control another or when a third party controls or has the power to control both. (e) OGC. The Office of the General Counsel performing legal services for the FmHA.

(f) List Officer. A person designated by the Administrator of FmHA to compile and maintain a list of persons suspended and debarred by the Agency.

(g) FmHA representatives. The State Director or a qualified individual designated by the State Director to preside over a meeting under these regulations.

(h) Days. This refers to calendar days. (i) Filing. An item is filed when it is delivered in hand.

(j) Notices. All notices to be sent to a person in accordance with these regulations will be sent by certified mail, return receipt requested. § 1918.104-1918.109 § 1918.110

[Reserved]

Complaints.

When a matter subject to action under this subpart arises involving unsatisfactory performance or improper action by persons dealing with applicants, borrowers, and grantees, a complainant may submit all information to the County Supervisor. The County Supervisor will attempt to resolve the problem, assisted if necessary, by the District Director. If the complaint is not resolved, the County Supervisor will forward the complaint and all related information to the State Director for review and assistance. Complainants may, if they prefer, submit their complaint directly to the State Director, whose address may be obtained at any FmHA County Office.

(a) General. The County Supervisor is charged with the responsibility of receiving and resolving, with such assistance and advice as he deems necessary, all complaints concerning the construction of houses financed by the Farmers Home Administration (FmHA). The County Supervisor must decide whether the complaints are "justified" or "not justified.” If a complaint is justified, the builder is expected to make the necessary corrections. If it is not justified, the builder is not obligated to correct the defect. The handling of construction complaints is a matter of prime importance because the FmHA has an interest not only in assist

ing the borrower-owner, but also in protecting its financial position in the property. The desire to retain homeownership is directly related to the homeowner's satisfaction with his house. If the homeowner is dissatisfied with the condition of his property, he will be less likely to maintain the property and less likely to meet his financial obligations with respect to it.

(b) Justified Complaints. A “justified complaint" means a complaint is justified if:

(1) It is covered by the warranty.

(2) It is received within the warranty period: Provided, That a complaint may be made after 1 year if there is evidence of accelerated deterioration of structural soundness or material failure in advance of normal life expectancy and the defect can be ascertained with exactness to be the builder's responsibility; and

(3) It is determined that: (i) The construction is defective in workmanship, material, or equipment, or

(ii) That the structure has not been constructed in accordance with the approved drawings and specifications, or

(iii) The structure does not comply with FmHA's Minimum Property Standards; or

(iv) The property does not meet code requirements.

(c) Not justified complaint. A “not justified complaint" means any complaint that does not meet the definition of a justified complaint. If the complaint is not justified, the repairs are the responsibility of the homeowner who should be encouraged to make them immediately to preserve the property.

(1) Examples of complaints that are not justified are those involving the question of who is responsible for such matters as:

(i) The repairs of cracks attributed to normal curing or settlement.

(ii) The repairs of leaky faucets. (iii) The application of protective painting and grouting to prevent accelerated deterioration of material.

(iv) Normal care of mechanical equipment.

(v) Changing the contour of the land or drainage system.

(vi) Keeping the well free from contamination.

(vii) Cleaning of individual sewage disposal systems.

§1918.112

Handling of dwelling construction complaints.

The County Supervisor is assigned the function of receiving and resolving with such assistance and advice as he deems necessary, all complaints concerning the construction of FmHA financed housing in the following manner:

(a) Each complaining homeowner should be requested to make a written complaint, but an oral complaint may be accepted if making a written complaint will impose a hardship.

(b) The homeowner will be told that he must first endeavor to resolve the complaint with the builder.

(1) The homeowner should be urged to give the builder a written list of the alleged defects, except where it would involve a hardship.

(2) The homeowner should be informed that if after 30 days the defects have not been corrected or other satisfactory arrangements have not been made by the builder, the homeowner should so notify the County Supervisor, preferably in writing.

(c) If the County Supervisor does not hear from the homeowner within 30 days, he can reasonably assume that the complaint has been satisfied, unless he has or receives information to the contrary.

