Projects With Industry

SUMMARY: The Secretary proposes to amend the regulations governing the

Projects With Industry (PWI) program (34 CFR Part 379). The PWI program

is authorized by section 621 of the Rehabilitation Act, as amended (the

Act). The purpose of the PWI program is to create and expand job and

career opportunities for individuals with disabilities in the

competitive labor market by establishing partnerships between program

grantees and private industry to provide job training, job placement,

and career advancement activities. The Secretary is proposing to change

the regulations governing this program in order to clarify statutory

intent, reduce grantee burden, address certain implementation problems,

and enhance project accountability.

DATES: Comments must be received on or before March 22, 1996.

ADDRESSES: All comments concerning these proposed regulations should be

addressed to Fredric K. Schroeder, Commissioner, Rehabilitation

Services Administration, U.S. Department of Education, 600 Independence

Avenue, S.W., Room 3028, Mary E. Switzer Building, Washington, D.C.

20202-2531. Comments may also be sent through the Internet to ``PWI--

R[email protected]''.

To ensure that public comments have maximum effect on the

development of the final regulations, the Department urges that each

comment clearly identify the specific section or sections of the

regulations that the comment addresses and that comments be in the same

order as the regulations.

Comments that concern information collection requirements must be

sent to the Office of Management and Budget at the address listed in

the Paperwork Reduction Act section of this preamble. A copy of those

comments may also be sent to the Department representative named in

this section.

FOR FURTHER INFORMATION CONTACT: Thomas E. Finch, U.S. Department of

Education, 600 Independence Avenue, S.W., Room 3315, Mary E. Switzer

Building, Washington, D.C. 20202-2575. Telephone: (202) 205-8292.

Individuals who use a telecommunications device for the deaf (TDD) may

call the Federal Information Relay Service (FIRS) at 1-800-877-8339

between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION:

Overview of Proposed Changes

The Secretary proposes to revise these regulations in order to

clarify statutory intent, reduce grantee burden, address demonstrated

problems in program administration, and clarify certain program

requirements. For example, some of the proposed changes would reduce

burden by eliminating unnecessary non-statutory requirements,

particularly non-statutory provisions in current regulations in

Secs. 379.42 through 379.45 relating to grant agreement and on-the-job

training requirements.

Other changes are being proposed to address demonstrated problems

in the PWI program. For example, the Secretary believes that the

program's defining feature, partnership with industry, has not received

sufficient emphasis in the program regulations. The present

regulations, most notably the selection criteria for new grant awards

and the compliance indicators, do not adequately emphasize partnership

with industry. To address this, the Secretary is proposing new

selection criteria that would add a separate criterion focusing on the

extent to which a project has established a working partnership with

private industry. In addition, the Secretary is soliciting public

comment on whether the compliance indicators require revision in order

to assess projects' partnership with industry.

The Secretary also proposes in certain instances to add clarifying

language, even if no specific changes to the regulatory text are being

proposed. The Secretary has added several explanatory notes to clarify

certain requirements that have been misunderstood by some grantees in

the past. Following the relevant sections, the Secretary has added

explanatory notes to clarify the State vocational rehabilitation (VR)

agency's role in the eligibility determination process in Sec. 379.3,

the grantee matching requirements in Sec. 379.40, and the compliance

indicator reporting requirements in Sec. 379.54.

The Secretary is proposing only one change to the compliance

indicators in this notice of proposed rulemaking, but is inviting

public comment on how to improve all of the indicators. To better focus

public comment, the preamble contains a list of issues pertaining to

the current compliance indicators and invites comment on each of them.

Section-by-Section Summary of Proposed Changes

The following is a section-by-section summary of major changes

proposed in this notice of proposed rulemaking.

In Sec. 379.2, the Secretary proposes to remove the

reference to ``agreement'' and substitute the term ``grant.'' This

terminology change would be made to enhance clarity. In Sec. 379.2(a),

the Secretary proposes to add ``nonprofit agencies and organizations''

as eligible applicants to clarify that these entities are also eligible

to apply for funding under this program. The Secretary also proposes,

for purposes of clarity, to relocate from Sec. 379.31(a) to

Sec. 379.2(b) the statutory requirement in section 621(e)(2) of the Act

that new awards be made to projects proposing to serve individuals in

geographic areas that are unserved or underserved by the PWI program.

The Secretary believes this requirement would be more logically placed

in Sec. 379.2(b) because it is a condition of eligibility for a new

award and not a factor in evaluating a grant application. The Secretary

is not proposing to define in regulations ``unserved'' or

``underserved.'' Each applicant has the flexibility in its application

to describe how the proposed project area is either unserved (e.g.,

there are currently no PWI projects in the geographic area) or

underserved (e.g., there are one or more PWI projects in the geographic

area, but the need for PWI services is not fully met) by the PWI

program.

The Secretary proposes to add a note following Sec. 379.3

to clarify the precise role of the State VR agency in the eligibility

determination process. This note would state that a PWI project makes

an interim determination of eligibility for project services and that

this determination becomes final within 60 days if the State vocational

rehabilitation unit does not make a determination that it is

inappropriate. The note would also clarify that in those instances when

an individual has already been determined eligible for vocational

rehabilitation services under section 102(a) of the Act, the individual

can be presumed to meet the definition of ``individual with a

disability'' for eligibility purposes under the PWI program.

In Sec. 379.5, the Secretary proposes to conform the

definitions of ``competitive employment'' and ``placement'' with

changes being proposed in the regulations governing The State

Vocational Rehabilitation Services Program in 34 CFR Part 361. The

definition of ``competitive employment'' would be revised to add the

requirement

[[Page 1673]]

that work be performed in an integrated setting and to clarify the

current requirement that individuals must be compensated at or above

the minimum wage but not less than the prevailing wage for the same or

similar work performed by non-disabled individuals in the local

community. The definition of ``placement'' would be revised to require

that an individual maintain employment for the duration of the

employer's probationary period or, in the absence of an established

period, at least 90 days. Current regulations provide that a placement

does not occur until competitive employment has been maintained for 60

days.

The proposed regulations would also add a definition of

``integrated setting,'' as it is used in the definition of

``competitive employment.'' ``Integrated setting'' would be defined to

mean ``a setting typically found in the community in which individuals

with disabilities have the opportunity to interact on a regular basis

with non-disabled individuals other than non-disabled individuals who

are providing services to them.''

The Secretary also proposes adding to this section definitions of

``job readiness training'' and ``job training.'' ``Job readiness

training'' would include training in job-seeking skills, training in

the preparation of resumes or job applications, training in

interviewing skills, participating in a job club, or other related

activities that may assist an individual to secure competitive

employment. Job readiness training is an authorized activity under the

PWI program; however, it must be distinguished from the job training

component required of PWI projects. Therefore, the Secretary is also

proposing to add a definition of ``job training'' that would require

projects to provide, or ensure the provision of, one or more of the

following activities prior to placement (as that term is defined in

Sec. 379.5(b)(7)): occupational skills training, on-the-job training,

workplace training combined with related instruction, job skill

upgrading and retraining, training to enhance basic work skills and

workplace competencies, or on-site job coaching.

The Secretary wants to ensure that all projects have an

identifiable training component and that the training provided by

projects focuses on imparting the skills needed for employment and

career advancement in the competitive labor market, as the statute

intends. The Secretary is concerned that the findings of some PWI on-

site compliance reviews conducted by the Department indicated that

certain grantees conducting programs of national scope failed to

provide this type of training. In addition, other findings indicated

that some grantees provided training that primarily taught job-seeking

skills and resume-writing. Although job readiness training is

authorized under this program, the Secretary does not believe that this

type of training alone meets the statutory requirement that projects

provide job training to prepare individuals with disabilities for

employment in the competitive labor market.

The Secretary proposes to add a definition of ``career advancement

services'' in order to clarify the meaning of this statutorily required

activity that must be a part of each project's program of services. The

proposed definition would define ``career advancement services'' to

mean ``services that develop specific job skills beyond those required

by the position currently held by an individual with a disability to

assist the individual to compete for a promotion or achieve an advanced

position in the same field.''

