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Contracting and Procurement Practices

Contractors assist PJs in carrying out their various programs and activities. Contracting is used for a range of purposes-from professional services and logistical support to construction activities and property management. When a PJ is involved with procuring property or services under a Federal grant, the PJ must make sure it is compliant with standards involving procurement practices, contracting services, conflict of interest provisions, and other related issues. For more information on conflict of interest provisions, see the Administrative Requirements topic in this training module.

Who is subject to Federal procurement requirements? Which contracting and procurement requirements should PJs, subrecipients, and State recipients consider when implementing their HOME programs?

All contracts for federally funded programs must specify the Federal requirements to which contractors are bound. PJs and their partners must follow procurement procedures that reflect Federal requirements, as well as state and local laws and regulations. Furthermore, PJs and their partners should check the published lists of debarred contractors to make sure potential contractors are eligible.

The key contracting and procurement laws that apply to the HOME Program include the following:

  • Procurement
    PJs, State recipients, subrecipients, and contractors are subject to the procurement requirements of 24 CFR Parts 84 and 85, as well as state and local laws and regulations. Owners and developers (including CHDOs) are not subject to Federal procurement requirements. PJs and their partners must ensure that every purchase order or other contract executed for federally-assisted projects includes any clauses required by Federal statutes and Executive Orders and their implementing regulations. Some of the clauses that must be incorporated into contracts include acknowledgment that contractors must follow Federal labor requirements (when they apply) like the Copeland Anti-Kickback Act, promise to comply with the Equal Employment opportunity Executive Order, and recognition of conflict-of-interest provisions (see Administrative Requirements topic). View 24 CFR 85.36 for more information about procurement.

  • Debarred Contractors
    HOME funds may not be used to directly or indirectly employ, award contracts to, or otherwise engage the services of any contractor or subrecipient during any period of debarment, suspension, or placement of ineligibility status. PJs should check all contractors, subcontractors, and subrecipients against the Federal publication that lists debarred and ineligible contractors. A list of debarred contractors can be found on the Excluded Parties Listing System. For a better understanding of what constitutes debarment, suspension, or ineligibility status, PJs can look to 24 CFR Part 24.

Note: PJs and their partners may be subject to additional state or local contracting and procurement laws. If that is the case, the more stringent standards apply.

Who is responsible for verifying contractors' eligibility?

Local Contracting Agencies (LCAs), which are usually the PJs, are expected to subscribe to the GSA Debarred Lists and verify eligibility for all prime contractors prior to contract award. HUD Labor Relations is not responsible for verifying contractor eligibility. A record of the verification is made to the labor standards enforcement file (a handwritten note that is dated and initialed is sufficient). HUD Labor Relations staff ensure that contractor verification is performed and documented by the LCA during monitoring reviews.

Who is responsible for verifying subcontractors' eligibility?

Only the eligibility of the prime contractor must be verified and documented in the labor standards enforcement file. Subcontractor clearance is the responsibility of the prime contractor. That does not mean that PJs can ignore subcontractor eligibility altogether. If PJs have reason to believe that a subcontractor is ineligible, they should inquire further to learn the subcontractor's actual status. If PJs find that the subcontractor is ineligible, they should notify the prime contractor immediately and ensure that the ineligible subcontractor is terminated.

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