‘‘(C) CONTENT.—The plan described in 
subparagraph (B) shall detail the steps the 
State will take to meet the standards. 
‘‘(D) FAILURE
TO
MEET
PERFORMANCE 
MEASURES FOR SECOND AND THIRD YEARS.— 
‘‘(i) AFTER SECOND YEAR OF FAIL-
URE.—If a State fails to meet the levels of 
performance described in subparagraph 
(A) for a second consecutive program year, 
the Secretary shall provide for the conduct 
by the State of a competition to award, for 
the first full program year following the 
determination (minimizing, to the extent 
possible, the disruption of services provided 
to participants), an amount equal to 25 
percent of the funds available to the State 
for such year. 
‘‘(ii) AFTER
THIRD
YEAR
OF
FAIL-
URE.—If the State fails to meet the levels 
of performance described in subparagraph 
(A) for a third consecutive program year, 
the Secretary shall provide for the conduct 
by the State of a competition to award the 
funds allocated to the State for the first 
full program year following the Secretary’s 
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determination that the State has not met 
the performance measures. 
‘‘SEC. 514. COMPETITIVE REQUIREMENTS RELATING TO 
GRANT AWARDS. 
‘‘(a) PROGRAM AUTHORIZED.—From the funds avail-
able for national grants under section 506(d), the Sec-
retary shall award grants to eligible applicants to carry 
out projects under this title through a competitive process 
that is conducted at least once every 3 years. 
‘‘(b) ELIGIBLE APPLICANTS.—An applicant shall be 
eligible to receive a grant under subsection (a) in accord-
ance with section 502(b)(1), and subsections (c) and (d). 
‘‘(c) CRITERIA.—The Secretary shall select the eligi-
ble applicants to receive grants under subsection (a) based 
on the following: 
‘‘(1) The applicant’s ability to administer a pro-
gram that serves the greatest number of eligible in-
dividuals, giving particular consideration to individ-
uals with greatest economic need, greatest social 
need, poor employment history or prospects, and 
over the age of 65. 
‘‘(2) The applicant’s ability to administer a pro-
gram that provides employment for eligible individ-
uals in the communities in which such individuals 
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reside, or in nearby communities, that will con-
tribute to the general welfare of the community. 
‘‘(3) The applicant’s ability to administer a pro-
gram that moves eligible individuals into unsub-
sidized employment, and the prior performance of 
the applicant, if any, in meeting performance meas-
ures under this title and under other Federal or 
State programs. 
‘‘(4) The applicant’s ability to move individuals 
with multiple barriers to employment into unsub-
sidized employment. 
‘‘(5) The applicant’s ability to coordinate with 
other organizations at the State and local level. 
‘‘(6) The applicant’s plan for fiscal manage-
ment of the program to be administered with funds 
received under this section. 
‘‘(7) Any additional criteria that the Secretary 
considers to be appropriate in order to minimize dis-
ruption for current participants. 
‘‘(d) RESPONSIBILITY TESTS.— 
‘‘(1) IN GENERAL.—Before final selection of a 
grantee, the Secretary shall conduct a review of 
available records to assess the applicant’s overall re-
sponsibility to administer Federal funds. 
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‘‘(2) REVIEW.—As part of the review described 
in paragraph (1), the Secretary may consider any in-
formation, including the organization’s history with 
regard to the management of other grants. 
‘‘(3) FAILURE TO SATISFY TEST.—The failure 
to satisfy any 1 responsibility test that is listed in 
paragraph (4), excluding those listed in subpara-
graphs (A) and (B), does not establish that the or-
ganization is not responsible unless such failure is 
substantial or persists for 2 or more consecutive 
years. 
‘‘(4) TEST.—The responsibility tests include re-
view of the following factors: 
‘‘(A) Unsuccessful efforts by the organiza-
tion to recover debts, after 3 demand letters 
have been sent, that are established by final 
agency action, or a failure to comply with an 
approved repayment plan. 
‘‘(B) Established fraud or criminal activity 
of a significant nature within the organization. 
‘‘(C) Serious administrative deficiencies 
identified by the Secretary, such as failure to 
maintain a financial management system as re-
quired by Federal rules or regulations. 
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