(7) With respect to claims involving thefts or losses in quarters or other places where the property was reasonably kept, a statement as to what security precautions were taken to protect the property involved.

(8) With respect to claims involving property being used for the benefit of the Government, a statement by the employee's supervisor evidencing that the claimant was required to provide such property or that his providing it was in the interest of the Government.

(9) Other evidence as may be required by the General Counsel.

policy requires, therefore, that awards may be made only to responsible contractors and grantees. In evaluating past performance of participants in programs administered by the Department, as well as other relevant aspects of the record and status of the participants, the criteria for debarment and suspension shall be uniform.

(b) It is recognized that each Department office requires certain latitude to function effectively in this area. Each office may accordingly implement these regulations by appropriate guidelines which prescribe auxiliary procedures not inconsistent with this part and which have been approved, prior to adoption, by the Office of General Counsel.

This part is issued under section 7(d) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(d)).

§ 24.3 Applicability.

(a) This part applies to (1) contracts in accordance with 41 CFR, Chapter I, for procurement of property, nonpersonal services (including construction), and personal services (41 CFR § 1-3.204); (2) HUD assisted contracts; (3) public and private organizations and individuals who are contractors with or grantees of the Department and to all who receive HUD funds from such contractors or grantees; (4) and participants, or contractors with participants, in programs where HUD is the guarantor or insurer.

(b) This part does not apply to (1) contracts with, or grants made to, owners

or occupants of real property in connection with the acquisition of such real property, or any interest therein, by a public entity for a HUD assisted program or project where such entity possesses the power of eminent domain; or (2) relocation payments.

§ 24.4 Definitions.

(a) "Debarment" means, in general, an exclusion from participation in HUD programs for a reasonable, specified period of time commensurate with the seriousness of the offense or failure, or the inadequacy of performance. However, in connection with Executive Order 11246 on Equal Employment Opportunity, the term debarment also means an exclusion from contracting or subcontracting for an indefinite period of time pending the elimination of the circumstances for which the exclusion was imposed.

(b) "Suspension" means a disqualification from participation in HUD programs for a temporary period of time because a contractor or grantee is suspected upon adequate evidence of engaging in criminal, fraudulent, or seriously improper conduct.

(c) "Placement in ineligibility status" means a disqualification from participation in HUD programs pending the elimination of the circumstances which constitute the basis for imposition of the disqualification.

(d) "Affiliates." Business concerns are affiliates of each other when either directly or indirectly one concern or individual controls or has the power to control another, or when a third party controls or has the power to control both.

(e) "Consolidated List." A list of all contractors and grantees against whom any or all of the measures referred to in this part have been invoked. It includes past performance data and the status of participant on any debarment, suspension, or ineligibility list.

(f) "Adverse Information Report." A record of contractors and grantees whose performance has been unsatisfactory under auxiliary procedures established by the offices of the Assistant Secretaries.

(g) "Contractors or grantees." Individuals and public or private organizations that are direct recipients of HUD funds or that receive HUD funds indirectly through non-Federal sources; all participants, or contractors with participants, in programs where HUD is the guarantor or insurer; and Federally assisted construction contractors.

(h) "Financial assistance." Assistance through grant or contractual arrangements; assistance in the form of loans, loan guarantees or insurance; and in addition, award of procurement contracts, notwithstanding any quid pro quo given. § 24.5 General.

(a) Debarment, suspension, and placement in ineligible status are measures which may be invoked by offices of the Department either to exclude or to disqualify contractors and grantees from participation in Department programs. These measures shall be used for the purpose of protecting the public and are not for punitive purposes. To assure the Department of benefits to be derived from the full and free competition of interested contractors and grantees, these measures should not be instituted for any time longer than deemed necessary, and should generally preclude awards only for the duration of the period of nonresponsibility.

(b) Department action to exclude or to disqualify contractors and grantees from participation in its programs, or to reconsider such measures, shall be based upon all available relevant facts. Department investigation required to elicit such facts and related evidence shall be conducted by the Office of Investigation or by such other office as has been assigned investigative authority.

(c) In any instance where Department action under these regulations results in an applicant's being denied financial assistance on the basis of his previous conduct with the Department, the applicant is entitled to a hearing in accordance with paragraphs (b) (2) and (3) of § 24.10 regardless of the procedure which has been applied to effect such denial: Provided, That the applicant has exhausted all other available procedures for reinstatement with respect to the program under which assistance was denied.

(d) Where an Assistant Secretary has authority under this part to act or make a determination, he may delegate all or part of this authority.

ineligibility and any Adverse Information Reports furnished by the Assistant Secretaries. He shall further maintain debarment lists of other Government agencies which this Department is required by law and Executive order to observe.

(b) Each Assistant Secretary shall advise the Director, Office of Investigation, of additions or deletions to be made in the lists maintained by the Office of Investigation. Such lists shall be periodically reviewed by the General Counsel to assure that the criteria, procedures, and standards included in these regulations are observed.

