[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR1003.606]



[Page 802-803]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 1003_COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND ALASKA 

NATIVE VILLAGES--Table of Contents

 

                  Subpart G_Other Program Requirements

 

Sec.  1003.606  Conflict of interest.



    (a) Applicability. (1) In the procurement of supplies, equipment, 

construction, and services by grantees and subgrantees, the conflict of 

interest provisions in 24 CFR 85.36 and 24 CFR 84.42 shall apply.

    (2) In all cases not governed by 24 CFR 85.36 and 24 CFR 84.42, the 

provisions of this section shall apply. Such cases include the provision 

of assistance by the grantee or by its subrecipients to businesses, 

individuals, and other private entities under eligible activities that 

authorize such assistance (e.g., rehabilitation, preservation, and other 

improvements of private properties or facilities under Sec.  1003.202; 

or grants, loans, and other assistance to businesses, individuals, and 

other private entities under Sec.  1003.203 or Sec.  1003.204.).

    (b) Conflicts prohibited. Except for the use of ICDBG funds to pay 

salaries and other related administrative or personnel costs, the 

general rule is that no persons described in paragraph (c) of this 

section who exercise or have exercised any functions or responsibilities 

with respect to ICDBG activities assisted under this part or who are in 

a position to participate in a decision-making process or gain inside 

information with regard to such activities, may obtain a personal or 

financial interest or benefit from an ICDBG assisted activity, or have 

an interest in any contract, subcontract or agreement with respect 

thereto, or the proceeds thereunder, either for themselves or those with 

whom they have family or business ties, during their tenure or for one 

year thereafter.

    (c) Persons covered. The conflict of interest provisions of 

paragraph (b) of this section apply to any person who is an employee, 

agent, consultant, officer, or elected or appointed official of the 

grantee, or of any designated public agencies, or CBDOs under Sec.  

1003.204, receiving funds under this part.

    (d) Exceptions requiring HUD approval.--(1) Threshold requirements. 

Upon the written request of a grantee, HUD may grant an exception to the 

provisions of paragraph (b) of this section on a case-by-case basis, 

when it determines that such an exception will serve to further the 

purposes of the Act



[[Page 803]]



and the effective and efficient administration of the grantee's program 

or project. An exception may be considered only after the grantee has 

provided the following:

    (i) A disclosure of the nature of the possible conflict, accompanied 

by an assurance that there has been public disclosure of the conflict 

and a description of how the public disclosure was made; and

    (ii) An opinion of the grantee's attorney that the interest for 

which the exception is sought would not violate Tribal laws on conflict 

of interest, or applicable State laws.

    (2) Factors to be considered for exceptions: In determining whether 

to grant a requested exception after the grantee has satisfactorily met 

the requirements of paragraph (d)(1) of this section, HUD shall consider 

the cumulative effect of the following factors, where applicable:

    (i) Whether the exception would provide a significant cost benefit 

or essential expert knowledge to the program or project which would 

otherwise not be available;

    (ii) Whether an opportunity was provided for open competitive 

bidding or negotiation;

    (iii) Whether the affected person has withdrawn from his or her 

functions or responsibilities, or from the decision-making process, with 

reference to the specific assisted activity in question;

    (iv) Whether the interest or benefit was present before the affected 

person was in a position as described in paragraph (b) of this section;

    (v) Whether undue hardship will result, either to the grantee or to 

the person affected, when weighed against the public interest served by 

avoiding the prohibited conflict;

    (vi) Any other relevant considerations.

    (e) Circumstances under which the conflict prohibition does not 

apply. (1) In instances where a person who might otherwise be deemed to 

be included under the conflict prohibition is a member of a group or 

class of beneficiaries of the assisted activity and receives generally 

the same interest or benefits as are being made available or provided to 

the group or class, the prohibition does not apply, except that if, by 

not applying the prohibition against conflict of interest, a violation 

of Tribal or State laws on conflict of interest would result, the 

prohibition does apply. However, if the assistance to be provided is 

housing rehabilitation (or repair) or new housing, a public disclosure 

of the nature of the assistance to be provided and the specific basis 

for the selection of the proposed beneficiaries must be made prior to 

the submission of an application to HUD. Evidence of this disclosure 

must be provided as a component of the application.

    (f) Record retention. All records pertaining to the grantee's 

decision under this section shall be maintained for HUD review upon 

request.



(Approved by the Office of Management and Budget under control number 

2577-0191)