CDBG Informationi
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STATE OF FLORIDA
DEPARTMENT OF COMMUNITY AFFAIRS
2 7 4 0 C E N T E R V I E W DRIVE • T A l t A H A S S E E, F L O R 1 O A 2 2 3 9 9
108 MARTINEZ
Go " r
February 27, 1990
Memo No:
M E M O R A N D U M
THOMAS G. PELHAM
Secreury
HCD:CDBG6-90-1
TO: All Small Cities Community Development Block Grant
Eligible Communities, Regional Planning Councils
and Other Interested Parties
j
FROM: Lewis O. Burnside, Jr , director
Division of Housing and Community Development
SUBJECT: LOCAL PROCUREMENT OF PROFESSIONAL SERVICES IN THE
ADMINISTRATION OF COMMUNITY DEVELOPMENT BLOCK
GRANT (CDBG) PROGRAMS
I. Introduction and Purpose
Many questions have been raised recently concerning CDBG
procurement procedures. There appears to be a lack of adequate
local procurement practices, and in some instances, use of
questionable procedures in selecting professional services for
grant preparation and the administration of CDBG programs. This
memorandum is an attempt to address this situation and assure
that maximum open and free competition is achieved through sound
procurement practices.
This memorandum does not supersede or replace any applicable
federal and state laws and regulations. However, this memorandum
will provide general guidance regarding the implementation of
these laws and regulations. All local government officials,
grant administrators, planning councils, consultants and others
with designated responsibility for the administration of CDBG
award contracts remain responsible for ensuring compliance with
all applicable federal and state laws and regulations. Such laws
and regulations include but are not limited to the following:
OMB Circular A-102, Attachment 0; 24 CFR Part 85 Section 85.36;
EMERGENCY MANAGEMENT . HOUSING AND COMMUNITY DEVELOPMENT 0 RESOURCE PLANNING AND MANAGEMENT
Memorandum
Page Two
s. 290.047(5), Florida Statutes (1989); s. 287.055, Florida
Statutes (1989) and the State of Florida CDBG administrative
rule, Florida Administrative Code Chapter 9B-43. These documents
are distributed during the Applicant Workshop which is at the start
of each funding cycle and are available, upon request, from the
Department.
The purpose of this memorandum is to clarify Procurement
Standards for all Small Cities CDBG eligible communities and
recipients of CDBG program funds. The memorandum sets out methods
and applicable requirements that are to be followed when procuring
professional services under the Small Cities CDBG Program.
A further purpose is to define Department policy regarding
the procurement of professional services under the Small Cities
CDBG Program. All previous Department memos which have been
issued on this subject are hereby superseded.
II. Recipient Responsibilities in the Procurement of
Professional Services
A. Professional Services
Potential recipients of CDBG funds must have written
procurement policies and procedures adopted and effective prior
to the advertisement for proposals to provide professional
services to administer FFY 1989 CDBG funds. Such policies should
be developed to achieve the economical and efficient
administration of the CDBG Program.
Professional services are defined as assistance obtained
from an independent contractor through a selection and/or
negotiation process which ensures maximum full and open
competition. Such services should be acquired as sealed
proposals consistent with the standards set forth in OMB Circular
A-102, Attachment O and 24 CFR Part 85, Section 85.36. Because
differences in price may only be a minor concern when compared to
qualitative considerations, professional services may be exempted
from the formal Invitation to Bid process. A formal, advertised
request for proposals process must be followed, and written
selection procedures must be included in all advertisements for
requests for proposals.
All necessary and affirmative steps to assure that small,
minority, women's business enterprise and labor surplus area firms
are provided the opportunity to submit proposals should be
exercised.
A
Memorandum
Page Three
B. Selection Procedures
To avoid violations of federal regulations contained in 24
CFR Section 85.36 and OMB Circular A-102, Attachment O, and
policy memoranda issued by HUD, recipients should follow these
guidelines:
- place advertisements for proposals in more than just
a single local newspaper;
- do not use familiarity with a particular Target Area
or a particular local jurisdiction as a selection
factor;
- assure that more than one potential bidder can meet
all of the selection factors;
- be sure of a clear connection between the selection
factors and the work to be accomplished;
- do not use "past CDBG performance as determined
by DCA" as a selection factor;
- consider the ability of potential bidders to become
familiar with the locality in a short time and
familiarity with the CDBG program;
- assure that contracts are only awarded to contractors
with sufficient capacity to complete the award
contract.
basis for: Sufficient records must be maintained to support the
- the selected method of procurement;
- the selection of contract type;
- the contractor selection or rejection;
- the selected contractor price.
C. Deterninina Pricing
• Fair and'reasonable profits should be permitted for
professional services under 24 CFR s. 85.36; however, a cost or
price analysis must be included in all proposals which supports
Memorandum
Page Four
the reasonableness of the proposed contract price. Under current
HUD guidelines, proposals which offer to prepare an applipation
at no fee are acceptable. However, such free service may not be
tied to the providing of any other service by that consultant.
Previous free services may not be considered by a local
government in selecting a contractor for future services.
Proposals to prepare an application which offer a variable
fee dependent on the awarding of additional services or contracts
appear to violate the specific provision for maximum free and
open competition required under 24 CFR s. 85.36, and are
therefore not allowed under current HUD guidelines.
D. Multi -Service Contracts
Under Section 290.047(5), Florida Statutes (1989), a local
government is permitted to contract with the same entity for more
than one service, provided that the local government can document
that the entity is either (i) the sole source or (ii) was
determined, through the Request for Proposals process, to be the
proposer most advantageous -to the local government. However, HUD
Circular Letter 81-69 states that there is a problem when unlike
services, such as grant application preparation, administering
CDBG Programs, and providing engineering services, and the like
are lumped together in a single contract. Such multi -service
contracts prevent the local government and DCA from effectively
administering the CDBG Program.
All contracts for professional services should conform to
the following:
(a)- any Request for Proposals which includes more than
one service should provide that:
1. proposals may be submitted for one or more of
the services;
2. proposals will be considered on an equal
competitive basis;
3. qualifications and proposals should be
separately stated for each service;
4. the evaluation of the proposals should
be separate for each service.
Memorandum
Page Five
(b) a separate professional services contract must be
executed between the local government and the
consultant for each particular CDBG program.
(c) those types of services having a relatively
undefined scope, such as program management or
administration, and those services of a more
defined scope, such as engineering or
architectural design, must be separated from each
other into individual contracts; and
(d) each services contract
number and individual
it is applicable.
E. Program Administration
must identify by program
project the grant to which
In addition, OMB Circular A-102, Attachment O establishes
that a general conflict exists where a local government awards a
multi -service contract to a firm to administer its CDBG program,
while at the same time the same firm is to provide a service,
such as engineering, where -the administrator must oversee and
approve its own work. In such cases, the services of an
independent third party should be obtained to provide the
necessary oversight and approvals.
The local government's recordkeeping and financial
management system should be maintained locally so that the local
government has control and accountability of all CDac funds_
III. Conclusion
The possible lack of competition in the procurement of
professional services for the administration of CDBG programs
appears to be inconsistent with the procurement standards
rewired by state and federal regulations. The policies set forth
in this memorandum should be implemented immediately to ensure
conformance upon receipt of CDBG funds beginning with FFY 1989.
Thank you for your attention and cooperation in this matter.
If you have any questions or require additional information, you
may write to Ms. Wanda A. Jones, Planning Manager, Department of
Community Affairs, 2740 Centerview Drive, Tallahassee, Florida
32399-2100 or you may contact Ms. Jones at (904) 487-3644.
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