(c) The Director, Office of Investigation, shall, in cooperation with the offices of the Department and the Office of ADP Systems Management and Operations, establish automative procedures for assuring that effective and timely reference checks may be made by designated officials.

(d) The General Counsel, in cooperation with the Assistant Secretaries, shall determine the necessity for and degree of restriction imposed on circulation to non-Federal entities of the lists maintained by the Office of Investigation and correspondence relating to such lists. If the General Counsel determines a list shall be so restricted, the Director, Office of Investigation, shall establish rules for handling such list. Lists shall be marked "For Official Use Only."

(e) All lists shall be kept current. Procedures for issuance of notices of additions and deletions shall be established by the Director, Office of Investigation, in cooperation with the Office of ADP Systems Management and Operations. Each Assistant Secretary shall appoint a liaison officer responsible for providing the Office of Investigation with current information.

(f) The Consolidated List shall show as a minimum the following information where applicable: (1) The names of those contractors and grantees debarred, suspended, or ineligible (in alphabetical order) with appropriate cross reference where more than one name is involved in a single transaction; (2) the basis of authority for each action; (3) the extent of restrictions imposed; and (4) the termination date for each listing. Within 30 days after the issuance of these regulations, each Assistant Secretary shall transmit to the Director, Office of Investigation, any debarment, suspension and ineligiblity lists (including the

bution of such list among Department employees shall be made to those whose duties require access to the list as authorized by the Assistant Secretaries having respective jurisdiction of such employees. Names and dates of debarment, suspension, or ineligibility contained in the Consolidated List will be available upon request to those who require such information in their relations with contractors and grantees; further information contained in such list shall only be distributed to those deemed eligible by the General Counsel under paragraph (d) of this section.

(h) Procedures for submitting requests for information contained in the Consolidated List and distribution of such information shall be established by the Office of Investigation in cooperation with the Office of ADP Systems Management and Operations.

(i) Following publication of these regulations and as soon as practicable, the Office of ADP Systems Managment and Operations shall conduct a feasibility study in connection with the inclusion in the ADP system of information contained in the Consolidated List.

Entry shall be made on the debarred, suspended, and ineligible list of contractors and grantees on the following bases:

(a) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Walsh-Healey Public Contracts Act (41 U.S.C. 37), which have been found by the Secretary of Labor to have violated any of the agreements or representations required by that Act.

(b) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Davis-Bacon Act (40 U.S.C. 276a-2(a)), as found by the Comptroller General to have violated said Act.

(c) Those listed by the Comptroller General in accordance with the provisions of Part 5, § 5.6(b) of the regulations of the Secretary of Labor issued pursuant to authority granted under Reorganization Plan 14 of 1950, as found by the Secretary of Labor to be in ag

gravated or willful violation of the prevailing wage or overtime pay provision of any statutes including the following:

(1) Davis-Bacon Act (40 U.S.C. 276a). (2) Anti-Kickback Act (18 U.S.C. 874, 40 U.S.C. 276 b, c).

(3) The Contract Work Hours and Safety Standards Act (40 U.S.C. 327330).

(4) National Housing Act (12 U.S.C. 1703).

(5) Hospital Survey and Construction Act (42 U.S.C. 291).

(6) Airport and Airway Development Act of 1970 (49 U.S.C. 1701).

(7) Housing Act of 1949 (42 U.S.C. 1401).

(8) School Survey and Construction Act of 1950 (20 U.S.C. 251).

(9) Defense Housing and Community Facilities and Services Act of 1951 (42 U.S.C. 1501, 1591).

(10) Federal Civil Defense Act of 1950 (50 App. U.S.C. 2281(1)).

(11) Area Redevelopment Act of 1961 (42 U.S.C. 2518).

(12) Delaware River Basin Compact (sec. 15.1, 75 Stat. 714).

(13) Health Professions Educational Assistance Act of 1963 (sec. 721, 77 Stat. 167).

(14) Mental Retardation Facilities Construction Act (secs. 101, 122, 135, 77 Stat. 282, 284, 288).

(15) Community Mental Health Centers Act (sec. 205, 77 Stat. 292).

(d) Those debarred by the Secretary of Labor, or by the Secretary of this Department with the approval of the Secretary of Labor, under Executive Order 11246 as amended by Executive Order 11375 on Equal Employment Opportunity from participation in Government, or federally assisted construction, contracting or subcontracting by reason of noncompliance with the Equal Opportunity clause.

(e) Those the Department has determined to debar or suspend for cause under the conditions and procedures set forth in §§ 24.9 and 24.10.

(f) Those determined by an executive agency in accordance with section 3(b) of the Buy American Act (41 U.S.C. 10b (b)) to have failed to comply with the provisions of section 3(a) of that Act under any contract containing the specific provision required by said section 3(a) and made by the agency for construction, alteration, or repair of any public building or public work.

(g) Those found by the Secretary of Labor to have breached an agreement or representation that they are "manufacturers" or "regular dealers" within the meaning of section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)) unless the Secretary of Labor has otherwise recommended under section 3 of such Act.