(d) If the homeowner notifies the County Supervisor that the complaint has not been satisfied, the County Supervisor should request the howeowner to furnish copies of all correspondence between the builder and himself, and, unless it would involve a hardship, reduce the complaint to writing if that has not already been done.

(e) The County Supervisor should write the builder and notify him of the homeowner's complaint and request the immediate correction of the defects.

(f) If the builder informs the FmHA that he has corrected or will correct the alleged defects, the County Supervisor will notify the homeowner by letter and the case will be closed unless a subsequent complaint is received from the homeowner.

(g) If no reply is received from the builder within 15 days, the County Supervisor should send a followup letter to the builder.

(h) If the builder fails to respond with in 15 days thereafter, the County Super

visor should advise the homeowner that the builder has not responded to FmHA's inquiries and it is presumed that he will not correct the alleged defects.

(i) The County Supervisor should make a finding that:

(1) None of the complaints are justified, or

(2) Some of the complaints are justified, or

(3) All of the complaints are justified.

NOTE: Advice and assistance must be obtained before the question of responsibility can be determined. Such advice and assistance should be sought immediately.

(j) If the County Supervisor is unable to reconcile differences within a reasonable period of time, and if a review of his findings is desired by either the homeowner or the builder, the County Supervisor should refer the complete file, including all correspondence, to the District Supervisor. Should the parties fail to resolve their differences, the findings of the County and District Supervisor with all related correspondence should be referred to the State Director for review and final determination. Such a proceeding should be very informal. The principal goal is to work out a satisfactory solution while avoiding unnecessary

expense.

(k) Should a builder decline to correct a justified complaint after being officially requested in writing to do so, formal suspension and debarment proceedings should be instituted promptly. If the builder fails to reply to official correspondence, his failure can be taken as his refusal to correct the justified complaint. Also, a builder's inability to correct a justified complaint constitutes noncompliance.

(1) In all instances involving a complaint, the County Supervisor shall notify the homeowner and builder in writing at each stage of their respective obligations. They shall both be informed of the final disposition of the case. All letters must be courteous and clearly state the position of the FmHA.

(m) All action in connection with complaints shall be maintained in a complaint file under the builder's name. A chronological history of every action of the complaint from date of receipt to the date of final disposition shall be kept in the file as well as related documentary information. Such records should be re

(a) General. Debarment and temporary suspension are drastic actions which may severely affect the economic wellbeing of the persons debarred or suspended. They shall not be based upon an unsupported accusation. In assessing whether adequate evidence exists for invoking this procedure, consideration should be given to the amount of credible evidence which is available, to the existence or absence of corroboration as to important allegations, as well as to the inferences which may be properly drawn from the existence or absence of affirmative facts.

(b) Debarment. Debarment may be imposed by the State Director, for a specified period of time, generally not to exceed 3 years, except in more serious cases. Debarment may also be imposed for a short, indefinite period of time, pending correction of the conditions which led to the debarment.

(c) Temporary suspension. Temporary suspension may be imposed by the State Director pending the debarment determination only in cases where immediate action is necessary to protect the interest of the FmHA and its program borrowers or grantees. The interests of the person to be suspended must be reasonably deemed to be of less importance than that of the FmHA or its program participants. Temporary suspension must be based on adequate evidence supporting at least one of the grounds listed under 1918.121. When a debarment determination adverse to the person is appealed, temporary suspension is automatic.

§ 1918.121 Grounds for debarment.

(a) A person may be debarred if any of the following have occurred within a reasonable period of time prior to institution of debarment proceedings:

(1) Serious or repetitive violation of any of the provisions of any laws administered by FmHA or any regulation issued thereunder.

(2) Serious or repetitive failure to perform obligations or carry out representa

tions or warranties made to FmHA or to any borrower or grantee under any program administered by FmHA.

(3) Acts of misconduct where a lack of business integrity directly affecting responsibility to participate in FmHA programs is indicated, including but not limited to false representation, embezzlement, theft, forgery, bribery, falsification of records and receiving stolen property.

