Recovery Act, Capital Fund, Procurement

Utah NAHROMarch 18, 2010St. George, UT

Topics to be Covered

• Procurement• Energy Star• Energy performance

Contracts• Section 3

• Recovery Act• Capital Fund• Obligations/Expenditures• Environmental Reviews

Recovery Act Funds

Thanks for your hard work on meeting obligation deadline!

• 3/17/11: 60% of funds expended• 3/17/12: 100% of funds expended• Don’t forget reporting requirements.

Please share your success stories with us.

Recovery Act – Reporting Requirements

• Recovery Act Management and Performance System (RAMPS)– National Environmental Policy ACT (NEPA)– Core Activities

• Federal Reporting• Performance Reports – cancelled

Important Dates• Recovery Act reporting: quarterly• Next Reporting Period: 4/1-10/10– For period ending 3/31/10– Access system early; don’t wait until last day

Websites• Ramps: http://portal.hud.gov/app_ramps/• Fed Reporting: www.federalreporting.gov

Recovery Act – Reporting Requirements

Capital Fund Due Dates

• 6.12.10: 2008 Obligation Deadline Date• 9.13.11: 2007 Expenditure Deadline Date• 9.14.11: 2009 Obligation deadline date• 6.12.12: 2008 Expenditure Deadline Date• 9.14.13: 2009 Expenditure Deadline Date

No 2010 processing dates yet.

When Are Funds Obligated?

• Not when planned for or included in PHA Plan• Not when IFB or RFP is issued• Not when bids are received

• Must have executed contract, PO• For force account, must be sequentially related

items• CFP – 2 years to obligate• Monthly LOCCS reporting of obligations required

When Are Funds Expended?

• Upon payment to contractors and vendors• CFP – total of 4 years to expend

• Monthly LOCCS reporting for expenditures required

• Remember: Funds drawn down from LOCCS should be disbursed within 3 days

Environmental Review Requirements

• All CFP grants, even if utilizing 1406 for 100% of the funds, must be covered by an Environmental Review worksheet and accompanied by a letter on the Responsible Entity’s (RE) letterhead– See 24 CFR part 58– The RE signer should work for the local

government. They cannot be a PHA employee.– Funds are “locked” until the requirement is met

Environmental Review RequirementsCont…

• Most PHAs put money into 1406 or rehab without change in size or capacity of more than 20%– This guidance pertains to those situations only– Contact your FMS if the PHA is engaging in more

extensive work

Environmental Review Requirements Cont…

• Steps to take after the RE is identified:– Decide which grants the RE is going to review and

gather budgets/work items for each of those years– Attach items to the worksheet and take to the RE

• Include information the RE will need that pertains to items on the ERR Statutory Worksheets

• If funds are going to 1406, use ERR Worksheet 2 and attach operating budgets to show what the funds will be used for

• If doing capital improvements as described above, use ERR Worksheet 3

Environmental Review Requirements Cont…

Good news: Environmental Review worksheets and letters

can cover more than one grant. – An RE can sign for an entire 5 Year Plan period– The only annual requirement is a letter or email

from the PHA stating that the planned activities have not changed from what was reviewed by the RE (e.g. if a PHA alters its 5 Year Plan, another letter and worksheet are required).

Environmental Review Requirements Cont…

• Most REs will categorize work as “Categorically Excluded and not subject to 58.5”. If so, send the paperwork to your FMS. No further action is needed.

Environmental Review Requirements Cont…

• If categorized as “Categorically Excluded and subject to 58.5 statutory requirements”, the following are required:– NOI/RROF Notification– RROF and Certification Form (Form 7015.5)– Authority to Use Grant Funds (form 7015.16)

Procurement HUD Regulations

“Open and fair competition”• 24 CFR 85.36 is the procurement regulation

applicable to all Public Housing Agencies• The regulation sets standards which must be

met in conducting requirements.