Section 379.10 would be amended to clarify that all

grantees must conduct all of the activities required under section

621(a)(2) of the Act and listed in this section. The Secretary does not

believe the wording in the current regulations is as clear on this

point as it could be.

The Secretary is proposing to add a note under this section to

clarify how grantees can meet the requirements of Sec. 379.10(a), which

requires each grantee to provide job training in a realistic work

setting for individuals served by the project. The Secretary believes

that projects should have maximum flexibility in determining the

precise form of their job training component, but believes that the job

training provided must be designed to develop skills that will lead to

participants' success in obtaining, retaining, and advancing in

competitive employment. The proposed note explains that grantees would

have the option of providing job training directly to project

participants or by ensuring the provision of that training by other

entities through cooperative arrangements while the individual is

participating in the project. Job training would be provided as

appropriate to the needs of each individual served by the project. The

Secretary does not intend that each project participant necessarily

receive job training, but that job training be available and accessible

to those individuals who need it to achieve competitive employment.

However, the Secretary expects that a sizeable number of project

participants would need and receive some type of job training.

The Secretary proposes a new Subpart C, containing

information about how to apply for a grant award (proposed Sec. 379.20)

and proposed new application content requirements (proposed

Sec. 379.21). The new application content section would better reflect

statutory requirements, would closely parallel proposed new selection

criteria, and would eliminate unnecessary non-statutory grant agreement

requirements contained in current Secs. 379.42 through 379.45. Section

621(e)(1)(B) of the Act authorizes the Commissioner of the

Rehabilitation Services Administration (RSA) to establish any

application content requirements that may be necessary.

In order to better assess whether an application meets the

statutory requirements of the program (and also to better evaluate an

application according to the proposed new selection criteria), the

Secretary proposes to require more specific information in the

application. Significant new elements of the grant application, all of

which stem from statutory provisions, would be as follows:

Section 379.21(a)(1), description of the proposed job training and

identification of need for the job training to be provided. As

discussed previously, the Secretary believes the training provided by

some projects does not meet the requirements of sections 621(a)(1) and

(a)(2) of the Act. The Secretary also believes that, consistent with

the statute, training should be developed in conjunction with private

industry and should be linked to identified local labor market

opportunities. The proposed regulations would, therefore, require

applicants to describe the job training, as defined in proposed

Sec. 379.5(b)(5), that they intend to provide and to demonstrate that

the training to be provided meets local labor market needs.

Section 379.21(a)(2) and 379.21(a)(3), description of the

involvement of private industry. The Secretary proposes to require

these descriptions to ensure that there is adequate private industry

involvement in all phases of the project and to ensure that the

statutorily required Business Advisory Council (BAC) is involved in all

relevant project activities.

Section 379.21(a)(4), explanation of how the geographic area the

applicant proposes to serve qualifies as an unserved or underserved

area. The Secretary proposes to require information to enable the

Department to determine that all applicants meet this eligibility

requirement.

[[Page 1674]]

In addition to adding certain requirements, the Secretary proposes

to simplify and clarify the information and assurances applicants must

provide under the current regulations. In the current regulations,

these requirements are located in multiple sections (Secs. 379.42

through 379.45). The Secretary proposes to repeal most of these

provisions, which contain longstanding, primarily non-statutory grant

agreement requirements, and place the few remaining statutory

requirements in new Sec. 379.21. For example, the description of the

annual evaluation plan, required under section 621(a)(5) of the Act and

Sec. 379.43(k) of the present regulations, would be moved to this

section with the proposed addition that the applicant's evaluation plan

include the capacity for collecting data required to establish

compliance with the performance indicators in Subpart F of the

regulations. Current requirements in Sec. 379.43(h) and (i), which

require a project to provide equitable compensation and working

conditions for the individuals with disabilities it places in

employment, would also be located in new Sec. 379.21.

The proposed new application content provisions would be mandatory

for all applicants. In accordance with 34 CFR 75.216(c), the Secretary

would not evaluate any application that does not contain all of the

information required under proposed Sec. 379.21.

The Secretary proposes to replace the selection criteria

in Sec. 379.30 with new selection criteria. The Secretary believes the

current selection criteria do not adequately reflect the statutory

purposes and certain key requirements of the program, particularly the

requirements relating to job training and partnership with industry,

and thus do not facilitate selection of the best applications. The

Secretary believes the proposed criteria are better tailored to the

unique aspects of the program. The proposed criteria in many instances

parallel proposed application content requirements and are designed to

evaluate the quality and extent of that information. For example, the

Secretary proposes to establish in Sec. 379.30(a) a criterion entitled

``Extent of need for the project'' that would be used to assess the

extent to which the applicant's proposed job training meets the

requirements and needs of the local labor market by preparing

individuals for jobs for which there is a demand. This criterion, which

would be weighted 20 points, parallels the application content

requirement dealing with job training in proposed Sec. 379.21(a)(1).

Another proposed new criterion in Sec. 379.30(b) entitled

``Partnership with industry'' would be used to evaluate the extent of

the proposed project's collaboration with private industry in all

aspects of program operations as well as the role of the BAC in

identifying job and career opportunities and developing appropriate job

training programs. This criterion, which would be weighted 25 points,

would track proposed application content requirements in

Sec. 379.21(a)(2) and (a)(3).

There are other significant changes in the proposed new selection

criteria. The Secretary proposes a new ``Project design and plan of

operation for achieving competitive employment outcomes'' criterion in

Sec. 379.30(c), which incorporates some elements of the present

``Project design'' criterion. The proposed criterion would be used to

assess applicants on project design issues (e.g., goals and objectives,

proposed activities, and methods and strategies to achieve competitive

employment outcomes for project participants) and would also examine

the extent to which the proposed management of the project would

further the execution of the proposed design. The Secretary believes

the proposed criterion would better enable the selection of projects

that, in addition to being well-conceived, have a high probability of

successful implementation. A maximum of 25 points would be allocated to

this criterion. The Secretary also proposes to make the criterion on

``Project evaluation'' in Sec. 379.30(f) more specific to the

evaluation mechanisms used in the PWI program. The revised criterion

would examine the applicant's proposed evaluation plan with respect to

its capacity for evaluating project operations and outcomes and for

generating data needed to meet the annual program evaluation and

compliance indicator requirements. This criterion would also evaluate

the extent of involvement of the BAC in evaluating the project's job

training, placement, and career advancement activities.

Following Sec. 379.40, the Secretary proposes to add a

note to clarify the program matching requirements, which have been

misinterpreted by some grantees to mean 20 percent of the Federal grant

rather than 20 percent of total project costs. The note would also

specify that cash or in-kind contributions, or a combination of the

two, may be used to meet this requirement. It would also cross-

reference applicable provisions in the Education Department General

Administrative Regulations (EDGAR).

Section 379.41 would be amended to specifically include

job readiness training, job training, and placement activities as

allowable project costs. In addition, the section would be amended to

update cross-references to the allowable costs provisions in EDGAR and

to remove bonding fees and liability and insurance premiums from the

list of program-specific allowable costs. Bonding and insurance costs

are expressly allowable under EDGAR and do not need to be particularly

identified in these program regulations.

A new Sec. 379.42 would be added to the regulations to

specify, in a single section, all of the requirements (both statutory

and EDGAR-based) that a grantee must meet in order to receive a

continuation award under the PWI program. These requirements include--

(1) making substantial progress toward meeting the objectives in its

approved application in accordance with 34 CFR 75.253(a)(2) of EDGAR;

(2) submitting all performance and financial reports required by 34 CFR

75.118 of EDGAR; and (3) submitting data in accordance with section

621(f)(4) of the Act and proposed Sec. 379.54 showing that it has met

the program compliance indicators. In addition, proposed Sec. 379.42

would specify two additional conditions that must be met before the

Secretary can make a continuation award: Congress must appropriate

sufficient funds under the program and continuation of the project must

be in the best interest of the Federal Government.

