[Federal Register Volume 64, Number 177 (Tuesday, September 14, 1999)]
[Proposed Rules]
[Pages 49940-49944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23701]
[[Page 49939]]
_______________________________________________________________________
Part VIII
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 943
Consortia of Public Housing Agencies and Joint Ventures; Proposed Rule
Federal Register / Vol. 64, No. 177 / Tuesday, September 14, 1999 /
Proposed Rules
[[Page 49940]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 943
[Docket No. FR-4474-P-01]
RIN 2577-AC00
Consortia of Public Housing Agencies and Joint Ventures
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a new statutory provision
specifically authorizing public housing agencies (PHAs) to administer
any or all of their housing programs through a consortium of PHAs. It
also authorizes PHAs to use subsidiaries, joint ventures, partnerships
or other business arrangements to administer its housing programs or to
provide supportive or social services. The proposed rule specifies
minimum requirements relating to formation and operation of consortia
and minimum contents of consortium agreements, as required by the
statute.
DATES: Comments Due Date: November 15, 1999.
ADDRESSES: Submit comments regarding this proposed rule to the
Regulations Division, Office of General Counsel, Room 10276, Department
of Housing and Urban Development, 451 Seventh Street, SW, Washington,
DC 20410-0500.
Communications should refer to the above docket number and title.
Facsimile (FAX) comments are not acceptable. A copy of each
communication submitted will be available for public inspection and
copying between 7:30 a.m. and 5:30 p.m. weekdays at the above address.
FOR FURTHER INFORMATION CONTACT: Rod Solomon, Deputy Assistant
Secretary for Policy, Program, and Legislative Initiatives, Office of
Public and Indian Housing, U.S. Department of Housing and Urban
Development, at (202) 708-0713 or e-mail him at the following address:
RodSolomon@hud.gov. The preceding telephone number is not toll-free.
Persons with hearing or speech impairments may access the above
telephone number via TTY by calling the Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Statutory Basis
Section 515 of the Quality Housing and Work Responsibility Act of
1998 (Pub. L. 105-276, 112 Stat. 2549, approved October 21, 1998)
(Public Housing Reform Act) repealed the existing section 13 of the
United States Housing Act of 1937 (42 U.S.C. 1437k) dealing with energy
conservation, replacing it with a new section 13 authorizing PHAs to
operate in consortia and joint ventures. The statute requires that HUD
specify minimum requirements relating to the formation and operation of
consortia and minimum contents of consortium agreements.
New section 13 provides authority for PHAs to form consortia, joint
ventures, affiliates, and subsidiaries for the purposes set out in the
statute. Before enactment of section 13, some PHAs had established
cooperative arrangements for carrying out some of their
responsibilities. A principal difference between such arrangements and
consortia as authorized under section 13, is that under section 13
funding may be directed to a representative of the consortium on behalf
of several PHAs instead of being paid to the PHAs separately. Another
major difference is that under a section 13 consortium, a joint PHA
plan is submitted on behalf of participating PHAs. Enactment of section
13, however, does not restrict the ability of PHAs to continue to
establish cooperative arrangements under which they receive funding
separately and submit separate PHA plans.
II. Regulatory Interpretations
A. Consortia
1. HUD Programs Covered
Generally, this rule covers the public housing program, PHA-
administered Section 8 housing assistance programs, and related
programs. Programs not covered are other housing owned by the PHA and
two categories of project-based Section 8 projects:
PHA-administered project-based section 8 under the Request
for Proposals published on May 19, 1999, 64 FR 27358 (HUD invited
response by specially created consortia that could qualify as PHAs.);
and
Section 8 projects that are the subject of financing
restructuring under the finance restructuring ``Mark to Market''
program, where Participating Administrative Entities are designated to
administer the program (see 42 U.S.C. 1437f note).
2. General
HUD encourages PHAs to take advantage of the new authority to
create consortia to operate their programs. This type of coordination
may be particularly helpful for PHAs with small programs or ones whose
location is not convenient to access planning resources. Acting
together, PHAs should be able to access expertise not otherwise readily
available and obtain significant cost savings. In addition, joint
planning by PHAs in adjacent geographic areas will permit a
metropolitan or regional perspective to be set out in a single PHA
Annual Plan. This may facilitate reaching deconcentration and mobility
goals for very low income families. Consequently, HUD has placed very
few limits on the exercise of PHA discretion in implementing this
statutory provision. Nothing in this rule, however, precludes PHAs from
making other contractual arrangements for administration of their
programs, consistent with program regulations and provisions of their
Annual Contributions Contracts (ACCs) with HUD.
