24 C.F.R. Subpart J—Limited Denial of Participation
Title 24 - Housing and Urban Development
Source: 68 FR 66597, Nov. 26, 2003, unless otherwise noted.
A limited denial of participation excludes a specific person from participating in a specific program, or programs, within a HUD field office's geographic jurisdiction, for a specific period of time. A limited denial of participation is normally issued by a HUD field office, but may be issued by a Headquarters office. The decision to impose a limited denial of participation is discretionary and in the best interests of the government. The Secretary designates HUD officials who are authorized to impose a limited denial of participation, affecting any participant and/or their affiliates, except FHA-approved mortgagees. (a) An authorized HUD official may issue a limited denial of participation against a person based upon adequate evidence of any of the following causes: (1) Approval of an applicant for insurance would constitute an unsatisfactory risk; (2) Irregularities in a person's past performance in a HUD program; (3) Failure of a person to maintain the prerequisites of eligibility to participate in a HUD program; (4) Failure to honor contractual obligations or to proceed in accordance with contract specifications or HUD regulations; (5) Failure to satisfy, upon completion, the requirements of an assistance agreement or contract; (6) Deficiencies in ongoing construction projects; (7) Falsely certifying in connection with any HUD program, whether or not the certification was made directly to HUD; (8) Commission of an offense listed in §24.800; (9) Violation of any law, regulation, or procedure relating to the application for financial assistance, insurance, or guarantee, or to the performance of obligations incurred pursuant to a grant of financial assistance or pursuant to a conditional or final commitment to insure or guarantee; (10) Making or procuring to be made any false statement for the purpose of influencing in any way an action of the Department; (11) Imposition of a limited denial of participation by any other HUD office; or (12) Debarment or suspension by another federal agency for any cause substantially the same as provided in §24.800. (b) Filing of a criminal Indictment or Information shall constitute adequate evidence for the purpose of limited denial of participation actions. The Indictment or Information need not be based on offenses against HUD. (c) Imposition of a limited denial of participation by any other HUD office shall constitute adequate evidence for a concurrent limited denial of participation. Where such a concurrent limited denial of participation is imposed, participation may be restricted on the same basis without the need for additional conference or further hearing. (d) An affiliate or organizational element may be included in a limited denial of participation solely on the basis of its affiliation, and regardless of its knowledge of or participation in the acts providing cause for the sanction. The burden of proving that a particular affiliate or organizational element is currently responsible and not controlled by the primary sanctioned party (or by an entity that itself is controlled by the primary sanctioned party) is on the affiliate or organizational element. A limited denial of participation is effective immediately upon issuance of the notice. A limited denial of participation may remain effective up to 12 months. A limited denial of participation is made effective by providing the person, and any specifically named affiliate, with notice: (a) That the limited denial of participation is being imposed; (b) Of the cause(s) under §24.1110 for the sanction; (c) Of the potential effect of the sanction, including the length of the sanction and the HUD program(s) and geographic area affected by the sanction; (d) Of the right to request, in writing, within 30 days of receipt of the notice, a conference under §24.1130; and (e) Of the right to contest the limited denial of participation under §24.1130. (a) Within 30 days after receiving a notice of limited denial of participation, you may request a conference with the official who issued such notice. The conference shall be held within 15 days after the Department's receipt of the request for a conference, unless you waive this time limit. The official or designee who imposed the sanction shall preside. At the conference, you may appear with a representative and may present all relevant information and materials to the official or designee. Within 20 days after the conference, or within 20 days after any agreed upon extension of time for submission of additional materials, the official or designee shall, in writing, advise you of the decision to terminate, modify, or affirm the limited denial of participation. If all or a portion of the remaining period of exclusion is affirmed, the notice of affirmation shall advise you of the opportunity to contest the notice and request a hearing before a Departmental Hearing Officer. You have 30 days after receipt of the notice of affirmation to request this hearing. If the official or designee does not issue a decision within the 20-day period, you may contest the sanction before a Departmental Hearing Officer. Again, you have 30 days from the expiration of the 20-day period to request this hearing. If you request a hearing before the Departmental Hearing Officer, you must submit your request to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW, B–133 Portals 200, Washington DC 20410–0500. (b) You may skip the conference with the official and you may request a hearing before a Departmental Hearing Officer. This must also be done within 30 days after receiving a notice of limited denial of participation. If you opt to have a hearing before a Departmental Hearing Officer, you must submit your request to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW, B–133 Portals 200, Washington DC 20410–0500. The hearing before the Departmental Hearing Officer is more formal than the conference before the sanctioning official described above. The hearing before the Departmental Hearing Officer will be conducted in accordance with 24 CFR part 26, subpart A. The Departmental Hearing Officer will issue findings of fact and make a recommended decision. The sanctioning official will then make a final decision as promptly as possible after the Departmental Hearing Officer recommended decision is issued. The sanctioning official may reject the recommended decision or any findings of fact, only after specifically determining the decision or any of the facts to be arbitrary or capricious or clearly erroneous. Federal agencies do not coordinate limited denial of participation actions. As stated in §24.1100, a limited denial of participation is a HUD-specific action and applies only to HUD activities. The scope of a limited denial of participation is as follows: (a) A limited denial of participation generally extends only to participation in the program under which the cause arose. A limited denial of participation may, at the discretion of the authorized official, extend to other programs, initiatives, or functions within the jurisdiction of an Assistant Secretary. The authorized official, however, may determine that the sanction shall apply