[Federal Register Volume 67, Number 140 (Monday, July 22, 2002)]
[Proposed Rules]
[Pages 48006-48014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18309]
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Part V
Department of Housing and Urban Development
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24 CFR Parts 21 and 24
Adoption of Governmentwide Debarment and Suspension (Nonprocurement)
and Government Requirements for Drug-Free Workplace (Grants); Proposed
Rule
Federal Register / Vol. 67, No. 140 / Monday, July 22, 2002 /
Proposed Rules
[[Page 48006]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 21 and 24
[Docket No. FR-4692-P-01]
RIN 2502-AC81
Adoption of Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free
Workplace (Grants)
AGENCY: Office of the Secretary, HUD.
ACTION: Proposed rule.
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SUMMARY: On January 23, 2002, a proposed common rule was published that
announced substantive changes and amendments to the governmentwide
nonprocurement common rule for debarment and suspension and the
governmentwide rule implementing the Drug-Free Workplace Act of 1988.
This rule would adopt those amendments.
DATES: Comment Due Date: September 20, 2002.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Rules Docket Clerk, 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. 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: Dane Narode, Deputy Chief Counsel for
Administrative Proceedings, Departmental Enforcement Center, Department
of Housing and Urban Development, 1250 Maryland Avenue, Suite 200,
Washington, DC 20024; telephone (202) 708-2350 (this is not a toll-free
number); e-mail: [email protected]. Hearing-impaired or speech-
impaired individuals may access the voice telephone number listed above
by calling the Federal information relay service during working hours
at 1-800-877-8339.
SUPPLEMENTARY INFORMATION: On January 23, 2002 (67 FR 3266), a
governmentwide common rule was published that proposed substantive
changes and amendments to the governmentwide nonprocurement common rule
for debarment and suspension and the governmentwide rule implementing
the Drug-Free Workplace Act of 1988. The publication is available at
http://www.access.gpo.gov/su_docs.
Through this proposed rule, HUD would adopt the changes and
amendments made in the common rule. In addition, HUD is proposing in
this rule to adopt specific requirements that, along with the
provisions in the common rule, would best serve HUD's programs.
HUD's proposed rule inserts an additional paragraph regarding
employment contracts to the definition of ``covered transaction'' found
at Sec. 24.200. HUD's addition makes clear that each payment under an
employment contract constitutes a new ``covered transaction.'' HUD has
also enhanced the exclusion review that takes place in Sec. 24.300.
Under HUD's proposed rule, a participant must ensure it is not entering
into a covered transaction with an excluded or disqualified person. In
reviewing for an exclusion, however, HUD, at section Sec. 24.300(d),
exempts participants from checking on the exemption status of their
principals while making salary payments pursuant to an employment
contract.
Additionally, Sec. 24.440 proposes to use terms or conditions to
the award transaction as a means to enforce exclusions under HUD
transactions rather than written certifications.
HUD proposes to provide examples for the debarment and suspension
common rule definition of ``principal'' found at Sec. 24.995. The
expansion contains minor modifications consistent with HUD's present
practice regarding the definition of ``principal'' for the purpose of
debarments and suspensions. HUD is retaining its definitions of
``Hearing Officer'' at Sec. 24.947 and ``Ultimate Beneficiary'' at
Sec. 24.1017 as found in the current common rule. The proposed rule
makes clear in Sec. 24.750 and Sec. 24.845 that all fact finding
referrals for HUD suspensions and debarments will be made to hearing
officers.
Subpart J of part 24, which addresses limited denial of
participation, has been revised stylistically so that the rule conforms
to the question and answer format of the proposed rule. HUD has removed
the term ``contractor'' from Sec. 24.1105 because the proposed rule has
deleted the definition of the term. The revised definition of
``participant'' in the proposed rule covers individuals previously
defined as ``contractors'' in the current rule. Section 24.1145, which
addresses imputing the conduct of one person to another in a limited
denial of participation, has been revised to be consistent with the
provisions of Sec. 24.630.
Finally, the requirements for maintaining a drug-free workplace are
being enacted as a new part 21, codifying HUD's drug-free workplace
requirements.
List of Subjects
24 CFR Part 21
Administrative practice and procedure, Grant programs, Drug-free
workplace, Reporting and recordkeeping rquirements.
24 CFR Part 24
Administrative practice and procedure, Government contracts, Grant
programs, Loan programs, Technical assistance, Reporting and
recordkeeping requirements.
For the reasons stated in the common preamble, the Department of
Housing and Urban Development amends 24 CFR Chapter I, as follows:
1. A new part 21 is added to read as follows:
PART 21--GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(GRANTS)
Subpart A--Purpose and Coverage
Sec.
21.100 What does this part do?
21.105 Does this part apply to me?
21.110 Are any of my Federal assistance awards exempt from this
part?
21.115 Does this part affect the Federal contracts that I receive?
Subpart B--Requirements for Recipients Other Than Individuals
21.200 What must I do to comply with this part?
21.205 What must I include in my drug-free workplace statement?
21.210 To whom must I distribute my drug-free workplace statement?
21.215 What must I include in my drug-free awareness program?
21.220 By when must I publish my drug-free workplace statement and
establish my drug-free awareness program?
21.225 What actions must I take concerning employees who are
convicted of drug violations in the workplace?
