[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR135.74]

[Page 720]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
    CHAPTER I--OFFICE OF ASSISTANT SECRETARY FOR EQUAL OPPORTUNITY, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 135_ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME PERSONS
--Table of Contents
 
                Subpart D_Complaint and Compliance Review
 
Sec. 135.74  Section 3 compliance review procedures.

    (a) Compliance reviews by Assistant Secretary. The Assistant 
Secretary shall periodically conduct section 3 compliance reviews of 
selected recipients and contractors to determine whether these 
recipients are in compliance with the regulations in this part.
    (b) Form of compliance review. A section 3 compliance review shall 
consist of a comprehensive analysis and evaluation of the recipient's or 
contractor's compliance with the requirements and obligations imposed by 
the regulations of this part, including an analysis of the extent to 
which section 3 residents have been hired and section 3 business 
concerns have been awarded contracts as a result of the methods 
undertaken by the recipient to achieve the employment, contracting and 
other economic objectives of section 3.
    (c) Where compliance review reveals noncompliance with section 3 by 
recipient or contractor. Where the section 3 compliance review reveals 
that a recipient or contractor has not complied with section 3, the 
Assistant Secretary shall notify the recipient or contractor of its 
specific deficiencies in compliance with the regulations of this part, 
and shall advise the recipient or contractor of the means by which these 
deficiencies may be corrected. HUD shall conduct a follow-up review with 
the recipient or contractor to ensure that action is being taken to 
correct the deficiencies.
    (d) Continuing noncompliance by recipient or contractor. A 
continuing failure or refusal by the recipient or contractor to comply 
with the regulations in this part may result in the application of 
sanctions specified in the contract through which HUD assistance is 
provided, or the application of sanctions specified in the regulations 
governing the HUD program under which HUD financial assistance is 
provided. HUD will notify the recipient of any continuing failure or 
refusal by the contractor to comply with the regulations in this part 
for possible action under any procurement contract between the recipient 
and the contractor. Debarment, suspension and limited denial of 
participation pursuant to HUD's regulations in 24 CFR part 24, where 
appropriate, may be applied to the recipient or the contractor.
    (e) Conducting compliance review before the award of assistance. 
Section 3 compliance reviews may be conducted before the award of 
contracts, and especially where the Assistant Secretary has reasonable 
grounds to believe that the recipient or contractor will be unable or 
unwilling to comply with the regulations in this part.
    (f) Consideration of complaints during compliance review. Complaints 
alleging noncompliance with section 3, as provided in Sec. 135.76, may 
also be considered during any compliance review conducted to determine 
the recipient's conformance with regulations in this part.