(4) Conviction of one of the following criminal offenses:

(i) One involving any statute authorizing a program administered by FmHA,

or

(ii) As an incident to obtaining or attempting to obtain a private or a public contract, or subcontract thereunder, or in the performance of such contract or subcontract, or

(iii) Under the Organized Crime Control Act of 1970, or

(iv) Where a lack of business integrity directly affecting responsibility to participate in FmHA programs is indicated, including but not limited to false representation, embezzlement, theft, forgery, bribery, falsification or destruction of records, and receiving of stolen property,

or

(v) Under the Federal Antitrust Statutes arising out of the submission of bids or proposals.

(5) The lack of the right to do business or practice at his profession in the jurisdiction where the contractual services are to be performed.

(6) Violation of any nondiscrimination or equal opportunity requirement administered by FmHA in connection with any FmHA programs.

§ 1918.122-1918.125 [Reserved] § 1918.126 Procedures for debarment and temporary suspension.

(a) Notice. (1) When a matter subject to action under § 1918.120 arises, the County Supervisor, assisted by the District Director, will obtain as much relevant, factual information about the specific problem as is feasible and will forward such information to the State Director. The State Director may proceed on this information or on information revealed by an audit or investigation, or by a complaint or information from any source. The State Director will inform

complainants of the disposition of their complaints.

(2) Debarment proceedings may not commence and notice of proposed debarment or temporary suspension may not be issued without the approval of OGC, which in temporary suspension cases, may be obtained by telephone. In addition, debarment proceedings involving loans or grants under Part 1823 (Association Loans and Grants-Community Facilities, Development, Conservation, Utilization-all FmHA 442, 476, and 447 series Instructions) or Subpart E of Part 1980 of this Chapter (Business and Industrial Loan Program) will be reviewed and concurred in by the Administrator of FmHA before notice is given under this Subpart.

(3) Notice shall be provided to the person and its known concerned affiliates against whom debarment is proposed, in writing and signed by the State Director, and shall include all of the following elements:

(i) Debarment is proposed and is an exclusion from participation in all FmHA programs and may last as long as 3 years or may be permanent.

(ii) A list of affiliates against whom debarment is proposed.

(iii) One or more of the grounds specified in § 1918.121.

(iv) A short, plain statement of the reasons for the proposed debarment.

(v) A statement that the person has a right to a meeting at which all charges may be rebutted, if requested, and an answer filed with the State Director within 20 days following receipt of the notice.

(vi) The answer may contain additional factual statements, legal arguments, and any other writings deemed relevant by the person.

(vii) Whether or not a temporary suspension has been imposed pending a debarment determination and in cases of temporary suspension, that a suspension is a temporary disqualification from participation in FmHA programs.

(viii) The date of the commencement of any such temporary suspension, which date may not be before the receipt of the notice.

(ix) That after 20 days following the receipt of the notice by the person, if no meeting has been requested, the debarment determination will be made by the

1

State Director, after due consideration of such information as may be available to him.

(x) Citation of these regulations.

(b) Answer-(1) Filing. The answer shall be filed with the State Director within 20 days of receipt of the notice.

(2) Contents. The answer shall contain a short and plain statement of facts which constitute grounds of defense and shall admit or deny averments on which FmHA relies, unless the person is without knowledge, in which case the answer shall so state. The answer shall contain a request for a meeting with an FmHA representative if such a meeting is desired. The answer may contain additional factual statements, legal arguments, and any other writings deemed relevant by the person.

(3) Effect of failure to deny averments or submit an answer. Averments in the notice are admitted when not denied in an answer.

(4) Extension of time. The State Director, for good cause shown, may grant a timely request for an extension of time to file an answer.

(c) Meeting-(1) Request for meeting. Any person who has been notified of a proposed debarment is entitled to a meeting with an FmHA representative at which all charges may be rebutted, if requested in an answer filed with the State Director within 20 days following receipt of the notice.