A new Sec. 379.43 would also be added to the regulations

to require each program grantee to submit to the Secretary at a

specified time the data it is required to collect as part of the annual

evaluation of project operations mandated by section 621(a)(5) of the

Act. The proposed regulations would require that this information be

reported no later than 60 days after the end of each project year,

unless the Secretary authorizes a later submission date. The term

``project year'' is synonymous with the term ``budget period'' and in

this program covers a period that is concurrent with the Federal fiscal

year, i.e., October 1 through September 30.

The reporting requirements for the compliance indicators,

currently located in Sec. 379.46, would be relocated to a proposed new

Sec. 379.54 in Subpart F. Unnecessary references to fiscal year 1990,

the effective date of this requirement, would be deleted, and a

proposed date for submitting compliance indicator data would be added

to the regulations. The proposed date is either 60 days after the end

of the project year if the grantee submits data for the most recent

complete project

[[Page 1675]]

year as provided for in paragraph (a) of this section or 60 days after

the end of the first 6 months of the current project year if the

grantee avails itself of the option provided for in paragraph (b) of

this section--unless the Secretary authorizes a later date for

submission of the compliance indicator data. The Secretary would also

add a note following this section to clarify that meeting the

compliance indicators is a requirement for continuation funding in

years three through five of a PWI grant. Continuation funding in the

second year is not subject to meeting the indicators because data from

the first complete project year are not available until after the

second year award is made.

Section 379.53(c) concerning the performance indicator on

cost per placement would be amended to increase the average cost per

placement from $1600 or less to $2400 or less. The performance ranges

and the points assigned to each range would also be revised to reflect

8 points awarded for a range of $2001 to $2400, 17 points awarded for a

range of $1601 to $2000, and 25 points awarded for projects with an

average cost per placement of less than $1600.

These proposed changes reflect an overall 50 percent increase in

cost per placement as compared to the current performance indicator.

Concern has been expressed by current PWI grantees that the dollar

threshold for this indicator is too low. Grantees have advised that the

current level of $1,600 or less, that was set in 1986, is not realistic

given the inflationary costs of services, especially the cost of

services for individuals with severe disabilities. The Secretary is

proposing this as an interim change prior to a more extensive revision

of the evaluation standards and performance indicators for the program

as discussed in the following paragraphs.

Program Evaluation Standards and Compliance Indicators

At this time, the Secretary is not proposing any substantive

changes to the evaluation standards and performance measures for the

PWI program contained in Subpart F of these regulations, other than

proposing an increase in the cost per placement indicator. However, a

recent assessment of the program suggests a need for revised

performance indicators. The report, ``Assessment of Performance

Indicators for the Projects With Industry (PWI) Program,'' by Research

Triangle Institute (RTI) (June, 1994), suggests that changes are needed

not only in the performance indicators, but also in the scoring system

and in the quality assurance methods used to validate the data that are

reported. Based upon experience in administering this program, the

Secretary is also concerned about the implementation of these

performance indicators and agrees that changes may be needed.

In light of these concerns, the Secretary is particularly

interested in receiving public comments on the following issues to

assist the Department in determining what changes need to be made to

improve the evaluation standards and performance indicators.

Are the Current Evaluation Standards Appropriate for the PWI Program?

The current evaluation standards are included as an appendix to the

regulations in 34 CFR Part 379. The seven standards were developed in

response to a Congressional mandate in 1984 and address the broad

purposes and activities of the PWI program. Are these standards still

appropriate for the program? Should one or more of the standards be

revised or modified to better reflect the legislative intent of the

program in light of the Rehabilitation Act Amendments of 1992 (the 1992

Amendments)? For example, none of the standards addresses career

advancement activities that were mandated in the Amendments. Is a new

or revised standard needed to accommodate this change?

Should All of the Evaluation Standards Have Related Performance

Indicators?

At the present time, certain evaluation standards for the PWI

program do not have corresponding measures of performance. For example,

none of the current performance indicators relates to Standard 5,

regarding the project's advisory committee (i.e., BAC), or to Standard

6, regarding the project's relationships with other agencies and

organizations. Since the establishment of a project BAC and the

project's relationship with business and industry are important

statutory requirements for the PWI program, the Secretary is

considering the establishment of compliance indicators for these

standards. What, if any, would be appropriate indicators to measure

project performance with regard to the use of the project's BAC and the

project's relationship with business and industry?

What Changes Are Needed to the Overall Scoring System for the

Performance Indicators?

The RTI report raises concerns about the overall scoring system for

the performance indicators and notes that the minimum required

composite score of 70 is too low to ensure sufficiently high levels of

performance by PWI projects. In addition, the use of composite scores

allows projects to receive no points for as many as five of the nine

indicators yet still achieve a sufficiently high score to receive

continuation funding.

Are changes needed in the scoring system? For example, the

Secretary is considering the establishment of a minimum required score

for each performance indicator. Should the scoring system continue to

allocate points by performance ranges, or should a graduated points

allocation system be used instead? For example, under the indicator on

percentage of persons placed whose disabilities are severe, points

could be allocated for each percentage point over and above a minimum

performance level (i.e., 50 percent) rather than allocating a set

number of points for performing anywhere within an established

performance range--the approach now established under current

Sec. 379.53(h). In addition, should all indicators be considered of

equal importance, or should a scoring system be developed that

establishes different weights for various indicators depending on their

importance? Another possibility is the use of a combination of a

``pass-fail'' approach for certain critical indicators and point scores

on other indicators.

What Safeguards Should be in Place to Ensure the Validity and Accuracy

of Data Reported on the Performance Indicators?

Both RSA's findings in conducting on-site compliance reviews of PWI

projects and the RTI report have surfaced concerns about the ability of

many PWI projects to collect, maintain, and report accurate data to

substantiate performance on the indicators. What safeguards are

necessary to ensure that projects are collecting and reporting accurate

performance data to meet the indicators and receive continuation

funding?

What Specific Changes are Needed in the Current Performance Indicators?

Use of Projections

There are two indicators that measure the project's actual yearly

performance against its initial projections. The two indicators address

actual costs versus projected costs of placements and actual

performance versus projected placement rates. The RTI report points out

that the ``promise-performance'' approach is problematic and should be

reconsidered. This approach could

[[Page 1676]]

encourage projects to set unreasonably low goals in order to earn

additional points under the indicators for exceeding those goals.

Because of these issues, the Secretary is considering the elimination

of these two indicators. Is there a strong rationale for retaining the

current indicators that rely on projections, or should the performance

indicators measure only the project's actual achievements? Could these

indicators be revised to better focus on improvements or progress

toward goals and thereby create incentives for achieving meaningful

goals?

Cost Per Placement

As noted previously, the Secretary is proposing an interim increase

in the performance indicator for cost per placement from the current

threshold of $1600 or less to a proposed new threshold of $2400 or

less. If the Secretary decides to keep a measure relating to cost per

placement, is the proposed new dollar limit reasonable? Should the

indicator be modified in some other way? Should the cost per placement

threshold amount be adjusted for inflation over the life of a project?

An argument could be made that any indicator that assesses cost per

placement conflicts with the existing indicators that focus on serving

and placing individuals with severe disabilities. Such an indicator

could lead to ``creaming'' and encourage projects to focus on serving

individuals who need fewer services and are easier to place into

employment. Another issue is that projects may be deterred from

providing resource-intensive skills training if cost per placement (and

not job retention or career advancement) is an indicator.

If the Secretary were to eliminate this indicator, what would be an

appropriate performance measure regarding the efficient use of

resources to implement Standard 4 (Funds shall be used to achieve the

project's primary objective at minimum cost to the Federal Government)?

Numbers Served

Based on the Government Performance and Results Act of 1994,

Federal programs are measuring the achievement of outputs and outcomes

and not processes. Given this focus, the Secretary is considering the

elimination of the current indicators relating to the percentage of

individuals with severe disabilities served and the percentage of

unemployed individuals served. Should these performance indicators be

retained, or should the indicators focus only on project outcomes such

as the number of individuals placed into employment and their earnings?

Should new indicators be developed for other project outputs such as

the number of project participants who complete a job training program,

as defined in proposed Sec. 379.5(b)(5)?