This rule provides for reporting by the consortium to HUD on behalf
of participating PHAs (see Sec. 943.124). HUD invites comments on
whether all reports should be combined reports.
Under the Section 8 Voucher program, program regulations (24 CFR
982.4) already provide for using a consortium of PHAs and having a
separate ACC with an entity authorized to act as legal representative
of the consortium.
3. PHA Inclusion of Programs in a Consortium
The statute specifies that ``any or all of the housing programs of
[the PHAs]'' may be administered by a consortium. HUD interprets the
coverage to include a PHA's public housing and Section 8 programs, and
related programs, such as the drug elimination program. When a PHA
participates, it must decide which categories of its programs to
include. For this purpose, the categories are as follows:
Public housing;
Section 8 voucher;
Section 8 Moderate Rehabilitation, including Single Room
Occupancy;
All project-based Section 8 programs administered by a PHA
under an ACC with HUD, except for Moderate Rehabilitation and
Certificates and Vouchers;
Grant programs associated with public housing and Section
8 housing programs (such as drug elimination)--unless use of a
consortium would be inconsistent with the terms of the grant program.
The participating PHAs will designate a lead agency in the
consortium agreement. The consortium agreement will specify the
responsibilities of the
[[Page 49941]]
lead PHA and other participating PHAs for administration of the
consortium and for administration of the covered programs. To assure
competency in the operation of the consortium, the rule requires that
the lead agency for the consortium may not be one designated as
troubled by HUD or one that fails the funding threshold on satisfaction
of civil rights requirements.
4. Relationship of PHAs in Consortium
The period of existence of a consortium and the terms under which a
PHA may withdraw from it before the end of that period must be
specified in the consortium agreement. To provide for orderly
transition, a PHA's withdrawal from a consortium or its natural
termination date must take effect at the end of the consortium's fiscal
year. Nothing in this rule affects HUD's authority to intervene, as
necessary, to enforce its rights under the Annual Contributions
Contract, if the actions of a consortium result in a default by a PHA.
5. HUD's Relationship to Consortium
The relationship between HUD and the consortium is to be specified
in a payment agreement with the lead agency and the other participating
PHAs. This agreement will specify the agreement for direct payment of
program funds to the lead agency on behalf of the consortium and
requirements for use of the funds in accordance with HUD regulations
and requirements, and remedies for any breach of the obligation of the
lead agency and participating PHAs to administer the combined program
in accordance with HUD requirements.
B. Joint Ventures, Partnerships, Affiliates, and Subsidiaries
1. HUD Programs Covered
Although section 13 authorizes joint ventures, partnerships,
affiliates, subsidiaries, and other business arrangements for all of a
PHA's programs, this rule covers only the public housing program. PHAs
engaged in Section 8 program administration are free to engage in such
arrangements without any new regulatory restrictions. (In the Section 8
programs, the PHA is paid a fixed fee for administration of assistance
to owners and is responsible for delivering the contract administration
services, without either increase or reduction of the fixed fee). In
the public housing program, special protections are imposed where
physical assets are at risk, as in Part 941, Subpart F, for mixed
finance development. This rule does not override those protections.
Section 13 authorizes the use of joint ventures, partnerships, or
other business arrangements with persons or entities ``with respect to
administration of the programs of the [PHA].'' In this proposed rule,
HUD has chosen to limit the applicability of the joint venture subpart
(Subpart C) and its associated special procurement flexibility to the
public housing program. PHAs do not need the flexibility granted by
this subpart for their Section 8 operations because they already have
it. For example, Section 8 operations are not subject to the
procurement provisions of 24 CFR part 85.
