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

Thu. Nov 30, 2023
09:14 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


14.1 General

PHAs can choose to coordinate, collaborate, partner, or contract with various types of 
public or private entities to administer or manage any or all of their programs or to 
handle procurement matters. This chapter assists PHAs in recognizing the benefits of 
these relationships and explains how the Federal procurement regulations apply. Please 
note that, for PHAs to access various interagency purchasing agreements, the 
underlying contract(s) must have been procured in accordance with 24 CFR 85.36.

Use of cooperative and interagency agreements can often greatly simplify and expedite 
the procurement process by relieving the PHA of developing specifications or issuing 
solicitations. These cooperative arrangements can also offer substantial discounts 
over what a PHA might be required to pay if it purchased the items on its own.

Please note that requirements of a PHA associated with a mixed-finance development 
process are addressed separately in Chapter 16 of this Handbook.

14.2 Intergovernmental Agreements for Procurement Activity

	A.	Requirements. A PHA may enter into intergovernmental or interagency 
		purchasing agreements without competitive procurement provided the 
		following conditions are met:

		1.	The agreement provides for greater economy and efficiency 
			and results in cost savings to the PHA. Before utilizing 
			an interagency agreement for procurement, the PHA should 
			compare the cost and availability of the identified 
			supplies or services on the open market with the cost of 
			purchasing them through another unit of government to 
			determine if it is the most economical and efficient 

		2.	The agreement is used for common supplies and services that 
			are of a routine nature only. In deciding whether it is 
			appropriate for the PHA to obtain supplies or services 
			through an intergovernmental agreement rather than through 
			a competitive procurement, the nature of the required 
			supplies or services will be a determining factor. 
			Intergovernmental agreements may be used only for the 
			procurement and use of common supplies and services. If 
			services, required by the PHA, are provided by the State or 
			locality and are part of that government’s normal duties 
			and responsibilities, it is permissible for the PHA to 
			share the services and cost of staff under an agreement. 
			For example, a PHA could enter into an intergovernmental 
			agreement, without competitive procurement, to use the 
			services of a local government’s accounting office to 
			conduct an annual audit of its books or to use the services 
			of a city health agency to provide advice about drug abuse 
			prevention strategies. A PHA could not, however, without 
			competitive procurement, enter into an intergovernmental 
			agreement with a local police department to purchase 
			cabinets manufactured by the police department (the 
			manufacturing of cabinets is not a normal function of a law 
			enforcement agency);

		3.	PHAs must take steps to ensure that any supplies or 
			services obtained using another agency’s contract are 
			purchased in compliance with 24 CFR 85.36;  

		4.	A PHA’s procurement files should contain a copy of the 
			Intergovernmental Agreement and documentation showing that 
			cost and availability were evaluated



                                                          Handbook No. 7460.8 REV 2
			before the agreement was executed, and these factors are 
			reviewed and compared at least annually with those 
			contained in the agreement; and

		5.	The agreement must be between the PHA and a state or local 
			governmental agency, which may be another PHA.

	B.	Examples. Types of intergovernmental agreements may include, but are 
		not limited to:

		1.	Paying a city for the cost of additional police patrols 
			(i.e., for special “community policing” efforts) so long 
			as those patrols are above and beyond those that the 
			police department would provide under the PHA’s 
			Cooperation Agreement with the city (see Appendix 16 for 
			sample intergovernmental agreement);

		2.	Using the city’s Recreation Department to operate an 
			after-school sports program for residents of public 

		3.	Using the services of the city’s accounting office to 
			conduct an internal audit;

		4.	Sharing warehouse space with the city;

		5.	Purchasing supplies and services through a local, county, 
			or State government’s supply, service, or equipment 

		6.	Using a local, county, or State governmental unit, 
			including another PHA, to perform procurement activities 
			for the PHA; or 

		7.	Using bonding services from a state Housing Finance Agency.

	C.	Process for Using Intergovernmental Agreements. Typically, the 
		process for entering into intergovernmental agreements is as 

		1.	The government agency solicits bids or proposals, then 
			enters into contracts with vendors for a variety of 
			supplies or services;

		2.	The PHA enters into an agreement with the government 
			agency whereby the PHA is able to order supplies and 
			services from the vendors who have a contractual 
			agreement to furnish the supplies and services to the 
			government agency (note, however, that some 
			states/localities allow for PHAs to access state/local 
			contracts directly without any formal agreement between 
			the PHA and the lead agency);

		3.	The PHA orders the supplies or services covered by the 
			government contract at the prices specified;

		4.	Depending on the agreement structure, PHAs may order the 
			supplies or services either directly from the vendor or 
			indirectly from the government agency; and

		5.	Again, depending on the agreement structure, the vendor 
			will bill the PHA directly and payment will be made to 
			the vendor or, if ordered through the sponsoring agency, 
			the PHA will reimburse the agency directly.

