U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
ATTENTION: REGIONAL OFFICE: ARA-HPMC; Low
Rent Housing Specialist
AREA OFFICE: Director Operations
Division; Program Managers; Multi-
family Housing Representatives;
Chief, Technical Services Branch
Expediting Construction of Mutual-Help Projects in
Indian Areas
PURPOSE. To expedite the development of housing in Indian areas
and provide a better control on costs by limiting the development
of mutual-help housing to the bid or turnkey method, and eliminating
the force account method of development, to reduce the minimum
required amount of mutual-help contributions and to supersede
and revise Circular HPMC-FHA 7580.2 dated February 26, 1971.
An October 12, 1971 report by the General Accounting Office
entitled "Slow Progress In Eliminating Substandard Indian
Housing" (B-114868) points up that the average construction
time for mutual-help projects developed under the force account
method is considerably longer than for mutual-help and other
public housing projects of larger size which are developed
under the turnkey and competitively bid methods of development.
The report also states that the longer construction periods
and smaller size projects are detrimental to the goal of
eliminating substandard Indian housing conditions in the 1970's
and, further, that such longer periods result in increased
costs to the Federal government for construction supervision,
overhead, and materials damages and losses.
The complete or partial construction of a mutual-help project
by the force account method generally involves the provision by
the Bureau of Indian Affairs of a construction superintendent.
However, the use of developers or contractors who are respon-
sible to the Indian housing authority (rather than the use of
federal construction superintendents) for the construction of
HUD-assisted low-rent public housing projects is consistent
with (1) current HUD policy for the public housing program
generally, (2) current efforts to limit the level of federal
employment, (3) the recommendations of the above mentioned
October 12, 1971 report of the General Accounting Office, (4)
the provisions of Section 1 of the U. S. Housing Act, as
amended, providing for maximum local responsibility in the
administration of the low-rent public housing program, and
DISTRIBUTION : 0-1, W-3-1, R-1,R-2,R-5, R-3-2,
and 25 copies Bulk to each Area Office
Deputies) determine such is the case, no special provision need be made under the terms of this Circular.
b. Inclusion of special requirements in Invitations for Bids, Construction Contracts, Invitations for Turnkey Proposals, and Contracts of Sale. In some cases, the Area Director or Regional Administrator (or their Deputies) may determine the need for and approve such modification of normal procedures and requirements as is necessary to achieve the employment, training, and economic benefit objectives of an Indian housing authority's proposal. However, any such modifications must be in accord with the requirements of subparagraph (d) below. Such modifications may include the addition of specific language to the Invitation for Bids, Construction Contract, Invitation for Turnkey Proposals, and Contract of Sale requiring the provision of preferential employment, training, and economic benefits for local Indian residents. An example of one type employment preference provision is attached to this Circular.
Waiver of Competitive Bidding and Advertising Requirements. Area Directors and Regional Administrators (and their Deputies) are authorized to waive the provision of Section 109(B) of Part Two of the Annual Contributions Contract to permit the negotiation of a Construction Contract or Contract of Sale in exceptional cases where he determines that such action is the only way of achieving the employment, training, and economic benefit objectives of the Indian housing authority and such action will be consistent with the requirements of subparagraph (d) below.
d. Additional requirements upon which approvals must be based. Approval by the Area Director or Regional Administrator (or their Deputies) of any waivers or modifications under subparagraphs (b) and (c) above shall be made only where he has determined that:
(1) There is no reason to expect that such approval will result in a higher HUD-assisted development cost than if the regular requirements or procedures were followed.
(2) All developers and contractors located on or owned in sub-
stantial part by residents of the Indian reservation or
the housing authority's area of operation are given an
equal opportunity to meet any special employment, training,
and economic benefit requirements to be approved.
(3) All potential Indian employees and trainees living on or
near the reservation shall be provided equal opportunity
(4) The project site is on an Indian reservation or on land owned in trust by the United States for the tribe or individual Indians.
(5) If an Indian or tribal developer or contractor is to be
selected on a preferential basis, any subcontracting to
non-Indian contractors will be accomplished in such a
manner as to assure that the arrangement is not in fact
or appearance one in which the Indian or tribal organ-
ization is a front for the purpose of obtaining a contract
for the non-Indian developer or contractor.
(6) The Indian housing authority's proposal and the final
arrangement to be approved by HUD shall have the con-
currence of the tribal council or other executive
committee or official authorized to provide such con-
4. The provisions of this Circular should be brought to the attention of each Indian housing authority by the appropriate Area Director or Regional Administrator.
This provides an example of one employment preference provision for Indians and is not to be considered as the only acceptable type of provision.
The Instructions to Bidding could include a provision such as the following:
"Employment Preference to Local Indian Residents
The attention of bidders is directed to Section
of the
Special Conditions which, in accordance with established
employment practices of the Local Authority, and as per-
mitted in Section 703(1) of Title VII of the Civil Rights
Act of 1964, requires the Contractor and each of his sub-
contractors to give preference in the hiring of workers
for the project to qualified Indians living on or near the
reservation. A list furnished by the
tribal Housing Authority setting out laborers and
mechanics entitled to such preference, together with the
trades or skills represented, will be furnished to all
bidders by the
In line with the foregoing, the Special Conditions of the construction contract would include a provision such as the following:
"Employment Preference to Local Residents
The Contractor and each of his subcontractors shall give
preference in the hiring of workers for the project to
qualified local Indian residents. The term "local Indian
residents" means Indians living on or near the reservation
whose names appear on a List furnished to the Contractor
by the
Housing Authority. Upon initial
hiring and whenever a job opening occurs thereafter, the
Contractor or subcontractor shall give written notice of
such opening to the President of the Tribal Council of
the
Tribe, stating the time when, and the
local place where, job applications will be accepted.
Except in cases of emergency, no one other than a local
Indian resident shall be hired for any job until 48 hours
(not counting Saturdays and Sundays) following the delivery
of such notice to the President. The Contractor or sub-
for valid reason, or to terminate the employment, of any
local Indian resident, but in either such event, the Con-
tractor or subcontractor shall within three days send a
written statement of the reasons for such action to the
President of the
Tribe. Nothing contained
herein shall require the displacement of a non-Indian
employee because a local Indian resident becomes available
after such employee had been hired for the project"
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