21.230 How and when must I identify workplaces?
Subpart C--Requirements for Recipients Who Are Individuals
21.300 What must I do to comply with this part if I am an
individual recipient?
21.301 [Reserved]
Subpart D--Responsibilities of HUD Awarding Officials
21.400 What are my responsibilities as an HUD awarding official?
Subpart E--Violations of this Part and Consequences
21.500 How are violations of this part determined for recipients
other than individuals?
[[Page 48007]]
21.505 How are violations of this part determined for recipients
who are individuals?
21.510 What actions will the Federal Government take against a
recipient determined to have violated this part?
21.515 Are there any exceptions to those actions?
Subpart F--Definitions
21.605 Award.
21.610 Controlled substance.
21.615 Conviction.
21.620 Cooperative agreement.
21.625 Criminal drug statute.
21.630 Debarment.
21.635 Drug-free workplace.
21.640 Employee.
21.645 Federal agency or agency.
21.650 Grant.
21.655 Individual.
21.660 Recipient.
21.665 State.
21.670 Suspension.
Authority: 41 U.S.C. 701; 42 U.S.C. 3535.
Subpart A--Purpose and Coverage
Sec. 21.100 What does this part do?
This part carries out the portion of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It
also applies the provisions of the Act to cooperative agreements and
other financial assistance awards, as a matter of Federal Government
policy.
Sec. 21.105 Does this part apply to me?
(a) Portions of this part apply to you if you are either:
(1) A recipient of an assistance award from the Department of
Housing and Urban Development; or
(2) An HUD awarding official. (See definitions of award and
recipient in Secs. 21.605 and 21.660, respectively.)
(b) The following table shows the subparts that apply to you:
------------------------------------------------------------------------
If you are . . . see sections . .
---------------------------------------------------------------.--------
(1) a recipient who is not an individual............. 24.2110-24.2230
24.2500-24.2515
(2) a recipient who is an individual................. 24.2110-24.2115
24.2300-24.2301
24.2500-24.2515
(3) a HUD awarding official.......................... 24.2100-24.2115
24.2400-24.2500
24.2515
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Sec. 21.110 Are any of my Federal assistance awards exempt from this
part?
This part does not apply to any award that the Secretary determines
the application of which would be inconsistent with the international
obligations of the United States or the laws or regulations of a
foreign government.
Sec. 21.115 Does this part affect the Federal contracts that I
receive?
It will affect future contract awards indirectly if you are
debarred or suspended for a violation of the requirements of this part,
as described in Sec. 21.510(c). However, this part does not apply
directly to procurement contracts. The portion of the Drug-Free
Workplace Act of 1988 that applies to Federal procurement contracts is
carried out through the Federal Acquisition Regulation in chapter 1 of
Title 48 of the Code of Federal Regulations (the drug-free workplace
coverage currently is in 48 CFR part 23, subpart 23.5).
Subpart B--Requirements for Recipients Other Than Individuals
Sec. 21.200 What must I do to comply with this part?
There are two general requirements if you are a recipient other
than an individual.
(a) First, you must make a good faith effort, on a continuing
basis, to maintain a drug-free workplace. You must agree to do so as a
condition for receiving any award covered by this part. The specific
measures that you must take in this regard are described in more detail
in the subsequent sections of this subpart. Briefly, those measures are
to:
(1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Secs. 21.205 through
21.220); and
(2) Take actions concerning employees who are convicted of
violating drug statutes in the workplace (see Sec. 21.225).
(b) Second, you must identify all known workplaces under your
Federal awards (see Sec. 21.230).
Sec. 21.205 What must I include in my drug-free workplace statement?
You must publish a statement that:
(a) Tells your employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance
is prohibited in your workplace;
(b) Specifies the actions that you will take against employees for
violating that prohibition; and
(c) Lets each employee know that, as a condition of employment
under any award, he or she:
(1) Will abide by the terms of the statement; and
(2) Must notify you in writing if he or she is convicted for a
violation of a criminal drug statute occurring in the workplace and
must do so no more than five calendar days after the conviction.
Sec. 21.210 To whom must I distribute my drug-free workplace
statement?
You must require that a copy of the statement described in
Sec. 21.205 be given to each employee who will be engaged in the
performance of any Federal award.
Sec. 21.215 What must I include in my drug-free awareness program?
You must establish an ongoing drug-free awareness program to inform
employees about:
(a) The dangers of drug abuse in the workplace;
(b) Your policy of maintaining a drug-free workplace;
(c) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(d) The penalties that you may impose upon them for drug abuse
violations occurring in the workplace.
Sec. 21.220 By when must I publish my drug-free workplace statement
and establish my drug-free awareness program?
If you are a new recipient that does not already have a policy
statement as described in Sec. 24.2205 and an ongoing awareness program
as described in Sec. 24.2215, you must publish the statement and
establish the program by the time given in the following table:
------------------------------------------------------------------------
If . . . then you . . .
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(a) the performance period of the award must have the policy statement
is less than 30 days. and program in place as soon
as possible, but before the
date on which performance is
expected to be completed.
(b) the performance period of the award must have the policy statement
is 30 days or more. and program in place within 30
days after award.
[[Page 48008]]
(c) you believe there are extraordinary may ask the HUD awarding
circumstances that will require more official to give you more time
than 30 days for you to publish the to do so. The amount of
policy statement and establish the additional time, if any, to be
awareness program. given is at the discretion of
the awarding official.