2. Procurement Provisions
To encourage PHAs to select the most qualified partners for joint
ventures in administration of public housing, the rule clarifies the
applicability of public housing procurement requirements (found in 24
CFR part 85) to these partners. For procurement of (a) supportive and
social services, and (b) administrative functions, this rule provides
that the standard requirements are applicable to the procurement of
goods and services, but a PHA may consider factors other than price in
selecting a partner under the conditions that would warrant sole source
selection. (See Sec. 943.150(b)). The rule also clarifies that a joint
venture partner is not subject to standard procurement requirements in
its activities unless the partner is a subsidiary, affiliate, or
identity of interest party of the PHA. In that case, HUD may exempt the
joint venture partner from compliance with the standard procurement
requirements if the joint venture partner has an acceptable alternative
procurement plan. A wholly owned subsidiary or affiliate of a PHA is
not exempt in any way.
3. Impact on Existing Joint Venture Authority
This statute does not attempt to regulate a PHA's use of joint
ventures, as may be permitted under State law, when using non-1937 Act
funds. The rule (Sec. 943.140(c)) makes that clear.
Findings and Certifications
Public Reporting Burden
The proposed information collection requirements contained in
Secs. 943.124, 943.126, and 943.128 have been submitted to the Office
of Management and Budget (OMB) under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction
Act, HUD may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection displays
a currently valid OMB control number.
Submit comments on the information collections by November 15,
1999, referring to the title and docket number of the rule. Comments
should be addressed to Mildred Hamman, Reports Liaison Officer, Office
of Public and Indian Housing, Department of Housing and Urban
Development, 451 Seventh Street, S.W., Washington, D.C. 20410.
Comments are solicited from members of the public and affected
entities concerning the proposed collection of information specifically
to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
The burden of information is estimated as follows:
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Number of Responses per Total annual Hours per Total annual
Section of CFR respondents respondent responses response hours
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943.124 Consortium Agreement... 40 1 40 8 320
943.126 Payment Agreement...... 40 1 40 4 160
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943.128(a) Consolid. Plan;..... Already included in burden estimates for PHA Plan under Part 903
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943.128(b) Consortium Reporting 40 1 40 8 320
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Total....................... .............. .............. .............. .............. 800
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Impact on Small Entities
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that an
agency analyze the impact of a rule on small entities whenever it
determines that the rule is likely to have a significant impact on a
substantial number of small entities. Based on HUD's experience and
contacts with representatives of PHAs and HUD field offices, we expect
a relatively small number of PHAs to form consortia--certainly fewer
than 100. While there would be savings and efficiencies in the long run
for small PHAs, forming a consortium also would require some work for
these PHAs--to enter consortium agreements--and would required them to
overcome resistance to giving up local control of their programs.
Consequently, we conclude that the rule will not have a significant
impact on a substantial number of small entities. We encourage small
entities to submit comments, however, on ways that the impact of the
rule on them could be made more advantageous.
Environmental Finding
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between the hours of 7:30 a.m. and 5:30 p.m. weekdays
in the Regulations Division at the above address.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule will not have substantial direct effects on
states or their political subdivisions, or the relationship between the
federal government and the states, or on the distribution of power and
responsibilities among the various levels of government. As a result,
the rule is not subject to review under the order.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532)
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. This proposed rule does not impose a Federal
mandate that will result in the expenditure by State, local, or tribal
governments in the aggregate, or by the private sector, of $100 million
or more in any one year. On the contrary, it adds new options for PHA
operations.
Regulatory Review
The Office of Management and Budget (OMB) has reviewed this
proposed rule under Executive Order 12866, Regulatory Planning and
Review, issued by the President on September 30, 1993. OMB determined
that this rule is a ``significant regulatory action'' as defined in
section 3(f) of the Order (although not an economically significant
regulatory action under the Order). Any changes made in this proposed
rule after its submission to OMB are identified in the docket file,
which is available for public inspection during regular business hours
in the Regulations Division, Office of General Counsel, Room 10276,
U.S. Department of Housing and Urban Development, 451 Seventh Street,
SW, Washington, DC 20410.
Catalog
The Catalog of Federal Domestic Assistance number for the programs
covered by this rule are 14.850, 14.855, and 14.857.
List of Subjects in 24 CFR 943
Low and moderate income housing, Reporting and recordkeeping
requirements.