Change in Earnings

Projects can currently earn points under one performance indicator

for project participants who have an increase in earnings of at least

$75 per week above earnings reported at project entry. This performance

level appears to be too low since the indicators also encourage

projects to focus on serving individuals who are unemployed.

The Secretary wishes to maintain an indicator or indicators that

measure increase in earnings. Is the current level for an increase of

at least $75 per week too low? Should it be raised? Should the level be

raised to an amount that would equal or exceed the average amount of

support provided through Federal income maintenance and insurance

programs (i.e., Social Security Disability Insurance program or

Supplemental Security Income program), thus encouraging projects to

assist individuals to find jobs that would allow them to leave the

beneficiary rolls?

Would a more effective approach be to measure the average

percentage increase in wages rather than a set amount increase? If so,

should there be more than one indicator to allow a differentiation

between those project participants who were unemployed at project entry

versus those individuals who had some earnings at project entry? Should

the performance level (or levels) for such an indicator or indicators

be adjusted for economic conditions in the local project area? If so,

how could those adjustments be implemented?

Individuals Who Are Unemployed

Recent polls conducted by Lou Harris and Associates have found that

almost two-thirds of the individuals with disabilities in this country

are not employed. These findings support the program's current emphasis

on placing individuals with disabilities who are unemployed. The

current indicators focus on individuals who have not worked for a

period of at least six months prior to project entry. Is this period of

sufficient length, or should the projects be encouraged through this

indicator to serve individuals with longer-term unemployment (e.g.,

individuals who have been continuously unemployed for more than 1 year)

or individuals who have never been employed?

In lieu of an indicator that measures a specific time period of

unemployment, would it be more appropriate to use the average number of

months unemployed as a measure? For example, the number of months since

each project participant was last employed could be tallied, and the

average (mean) could be computed and reported for the performance

indicator. If such an approach were used, should the indicator also

include the average number of months since an individual was enrolled

full time in school to take into consideration those individuals making

the transition from school to work?

Should New Indicators Be Developed to Address Statutory Requirements in

the Rehabilitation Act Amendments of 1992?

Career Advancement

The 1992 Amendments required grantees under the PWI program to

provide career advancement services to project participants. Should an

indicator or indicators be developed for measuring career advancement?

Would it be possible and appropriate to measure the number of project

participants who are placed in jobs that have career advancement

potential? Should the indicators measure the number of underemployed

individuals who are assisted by the PWI project to advance in

employment? If so, how could the scoring system balance such an

indicator against the indicator that focuses on placing individuals who

are unemployed? Would these indicators be at cross-purposes?

Long-Term Retention of Jobs

The 1992 Amendments require PWI projects to report on the number of

project participants who were terminated from project placements and

the duration of those placements. A clear outcome measure for the PWI

program would be that project participants maintain employment for a

longer period than the current regulatory requirement of 60 days. The

Secretary is considering the establishment of a performance indicator

related to long-term job retention for project participants beyond the

retention standard to achieve a placement under this program. What

would be an appropriate length of time for a job retention measure

following placement--six months, nine months, one year, or longer? How

can job retention be measured for those individuals placed in the

fourth and fifth years of a time-limited project?

The Secretary is particularly interested in comments on the above

issues and is also interested in

[[Page 1677]]

comments regarding any other concerns relating to the evaluation

standards and performance indicators for the PWI program.

Executive Order 12866

1. Assessment of Costs and Benefits

These proposed regulations have been reviewed in accordance with

Executive Order 12866. Under the terms of the order the Secretary has

assessed the potential costs and benefits of this regulatory action.

The potential costs associated with the proposed regulations are

those resulting from statutory requirements and those determined by the

Secretary to be necessary for administering this program effectively

and efficiently. Burdens specifically associated with information

collection requirements, if any, are identified and explained elsewhere

in this preamble under the heading Paperwork Reduction Act of 1995.

In assessing the potential costs and benefits--both quantitative

and qualitative--of these proposed regulations, the Secretary has

determined that the benefits of the proposed regulations justify the

costs. A further discussion of the potential costs and benefits of

these proposed regulations is contained in the summary at the end of

this section of the preamble.

The Secretary has also determined that this regulatory action does

not unduly interfere with State, local, and tribal governments in the

exercise of their governmental functions.

To assist the Department in complying with the specific

requirements of Executive Order 12866, the Secretary invites comment on

whether there may be further opportunities to reduce any potential

costs or increase potential benefits resulting from these proposed

regulations without impeding the effective and efficient administration

of the program.

Summary of potential benefits relative to potential costs of the

regulatory provisions discussed earlier in this preamble:

The Secretary believes the NPRM would substantially improve the PWI

program regulations and would yield substantial benefits in terms of

improved program management and accountability. As stated in the

supplementary information section of this preamble (particularly in the

sections entitled ``Overview of Proposed Changes'' and the ``Section-

By-Section Summary of Proposed Changes''), the Secretary believes the

proposed regulations better reflect the statute, reduce grantee burden

by removing unnecessary non-statutory requirements, and improve program

administration by clarifying frequently misunderstood program

requirements. The Secretary has determined that the potential benefits

of these proposed changes outweigh the potential costs to grantees. A

brief discussion of the benefits of these proposed regulations, and

cross-references to relevant portions of the Supplementary Information

section of the preamble, follow.

More Accurate Reflection of Statutory Requirements

The Secretary believes these proposed regulations better reflect

statutory intent, particularly with regard to the requirements for

partnership with industry and job training. The proposed regulations

include changes in the application content requirements (discussed in

the sections of the preamble that cover Subpart C) and selection

criteria (Sec. 379.30) in order to place more appropriate emphasis on

these features of the PWI program. These changed requirements could

entail some additional costs for applicants, in the form of additional

resources needed to prepare a grant application. However, the Secretary

believes that these costs would be more than offset by the benefit to

the PWI program--namely, the selection for funding of projects that

better reflect the requirements of the statute.

Reduction of Grantee Burden

As discussed in the ``Section-By-Section Summary'' (in particular

the part that describes the proposed Subpart C), the Secretary is

proposing to simplify and eliminate many of the existing application

requirements. These changes would reduce burden on grant applicants by

clarifying and reducing the application requirements. This reduction in

burden should more than offset the application requirements being added

by these proposed regulations.

Clarification of Program Requirements

The Secretary is proposing to add new definitions and revise

existing definitions of statutory terms in order to clarify their

meaning. These definitions are described in the part of the ``Section-

By-Section Summary'' pertaining to Sec. 379.5. For example, the

Secretary has added definitions of the terms ``career advancement

services'' and ``job training.'' The addition of these definitions may

be perceived as imposing additional costs on grantees, in that they

would establish specific requirements for previously undefined required

program activities. However, the Secretary believes these definitions

would allow for considerable grantee flexibility in project design,

while ensuring that projects fulfill the program's statutory intent. In

addition, the proposed definitions of ``placement'' and ``competitive

employment,'' which conform to the definitions being proposed for The

State Vocational Rehabilitation Services Program, would facilitate

coordination between the two programs.

As stated in the ``Overview of Proposed Changes'' section of the

preamble, in many parts of the proposed regulations the Secretary has

provided explanatory notes to clarify several program requirements that

have been misunderstood by some grantees in the past. The relevant

parts of the ``Section-By-Section Summary'' (specifically the parts

dealing with Secs. 379.3, 379.10, 379.40, and 379.54) describe the

rationale for the addition of each note. The Secretary believes these

notes will better elucidate program requirements and facilitate grantee

compliance with those requirements.

In addition, the proposed regulations replace confusing terminology

contained in the present regulations (see specifically the section of

the ``Section-By-Section Summary'' pertaining to Sec. 379.2).

2. Clarity of the Regulations

Executive Order 12866 requires each agency to write regulations

that are easy to understand.

