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paragraph (1), the Secretary shall provide 
technical assistance and require such 
grantee to submit a corrective action plan 
not later than 160 days after the end of 
the program year. 
‘‘(ii) CONTENT.—The plan submitted 
under subparagraph (A) shall detail the 
steps the grantee will take to meet the na-
tional performance measures in the next 
program year. 
‘‘(2) STATE GRANTEES.— 
‘‘(A) IN
GENERAL.—Not later than 120 
days after the end of the program year, the 
Secretary shall determine if a State grantee al-
lotted funds under section 506(e) has met the 
expected levels of performance established 
under subsection (a)(2)(C) (including any ad-
justments to such levels made in accordance 
with to subsection (a)(2)(D)) for the core indi-
cators of performance described in subsection 
(b)(1). 
‘‘(B) TECHNICAL
ASSISTANCE
AND
COR-
RECTIVE
ACTION
PLAN.—If a State fails to 
meet the levels of performance described in sub-
paragraph (A), the Secretary shall provide tech-
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nical assistance and require the State to submit 
a corrective action plan not later than 160 days 
after the end of the program year. 
‘‘(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 THE THIRD YEAR.—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 
determination that the State has not met the 
performance measures. 
‘‘SEC. 514. COMPETITIVE REQUIREMENTS RELATING TO 
GRANT AWARDS. 
‘‘(a) PROGRAM AUTHORIZED.— 
‘‘(1) INITIAL
APPROVAL
OF
GRANT
APPLICA-
TIONS.—From the funds available for national 
grants under section 506(d), the Secretary shall 
award grants to eligible applicants to carry out 
projects under this title for a period of 3 years 
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through a competitive process except as provided in 
paragraph (2). 
‘‘(2) CONTINUATION OF APPROVAL BASED ON 
PERFORMANCE.—If the recipient of a grant made 
under paragraph (1) satisfies the requirements of 
section 513 during such 3-year period (and the suc-
ceeding 1-year period for which any grant is made 
under this paragraph) with respect to a project, the 
Secretary may award grants to such recipient to 
continue such project beyond such 3-year period for 
not to exceed 2 successive 1-year periods without re-
gard to such process. 
‘‘(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. 
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‘‘(2) The applicant’s ability to administer a pro-
gram that provides employment for eligible individ-
uals in the communities in which such individuals 
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. 
‘‘(4) The applicant’s prior performance, if any, 
in meeting performance measures under this title 
and under other Federal or State programs. 
‘‘(5) The applicant’s ability to move individuals 
with multiple barriers to employment into unsub-
sidized employment. 
‘‘(6) The applicant’s ability to coordinate with 
other organizations at the State and local level. 
‘‘(7) The applicant’s plan for fiscal manage-
ment of the program to be administered with funds 
received under this section. 
‘‘(8) 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 
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available records to assess the applicant’s overall re-
sponsibility to administer Federal funds. 
‘‘(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 
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