(h) Those who have failed to pay their debts to the Department within a reasonable period of time after a written demand for payment has been made in accordance with 4 CFR Part 102, Standards for the Administrative Collection of Claims and implementing HUD regulations in Part 17 of this subtitle. § 24.8 Treatment to be accorded contractors or grantees in debarred, suspended, or ineligible status.

Contractors or grantees listed as debarred, suspended, or ineligible shall be treated as follows:

(a) Total restrictions. Department funds shall not be expended for financial assistance to a contractor or grantee that is listed on the basis of § 24.7 (a), (b), (d), or (e); § 24.9(a) (1), (2), (3), (4), (5), (6), or (8); or to any concern, corporation, partnership, or association in which the former contractor or grantee has a substantial interest, nor shall bids or proposals be solicited therefrom. (Provided, under section 303(b) (2) of Executive Order 11246, debarment of an applicant is limited to the program with respect to which the noncompliance occurred.)

(b) Restrictions under statutes designated in the regulations of the Secretary of Labor. A contractor listed on the basis of § 24.7 (c), or any concern, corporation, partnership, or association in which such contractor has a controlling interest, shall be ineligible for a period of 3 years (from the date of publication by the Comptroller General) to participate in any contracts subject to any of the statutes listed in § 24.7.

(c) Buy American Act restrictions. As specified in the Buy American Act (41 U.S.C. 10b (b)), contracts supported by Department funds shall not be awarded to contractors and grantees listed on the basis of § 24.7(f) for construction, alteration, or repair of public works in the continental United States or elsewhere.

(d) Ineligibility restrictions of the Walsh-Healey Act. Contracts supported by Department funds shall not be

awarded to a contractor or grantee in any amount exceeding $10,000 for those materials, supplies, articles, or equipment with respect to which the contractor or grantee has geen found to be ineligible to be awarded a contract by the Secretary of Labor, as provided in § 24.7 (g). However, contractors or grantees on this basis may, in the discretion of the Department, be awarded such contracts and may be solicited for bids or proposals, for (1) such materials, supplies, articles, or equipment when the amount does not exceed $10,000; (2) services regardless of amount; and (3) commodities in which the contractor or grantee has not been declared ineligible, regardless of amount.

(e) Restrictions on subcontracting. Where a contractor or grantee listed on the debarred bidders' list is proposed as a subcontractor, the contracting officer or program officer should decline to approve subcontracting with that contractor or grantee unless it is determined by the Department to be in the best interest of the Government to do so. Such determination shall in no event be made in the case of debarment under § 24.7(d). § 24.9

Causes and conditions applicable to determination of debarment. Subject to the following conditions, the Department may debar a contractor or grantee in the public interest for any of the following causes:

(a) Causes. (1) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract, or subcontract thereunder, or in the performance of such contract or subcontract.

(2) Conviction under the Federal Antitrust Statutes arising out of the submission of bids or proposals.

(3) Violation of contract provisions, as set forth below, of a character which is regarded by the Department to be so serious as to justify debarment action:

(i) Willful failure to perform in accordance with the specifications or within the time limit provided in the contract.

(ii) A record of failure to perform, or of unsatisfactory performance, in accordance with the terms of one or more contracts: Provided, That such failure or unsatisfactory performance has occurred within a reasonable period of time preceding the determination to debar. Failure to perform or unsatisfactory performance caused by acts beyond the control of the firm or individual as a con

tractor shall not be considered to be a basis for debarment.

(iii) Violation of the contractual provision against contingent fees.

(iv) Acceptance of a contingent fee, which is paid in violation of the contractual provision against contingent fees.

(v) Violation of the contractual provision requiring affirmative action to provide equal opportunity in the participant's own employment practices.

(4) Any other cause of such serious compelling nature, affecting responsibility, as may be determined in writing by the Secretary or his duly authorized representative to warrant debarment. Such determination shall clearly demonstrate that participation by the contractor or grantee would be harmful to the best interests of the public.

(5) Debarment by some other executive agency.

(6) Those debarred by procedures prescribed by section 512 of the National Housing Act.

(7) Those found by the Secretary, after hearing and in accordance with procedural requirements of implementing regulations, to have violated title VI of the Civil Rights Act of 1964. (Title VI and implementing regulations limit a withholding of financial assistance to the particular program, or part thereof, where the noncompliance occurred.)

(8) Those found by the Secretary to have violated any rule, regulation, or procedure issued or adopted pursuant to Executive Order 11063, or any nondiscrimination provision included in any agreement or contract pursuant to any such rule, regulation, or procedure.

(b) Conditions. (1) Debarment for any of the causes set forth in paragraph (a) of this section shall be made only upon approval of the Secretary or his duly authorized representative.

(2) The existence of any of the causes set forth in paragraph (a) of this section does not necessarily require that a contractor or grantee be debarred. In each instance, whether the offense or failure, or inadequacy of performance, be of a criminal, fraudulent, or other serious nature, the decision to debar shall be made within the discretion of the Department and shall be rendered in the best interests of the Government. Likewise, all mitigating factors may be considered in determining the seriousness of the offense, failure or inadequacy of per