The Secretary invites comments on how to make these proposed

regulations easier to understand, including answers to questions such

as the following: (1) Are the requirements in the proposed regulations

clearly stated? (2) Do the regulations contain technical terms or other

wording that interferes with their clarity? (3) Does the format of the

regulations (grouping and order of sections, use of headings,

paragraphing, etc.) aid or reduce their clarity? Would the regulations

be easier to understand if they were divided into more (but shorter)

sections? (A ``section'' is preceded by the symbol ``Sec. '' and a

numbered heading; for example, Sec. 379.10 What types of project

activities are required of each grantee under this program?) (4) Is the

description of the regulations in the Supplementary Information section

of this preamble helpful in understanding the regulations? How could

this description be more helpful in making the regulations easier to

understand? (5) What else could the Department do to

[[Page 1678]]

make the regulations easier to understand?

A copy of any comments that concern how the Department could make

these proposed regulations easier to understand should be sent to

Stanley M. Cohen, Regulations Quality Officer, U.S. Department of

Education, 600 Independence Avenue, S.W. (Room 5100, FB-10B),

Washington, D.C. 20202-2241.

Regulatory Flexibility Act Certification

The Secretary certifies that these proposed regulations would not

have a significant economic impact on a substantial number of small

entities.

The small entities that would be affected by these proposed

regulations are government, nonprofit, and for-profit agencies and

organizations that receive Federal funds under this program. However,

the regulations would not have a significant economic impact on these

entities because the regulations would not impose excessive regulatory

burdens or require unnecessary Federal supervision. The regulations

would impose minimal requirements to ensure the proper expenditure of

program funds.

Paperwork Reduction Act of 1995

Sections 379.20, 379.21, 379.30, 379.42, 379.43, 379.53, and 379.54

contain information collection requirements. As required by the

Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of

Education has submitted a copy of these sections to the Office of

Management and Budget (OMB) for its review.

Collection of Information: Projects With Industry

These regulations would affect the following types of entities

eligible to apply for grants under the PWI program: for-profit and

nonprofit agencies or organizations with the capacity to create and

expand job and career opportunities for individuals with disabilities,

including designated State units, labor unions, employers, community

rehabilitation program providers, trade associations, and Indian tribes

and tribal organizations. These information collection requirements

would affect applicants for new awards and organizations and entities

already receiving assistance under the PWI program.

The Department needs to collect this information in order to

fulfill statutory requirements regarding the annual evaluation report

and compliance indicators (in sections 621(b)(3) and 621(f)(2) of the

Act, respectively). In addition, the Department must collect this

information in order to ensure the selection of projects for funding

that meet the statutory requirements of the PWI program.

All information is to be collected and reported once each year,

with the exception of that which is required of applicants for new

awards in Secs. 379.21 and 379.30. These sections require responses

from every organization or entity that applies for a new award under

the program. Annual reporting and recordkeeping burden for these

information collection and reporting requirements is estimated to

average 40 hours for each response for 411 respondents (310 applicants

and 101 grantees), including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Thus, the total annual reporting and recordkeeping burden for this

collection is estimated to be 16,440 hours.

Organizations and individuals desiring to submit comments on the

information collection requirements should direct them to the Office of

Information and Regulatory Affairs, OMB, Room 10235, New Executive

Office Building, Washington, D.C. 20503; Attention: Laura Oliven.

The Department considers comments by the public on these proposed

collections of information in--

Evaluating whether the proposed collections of information

are necessary for the proper performance of the functions of the

Department, including whether the information will have practical

utility;

Evaluating the accuracy of the Department's estimate of

the burden of the proposed collections of information, including the

validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of the collection of information on

those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology; e.g., permitting

electronic submission of responses.

OMB is required to make a decision concerning the collections of

information contained in these proposed regulations between 30 and 60

days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication. This does not affect

the deadline for the public to comment to the Department on the

proposed regulations.

Intergovernmental Review

This program is subject to the requirements of Executive Order

12372 and the regulations in 34 CFR Part 79. The objective of the

Executive order is to foster an intergovernmental partnership and a

strengthened federalism by relying on processes developed by State and

local governments for coordination and review of proposed Federal

financial assistance.

In accordance with the order, this document is intended to provide

early notification of the Department's specific plans and actions for

this program.

Invitation to Comment

Interested persons are invited to submit comments and

recommendations regarding these proposed regulations.

All comments submitted in response to these proposed regulations

will be available for public inspection, during and after the comment

period, in Room 3330, Mary E. Switzer Building, 330 C Street, S.W.,

Washington, D.C., between the hours of 8:30 a.m. and 4:00 p.m., Monday

through Friday of each week except Federal holidays.

Assessment of Educational Impact

The Secretary particularly requests comments on whether the

proposed regulations in this document would require transmission of

information that is being gathered by or is available from any other

agency or authority of the United States.

List of Subjects in 34 CFR Part 379

Education, Grant programs--education, Grant programs--social

programs, Reporting and recordkeeping requirements, Vocational

rehabilitation.

(Catalog of Federal Domestic Assistance Number 84.234 Projects With

Industry.)

Dated: October 16, 1995.

Howard R. Moses,

Acting Assistant Secretary for Special Education and Rehabilitative

Services.

The Secretary proposes to amend Title 34 of the Code of Federal

Regulations by revising Part 379 to read as follows:

PART 379--PROJECTS WITH INDUSTRY

Subpart A--General

Sec.

379.1 What is the Projects With Industry program?

379.2 Who is eligible for a grant award under this program?

[[Page 1679]]

379.3 Who is eligible for services under this program?

379.4 What regulations apply?

379.5 What definitions apply?

Subpart B--What Kinds of Activities Does the Department of Education

Assist Under This Program?

379.10 What types of project activities are required of each

grantee under this program?

379.11 What additional types of project activities may be

authorized under this program?

Subpart C--How Does One Apply for an Award?

379.20 How does an eligible entity apply for an award?

379.21 What is the content of an application for an award?

Subpart D--How Does the Secretary Make a Grant?

379.30 What selection criteria does the Secretary use under this

program?

379.31 What other factors does the Secretary consider in reviewing

an application?

Subpart E--What Conditions Must Be Met by a Grantee?

379.40 What are the matching requirements?

379.41 What are allowable costs?

379.42 What are the requirements for a continuation award?

379.43 What are the additional reporting requirements?

Subpart F--What Compliance Indicator Requirements Must a Grantee Meet

To Receive Continuation Funding?

379.50 What are the compliance indicator requirements for

continuation funding?

379.51 What are the program compliance indicators?

379.52 How is grantee performance measured using the compliance

indicators?

379.53 What are the weights, minimum performance levels, and

performance ranges for each compliance indicator?

379.54 What are the reporting requirements for the compliance

indicators?

Appendix--Evaluation Standards

Authority: Sections 12(c) and 621 of the Act; 29 U.S.C. 711(c)

and 795g, unless otherwise noted.

Subpart A--General

Sec. 379.1 What is the Projects With Industry (PWI) program?

This program is designed to--

(a) Create and expand job and career opportunities for individuals

with disabilities in the competitive labor market by engaging the

talent and leadership of private industry as partners in the

rehabilitation process;

(b) Identify competitive job and career opportunities and the

skills needed to perform these jobs;

(c) Create practical settings for job readiness and job training

programs; and

(d) Provide job placements and career advancement.

(Authority: Section 621(a)(1) of the Act; 29 U.S.C. 795g(a)(1))

Sec. 379.2 Who is eligible for a grant award under this program?

(a) The Secretary may make a grant under this program to any--

(1) Community rehabilitation program provider;

(2) Designated State unit;

(3) Employer;

(4) Indian tribe or tribal organization;

(5) Labor Union;

(6) Nonprofit agency or organization;

(7) Trade association; or

(8) Other agency or organization with the capacity to create and

expand job and career opportunities for individuals with disabilities.

(b) New awards may be made only to those eligible entities

identified in paragraph (a) of this section that propose to serve

individuals with disabilities in States, portions of States, Indian

tribes, or tribal organizations that are currently unserved or

underserved by the PWI program.

(Authority: Section 621(a)(2) and 621(e)(2) of the Act; 29 U.S.C.

795g(a)(2) and 795g(e)(2))

Sec. 379.3 Who is eligible for services under this program?

