A piggyback clause allows one government agency or public housing authority (PHA) to utilize the terms, pricing, and vendors of a contract already competitively awarded by another agency. This clause supports intergovernmental cooperative purchasing, which is widely used across the public sector to streamline procurement and reduce administrative burden. HUD permits cooperative purchasing, including piggybacking, under certain conditions as outlined in:
- 2 CFR § 200.318(e): Requires procurement practices to ensure full and open competition while complying with federal, state, and local laws.
- HUD Procurement Handbook 7460.8 REV-2, Section 14.5: Provides specific guidelines for cooperative purchasing and piggybacking.
Key stipulations include:
- The original contract must be competitively procured
- The contract must explicitly allow piggybacking
- Local and state laws must permit such an arrangement
- The PHA must document cost reasonableness and obtain any necessary board approvals
- Legal review is recommended for high-value or complex piggybacking decisions
Advantages of Cooperative Purchasing
HUD’s Office of Public and Indian Housing (PIH) recognition of intergovernmental cooperative purchasing agreements allows for a publicly awarded RFQ/RFP by one Public Housing Authority (PHA) to be used by another PHA for a similar service. This is especially helpful with technical and specialized services such as those involving environmental compliance or property repositioning. Advantages of piggybacking onto existing and qualified PHA contracts are:
- Cost savings from bulk purchasing and eliminating redundant procurement expenses
- Faster acquisition of services by adopting existing contracts, bypassing lengthy RFP processes
- Resource efficiency, where smaller PHAs benefit from larger agencies’ procurement expertise
- Enables PHAs to work with pre-approved vendors with proven track records
- Streamlined vendor management and operational consistency
- Open conversation and strategic decision-making by all applicable stakeholders
Cooperative Purchasing and RAD (Rental Assistance Demonstration)
HUD’s Rental Assistance Demonstration (RAD) program allows PHAs to convert their public housing properties to Section 8-based rental assistance, enabling access to private capital and long-term sustainability. This process requires precise planning, documentation, and compliance with HUD guidelines. However, the necessary expertise to support the highly regulatory needs and pathway for
both RAD and SAC transactions is often difficult to find and even harder to trust. In this context, cooperative purchasing and piggybacking can ensure compliance with RAD milestones and timelines through expedited procurement of essential technical services, such as:
- Environmental Reviews (Part 50 or Part 58) and Capital Needs Assessments (CNAs)
- Energy audits, green building and sustainability planning, and Utility Allowance Calculations.
- Special Applications Center (SAC) demolition/disposition applications under Section 18.
- Coordination with RAD teams on blended strategies like RAD/Section 18 combos.
- Relocation planning and tenant coordination.
- Oversight of property removals from the public housing inventory.
Understanding allowable expenses thresholds – Micro, small, and large purchases
Some PHAs have preset spending thresholds that allow for purchases below specified amounts. Typically, micro-purchases are less than $10,000 and allow for flexibility and efficiency in contracting services. In many cases, a Capital Needs Assessment, Environmental Assessment, or Energy Study can be procured for less than the micro-purchase limit. Additionally, hourly consulting and repositioning evaluations are also services that can be procured without issuing a formal RFP.
Small purchases typically range from expenses above $10,000 up to $250,000 and typically require three qualified bids. Large purchases exceed $250,000 and are often outlined in a PHA’s 5-year capital fund plan. “Small” purchases are ideal for piggybacking.
By utilizing micro-purchases to initiate the repositioning process, PHAs can ensure a reasonable and efficient beginning to the evaluation and decision-making process.
How D3G Supports RAD and Cooperative Procurement
Dominion Due Diligence Group (D3G) provides industry-leading expertise across all phases of public housing redevelopment, RAD conversions, SAC involvement and repositioning. D3G facilitates PHAs, developers, non-profits, housing agencies and public-private partnerships (PPP or P3s) by:
- Supporting PHAs in strategic planning, financing, and timeline alignment to meet RAD, SAC, and Restore-Rebuild conversion opportunities.
- Delivering RAD-critical services, including Environmental Reviews, Capital Needs, Assessments, utility benchmarking, building code compliance, and energy modeling.
- Providing liaison services for Clients directly to HUD’s Office of Recapitalization or the Special Application Center (SAC) within PIH.
- Preparing documentation required by the RAD Resource Desk, SAC applications, and HUD field offices.
- Reviewing existing contracts to evaluate piggyback eligibility and HUD compliance.
Conclusion
D3G has been instrumental in HUD’s Rental Assistance Demonstration (RAD) since its inception more than a decade ago, and for more than 30 years, we have worked with HUD housing programs. Our Founder and CEO, Robert Hazelton, is well-regarded in the affordable housing industry for his innovation and passion in neighborhood revitalization efforts. Over the years, we have found that “piggybacking” and the use of HUD’s cooperative purchasing agreements can be powerful tools for PHAs navigating complex redevelopment timelines. When executed properly, cooperative purchasing agreements save time, reduce costs, and streamline procurement.
D3G offers the technical knowledge, the HUD expertise, and the contract support to support PHAs in their successful, compliant outcomes under RAD and other repositioning strategies. Let us help with your Agency’s portfolio repositioning plans!