Accordingly, HUD proposes to add a new part 943 to title 24 of the
Code of Federal Regulations as follows:
PART 943-- PUBLIC HOUSING AGENCY CONSORTIA AND JOINT VENTURES
Sec.
Subpart A--General
943.100 What is the purpose of this part?
Subpart B--Consortia
943.115 What programs are covered under this subpart?
943.118 What is a consortium?
943.120 What programs of a PHA are included in a consortium's
functions:
943.122 How is a consortium organized?
943.124 What elements must a consortium agreement contain?
943.126 What is the relationship between HUD and a consortium?
943.128 How does a consortium carry out planning and reporting
functions?
943.130 What are the responsibilities of participating PHAs?
Subpart C--Subsidiaries, Affiliates, Joint Ventures in Public Housing
943.140 What programs and activities are covered by this subpart?
943.142 In what types of operating organizations may a PHA
participate?
943.144 What financial impact do operations of a subsidiary,
affiliate, or joint venture operations have on a PHA?
943.146 What impact does the use of a subsidiary, affiliate, or
joint venture have on financial accountability to HUD and the
Federal government?
943.148 What procurement standards apply to PHAs selecting partners
for a joint venture?
943.150 What procurement standards apply to a PHA's joint venture
partner?
943.151 What procurement standards apply to a joint venture itself?
Authority: 42 U.S.C. 1437k and 3535(d).
Subpart A--General
Sec. 943.100 What is the purpose of this part?
This part authorizes public housing agencies (PHAs) to form
consortia, joint ventures, affiliates, subsidiaries, partnerships, and
other business arrangements under section 13 of the United States
Housing Act of 1937 (42 U.S.C. 1437k). Under this authority,
participating PHAs submit joint PHA plans to HUD and combine their
funding and program administration. This part does not preclude a PHA
from entering cooperative arrangements to operate its programs under
other authority, as long as they are consistent with other program
regulations and requirements.
Subpart B--Consortia
Sec. 943.115 What programs are covered under this subpart?
(a) Except as provided in paragraph (b) of this section, this
subpart applies to the following:
(1) PHA administration of public housing or Section 8 programs
under an ACC with HUD; and
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(2) PHA administration of grants to the PHA in connection with its
public housing or Section 8 programs.
(b) This subpart does not apply to the following:
(1) PHA administration of Section 8 projects assigned to a PHA for
contract administration pursuant to an ACC entered under the Request
for Proposals published May 19, 1999 (64 FR 27358);
(2) Section 8 contract administration of a restructured subsidized
multifamily project by a Participating Administrative Entity in
accordance with part 401 of this title; or
(3) A PHA in its capacity as owner of a Section 8 project.
Sec. 943.118 What is a consortium?
A consortium consists of two or more PHAs that join together to
perform planning, reporting, and other administrative functions for
participating PHAs, as specified in a consortium agreement. The lead
agency collects the assistance funds from HUD that would be paid to the
participating PHAs for the elements of their operations that are
administered by the consortium and allocates them according to the
consortium agreement. A consortium also submits a joint PHA plan.
Sec. 943.120 What programs of a PHA are included in a consortium's
functions?
(a) A PHA may enter a consortium under this subpart for
administration of any of the following program categories:
(1) The PHA's public housing program;
(2) The PHA's Section 8 voucher and certificate program (including
the project-based certificate and voucher programs);
(3) The PHA's Section 8 Moderate Rehabilitation program, including
Single Room Occupancy program;
(4) All other project-based Section 8 programs administered by the
PHA under an Annual Contributions Contract (ACC) with HUD, except for
Moderate Rehabilitation and Certificates and Vouchers; and
(5) Any grants to the PHA in connection with its Section 8 or
public housing programs, to the extent not inconsistent with the terms
of the governing documents for the grant's funding source.
(b) If a PHA elects to enter a consortium with respect to a program
category specified in paragraph (a)(1), (a)(2), (a)(3), or (a)(4) of
this section, the consortium must cover the PHA's whole program under
the ACC with HUD for that program category, including all dwelling
units and all funding for that program under the ACC with HUD.
Sec. 943.122 How is a consortium organized?
(a) PHAs that elect to form a consortium enter into a consortium
agreement among the participating PHAs, specifying a lead agency (see
Sec. 943.124). HUD enters into a payment agreement with the lead agency
and the other participating PHAs (see Sec. 943.126).