(a) An individual is eligible for services under this program if

the appropriate State vocational rehabilitation unit determines the

individual to be an individual with a disability or an individual with

a severe disability, as defined in sections 7(8)(A) and 7(15)(A),

respectively, of the Act.

(b) In making the determination under paragraph (a) of this

section, the State vocational rehabilitation unit shall rely on the

determination made by the recipient of the grant under which the

services are provided, to the extent that the determination is

appropriate, available, and consistent with the requirements of the

Act.

(c) If a State vocational rehabilitation unit does not notify a

recipient of a grant within 60 days that the determination of the

recipient is inappropriate, the recipient of the grant may consider the

individual to be eligible for services.

(Authority: Section 621(a)(3) of the Act; 29 U.S.C. 795g(a)(3))

Note: Under this program, the PWI grantee makes an initial or

preliminary determination that an individual is eligible for

services because the individual meets the definition of an

``individual with a disability'' or an ``individual with a severe

disability.'' The State vocational rehabilitation unit has a maximum

of 60 days to assess the appropriateness of the preliminary

determination. If the State vocational rehabilitation unit does not

decide that the preliminary eligibility determination is

inappropriate within this time period, the eligibility determination

becomes final. If an individual has already been determined eligible

for vocational rehabilitation services under section 102(a) of the

Act and is referred by the State vocational rehabilitation unit to

the PWI, the PWI grantee can presume that the individual is an

``individual with a disability'' under section 7(8)(A) of the Act.

The State vocational rehabilitation unit should provide

documentation of that eligibility to the PWI. If the State

vocational rehabilitation unit has determined that the eligible

individual also meets the definition of an ``individual with a

severe disability'' under section 7(15)(A) of the Act, the PWI

grantee should be advised of that determination and provided

appropriate documentation of that determination.

Sec. 379.4 What regulations apply?

The following regulations apply to the Projects With Industry

program:

(a) The regulations in this part 379; and

(b) The regulations in 34 CFR part 369, except for the regulations

in Secs. 369.30 and 369.31.

(Authority: Section 621 of the Act; 29 U.S.C. 795g)

Sec. 379.5 What definitions apply?

(a) The definitions in 34 CFR part 369 apply to this program.

(b) The following definitions also apply to this program:

(1) Career advancement services mean services that develop specific

job skills beyond those required by the position currently held by an

individual with a disability to assist the individual to compete for a

promotion or achieve an advanced position in the same field.

(2) Competitive employment, as the placement outcome under this

program, means work--

(i) In the competitive labor market that is performed on a full-

time or part-time basis in an integrated setting; and

(ii) For which an individual is compensated at or above the minimum

wage, but not less than the prevailing wage for the same or similar

work in the local community performed by individuals who are not

disabled.

(3) Integrated setting, as part of the definition of competitive

employment, means a setting typically found in the community in which

individuals with disabilities have the opportunity to interact on a

regular basis with non-disabled individuals other than non-disabled

individuals who are providing services to them.

(4) Job readiness training, as used in Sec. 379.41(a), means--

[[Page 1680]]

(i) Training in job-seeking skills;

(ii) Training in the preparation of resumes or job applications;

(iii) Training in interviewing skills;

(iv) Participating in a job club; or

(v) Other related activities that may assist an individual to

secure competitive employment.

(5) Job training, as used in this part, means one or more of the

following training activities provided prior to placement, as that term

is defined in Sec. 379.5(b)(7):

(i) Occupational skills training.

(ii) On-the-job training.

(iii) Workplace training combined with related instruction.

(iv) Job skill upgrading and retraining.

(v) Training to enhance basic work skills and workplace

competencies.

(vi) On-site job coaching.

(6) Person served means an individual for whom services by a PWI

project have been initiated with the objective that those services will

result in a placement in competitive employment.

(7) Placement means the attainment of competitive employment by a

person served by a PWI project who has successfully completed training

and maintained employment for the duration of the probationary period

established by the employer for its employees or, if the employer does

not have an established probationary period, for a period of at least

90 days.

(Authority: Sections 12(c) and 621 of the Act; 29 U.S.C. 711(c) and

795g)

Subpart B--What Kinds of Activities Does the Department of

Education Assist Under This Program?

Sec. 379.10 What types of project activities are required of each

grantee under this program?

Each grantee under the PWI program shall--

(a) Provide individuals with disabilities with job training in a

realistic work setting, as appropriate to the needs of each individual

served by the project, in order to prepare them for employment and

career advancement in the competitive labor market;

(b) Provide individuals with disabilities with job placement and

career advancement services;

(c) Provide individuals with disabilities with supportive services

that are necessary to permit them to maintain the employment and career

advancement for which they have received training under this program;

(d) To the extent appropriate, provide for--

(1) The development and modification of jobs and careers to

accommodate the special needs of the individuals with disabilities

being trained and employed under this program;

(2) The purchase and distribution of rehabilitation technology to

meet the needs of individuals with disabilities at job sites; and

(3) The modification of any facilities or equipment of the employer

that are to be used by individuals with disabilities under this

program; and

(e) Provide for the establishment of Business Advisory Councils

(BAC) comprised of representatives of private industry, business

concerns, organized labor, and individuals with disabilities and their

representatives who will identify job and career availability within

the community, the skills necessary to perform those jobs and careers,

and prescribe appropriate training programs.

Note: A PWI grantee can meet the requirements of Sec. 379.10(a)

by (1) directly providing job training to project participants, (2)

by ensuring the provision of this training through arrangements with

other entities, or (3) by a combination of both (1) and (2). The job

training provided must meet the definition of job training in

Sec. 379.5(b)(5) and must be provided as appropriate to the needs of

each individual served by the project. Although each individual

served by the project may not need job training, the Secretary

expects that each PWI project will have an identifiable job training

component that is available to those individuals who need it. In

order to meet the requirements of Sec. 379.10(a), the job training

must be provided while the individual is participating in the

project. Therefore, post-employment training provided by an employer

after placement by the PWI project, as defined in Sec. 379.5(b)(7),

would not meet this requirement. In addition, a project that

provides only job readiness training, as defined in

Sec. 379.5(b)(4), would not meet the requirements of Sec. 379.10(a).

(Authority: Section 621(a) of the Act; 29 U.S.C. 795g)

Sec. 379.11 What additional types of project activities may be

authorized under this program?

The Secretary may include, as part of grant agreements with

recipients under this program, authority for recipients to provide the

following types of technical assistance:

(a) Assisting employers in hiring individuals with disabilities.

(b) Improving or developing relationships between grant recipients

or prospective grant recipients and employers or organized labor.

(c) Assisting employers in understanding and meeting the

requirements of the Americans with Disabilities Act of 1990 (42 U.S.C.

12101 et seq.) as that Act relates to employment of individuals with

disabilities.

(Authority: Section 621(a) of the Act; 29 U.S.C. 795g)

Subpart C--How Does One Apply for an Award?

Sec. 379.20 How does an eligible entity apply for an award?

In order to apply for a grant, an eligible entity shall submit an

application to the Secretary in response to an application notice

published in the Federal Register.

(Authority: Section 621(e)(1)(B) of the Act; 29 U.S.C.

795g(e)(1)(B))

Sec. 379.21 What is the content of an application for an award?

(a) The grant application must include a description of--

(1) The proposed job training to prepare project participants for

specific jobs in the competitive labor market for which there is a need

in the geographic area to be served by the project, as identified by an

existing current labor market analysis or other needs assessment

conducted by the applicant in collaboration with private industry;

(2) The involvement of private industry in the design of the

proposed project and the manner in which the project will collaborate

with private industry in planning, implementing, and evaluating job

training, job placement, and career advancement activities;

(3) The responsibilities of the BAC and how it will interact with

the project in carrying out grant activities;

(4) The geographic area to be served by the project, including an

explanation of how the area is currently unserved or underserved by the

PWI program;

(5) A plan for evaluating annually the operation of the proposed

project, which, at a minimum, provides for collecting and submitting to

the Secretary the following information and any additional data needed

to determine compliance with the program compliance indicators

established in Subpart F:

(i) The numbers and types of individuals with disabilities served.