	D.	Terms of Agreement. Most government agencies will have their own 
		intergovernmental agreement forms. However, the PHA should 
		review any standard agreements to make sure that all applicable 
		procurement regulations are met and that the PHA’s interests are 
		protected. PHAs should consider inclusion of the following 
		provisions in their intergovernmental agreements


                                                          Handbook No. 7460.8 REV 2 
		1.	Identification of the parties;

		2.	Effective date;

		3.	Basic purpose of the agreement;

		4.	Procedures for providing lists of needed items;

		5.	Description of items to be purchased;

		6.	Identification of lead party in the procurement;

		7.	Rules or codes that should be followed in the procurement 
			(PHA procurement policy, State procurement code, Federal 
			Regulations, etc.);

		8.	Delivery terms;

		9.	Types of contract (indefinite quantity, etc.);

		10.	Warranty terms;

		11.	Any fees to be paid to the lead agency;

		12.	Procedures for resolving disputes with contractors;

		13.	Procedures for resolving disputes between the parties;

		14.	Procedures for bilateral modification or early termination 
			of the agreement.

		15.	Any provisions for meetings on specification issues;

		16.	Non-exclusivity clause (right to conduct separate 
			procurements, notwithstanding the existence of a 
			cooperative purchasing agreement); and

		17.	Authorized signatures and titles.

	E.	Evaluating the Use of Intergovernmental Agreements. After entering 
		into an agreement, PHAs should compare cost and availability 
		annually to determine if the terms of the agreement continue to 
		pass the tests of economy and efficiency.

	F.	Federal Supply Schedule Contracts. The General Services 
		Administration (GSA) within the Federal government awards a wide 
		variety of contracts under which Federal agencies may purchase 
		supplies and services from pre-priced schedules.  (Note: These 
		contracts may provide supplies or services despite the name 
		Federal Supply Schedule.)  Section 211 of the E-Government Act of 
		2002 only allows for state and local government entities (including 
		PHAs) to purchase from GSA Schedule 70, Information Technology, and 
		Consolidated (formerly Corporate Contracts) Schedule contracts 
		containing IT SINs.  State and local government entities may not 
		purchase information technology from any other GSA Schedules.  No 
		other schedule contracts are available to PHAs.  In addition, PHAs 
		may not purchase items from GSA schedule contractors on a 
		noncompetitive basis.  PHAs may solicit GSA contractors for prices 
		for supplies and services when conducting competitive procurements, 
		but they shall be considered only another potential source.  


                                                          Handbook No. 7460.8 REV 2
14.3 Selecting Joint Venture Partners

In connection with the provision of PHA administrative or management functions of 
public housing, or the provision of supportive and social services, PHAs may use 
one of the following options for the selection of joint venture partners:

	A.	The QBS method, using a RFQ, subject to the negotiation of a fair 
		and reasonable price; or

	B.	The solicitation of a sole source proposal, under the following 

		1.	The proposed joint venture partner has under its control 
			and will make available to the partnership substantial, 
			unique, and tangible resources or other benefits that 
			would not otherwise be available to the PHA on the open 
			market (such as planning expertise, program experience, 
			or financial or other resources).

			In this case, the PHA must carefully and thoroughly 
			document both the cost reasonableness and the unique 
			qualifications offered by its proposed partner; or

		2.	A resident group or a PHA subsidiary is willing and able 
			to act as the partner in performing the administrative 
			or management function or to provide supportive or 
			social services. A resident group or a PHA subsidiary 
			must comply with the requirements of 24 CFR Part 84 (if 
			the entity is a nonprofit) or 24 CFR Part 85 (if it is a 
			State or local government) in selecting members of the 
			team. Team members must be paid on a cost reimbursement 
			basis only. The PHA must document the cost reasonableness 
			of its selection of a resident group or subsidiary and the 
			group’s ability to act as a PHA partner

14.4 Conflict of Interest Considerations for Joint Ventures, Subsidiaries and Affiliates

Federal, and often State and local procurement laws, contain various conflict of 
interest provisions barring PHAs from obtaining supplies and services from persons 
or entities with certain conflicts. 

	A.	Section 515 of the old ACC (53010 and 53011) specifies that 
		transactions between PHAs and any joint venture, subsidiary, 
		affiliate, or other identity-of-interest entity must comply 
		with the conflict of interest provisions. 

