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Housing Agency Marketplace - Housing Agency Marketplace
Customer Support: 866-526-9266

Thu. Nov 30, 2023
08:51 PM UTC

HUD Procurement Handbook 7460.8 REV 2
This handbook is originally from the U.S. Department of Housing and Urban Development (HUD)

                                                       Handbook No. 7460.8 REV 2
                        GOVERNING PHA PROCUREMENT
13.1 General

In addition to federal law and regulations, PHAs are governed by a wide assortment of 
state and local requirements. In general, where these rules conflict, the more 
stringent law or rule applies. For example, the Federal statutory limit on small 
purchases is $100,000. That does not prohibit a State from imposing a more stringent 
limit, e.g., $25,000, on small purchases. A PHA governed by that State’s law would 
comply with the $25,000 limit.

HUD requires a standard form of Cooperation Agreement between a PHA and the Local 
Governing Body (LGB) under  which the LGB is required to furnish the same public 
facilities and services to the PHA and its tenants as to other dwellings. The LGB is 
required to cooperate with the PHA in the development and administration of its 
projects, to accept dedications of lands for roads, alleys and sidewalks and to 
provide water, storm and sanitary storm services for which the PHA shall pay the same 
amount as private owners. These arrangements may require some flexibility in 
complying with PHA procurement requirements.

This chapter discusses the relationship between these federal, state, and local rules, 
as they relate to procurement, and also lists suggested resources and other guidance 
to help PHAs remain current in these various requirements.

13.2 Exceptions to Local Pre-emption

In general, a PHA must comply with state or local procurement rules if they are more 
stringent. Two exceptions include:

	A.	Geographic Preferences. Although some States impose certain 
		geographic preference restrictions in the evaluation of offers, 
		24 CFR 85.36(c)(2) preempts such laws by prohibiting the use of 
		geographic restrictions unless expressly required or encouraged 
		by Federal law.

	B.	State Prevailing Wage Requirements. Federal wage determinations 
		(either Davis-Bacon or HUD-Determined Wage Rates) preempt any 
		State prevailing wage rate when the State wage rate is higher than 
		the applicable Federally-imposed wage rate (24 CFR Part 965). 
		Appropriate Federal preemption language is included in the labor 
		standards clauses found in forms HUD-5370, 5370-EZ, and 5370-C.

13.3 State Law

Typically, PHAs are governed by two sets of state regulations. One set is called 
“state-enabling legislation” and the second is a separate set of state statutes or 

	A.	State public housing laws generally describe the creation and 
		operation of PHAs within the state (also referred to as “Local 
		Housing Authorities,” “Municipal Housing Authorities,” “Regional 
		Housing Authorities,” “County or City Housing Authorities,” 
		“Consolidated Housing Authorities,” and in some cases a “State 
		PHA”). Some State public housing laws also provide guidance on 
		specific operational tasks, such as procurement actions with which 
		PHAs must comply.

	B.	The separate State statutes or codes sometimes apply to local 
		governments, including PHAs, but in other states, the State statutes 
		or codes do not apply.                        


                                                          Handbook No. 7460.8 REV 2
	C.	The laws that enable the establishment of public housing authorities 
		and other State requirements that impact procurement activities 
		differ from state to state, as follows:

		1.	State-enabling legislation may include specific guidance 
			on how the various procurement regulations apply to PHA 
			contracts within that State; or

		2.	The State law creating public housing may be silent on 
			procurement, and:

			a.    The State procurement code applies to units of local 
			      government, including PHAs;

			b.    The State procurement code does not apply to local 
			      governments, including PHAs;

			c.    Adoption of the state procurement statutes is not 
			      mandatory for units of local government;

			d.    A State’s procurement code generally does not apply 
			      to PHAs because they are not State agencies; however, 
			      specific clauses in the regulations may apply; and

			e.    The State procurement code may mandate certain 
			      practices but specifically exempt PHAs from one or 
			      more of the requirements.

	D.	Some States have passed laws on procurement but specifically exempt 
		contracts awarded with Federal funds. Also, in some cases, 
		procurement laws may be waived if the PHA makes a written request 
		and provides sufficient justification for not following the State 

	E.	Some States have passed very detailed “Procurement Codes” based on 
		the American Bar Association’s (ABA) Model Procurement Code for 
		State and Local Governments, which apply to local governments, 
		including PHAs. In these States, detailed procedures are provided 
		for nearly all key aspects of public contracting ranging from 
		types of specifications to contract administration.
13.4 Local Law

Some local governments pass laws applicable to public housing contracts, others do 

	A.	In cases where State procurement laws do not specifically apply to 
		PHAs, local government laws on public contracts should be consulted 
		and PHAs should establish their policy and procedures based on the 
		most stringent requirements, either Federal or local; and

	B.	When applicable local laws, in addition to State law, exist on 
		procurement, the most stringent of the three applies as long as the 
		procurement conforms to Federal requirements.

Local jurisdictions frequently pass ordinances on specific construction practices and 
bonding requirements that a PHA must follow in addition to any State or local laws as 
long as they conform to Federal requirements.

13.5 Guidance on State and Local Procurement Laws

	A.	The complex structure of Federal, State, and local laws pertaining 
		to procurement and contracting activities (including applicable 
		labor rates) requires that a PHA have                                                    


                                                          Handbook No. 7460.8 REV 2 
		a comprehensive understanding of the combination of rules and 
		regulations with which it must comply. A PHA’s procurement policy 
		and procedures must incorporate and reflect the relationship 
		between each set of laws and procurement practices. To properly 
		carry out the procurement function and ensure compliance with all 
		applicable Federal, State, and local procurement regulations, 
		PHAs should take the following steps:

	B.	Create a procurement resource center that includes copies of all 
		applicable laws and regulations. Update those resources as 
		necessary. Consult the following to locate applicable Federal, 
		State, and local documents:



		3.	The state legislation that creates your state’s Housing 
			Authorities (State enabling legislation);

		4.	State procurement laws, State procurement codes, or State 
			statutes pertaining to contracting and procurement;

		5.	Local government laws on public contracts;

		6.	Most recent State or local prevailing wage rates; and

		7.	Most recent Davis-Bacon rates for your area (; 

		8.	The current HUD Maintenance Wage Decision (HUD-52158) for 
			the PHA.

	C.	Ensure that PHA staff involved in contracting and procurement are 
		familiar with all Federal and State laws (or regulations) and local 
		ordinances relating to procurement activities.

	D.	Before submitting a policy for adoption by the Board, it is 
		advisable to consult with your legal counsel and/or HUD Field 
		Counsel to ensure that policy language adequately covers all 
		applicable rules. Update the policy as pertinent regulations 

	E.	Tailor an existing procurement policy (or develop a new procurement 
		policy) that reflects the mix of all procurement laws applicable to 
		your PHA. 

	F.	Develop detailed plans of implementation for procurement procedures 
		and train the staff. Update plans as necessary. 


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