(ii) The types of services provided.

(iii) The sources of funding.

(iv) The percentage of resources committed to each type of service

provided.

(v) The extent to which the employment status and earning power of

individuals with disabilities changed following services.

(vi) The extent of capacity building activities, including

collaboration with business and industry and other organizations,

agencies, and institutions.

[[Page 1681]]

(vii) A comparison, if appropriate, of activities in prior years

with activities in the most recent year.

(viii) The number of project participants who were terminated from

project placements and the duration of those placements; and

(6) A description of the manner in which the project will address

the needs of individuals with disabilities from minority backgrounds,

as required by 34 CFR 369.21.

(b) The grant application must also include assurances from the

applicant that--

(1) The project will carry out all activities required in

Sec. 379.10;

(2) Individuals with disabilities who are placed by the project

will receive compensation at or above the minimum wage, but no less

than the prevailing wage for the same or similar work performed in the

local community by individuals who are not disabled;

(3) Individuals with disabilities who are placed by the project

will be given terms and benefits of employment equal to those that are

given to similarly situated co-workers and will not be segregated from

their co-workers; and

(4) The project will maintain any records required by the Secretary

and make those records available for monitoring and audit purposes.

(Authority: Sections 621(a)(4), 621(a)(5), 621(b), and 621(e)(1)(B)

of the Act; 29 U.S.C. 795g(a)(4), 795g(a)(5), 795g(b), and

795g(e)(1)(B))

Subpart D--How Does the Secretary Make a Grant?

Sec. 379.30 What selection criteria does the Secretary use under this

program?

The Secretary uses the following criteria to evaluate an

application:

(a) Extent of need for project (20 points). The Secretary reviews

each application to determine the extent to which the project meets

demonstrated needs. The Secretary looks for evidence that--

(1) The applicant has described an existing current labor market

analysis, or has performed in collaboration with private industry a

needs assessment, for the geographic area to be served that shows a

demand in the competitive labor market for the types of jobs for which

project participants will be trained; and

(2) The job training to be provided meets the identified needs of a

specific industry or industries in the geographic area to be served by

the project.

(b) Partnership with industry (25 points). The Secretary looks for

information that demonstrates--

(1) The extent of the project's collaboration with private industry

in the planning, implementation, and evaluation of job training,

placement, and career advancement activities; and

(2) The extent of participation of the BAC in the identification of

job and career opportunities, the skills necessary to perform the jobs

and careers identified, and the development of training programs

designed to develop these skills.

(c) Project design and plan of operation for achieving competitive

employment outcomes (25 points). The Secretary reviews each application

to determine--

(1) The extent to which the project goals and objectives for

achieving competitive employment outcomes for individuals with

disabilities to be served by the project are clearly stated and meet

the needs identified by the applicant and the purposes of the program;

(2) The extent to which the project provides for all services and

activities required under Sec. 379.10;

(3) The feasibility of proposed strategies and methods for

achieving project goals and objectives for competitive employment

outcomes for project participants;

(4) The extent to which project activities will be coordinated with

the State vocational rehabilitation unit and with other appropriate

community resources in order to ensure an adequate number of referrals

and a maximum use of comparable benefits and services;

(5) The extent to which the applicant's management plan will ensure

proper and efficient administration of the project; and

(6) Whether the applicant has proposed a realistic timeline for the

implementation of project activities to ensure timely accomplishment of

proposed goals and objectives to achieve competitive employment

outcomes for individuals with disabilities to be served by the project.

(d) Adequacy of resources and quality of key personnel (10 points).

The Secretary reviews each application to determine--

(1) The adequacy of the resources (including facilities, equipment,

and supplies) that the applicant plans to devote to the project;

(2) The quality of key personnel that will be involved in the

project, including--

(i) The qualifications of the project director;

(ii) The qualifications of each of the other key personnel to be

used in the project; and

(iii) The experience and training of key personnel in fields

related to the objectives and activities of the project; and

(3) The way the applicant plans to use its resources and personnel

to achieve the project's goals and objectives, including the time that

key personnel will commit to the project.

(e) Budget and cost effectiveness (10 points). The Secretary

reviews each application to determine the extent to which--

(1) The budget is adequate to support the project; and

(2) Costs are reasonable in relation to the objectives of the

project.

(f) Project evaluation (10 points). The Secretary reviews each

application to determine the quality of the proposed evaluation plan

with respect to--

(1) Evaluating project operations and outcomes;

(2) Involving the BAC in evaluating the project's job training,

placement, and career advancement activities;

(3) Meeting the annual evaluation reporting requirements in

Sec. 379.21(a)(7);

(4) Determining compliance with the indicators; and

(5) Addressing any deficiencies identified through project

evaluation.

(Authority: Sections 12(c) and 621 of the Act; 29 U.S.C. 711(c) and

795g)

Sec. 379.31 What other factors does the Secretary consider in

reviewing an application?

In addition to the selection criteria in Sec. 379.30, the

Secretary, in making awards under this program, considers--

(a) The equitable distribution of projects among the States; and

(b) The past performance of the applicant in carrying out a similar

PWI project under previously awarded grants, as indicated by factors

such as compliance with grant conditions, soundness of programmatic and

financial management practices, and meeting the requirements of Subpart

F.

(Authority: Sections 621(e)(2) and 621(f)(4) of the Act; 29 U.S.C.

795g(e)(2) and 795g(f)(4))

Subpart E--What Conditions Must Be Met by a Grantee?

Sec. 379.40 What are the matching requirements?

The Federal share may not be more than 80 percent of the total cost

of a project under this program.

(Authority: Section 621(c) of the Act; 29 U.S.C. 795g(c))

Note: (a) For example, if the total cost of a project is

$500,000, the Federal share would be no more than $400,000 and the

grantee's required minimum share (matching contribution) would be

$100,000 (provided in cash or through third party in-kind

contributions). The matching contribution is

[[Page 1682]]

based upon the total cost of the project, not on the amount of the

Federal grant award.

(b) The matching contribution must comply with the requirements

of 34 CFR 74.23 (for grantees that are institutions of higher

education, hospitals, or other nonprofit organizations) or 34 CFR

80.24 (for grantees that are State, local, or Indian tribal

governments). The term ``third party in-kind contributions'' is

defined in either 34 CFR 74.2 or 34 CFR 80.3, as applicable to the

type of grantee.

Sec. 379.41 What are allowable costs?

In addition to those costs that are allowable in accordance with 34

CFR 74.27 and 34 CFR 80.22, the following items are allowable costs

under this program:

(a) The costs of job readiness training, as defined in

Sec. 379.5(b)(4); job training, as defined in Sec. 379.5(b)(5); job

placement services; and related vocational rehabilitation services and

supportive rehabilitation services.

(b) Instruction and supervision of trainees.

(c) Training materials and supplies, including consumable

materials.

(d) Instructional aids.

(e) The purchase or modification of rehabilitation technology to

meet the needs of individuals with disabilities.

(f) Alteration and renovation appropriate and necessary to ensure

access to and use of buildings by persons with disabilities served by

the project.

(Authority: Sections 12(c) and 621 of the Act; 29 U.S.C. 711(c) and

795g))

Sec. 379.42 What are the requirements for a continuation award?

(a) A grantee that wants to receive a continuation award must--

(1) Comply with the provisions of 34 CFR 75.253(a), including

making substantial progress toward meeting the objectives in its

approved application and submitting all performance and financial

reports required by 34 CFR 75.118; and

(2) Submit data in accordance with Sec. 379.54 showing that it has

met the program compliance indicators established in Subpart F.

(b) In addition to the requirements in paragraph (a) of this

section, the following other conditions in 34 CFR 75.253(a) must be met

before the Secretary can make a continuation award:

(1) Congress must appropriate sufficient funds under the program.

(2) Continuation of the project must be in the best interest of the

Federal Government.

(Authority: Sections 12(c) and 621(f)(4) of the Act; 29 U.S.C.

711(c) and 795g(f)(4))

Sec. 379.43 What are the additional reporting requirements?