------------------------------------------------------------------------
Sec. 21.225 What actions must I take concerning employees who are
convicted of drug violations in the workplace?
There are two actions you must take if an employee is convicted of
a drug violation in the workplace:
(a) First, you must notify Federal agencies if an employee who is
engaged in the performance of an award informs you about a conviction,
as required by Sec. 21.205(c)(2), or you otherwise learn of the
conviction. Your notification to the Federal agencies must:
(1) Be in writing;
(2) Include the employee's position title;
(3) Include the identification number(s) of each affected award;
(4) Be sent within ten calendar days after you learn of the
conviction; and
(5) Be sent to every Federal agency on whose award the convicted
employee was working. It must be sent to every awarding official or his
or her official designee, unless the Federal agency has specified a
central point for the receipt of the notices.
(b) Second, within 30 calendar days of learning about an employee's
conviction, you must either:
(1) Take appropriate personnel action against the employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
(2) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for these purposes
by a Federal, State or local health, law enforcement, or other
appropriate agency.
Sec. 21.230 How and when must I identify workplaces?
(a) You must identify all known workplaces under each HUD award. A
failure to do so is a violation of your drug-free workplace
requirements. You may identify the workplaces:
(1) To the HUD official that is making the award, either at the
time of application or upon award; or
(2) In documents that you keep on file in your offices during the
performance of the award, in which case you must make the information
available for inspection upon request by HUD officials or their
designated representatives.
(b) Your workplace identification for an award must include the
actual address of buildings (or parts of buildings) or other sites
where work under the award takes place. Categorical descriptions may be
used (e.g., all vehicles of a mass transit authority or State highway
department while in operation, State employees in each local
unemployment office, performers in concert halls or radio studios).
(c) If you identified workplaces to the HUD awarding official at
the time of application or award, as described in paragraph (a)(1) of
this section, and any workplace that you identified changes during the
performance of the award, you must inform the HUD awarding official.
Subpart C--Requirements for Recipients Who Are Individuals
Sec. 21.300 What must I do to comply with this part if I am an
individual recipient?
As a condition of receiving an HUD award, if you are an individual
recipient, you must agree that:
(a) You will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity related to the award; and
(b) If you are convicted of a criminal drug offense resulting from
a violation occurring during the conduct of any award activity, you
will report the conviction:
(1) In writing;
(2) Within 10 calendar days of the conviction;
(3) To the HUD awarding official or other designee for each award
that you currently have, unless Sec. 21.301 or the award document
designates a central point for the receipt of the notices. When notice
is made to a central point, it must include the identification
number(s) of each affected award.
Sec. 21.301 [Reserved]
Subpart D--Responsibilities of HUD Awarding Officials
Sec. 21.400 What are my responsibilities as an HUD awarding official?
As an HUD awarding official, you must obtain each recipient's
agreement, as a condition of the award, to comply with the requirements
in:
(a) Subpart B of this part, if the recipient is not an individual;
or
(b) Subpart C of this part, if the recipient is an individual.
Subpart E--Violations of this Part and Consequences
Sec. 21.500 How are violations of this part determined for recipients
other than individuals?
A recipient other than an individual is in violation of the
requirements of this part if the Secretary determines, in writing,
that:
(a) The recipient has violated the requirements of Subpart B of
this part; or
(b) The number of convictions of the recipient's employees for
violating criminal drug statutes in the workplace is large enough to
indicate that the recipient has failed to make a good faith effort to
provide a drug-free workplace.
Sec. 21.505 How are violations of this part determined for recipients
who are individuals?
An individual recipient is in violation of the requirements of this
part if the Secretary determines, in writing, that:
(a) The recipient has violated the requirements of Subpart C of
this part; or
(b) The recipient is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any award activity.
Sec. 21.510 What actions will the Federal Government take against a
recipient determined to have violated this part?
If a recipient is determined to have violated this part, as
described in Sec. 21.500 or 21.505, the Department of Housing and Urban
Development may take one or more of the following actions:
(a) Suspension of payments under the award;
(b) Suspension or termination of the award; and
(c) Suspension or debarment of the recipient under 24 CFR part 24,
for a period not to exceed five years.
Sec. 21.515 Are there any provisions for exceptions to those actions?
The Secretary may waive with respect to a particular award, in
writing, a suspension of payments under an award, suspension or
termination of an award, or suspension or debarment of a recipient if
the Secretary determines that such a waiver would be in the public
interest. This exception authority cannot be delegated to any other
official.
[[Page 48009]]
Subpart F--Definitions
Sec. 21.605 Award.
Award means an award of financial assistance by the Department of
Housing and Urban Development or other Federal agency directly to a
recipient.
(a) The term award includes:
(1) A Federal grant or cooperative agreement, in the form of money
or property in lieu of money.
(2) A block grant or a grant in an entitlement program, whether or
not the grant is exempted from coverage under the Governmentwide rule
(codified in HUD's regulations at 24 CFR part 85) that implements OMB
Circular A-102 and specifies uniform administrative requirements.
(b) The term award does not include:
(1) Technical assistance that provides services instead of money.
(2) Loans.
(3) Loan guarantees.
(4) Interest subsidies.
(5) Insurance.