PROCUREMENT HUD Guidance

• Handbook 7460.8 REV-2 – dated 3/2/10• The HUD handbook has specific guidance,

“how to” instructions, and samples of procurement policies, sample contract award, sample advertisement , sample procedures for evaluation committees, etc.

Housing Authority Procurement Policy

• HA’s have their own procurement policy to implement the Requirements of 24 CFR 85.36.

• OPH strongly recommends that HA’s update their procurement policy according to the sample in HUD handbook 7460.8 REV dated March 2, 2007. HQ’s checklist for the ARRA Monitoring Review reveled that to meet all their critical elements you would need to use the sample procurement policy.

Housing Authority Procurement Policy

• The critical elements contained in the sample procurement policy are: Purchasing Methods, Ethics in Contracting, cost and Price Analysis, Bonding Req., Contract Clauses, etc.

• The policy is established by board resolution. • Usually the Board designates the Executive

Director as the person responsible for carrying out its Procurement Policy.

PHA Operating Procedures

• The Housing Authority should have a set of operating procedures to ensure that all staff are able to operate from a common system of procedures.

• The HUD Handbook 7460.8 REV 2 should be used as a reference during the composition of a HA’s Operating Procedure.

HUD Contracting Basics

• Micro Purchases- Under $2,000- May purchase from a single vendor if cost is reasonable. HA should have cost estimate on the purchase request.

• HA should spread purchases to different vendors if possible.

• HA should maintain a list of all purchases.• HA should not split up orders to be under the

$2,000 threshold.

HUD Contracting Basics (Cont.)

• Small Purchases from $2,000 to $100,000• A. Must have three quotes in writing, orally or telephone.

Written quotes are preferred.• Must have detail scope of work. Specifications and

drawings may be necessary to describe work.• Bid package must contain General Conditions HUD-Form

5370-EZ.• Davis-Bacon Wage Rates – Required on all construction

contracts over $2,000. Davis bacon wage rates may be obtained from web site:

• www.access.gpo.gov/davisbacon/allstates.html

Solicitation-Small Purchases

• IFB-Invitation for Bid-Bid is awarded based on lowest price. All bidders should bid on the same scope of work.

• RFP- Request for Proposal – The award is based on factors other than price alone. The PHA must issue a Request for Proposal (RFQ) with evaluation criteria and rating points that will be used to evaluate the merits of each quotation. Award is then made to the most qualified vendor if its price is reasonable.

• QBS-Qualifications Based Selection – permitted only in procurement of A/E Services. Under QBS, the A/E is selected on qualifications, then a price is negotiated.

Larger Procurements • Contracts over $100,000- Must be advertised in Local Newspaper• Construction Contracts over $100,000- bid package needs the Following:• 1. Specifications and Drawings• 2. General Conditions HUD-5370• 3. Davis Bacon Wages• 4. Invitation for Bids• 5. Instructions to Bidders HUD-5369• 6. Reps., Certs. and Statements HUD-5369A• 7. Bid Guarantee(Bid Bond SF-24), Performance and Payment Bonds• 8. Bid Form

Contract Administration

The goal of contract administration is to ensure that the contract is preformed, as written, by

both the contractor and the Housing Authority.• Elements of Contract Administration– Assuring that the contractor does the work called

for in the contract.– Assuring Quality– Assuring timely performance– Assuring performance within budget.

Construction Management Files

• General File– Construction Award letter, signed contract, notice to

proceed letter, contractor’s schedule, contractor’s schedule of costs

• Submittal File – beware of substitutions to specifications. Get A/E ‘s approval of submittals.

• Construction Inspection File-Written Inspection Reports. – Contractor’s payrolls conforming to Davis-Bacon– Final Project Closeout and Warranty File

Energy Star

• Energy Star is a government-backed program helping businesses and individuals protect the environment through superior energy efficiency.

• HUD, EPA and DOE have signed a formal partnership to promote Energy Star throughout HUD’s Affordable housing programs.