(b) The lead agency must not be a PHA that is designated as a
``troubled PHA'' by HUD or that has been determined by HUD to fail the
civil rights compliance threshold for new funding. The lead agency is
designated to receive HUD program payments on behalf of participating
PHAs, to administer HUD requirements for administration of the funds,
and to apply the funds in accordance with the consortium agreement and
HUD regulations and requirements.
Sec. 943.124 What elements must a consortium agreement contain?
(a) The consortium agreement among the participating PHAs governs
the formation and operation of the consortium. It must be consistent
with the consortium's payment agreement with HUD and must specify the
following:
(1) The names of the participating PHAs and the program categories
each PHA is including under the consortium agreement;
(2) The name of the lead agency;
(3) The functions to be performed by the lead agency and the other
participating PHAs during the term of the payment agreement;
(4) The allocation of funds among participating PHAs and
responsibility for administration of funds paid to the consortium under
the payment agreement; and
(5) The period of existence of the consortium and the terms under
which a PHA may withdraw from it before the end of that period. To
provide for orderly transition, the consortium's termination date or a
PHA's withdrawal from the consortium must take effect at the end of the
consortium's fiscal year.
(b) The agreement must acknowledge that the participating PHAs are
subject to the requirements of the joint PHA Plan.
(c) The agreement must be signed by an authorized representative of
each participating PHA.
Sec. 943.126 What is the relationship between HUD and a consortium?
(a) HUD has a direct relationship with the consortium through a
payment agreement, executed in the form prescribed by HUD. The payment
agreement specifies the conditions under which HUD agrees to pay
program funds to the lead agency on behalf of the participating PHAs.
It specifies the requirements for use of the funds in accordance with
HUD regulations and requirements.
(b) Under the payment agreement, the participating PHAs agree that
HUD will pay the consortium all assistance payments otherwise payable
to the PHAs for the program categories they have included under the
consortium agreement. The combined amount is paid to the lead agency on
behalf of the consortium.
Sec. 943.128 How does a consortium carry out planning and reporting
functions?
(a) During the term of the payment agreement, the consortium must
complete a joint five-year Plan and a joint Annual Plan for all
participating PHAs, in accordance with part 903 of this chapter.
(b) The consortium must submit reports to HUD, in accordance with
HUD regulations and requirements, for all of the participating PHAs.
All PHAs will be bound by plans and reports submitted to HUD by the
consortium for programs covered by the consortium.
(c) Each PHA must keep a copy of the consortium agreement on file
for inspection.
Sec. 943.130 What are the responsibilities of participating PHAs?
Despite participation in a consortium, each participating PHA
remains responsible for its own obligations under its ACC with HUD.
This means that it has an obligation to assure that all program funds,
including funds paid to the lead agency for administration by the
consortium, are used in accordance with HUD regulations and
requirements, and that the PHA program is administered in accordance
with HUD regulations and requirements. Any breach of program
requirements with respect to a program covered by the consortium
agreement is a breach of the ACC with each of the participating PHAs,
so each PHA is responsible for the performance of the consortium.
Subpart C--Subsidiaries, Affiliates, Joint Ventures in Public
Housing
Sec. 943.140 What programs and activities are covered by this subpart?
(a) This subpart applies to the provision of a PHA's public housing
administrative functions, and to the provision (or arranging for the
provision) of supportive and social services in connection with public
housing. It does not apply to activities of a PHA that are subject to
the
[[Page 49944]]
requirements of part 941, subpart F, of this title.
(b) For purposes of this subpart, the term ``joint venture
partner'' means a participant (other than a PHA) in a joint venture,
partnership, or other business arrangement or contract for services
with a PHA.
(c) This part does not affect a PHA's authority to use joint
ventures, as may be permitted under State law, when using non-1937 Act
funds.
Sec. 943.142 In what types of operating organizations may a PHA
participate?
(a) A PHA may create and operate a wholly owned or controlled
subsidiary or other affiliate; may enter into joint ventures,
partnerships, or other business arrangements with individuals,
organizations, entities, or governmental units. A subsidiary or
affiliate may be a nonprofit corporation. It may be an organization
controlled by the same persons who serve on the governing board of the
PHA or who are employees of the PHA.