(6) Direct appropriations.
(7) Veteran's benefits to individuals (i.e., any benefit to
veterans, their families, or survivors by virtue of the service of a
veteran in the Armed Forces of the United States).
Sec. 21.610 Controlled substance.
Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15.
Sec. 21.615 Conviction.
Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.
Sec. 21.620 Cooperative agreement.
Cooperative agreement means an award of financial assistance that,
consistent with 31 U.S.C. 6305, is used to enter into the same kind of
relationship as a grant (see definition of grant in Sec. 21.650),
except that substantial involvement is expected between the Federal
agency and the recipient when carrying out the activity contemplated by
the award. The term does not include cooperative research and
development agreements as defined in 15 U.S.C. 3710a.
Sec. 21.625 Criminal drug statute.
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance.
Sec. 21.630 Debarment.
Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement
contracts and covered nonprocurement transactions. A recipient so
prohibited is debarred, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and
the common rule, Governmentwide Debarment and Suspension
(Nonprocurement), that implements Executive Order 12549 and Executive
Order 12689.
Sec. 21.635 Drug-free workplace.
Drug-free workplace means a site for the performance of work done
in connection with a specific award at which employees of the recipient
are prohibited from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.
Sec. 21.640 Employee.
(a) Employee means the employee of a recipient directly engaged in
the performance of work under the award, including:
(1) All direct charge employees;
(2) All indirect charge employees, unless their impact or
involvement in the performance of work under the award is insignificant
to the performance of the award; and
(3) Temporary personnel and consultants who are directly engaged in
the performance of work under the award and who are on the recipient's
payroll.
(b) This definition does not include workers not on the payroll of
the recipient (e.g., volunteers), even if used to meet a matching
requirement; consultants or independent contractors not on the payroll;
or employees of subrecipients or subcontractors in covered workplaces.
Sec. 21.645 Federal agency or agency.
Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency.
Sec. 21.650 Grant.
Grant means an award of financial assistance that, consistent with
31 U.S.C. 6304, is used to enter into a relationship:
(a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or
stimulation authorized by a law of the United States, rather than to
acquire property or services for the Federal Government's direct
benefit or use; and
(b) In which substantial involvement is not expected between the
Federal agency and the recipient when carrying out the activity
contemplated by the award.
Sec. 21.655 Individual.
Individual means a natural person.
Sec. 21.660 Recipient.
Recipient means any individual, corporation, partnership,
association, unit of government (except a Federal agency), or legal
entity, however organized, that receives an award directly from a
Federal agency.
Sec. 21.665 State.
State means any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.
Sec. 21.670 Suspension.
Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement
transactions for a temporary period, pending completion of an
investigation and any judicial or administrative proceedings that may
ensue. A recipient so prohibited is suspended, in accordance with the
Federal Acquisition Regulation for procurement contracts (48 CFR part
9, subpart 9.4) and the common rule, Governmentwide Debarment and
Suspension (Nonprocurement) that implements Executive Order 12549 and
Executive Order 12689. Suspension of a recipient is a distinct and
separate action from suspension of an award or suspension of payments
under an award.
2. Part 24 is revised to read as set forth at 67 FR 3273, January
23, 2002:
PART 24--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
Sec.
24.25 How is this part organized?
24.50 How is this part written?
24.75 Do terms in this part have special meanings?
Subpart A--General
24.100 What does this part do?
24.105 Does this part apply to me?
[[Page 48010]]
24.110 What is the purpose of the nonprocurement debarment and
suspension system?
24.115 How does an exclusion restrict a person's involvement in
covered transactions?
24.120 May we grant an exception to let an excluded person
participate in a covered transaction?
24.125 Does an exclusion under the nonprocurement system affect a
person's eligibility to participate in Federal procurement
contracts?
24.130 Does an exclusion under the Federal procurement system
affect a person's eligibility to participate in nonprocurement
transactions?
24.135 May the Department of Housing and Urban Development exclude
a person who is not currently participating in a nonprocurement
transaction?
24.140 How do I know if a person is excluded?
24.145 Does this part cover persons who are disqualified as well
as those who are excluded from nonprocurement transactions?
Subpart B--Covered Transactions
24.200 What is a covered transaction?
24.205 Why is it important to know if a particular transaction is
a covered transaction?
24.210 Which nonprocurement transactions are covered transactions?
24.215 Which nonprocurement transactions are not covered
transactions?
24.220 Are any procurement contracts included as covered
transactions?
24.225 How do I know if a transaction that I may participate in is
a covered transaction?
Subpart C--Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
24.300 May I enter into a covered transaction with an excluded or
disqualified person?
24.305 What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?
24.310 May I use the services of an excluded person under a
covered transaction?
24.315 Must I verify that principals of my covered transactions
are eligible to participate?
24.320 What happens if I do business with an excluded person in a
covered transaction?
24.325 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
Disclosing Information--Primary Tier Participants
24.330 What information must I provide before entering into a
covered transaction with the Department of Housing and Urban
Development?
24.335 If I disclose unfavorable information required under
Sec. 24.330 will I be prevented from entering into the transaction?
24.340 What happens if I fail to disclose the information required
under Sec. 24.330?
24.345 What must I do if I learn of the information required under
Sec. 24.330 after entering into a covered transaction with the
Department of Housing and Urban Development?