to all programs throughout HUD where the sanction is based on an indictment or conviction. (b) For purposes of this subpart, participation includes receipt of any benefit or financial assistance through grants or contractual arrangements; benefits or assistance in the form of loan guarantees or insurance; and awards of procurement contracts. (c) The sanction may be imposed for a period not to exceed 12 months, and shall be effective within the geographic jurisdiction of the office imposing it, unless the sanction is imposed by an Assistant Secretary or Deputy Assistant Secretary in which case the sanction may be imposed on either a nationwide or a more restricted basis. For purposes of determining a limited denial of participation, HUD may impute conduct as follows: (a) Conduct imputed from an individual to an organization. HUD may impute the fraudulent, criminal, or other improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with an organization, to that organization when the improper conduct occurred in connection with the individual's performance of duties for or on behalf of that organization, or with the organization's knowledge, approval, or acquiescence. The organization's acceptance of the benefits derived from the conduct is evidence of knowledge, approval, or acquiescence. (b) Conduct imputed from an organization to an individual or between individuals. HUD may impute the fraudulent, criminal, or other improper conduct of any organization to an individual, or from one individual to another individual, if the individual to whom the improper conduct is imputed either participated in, had knowledge of, or reason to know of the improper conduct. (c) Conduct imputed from one organization to another organization. HUD may impute the fraudulent, criminal, or other improper conduct of one organization to another organization when the improper conduct occurred in connection with a partnership, joint venture, joint application, association, or similar arrangement, or when the organization to whom the improper conduct is imputed has the power to direct, manage, control, or influence the activities of the organization responsible for the improper conduct. Acceptance of the benefits derived from the conduct is evidence of knowledge, approval, or acquiescence. If you have submitted a request for a hearing pursuant to §24.1130 of this section, and you also receive, pursuant to subpart G or H of this part, a notice of proposed debarment or suspension that is based on the same transaction(s) or conduct as the limited denial of participation, as determined by the debarring or suspending official, the following rules shall apply: (a) During the 30-day period after you receive a proposed debarment or suspension, during which you may elect to contest the debarment under §24.815, or the suspension pursuant to §24.720, all proceedings in the limited denial of participation, including discovery, are automatically stayed. (b) If you do not contest the proposed debarment pursuant to §24.815, or the suspension pursuant to §24.720, the final imposition of the debarment or suspension shall also constitute a final decision with respect to the limited denial of participation to the extent that the debarment or suspension is based on the same transaction(s) or conduct as the limited denial of participation. (c) If you contest the proposed debarment pursuant to §24.815, or the suspension pursuant to §24.720, then: (1) Those parts of the limited denial of participation and the debarment or suspension based on the same transaction(s) or conduct, as determined by the debarring or suspending official, shall be immediately consolidated before the debarring or suspending official; (2) Proceedings under the consolidated portions of the limited denial of participation shall be stayed before the hearing officer until the suspending or debarring official makes a determination as to whether the consolidated matters should be referred to a hearing officer. Such a determination must be made within 90 days of the date of the issuance of the suspension or proposed debarment, unless the suspending/debarring official extends the period for good cause. (i) If the suspending or debarring official determines that there is a genuine dispute as to material facts regarding the consolidated matter, the entire consolidated matter will be referred to the hearing officer hearing the limited denial of participation, for additional proceedings pursuant to 24 CFR 24.750 or §24.845. (ii) If the suspending or debarring official determines that there is no dispute as to material facts regarding the consolidated matter, jurisdiction of the hearing officer under 24 CFR part 24, subpart J, to hear those parts of the limited denial of participation based on the same transaction[s] or conduct as the debarment or suspension, as determined by the debarring or suspending official, will be transferred to the debarring or suspending official, and the hearing officer responsible for hearing the limited denial of participation shall transfer the administrative record to the debarring or suspending official. (3) The suspending or debarring official shall hear the entire consolidated case under the procedures governing suspensions and debarments, and shall issue a final decision as to both the limited denial of participation and the suspension or debarment. The imposition of a limited denial of participation does not affect the right of the Department to suspend or debar any person under this part. If the cause for the limited denial of participation is resolved before the expiration of the 12-month period, the official who imposed the sanction may terminate it. When a limited denial of participation has been made final, or the period for requesting a conference pursuant to §24.1130 has expired without receipt of such a request, the official imposing the limited denial of participation shall notify the Director of the Compliance Division in the Departmental Enforcement Center of the scope of the limited denial of participation.
Title 24: Housing and Urban Development
PART 24—GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
Subpart J—Limited Denial of Participation
§ 24.1100 What is a limited denial of participation?
§ 24.1105 Who may issue a limited denial of participation?
§ 24.1110 When may a HUD official issue a limited denial of participation?
§ 24.1115 When does a limited denial of participation take effect?
§ 24.1120 How long may a limited denial of participation last?
§ 24.1125 How does a limited denial of participation start?
§ 24.1130 How may I contest my limited denial of participation?
§ 24.1135 Do federal agencies coordinate limited denial of participation actions?
§ 24.1140 What is the scope of a limited denial of participation?
§ 24.1145 May HUD impute the conduct of one person to another in a limited denial of participation?
§ 24.1150 What is the effect of a suspension or debarment on a limited denial of participation?
§ 24.1155 What is the effect of a limited denial of participation on a suspension or a debarment?
§ 24.1160 May a limited denial of participation be terminated before the term of the limited denial of participation expires?
§ 24.1165 How is a limited denial of participation reported?
Appendix to Part 24—Covered Transactions