(2) Time and place. The meeting shall be scheduled and shall be held promptly after receipt of the answer. The State Director, in setting the time and place for the meeting shall give consideration to the convenience of the person and the Agency.

(3) Notice. The State Director shall promptly notify the parties of the time and place of the meeting.

(4) Procedure. The meeting will be an informal proceeding at which the person will be given an opportunity to rebut the charges. The person may be represented by counsel. The proceeding will not, however, be a formal hearing and will not include presentation of evidence by FmHA.

(5) Evidence. Technical rules of evidence shall not apply.

(6) Record. The record of a debarment proceeding shall include any notices and orders, the answer, any written

evidence in the possession of the Government or adduced by the person, and a synopsis of any oral evidence presented at the meeting. The synopsis will be prepared by FmHA and be submitted to the person for his approval and any noted exceptions.

(7) Prior adjudication. If a person has been a party to an action in a court involving any issue or issues involved in the proceeding, or if a person has been debarred by another Federal agency and such debarment involves any issues or issues involved in the proceeding, evidence of such a court holding or Federal agency debarment determination may be made part of the record.

(8) Failure to appear. If any party to the proceeding, after being duly notified, fails to appear at the meeting, without reasonable cause, he shall be deemed to have waived the right to a meeting.

(d) Debarment determination—(1) Meeting held. Within 10 days after the meeting, the State Director upon the basis of and after due consideration of the record, shall make a debarment determination.

(2) Meeting waived. If no meeting has been requested, the State Director, after 20 days following receipt of the notice by the person, on the basis of an after due consideration of the information he possesses, including any written rebuttal, shall make a debarment determination.

(3) Proof required. Any debarment determination in the proceeding shall be supported by and in accordance with the reliable, probative, and substantial evidence in the possession of FmHA.

(4) Prior adjudication. If a person has been a party to an action in a court involving any issue or issues involved in the proceeding, or if a person has been debarred by another Federal agency and such debarment involves any issue or issues involved in the proceeding, the State Director may accept the decision of the court or other Federal agency as to the issue or issues decided by it.

(5) Effective date. A person will be debarred upon issuance of the notice of debarment determination by the State Director.

(e) Notice of debarment determination (1) Notice of the debarment determination may not be issued without the approval of OGC.

(2) Notice of the debarment determination shall be provided to the persons

affected in writing and signed by the State Director.

(3) In cases of an adverse debarment determination, the notice shall include all of the following elements:

(i) That debarment has been imposed. (ii) The scope thereof as to affiliates. (iii) The period of time for which debarment is imposed.

(iv) One or more of the grounds specified in § 1918.121 on which the debarment is based.

(v) That the debarment determination may be appealed in writing (original and two copies) through the Contracting Officer to the Board of Contract Appeals, U.S. Department of Agriculture, Washington, DC 20250. (For the purpose of this Subpart C, the State Director is designated as the Contracting Officer.)

(vi) That appeals must be filed within 30 days of the issuance of the notice of the debarment determination and in accordance with the rules of the USDA Board of Contract Appeals as found in 7 CFR Part 2400.

(vii) That if the debarment determination is appealed, the person will be in a status of temporary suspension until final decision by the Board.

(4) In cases where it is determined that debarment will not be imposed, the notice shall indicate:

(i) That debarment will not be imposed.

(ii) In cases where a temporary suspension has been imposed, that the suspension has been lifted.

(f) Appeals. Appeals may be taken from an adverse debarment determination within 30 days of the issuance of the notice of such determination, unless an extension is granted by the State Director for good cause. The manner of filing appeals and the procedure on appeals shall be governed by the rules of the Board of Contract Appeals. (See 7 CFR Part 2400.) No appeal may be taken to the Board of Contract Appeals from any temporary suspension imposed under these regulations.

(g) Rescission and reinstatement. (1) A person debarred under the subpart for one year or more may request reinstatement any time after six months have passed from the final determination as indicated by:

(i) The issuance of the notice of debarment determination by the State Director if no appeal is taken, or