(b) The purpose of any of these operating organizations would be to
administer programs of the PHA.
Sec. 943.144 What financial impact do operations of a subsidiary,
affiliate, or joint venture have on a PHA?
Income generated by subsidiaries, affiliates, or joint ventures
formed under the authority of this subpart is to be used for low-income
housing or to benefit the residents assisted by the PHA. This income
will not cause a decrease in funding provided under the public housing
program except as otherwise provided under the Operating Fund and
Capital Fund formulas.
Sec. 943.146 What impact does the use of a subsidiary, affiliate, or
joint venture have on financial accountability to HUD and the Federal
government?
None. The subsidiary, affiliate, or joint venture is subject to the
same authority of HUD, HUD's Inspector General, and the General
Accounting Office to audit its conduct.
Sec. 943.148 What procurement standards apply to PHAs selecting
partners for a joint venture?
(a) The requirements of part 85 of this title (generally requiring
a request for proposals or ``RFP'') are applicable to a PHA's
procurement of goods and services under this subpart in connection with
the PHA's public housing program.
(b) A PHA may use competitive proposal procedures for
qualifications-based procurement (request for qualifications or
``RFQ'') or may solicit a proposal from only one source (``sole
source'') to select a joint venture partner to perform an
administrative function of its public housing program or to provide or
arrange to provide supportive or social services covered under this
part under the following circumstances:
(1) The proposed joint venture partner has under its control and
will make available to the partnership substantial, unique and tangible
resources or other benefits that would not otherwise be available to
the PHA on the open market (e.g., planning expertise, program
experience, or financial or other resources). In this case, the PHA
must maintain documentation to substantiate both the cost
reasonableness of its selection of the proposed partner and the unique
qualifications of the partner: or
(2) A resident group or a PHA subsidiary is willing and able to act
as the PHA's partner in performing administrative functions or to
provide supportive or social services. This entity must comply with the
requirements of part 85 of this title with respect to its selection of
the members of the team and the members must be paid on a cost-
reimbursement basis only.
Sec. 943.150 What procurement standards apply to a PHA's joint venture
partner?
(a) General. A joint venture partner is not a grantee or subgrantee
and, accordingly, is not required to comply with part 85 of this title
in its procurement of goods and services under this part. The partner
must comply with all applicable State and local procurement and
conflict of interest requirements with respect to its selection of
entities to assist in PHA program administration.
(b) Exception. If the joint venture partner is a subsidiary,
affiliate, or identity of interest party of the PHA, it is subject to
the requirements of part 85 of this title. HUD may, on a case-by-case
basis, exempt such a joint venture partner from the need to comply with
requirements under part 85 of this title if it determines that the
joint venture has developed an acceptable alternative procurement plan.
(c) Contracting with identity-of-interest parties. A joint venture
partner may contract with an identity-of-interest party for goods or
services, or a party specified in the selected bidder's response to a
RFP or RFQ (as applicable), without the need for further procurement
if:
(1) The PHA can demonstrate that its original competitive selection
of the partner clearly anticipated the later provision of such goods or
services;
(2) Compensation of all identity-of-interest parties is structured
to ensure there is no duplication of profit or expenses; and
(3) The PHA can demonstrate that its selection is reasonable based
upon prevailing market costs and standards, and that the quality and
timeliness of the goods or services is comparable to that available in
the open market. For purposes of this paragraph (c), an ``identity-of-
interest party'' means a party that is wholly owned or controlled by,
or that is otherwise affiliated with, the partner or the PHA. The PHA
may use an independent organization experienced in cost valuation to
determine the cost reasonableness of the proposed contracts.
Sec. 943.151 What procurement standards apply to a joint venture
itself?
(a) When the joint venture as a whole is controlled by the PHA or
an identity of interest party of the PHA, the joint venture is subject
to the requirements of part 85 of this title.
(b) If a joint venture is not controlled by the PHA or an identity
of interest party of the PHA, then the rules that apply to the other
partners apply. See Sec. 943.150.
Dated: August 27, 1999.
Harold Lucas,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-23701 Filed 9-13-99; 8:45 am]
BILLING CODE 4210-33-P