Disclosing information--Lower Tier Participants
24.350 What information must I provide to a higher tier
participant before entering into a covered transaction with that
participant?
24.355 What happens if I fail to disclose the information required
under Sec. 24.350?
24.360 What must I do if I learn of information required under
Sec. 24.350 after entering into a covered transaction with a higher
tier participant?
Subpart D--Responsibilities of HUD Officials Regarding Transactions
24.400 May I enter into a transaction with an excluded or
disqualified person?
24.405 May I enter into a covered transaction with a participant
if a principal of the transaction is excluded?
24.410 May I approve a participant's use of the services of an
excluded person?
24.415 What must I do if a Federal agency excludes the participant
or a principal after I enter into a covered transaction?
24.420 May I approve a transaction with an excluded or
disqualified person at a lower tier?
24.425 When do I check to see if a person is excluded or
disqualified?
24.430 How do I check to see if a person is excluded or
disqualified?
24.435 What must I require of a primary tier participant?
24.440 What method do I use to communicate those requirements to
participants?
24.445 What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified person?
24.450 What action may I take if a primary tier participant fails
to disclose the information required under Sec. 24.330?
24.455 What may I do if a lower tier participant fails to disclose
the information required under Sec. 24.350 to the next higher tier?
Subpart E--Governmentwide List of Parties Excluded or Disqualified From
Federal Procurement and Nonprocurement Programs
24.500 What is the purpose of the List?
24.505 Who uses the List?
24.510 Who maintains the List?
24.515 What specific information is on the List?
24.520 Who gives the GSA the information that it puts on the List?
24.525 Whom do I ask if I have questions about a person on the
List?
24.530 Where can I get the List?
Subpart F--General Principles Relating to Suspension and Debarment
Actions
24.600 How do suspension and debarment actions start?
24.605 How does suspension differ from debarment?
24.610 What procedures does the Department of Housing and Urban
Development use in suspension and debarment actions?
24.615 How does the Department of Housing and Urban Development
notify a person of suspension and debarment actions?
24.620 Do Federal agencies coordinate suspension and debarment
actions?
24.625 What is the scope of a suspension or debarment action?
24.630 May the Department of Housing and Urban Development impute
the conduct of one person to another?
24.635 May the Department of Housing and Urban Development settle
a debarment or suspension action?
24.640 May a settlement include a voluntary exclusion?
24.645 Do other Federal agencies know if the Department of Housing
and Urban Development agrees to a voluntary exclusion?
Subpart G--Suspension
24.700 When may the suspending official issue a suspension?
24.705 What does the suspending official consider in issuing a
suspension?
24.710 When does a suspension take effect?
24.715 What notice does the suspending official give me if I am
suspended?
24.720 How may I contest a suspension?
24.725 How much time do I have to contest a suspension?
24.730 What information must I provide to the suspending official
if I contest a suspension?
24.735 Under what conditions do I get an additional opportunity to
challenge the facts on which the suspension is based?
24.740 Are suspension proceedings formal?
24.745 Is a record made of fact-finding proceedings?
24.750 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
24.755 When will I know whether the suspension is continued or
terminated?
24.760 How long may my suspension last?
Subpart H--Debarment
24.800 What are the causes for debarment?
24.805 What notice does the debarring official give me if I am
proposed for debarment?
24.810 When does a debarment take effect?
24.815 How may I contest a proposed debarment?
24.820 How much time do I have to contest a proposed debarment?
24.825 What information must I provide to the debarring official
if I contest a proposed debarment?
24.830 Under what conditions do I get an additional opportunity to
challenge the facts on which the proposed debarment is based?
24.835 Are debarment proceedings formal?
24.840 Is a record made of fact-finding proceedings?
24.845 What does the debarring official consider in deciding
whether to debar me?
24.850 What is the standard of proof in a debarment action?
[[Page 48011]]
24.855 Who has the burden of proof in a debarment action?
24.860 What factors may influence the debarring official's
decision?
24.865 How long may my debarment last?
24.870 When do I know if the debarring official debars me?
24.875 May I ask the debarring official to reconsider a decision
to debar me?
24.880 What factors may influence the debarring official during
reconsideration?
24.885 May the debarring official extend a debarment?
Subpart I--Definitions
24.900 Adequate evidence.
24.905 Affiliate.
24.910 Agency.
24.915 Agent or representative.
24.920 Civil judgment.
24.925 Conviction.
24.930 Debarment.
24.935 Debarring official.
24.940 Disqualified.
24.945 Excluded or exclusion.
24.947 Hearing officer.
24.950 Indictment.
24.955 Ineligible or ineligibility.
24.960 Legal proceedings.
24.965 List of parties excluded or disqualified from federal
procurement and nonprocurement programs.
24.970 Nonprocurement transaction.
24.975 Notice.
24.980 Participant.
24.985 Person.
24.990 Preponderance of the evidence.
24.995 Principal.
24.1000 Respondent.
24.1005 State.
24.1010 Suspending official.
24.1015 Suspension.
24.1017 Ultimate beneficiaries.
24.1020 Voluntary exclusion or voluntarily excluded.
Appendix to part 24--Covered Transactions.
Subpart J--Limited Denial of Participation
24.1100 What is a limited denial of participation?
24.1105 Who may issue a limited denial of participation?
24.1110 When may a HUD official issue a limited denial of
participation?