Each grantee shall submit the data from its annual evaluation of

project operations required under Sec. 379.21(a)(5) no later than 60

days after the end of each project year, unless the Secretary

authorizes a later submission date.

(Authority: Sections 12(c) and 621 of the Act; 29 U.S.C. 711(c) and

795g)

Subpart F--What Compliance Indicator Requirements Must a Grantee

Meet to Receive Continuation Funding?

Sec. 379.50 What are the compliance indicator requirements for

continuation funding?

In order to receive a continuation award for the third or any

subsequent year of a PWI grant, a grantee must receive a minimum

composite score of at least 70 points on the program compliance

indicators contained in Sec. 379.53.

(Authority: Section 621(f)(4) of the Act; 29 U.S.C. 795g(f)(4))

Sec. 379.51 What are the program compliance indicators?

The program compliance indicators implement program evaluation

standards, which are contained in an appendix to this part, by

establishing minimum performance levels and performance ranges in

essential project areas to measure the effectiveness of individual

grantees.

(Authority: Sections 621(d)(1) and 621(f)(1) of the Act; 29 U.S.C.

795g(d)(1) and 795g(f)(1))

Sec. 379.52 How is grantee performance measured using the compliance

indicators?

(a) Each compliance indicator establishes a minimum performance

level.

(b) Each compliance indicator also establishes three performance

ranges with points assigned to each range. The higher the performance

range, the greater the number of points assigned to that range.

(c) If a grantee does not achieve the minimum performance level for

a compliance indicator, the grantee receives no points.

(d) If a grantee achieves or exceeds the minimum performance level,

the grantee receives the points assigned to the particular performance

range that corresponds to its actual level of performance.

(e) The maximum possible composite score that a grantee can receive

is 150 points.

(f) A grantee must receive a composite score of at least 70 points

to meet the evaluation standards and to qualify for continuation

funding.

(Authority: Section 621(f)(4) of the Act; 29 U.S.C. 795g(f)(4))

Sec. 379.53 What are the weights, minimum performance levels, and

performance ranges for each compliance indicator?

(a) Percent of persons served whose disabilities are severe. (3-10

points) A minimum of 50 percent of persons served by the project are

persons who have severe disabilities. The performance ranges and the

points assigned to each range are as follows:

(1) 50 percent to 59 percent--3 points.

(2) 60 percent to 75 percent--7 points.

(3) 76 percent or more--10 points.

(b) Percent of persons served who have been unemployed for at least

six months at the time of project entry. (5-15 points) A minimum of 50

percent of persons served by the project have been unemployed for at

least six months at the time of project entry. The performance ranges

and the points assigned to each range are as follows:

(1) 50 percent to 59 percent--5 points.

(2) 60 percent to 75 percent--10 points.

(3) 76 percent or more--15 points.

(c) Cost per placement. (8-25 points) The average cost per

placement of persons served by the project does not exceed $2400.00.

The performance ranges and the points assigned to each range are as

follows:

(1) $2001 to $2400--8 points.

(2) $1601 to $2000--17 points.

(3) Less than $1600--25 points.

(d) Projected cost per placement. (5-15 points) The actual average

cost per placement of persons served by the project does not exceed 140

percent of the projected average cost per placement in the grantee's

application. The performance ranges and the points assigned to each

range are as follows:

(1) 126 percent to 140 percent--5 points.

(2) 111 percent to 125 percent--10 points.

(3) 110 percent or less--15 points.

(e) Placement rate. (8-25 points) A minimum of 40 percent of

persons served by the project are placed in competitive employment. The

performance ranges and the points assigned to each range are as

follows:

(1) 40 percent to 49 percent--8 points.

(2) 50 percent to 69 percent--17 points.

(3) 70 percent or more--25 points.

(f) Projected placement rate. (5-15 points) The actual number of

persons served by the project who are placed into competitive

employment is at least 50 percent of the number of persons that the

grantee, in the grant application, projected would be placed. The

performance ranges and the points assigned to each range are as

follows:

[[Page 1683]]

(1) 50 percent to 74 percent--5 points.

(2) 75 percent to 94 percent--10 points.

(3) 95 percent or more--15 points.

(g) Change in earnings. (7-20 points) The earnings of persons

served by the project who are placed into competitive employment have

increased by an average of at least $75.00 a week over earnings at

project entry. The performance ranges and the points assigned to each

range are as follows:

(1) $75 to $124--7 points.

(2) $125 to $199--14 points.

(3) $200 or more--20 points.

(h) Percent placed who have severe disabilities. (3-10 points) At

least 50 percent of persons served by the project who are placed into

competitive employment are persons who have severe disabilities. The

performance ranges and the points assigned to each range are as

follows:

(1) 50 percent to 59 percent--3 points.

(2) 60 percent to 75 percent--7 points.

(3) 76 percent or more--10 points.

(i) Percent unemployed placed. (5-15 points) At least 50 percent of

persons served by the project who are placed into competitive

employment are persons who were unemployed for at least six months at

the time of project entry. The performance ranges and the points

assigned to each range are as follows:

(1) 50 percent to 59 percent--5 points.

(2) 60 percent to 75 percent--10 points.

(3) 76 percent or more--15 points.

(j) Summary chart of weights and performance ranges. The following

composite chart shows the weights assigned to the performance ranges

for each compliance indicator.

------------------------------------------------------------------------

Performance

ranges--

Indicator --------------

(1) (2) (3)

------------------------------------------------------------------------

Persons with severe disabilities served.................. 3 7 10

Unemployed served........................................ 5 10 15

Cost per placement....................................... 8 17 25

Projected cost per placement............................. 5 10 15

Placement rate........................................... 8 17 25

Projected placement rate................................. 5 10 15

Change in earnings....................................... 7 14 20

Percent placed who have severe disabilities.............. 3 7 10

Percent unemployed placed................................ 5 10 15

--------------

Total possible score................................ 49 102 150

------------------------------------------------------------------------

(Authority: Section 621(f)(1) of the Act; 29 U.S.C. 795g(f)(1))

Sec. 379.54 What are the reporting requirements for the compliance

indicators?

(a) In order to receive continuation funding for the third or any

subsequent year of a PWI grant, each grantee must submit data for the

most recent complete project year no later than 60 days after the end

of that project year, unless the Secretary authorizes a later

submission date, in order for the Secretary to determine if the grantee

has met the program compliance indicators established in Subpart F.

(b) If the data for the most recent complete project year provided

under paragraph (a) of this section shows that a grantee has failed to

achieve the minimum composite score required in Sec. 379.52(f) to meet

the program compliance indicators, the grantee may, at its option,

submit data from the first 6 months of the current project year no

later than 60 days after the end of that 6-month period, unless the

Secretary authorizes a later submission date, to demonstrate that its

project performance has improved sufficiently to meet the minimum

composite score.

(Authority: Section 621(f)(2) of the Act; 29 U.S.C. 795g(f)(2))

Note: A grantee receives its second year of funding (or the

first continuation award) under this program before data from the

first complete project year is available. Data from the first

project year, however, must be submitted and is used (unless the

grantee exercises the option in paragraph (b) of this section) to

determine eligibility for the third year of funding (or the second

continuation award).

Appendix--Evaluation Standards

Standard 1: The primary objective of the project shall be to

assist individuals with disabilities to obtain competitive

employment. The activities carried out by the project shall support

the accomplishment of this objective.

Standard 2: The project shall serve individuals with

disabilities that impair their capacity to obtain competitive

employment. In selecting persons to receive services, priority shall

be given to individuals with severe disabilities.

Standard 3: The project shall ensure the provision of services

that will assist in the placement of persons with disabilities.

Standard 4: Funds shall be used to achieve the project's primary

objective at minimum cost to the Federal Government.

Standard 5: The project's advisory council shall provide policy

guidance and assistance in the conduct of the project.

Standard 6: Working relationships, including partnerships, shall

be established with agencies and organizations in order to expand

the project's capacity to meet its objectives.

Standard 7: The project shall obtain positive results in

assisting individuals with disabilities to obtain competitive

employment.

[FR Doc. 96-660 Filed 1-19-96; 8:45 am]

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