	B.	Section 19 of the new ACC (HUD 53012-A, 7/95) similarly 
		specifies that PHA transactions must comply with the conflict 
		of interest provisions. In addition, the conflict of interest 
		provisions of 24 CFR 85.36 must also be followed if Federal 
		grant funds are involved. 

	C.	In addition to Federal conflict of interest provisions in the 
		ACC and in 24 CFR 85.36, all joint venture partners and the 
		joint venture as a whole must comply with State and local 
		procurement and conflict of interest requirements in conducting 
		activities to acquire supplies and services. A person who is a 
		member of both a PHA’s Board of Commissioners and another 
		entity’s governing board may not participate in actions by the 
		PHA Board that are incidental agreements with the entity and may 
		present a conflict of interest, real or apparent.

	D.	Disclosures of conflict must be made to HUD and waivers of conflict 
		under the ACC and exceptions under 24 CFR 85.36 must be submitted to 
		the HUD Field Offices for approval by HUD Headquarters if the HUD 
		Field Office recommends approval. HUD Headquarters will determine if 
		good cause exists for approving a waiver under the ACC or an 
		exception under 24 CFR 85.36.



                                                          Handbook No. 7460.8 REV 2
	E.	The ability of a PHA Board to act at all in these cases will be 
		determined by whether a quorum of Board members is left after the 
		abstentions of common board members who have conflicts.                                                           
14.5 Procurement Requirements of Joint Venture Partners (24 CFR Part 943, Subpart C)

	A.	A joint venture partner is generally not a grantee or subgrantee 
		and, accordingly, is not required to follow 24 CFR Parts 84 or 85 
		in procuring supplies or services. The exception to this general 
		rule applies if the joint venture partner is a subsidiary, 
		affiliate or identity-of- interest party of the PHA. (See Section 
		14.6.B below.)

	B.	If the joint venture partner is a resident group, subsidiary, 
		affiliate, or identity-of-interest party of the PHA, it must comply 
		with 24 CFR Parts 84 or 85, as applicable. HUD may, on a 
		case-by-case basis, grant an exemption to the joint venture partner 
		from the need to comply with the requirements under 24 CFR 85.36 if 
		HUD determines there is good cause and that the joint venture 
		partner has developed an acceptable alternative procurement plan.

	C.	A selected joint venture partner may contract with an 
		identity-of-interest party for goods or services or a party 
		specified in the selected bidder’s response to an RFP or RFQ 
		(as applicable) without further procurement if:

		1.	The PHA can demonstrate that its original competitive 
			selection of the partner clearly anticipated the later 
			provision of such goods and services; 

		2.	Compensation of all identity-of-interest parties is 
			structured to ensure that there is no duplication of 
			profit or expenses; and

		3.	The PHA can demonstrate that its selection is reasonable 
			based on prevailing market costs and standards, and the 
			quality and timeliness of the goods and services is 
			comparable to that available in the open market.

14.6 Contracting with PHA Subsidiaries, Affiliates, and Joint Venture Partners

A PHA may, in connection with public housing, contract with a joint venture partner, 
subsidiary, or affiliate to perform  (1) administrative or maintenance services, (2) 
the provision of social and supportive services, or (3) other services only after 
compliance with 24 CFR 85.36, i.e., full and open competition.

14.7 Consortia

The 1998 Quality Housing and Work Responsibility Act (QHWRA) created a new Section 13 
of the Housing Act of 1937 that authorizes PHAs to form a special type of consortium, 
called a Section 13 Consortium. Regulations on Consortia can be found at 24 CFR Part 

	A.	Under a Section 13 Consortium, participating PHAs enter into a 
		consortium agreement, submit joint PHA Plans to HUD, and may 
		combine all or part of their funding and program administration.

	B.	Although PHAs do not need to comply with 24 CFR 85.36 to enter 
		into Consortia, the consortium itself must comply.

14.8 Considerations


                                                          Handbook No. 7460.8 REV 2
A PHA should consider several factors before deciding to participate in a particular 
type of operating organization, including:

•	The complexity of the program(s) to be managed and administered;

•	Technical capability of staff;

•	PHA financial strength;

•	PHA willingness to assume financial risk;

•	PHA statutory and contractual powers; 

•	Identity-of-interest and conflict of interest issues; and

•	State Law. PHAs are typically created through State-enabling legislation and 
	governed by State statutes. As a result, contractual powers may vary 
	significantly. For this reason, PHAs should have legal counsel investigate 
	the specific limitations, liabilities, and authority available under State 
	law before entering into any cooperative business relationship.



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