24.1115 When does a limited denial of participation take effect?
24.1120 How long may a limited denial of participation last?
24.1125 How does a limited denial of participation start?
24.1130 How may I contest my limited denial of participation?
24.1135 Do Federal Agencies coordinate limited denial of
participation actions?
24.1140 What is the scope of a limited denial of participation?
24.1145 May HUD impute the conduct of one person to another in a
limited denial of participation?
24.1150 What is the effect of a suspension or debarment on a
limited denial of participation?
24.1155 What is the effect of a limited denial of participation on
a suspension or a debarment?
12.1160 May a limited denial of participation be terminated before
the term of the limited denial of participation expires?
24.1165 How is a limited denial of participation reported?
Authority: 41 U.S.C. 701 et seq.: 42 U.S.C. 3535(d); Sec. 2455,
Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549 (3
CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR, 1989 Comp., p. 235).
3. Part 24 is further amended as set forth below.
a. ``[Agency noun]'' is removed and ``the Department of Housing and
Urban Development'' is added in its place wherever it occurs.
b. ``[Agency adjective]'' is removed and ``HUD'' is added in its
place wherever it occurs.
c. ``[Agency head or designee]'' is removed and ``HUD Debarring
Official or designee'' is added in its place wherever it occurs.
4. Section 24.200 is further amended by adding a paragraph (c) to
read as follows:
Sec. 24.200 What is a covered transaction?
* * * * *
(c) In the case of employment contracts that are covered
transactions, each salary payment under the contract is a separate
covered transaction.
5. Section 24.300 is further amended by adding paragraphs (c) and
(d) to read as follows:
Sec. 24.300 May I enter into a covered transaction with an excluded or
disqualified person?
* * * * *
(c) You as a participant are responsible for determining whether
you are entering into a covered transaction with an excluded or
disqualified person. You may decide the method by which you do so. You
may, but are not required to, check the List.
(d) In the case of an employment contract, HUD does not require
employers to check the List prior to making salary payments pursuant to
that contract.
6. Section 24.440 is added to read as follows:
Sec. 24.440 What method do I use to communicate those requirements to
participants?
To communicate the requirements to participants, you must include a
term or condition in the transaction requiring the participants'
compliance with subpart C of this part and requiring them to include a
similar term or condition in lower tier covered transactions.
7. Section 24.750 is further amended by adding a paragraph (c) to
read as follows:
Sec. 24.750 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
* * * * *
(c) The official receiving the referral for findings of fact
regarding disputed material facts must be a hearing officer in all HUD
suspensions.
8. Section 24.845 is further amended by adding a paragraph (d) to
read as follows:
Sec. 24.845 What does the debarring official consider in deciding
whether to debar me?
* * * * *
(d) The official receiving the referral for findings of fact
regarding disputed material facts must be a hearing officer in all HUD
debarments.
9. Section 24.947 is added to read as follows:
Sec. 24.947 Hearing officer.
Hearing officer means an Administrative Law Judge or Board of
Contract Appeals Judge authorized by HUD's Secretary or by the
Secretary's designee, to conduct proceedings under this part.
10. Section 24.995 is further amended by adding a paragraph (c) to
read as follows:
Sec. 24.995 Principal.
* * * * *
(c) A person who has a critical influence on, or substantive
control over, a covered transaction, whether or not employed by the
participant. Persons who have a critical influence on, or substantive
control over, a covered transaction may include, but are not limited
to:
(1) Loan officers;
(2) Staff appraisers and inspectors;
(3) Underwriters;
(4) Bonding companies;
(5) Borrowers under programs financed by HUD or with loans
guaranteed, insured, or subsidized through HUD programs;
(6) Purchasers of properties with HUD-insured or Secretary-held
mortgages;
(7) Recipients under HUD assistance agreements;
(8) Ultimate beneficiaries of HUD programs;
(9) Fee appraisers and inspectors;
(10) Real estate agents and brokers;
(11) Management and marketing agents;
(12) Accountants, consultants, investment bankers, architects,
engineers, and attorneys who are in a business relationship with
participants in connection with a covered transaction under a HUD
program;
(13) Contractors involved in the construction or rehabilitation of
[[Page 48012]]
properties financed by HUD, with HUD insured loans, or acquired
properties, including properties held by HUD as mortgagee-in-
possession;
(14) Closing agents;
(15) Turnkey developers of projects financed by or with financing
insured by HUD;
(16) Title companies;
(17) Escrow agents;
(18) Project owners;
(19) Administrators of nursing homes and projects for the elderly
financed or insured by HUD; and,
(20) Developers, sellers or owners of property financed with loans
insured under title I or title II of the National Housing Act.
11. Subpart J is added to Part 24 to read as follows:
Subpart J--Limited Denial of Participation
Sec. 24.1100 What is a limited denial of participation?
A limited denial of participation excludes a specific person from
participating in a specific program, or programs, within a HUD Field
Office's geographic jurisdiction, for a specific period of time. A
limited denial of participation is normally issued by a HUD Field
Office but may be issued by a Headquarters office. The decision to
impose a limited denial of participation is discretionary and in the
best interests of the Government.
Sec. 24.1105 Who may issue a limited denial of participation?