• Notice PIH 2005-25 dated July 13, 2005- Using ENERGY STAR to Promote Energy Efficiency in Public Housing- HAs are strongly encouraged to Purchase Energy Star products unless the energy star appliance is not cost-effective to the agency.

Energy Star Products

• Energy Star Manufacturers and savings calculators can be found on the Energy Star website: www.energystar.gov.

• Appliances will have the Energy Star Logo • Refrigerators Heating equipment• Clothes washers Ventilation fans • Dishwashers Insulation• Lighting Fixtures roof products• Room and central air conditioners, etc.

Energy Star DOE Bulk Purchasing

• HUD approves use of DOE’s Quantity Quotes Website: www.quantity qoutes.net

• Obtaining 3 quotes from the DOE website satisfies 24 CFR 85.36(d) for purchases from $2,000 to $100,000

• A. Purchaser makes request• B. Suppliers respond via web site• C. Purchaser follows up with Supplier• If less than three quotes are received then PHA must

obtain another quote from other sources

Energy Performance Contracts• A. Energy Performance Contracting is a HUD program enabling Housing

Authorities to complete energy saving projects via an alternate funding source. The energy savings generated from the projects pays for the projects. (plus additional savings).

• B. Savings are generated as HUD freezes the utility base (at its current level) for the life of the project (usually 12 years). There is also an add-on subsidy that can be used.

• C. The HA obtains a loan to finance the energy conservation projects. An Energy Service Company (ESCO) performs the energy audit, project designs, project management and assists the HA to obtain the loan. The energy savings that pay off the loan are guaranteed by the ESCO.

• D. Usually ESCOs are interested in projects over $500,000.• E. HQ in HUD is also coming out with an ESCO Light. The PHA would act

as the ESCO, assisted by a Mechanical Engineer.

5 Steps to Energy Performance Contracting

• 1. Decide if Performance Contracting is right for you. Assess your needs & potential benefits.

• 2. Select an Energy Service Company-Develop a RFP- The RFP must be approved by HUD Field Office prior to solicitation.

• 3. ESCO identifies energy-saving opportunities. Develop an audit contract-Must be approved by HUD Field Office.

• 4. Negotiate an Energy Performance Contract-Must be Field Office approved. Verify savings and enjoy benefits.

• 5. Monitor long-term performance.• Please contact your FMS for guidance and information.

Section 3 Reporting

“ to the greatest extent possible, provide job training, employment & contract opportunities for low or very low-income residents in connection with projects & activities in their neighborhoods”

http://www.hud.gov/offices/fheo/section3/section3.cfm

• Annual reports due by January 10http://www.hud.gov/offices/fheo/section3/Sec3-Reporting-Guidance-pih-1.31.pdf

A PHA’s Section 3 Responsibilities

• Implementing procedures for notification to Section 3 residents & businesses

• Notifying potential contractors working on Section 3 projects of their responsibilities

• Incorporating Section 3 clause into all solicitations & contracts

• Facilitating training, employment & contract awards

Section 3 Responsibilities, cont.

• Actively cooperating with HUD in making contractors comply

• Refraining from entering into contracts with contractors that are in violation of Section 3

• Documenting actions taken to comply with Section 3

• Submit Section 3 Annual Summary Reports (form HUD-60002)

PHA Programs Covered by Section 3

• Operating Fund• Capital Fund/Recovery Act• HOPE VI• ROSS• FSS• Separate HUD-60002 submission for each

program– Submit on-line: www.hud.gov/section3

Denver Office of Public Housing

• New Staff– Crystal Bergemann, Presidential Management Fellow (PMF),

joined OPH in July– Eva Tafoya, PMF, joined OPH in August– Jaime Schuler, PMF, joined OPH in August– James Ashford, Federal Career Intern, joined OPH in November.

• Web page– http://www.hud.gov/local/shared/working/r8/ph/index.cfm?stat

e=co

• News-to-Use– http://www.hud.gov/local/shared/working/r8/ph/whatsnew.cfm

?state=co

Any Questions?