or contracts from the Corporation for a particular 
service area.
    (6) After considering the recommendation made by the review panel, 
if a review panel was convened, make a staff recommendation to the 
Corporation President. If the staff recommendation differs from that of 
the review panel, the staff recommendation shall include the 
recommendation of the review panel and an explanation of the basis for 
the staff recommendation.
    (b) After reviewing the written recommendations, the President 
shall select the applicants to be awarded grants or contracts from the 
Corporation and the Corporation shall notify each applicant in writing 
of the President's decision regarding each applicant's application. The 
President of the Corporation shall not make an award of a grant or 
contract for a term longer than five years.
    (c) In the event that there are no applicants for a service area or 
the Corporation determines that no competitor meets the criteria and 
therefore determines not to award a grant for a particular service 
area, the Corporation has discretion to determine how to provide the 
provision of legal assistance to the service area under competition, 
including but not limited to, enlarging the service area of a 
neighboring program or putting a current recipient on month-to-month 

[[Page 48956]]
funding in order to permit the Corporation to conduct a new 
competition.
    (d) In selecting recipients of awards for grants or contracts under 
this part, the Corporation shall not grant any preference to current or 
previous recipients of funds from the Corporation.


Sec. 1634.9  Selection criteria.

    The Corporation shall consider the following criteria in selecting 
recipients.
    (a) Whether the applicant has a full understanding of the basic 
legal needs of the eligible clients in the area to be served;
    (b) The quality, feasibility and cost-effectiveness of the 
applicant's legal services delivery approach in relation to the 
Corporation's Performance Criteria and the American Bar Association's 
Standards for Providers of Civil Legal Services to the Poor, as 
evidenced by, among other things, the applicant's experience with the 
delivery of the type of legal assistance contemplated under the 
proposal;
    (c) Whether the applicant's governing or policy body meets or will 
meet all applicable requirements of the LSC Act, regulations, 
guidelines, instructions and any other requirements of law;
    (d) Applicant's capacity to comply with all other applicable 
provisions of the LSC Act, rules, regulations, guidelines and 
instructions, as well as with ethical requirements and any other 
requirements imposed by law. Evidence of the applicant's capacity to 
comply with this criterion may include, among other things, the 
applicants compliance experience with the Corporation or other funding 
sources or regulatory agencies, including but not limited to federal or 
state agencies, bar associations or foundations, courts, IOLTA 
programs, and private foundations;
    (e) The reputations of the applicant's principals and key staff;
    (f) The applicant's knowledge of the various components of the 
legal services delivery system in the State and its willingness to 
coordinate with them as appropriate to assure the availability of a 
full range of legal assistance, including its capacity to:
    (1) develop and increase non-Corporation resources,
    (2) cooperate with State and local bar associations, private 
attorneys and pro bono programs to increase the involvement of private 
attorneys in the delivery of legal assistance and the availability of 
pro bono legal services to eligible clients, and
    (3) have knowledge of and cooperate with other services providers, 
community groups, public interest organizations and human services 
providers in a manner that is consistent with the local ethical 
requirements;
    (g) Applicant's capacity to ensure continuity in client services 
and representation of eligible clients with pending matters.
    (h) Applicant does not have known or potential conflicts of 
interest, institutional or otherwise, with client community and 
demonstrates a capacity to protect against such conflicts that may 
arise during the term of the grant or contract.


Sec. 1634.10  Transition provisions.

    (a) When the competitive bidding process results in the award of a 
grant or contract to an applicant other than the current recipient to 
serve the area currently served by that recipient, the Corporation may, 
if the law permits;
    (1) Provide continued funding to the current recipient, for a 
period and at a level to be determined by the Corporation after 
consultation with the recipient, to ensure the prompt and orderly 
completion of or withdrawal from pending cases or matters or the 
transferral of such cases or matters to the new recipient or to other 
appropriate legal services providers in a manner consistent with the 
rules of ethics or professional responsibility for the jurisdiction in 
which those services are being provided;
    (2) Ensure, after consultation with the recipient, the appropriate 
disposition of real and personal property purchased by the current 
recipient in whole or in part with Corporation funds.
    (b) Awards of grants or contracts for legal assistance to any 
applicant that is not a current recipient may, in the Corporation's 
discretion, provide for incremental increases in funding up to the 
annualized level of the grant or contract award in order to ensure that 
the applicant has the capacity to use Corporation funds in an effective 
and efficient manner.


Sec. 1634.11  Emergency Procedures and Waivers

    The President of the Corporation may waive the requirements of 
Sec. Sec. 1634.6 and 1634.8(a)(3) and (5), when necessary to comply 
with requirements imposed by law on the awards of grants and contracts 
for a particular fiscal year.

    Dated: September 18, 1995.
Suzanne B. Glasow,
Senior Counsel for Operations and Regulations.
[FR Doc. 95-23491 Filed 9-20-95; 8:45 am]
BILLING CODE 7050-01-M