The Secretary designates HUD Officials who are authorized to impose
a limited denial of participation, affecting any participant and/or
their affiliates, except FHA approved mortgagees.
Sec. 24.1110 When may a HUD official issue a limited denial of
participation?
(a) An authorized HUD official may issue a limited denial of
participation against a person based upon adequate evidence of any of
the following causes:
(1) Approval of an applicant for insurance would constitute an
unsatisfactory risk;
(2) Irregularities in a person's past performance in a HUD program;
(3) Failure of a person to maintain the prerequisites of
eligibility to participate in a HUD program;
(4) Failure to honor contractual obligations or to proceed in
accordance with contract specifications or HUD regulations;
(5) Failure to satisfy, upon completion, the requirements of an
assistance agreement or contract;
(6) Deficiencies in ongoing construction projects;
(7) Falsely certifying in connection with any HUD program, whether
or not the certification was made directly to HUD;
(8) Commission of an offense listed in Sec. 24.800;
(9) Violation of any law, regulation, or procedure relating to the
application for financial assistance, insurance or guarantee, or to the
performance of obligations incurred pursuant to a grant of financial
assistance or pursuant to a conditional or final commitment to insure
or guarantee;
(10) Making or procuring to be made any false statement for the
purpose of influencing in any way an action of the Department;
(11) Imposition of a limited denial of participation by any other
HUD office; or
(12) Debarment or suspension by another federal agency for any
cause substantially the same as provided in Sec. 24.800.
(b) Filing of a criminal Indictment or Information shall constitute
adequate evidence for the purpose of limited denial of participation
actions. The Indictment or Information need not be based on offenses
against HUD.
(c) Imposition of a limited denial of participation by any other
HUD office shall constitute adequate evidence for a concurrent limited
denial of participation. Where such a concurrent limited denial of
participation is imposed, participation may be restricted on the same
basis without the need for additional conference or further hearing.
(d) An affiliate or organizational element may be included in a
limited denial of participation solely on the basis of its affiliation,
and regardless of its knowledge of or participation in the acts
providing cause for the sanction. The burden of proving that a
particular affiliate or organizational element is currently responsible
and not controlled by the primary sanctioned party (or by an entity
that itself is controlled by the primary sanctioned party) is on the
affiliate or organizational element.
Sec. 24.1115 When does a limited denial of participation take effect?
A limited denial of participation is effective immediately upon
issuance of the notice.
Sec. 24.1120 How long may a limited denial of participation last?
A limited denial of participation may remain effective up to 12
months.
Sec. 24.1125 How does a limited denial of participation start?
A limited denial of participation is made effective by providing
the person, and any specifically named affiliate, with notice:
(a) That the limited denial of participation is being imposed;
(b) Of the cause(s) under Sec. 24.1110 for the sanction;
(c) Of the potential effect of the sanction, including the length
of the sanction and the HUD program(s) and geographic area affected by
the sanction;
(d) Of the right to request, in writing, within 30 days of receipt
of the notice, a conference under Sec. 24.1130; and
(e) Of the right to contest the limited denial of participation
under Sec. 24.1130.
Sec. 24.1130 How may I contest my limited denial of participation?
(a) Within 30 days after receiving a notice of limited denial of
participation, you may request a conference with the official who
issued such notice. The conference shall be held within 15 days after
the Department's receipt of the request for a conference, unless you
waive this time limit. The official who imposed the sanction, or
designee, shall preside. At the conference, you may appear with a
representative and may present all relevant information and materials
to the official or designee. Within 20 days after the conference, or
within 20 days after any agreed upon extension of time for submission
of additional materials, the official or designee shall, in writing,
advise you of the decision to terminate, modify, or affirm the limited
denial of participation. If all or a portion of the remaining period of
exclusion is affirmed, the notice of affirmation shall advise you of
the opportunity to contest the notice and request a hearing before a
Departmental Hearing Officer. You have 30 days after receipt of the
notice of affirmation to request this hearing. If the official or
designee does not issue a decision within the 20-day period, you may
contest the sanction before a Departmental Hearing Officer. Again, you
have 30 days from the expiration of the 20-day period to request this
hearing. If you request a hearing before the Departmental Hearing
Officer, you must submit your request to the Debarment Docket Clerk,
Department of Housing and Urban Development, 451 Seventh Street, SW., B
133 Portals 200, Washington, DC 20410.
(b) You may skip the conference with the official and you may
request a hearing before a Departmental Hearing Officer. This must also
be done within 30 days after receiving a notice of limited denial of
participation. If you opt to have a hearing before a Departmental
Hearing Officer, you must submit your request to the Debarment Docket
Clerk, Department of Housing
[[Page 48013]]
and Urban Development, 451 Seventh Street, SW., B 133 Portals 200,
Washington, DC 20410. The hearing before the Departmental Hearing
Officer is more formal than the conference before the sanctioning
official described above. The hearing before the Departmental Hearing
Officer will be conducted in accordance with 24 CFR part 26, subpart A.
The Departmental Hearing Officer will issue findings of fact and make a
recommended decision. The sanctioning official will then make a final
decision as promptly as possible after the Departmental Hearing Officer
recommended decision is issued. The sanctioning official may reject the
recommended decision or any findings of fact, only after specifically
determining the decision or any of the facts to be arbitrary or
capricious or clearly erroneous.
Sec. 24.1135 Do Federal Agencies coordinate limited denial of
participation actions?
Federal agencies do not coordinate limited denial of participation
actions. As stated in Sec. 24.1100, a limited denial of participation
is a HUD specific action and applies only to HUD activities.
Sec. 24.1140 What is the scope of a limited denial of participation?
The scope of a limited denial of participation is as follows:
(a) A limited denial of participation generally extends only to
participation in the program under which the cause arose. Program may,
in the discretion of the authorized official, include any or all of the
functions within the jurisdiction of an Assistant Secretary. The
authorized official, however, may determine that the sanction shall
apply to all programs throughout HUD where the sanction is based on an
indictment or conviction.
(b) For purposes of this subpart, participation includes receipt of
any benefit or financial assistance through grants or contractual
arrangements; benefits or assistance in the form of loan guarantees or
insurance; and awards of procurement contracts.
(c) The sanction may be imposed for a period not to exceed 12
months, and shall be effective within the geographic jurisdiction of
the office imposing it, unless the sanction is imposed by an Assistant
Secretary or Deputy Assistant Secretary in which case the sanction may
be imposed on either a nationwide or a more restricted basis.
Sec. 24.1145 May HUD impute the conduct of one person to another in a
limited denial of participation?
For purposes of determining a limited denial of participation, HUD
may impute conduct as follows:
(a) Conduct imputed to participant. HUD may impute the fraudulent,
criminal, or other seriously improper conduct of any officer, director,
shareholder, partner, employee, or other individual associated with a
participant to the participant when the conduct occurred in connection
with the individual's performance of duties for or on behalf of the
participant, or with the participant's knowledge, approval or
acquiescence. The participant's acceptance of the benefits derived from
the conduct is evidence of knowledge, approval, or acquiescence.
(b) Conduct imputed to individuals associated with participant. HUD
may impute the fraudulent, criminal, or other seriously improper
conduct of a participant to any officer, director, shareholder,
partner, employee, or other individual associated with the participant
who participated in, knew of, or had reason to know of the
participant's conduct.
(c) Conduct of one participant imputed to other participants in a
joint venture. HUD may impute the fraudulent, criminal, or other
seriously improper conduct of one participant in a joint venture, grant
pursuant to a joint application, or similar arrangement to other
participants if the conduct occurred for or on behalf of the joint
venture, grant pursuant to a joint application or similar arrangement,
or with the knowledge, approval, or acquiescence of those participants.
Acceptance of the benefits derived from the conduct is evidence of
knowledge, approval, or acquiescence.
Sec. 24.1150 What is the effect of a suspension or debarment on a
limited denial of participation?
If you have submitted a request for a hearing pursuant to
Sec. 24.1130 of this section, and you also receive, pursuant to subpart
G or H of this part, a notice of proposed debarment or suspension that
is based on the same transaction(s) or conduct as the limited denial of
participation, as determined by the debarring or suspending official,
the following rules shall apply:
(a) During the 30-day period after you receive a proposed debarment
or suspension, during which you may elect to contest the debarment
under Sec. 24.815, or the suspension pursuant to Sec. 24.720, all
proceedings in the limited denial of participation, including
discovery, are automatically stayed.
(b) If you do not contest the proposed debarment pursuant to
Sec. 24.815, or the suspension pursuant to Sec. 24.720, the final
imposition of the debarment or suspension shall also constitute a final
decision with respect to the limited denial of participation to the
extent that the debarment or suspension is based on the same
transaction(s) or conduct as the limited denial of participation.
(c) If you contest the proposed debarment pursuant to Sec. 24.815,
or the suspension pursuant to Sec. 24.720, then:
(1) Those parts of the limited denial of participation and the
debarment or suspension based on the same transaction(s) or conduct, as
the determined by the debarring or suspending official, shall be
immediately consolidated before the debarring or suspending official;
(2) Jurisdiction of the hearing officer under 24 CFR part 24,
subpart J, to hear those parts of the limited denial of participation
based on the same transaction(s) or conduct as the debarment or
suspension, as determined by the debarring or suspending official,
shall be divested, and the hearing officer responsible for hearing the
limited denial of participation shall transfer the administrative
record to the debarring or suspending official; and
(3) The debarring or suspending official shall hear the entire
consolidated case under the procedures governing debarments and
suspensions, and shall issue a final decision as to both the limited
denial of participation and the debarment or suspension.
Sec. 24.1155 What is the effect of a limited denial of participation
on a suspension or a debarment?
The imposition of a limited denial of participation does not affect
the right of the Department to suspend or debar any person under this
part.
Sec. 24.1160 May a limited denial of participation be terminated
before the term of the limited denial of participation expires?
If the cause for the limited denial of participation is resolved
before the expiration of the 12-month period, the official who imposed
the sanction may terminate it.
Sec. 24.1165 How is a limited denial of participation reported?
When a limited denial of participation has been made final, or the
period for requesting a conference pursuant to Sec. 24.1130 has expired
without receipt of such a request, the official imposing the limited
denial of participation shall notify the Director of the Compliance
Division in the Departmental Enforcement Center of the scope of the
limited denial of participation.
[[Page 48014]]
Dated: June 5, 2002.
Mel Martinez,
Secretary.
[FR Doc. 02-18309 Filed 7-19-02; 8:45 am]
BILLING CODE 4210-74-P