1.     PURPOSE: To announce plans for private sector projects under Section 502(e) of the OAA in the amount of $1million.  This opportunity is limited to selected current SCSEP grantees.

2.      REFERENCES: Older Worker Bulletins No. 94-12, No. 97-7, No. 98-15, No. 00-13 and No. 01- 8.

3.      BACKGROUND: Section 502(e)(1) of the OAA Amendments of 2000 authorizes the Department to conduct projects that provide SCSEP participants with second career training and placement opportunities with private business concerns. Such projects can facilitate the achievement of economic self-sufficiency for SCSEP participants.

In addition, Section 502(e) provides grantees and sub-grantees with opportunities to initiate or enhance their relationships with the private sector, foster collaboration with the One-Stop Delivery System, improve their ability to meet and exceed performance standards, and broaden the range of options available to SCSEP participants, including new work arrangements such as flex-time, job sharing, and other arrangements relating to reduced physical exertion. 

Section 502(e) projects can be effective tools to move participants into unsubsidized employment.  These projects may assist SCSEP grantees to become more active partners in the One-Stop System by having another resource to offer employers and applicants.  Further, OAA Section 502(e) projects may be the best vehicle for obtaining job placements in the private for-profit sector, where wages and fringe benefits often exceed those in the public or non-profit sectors.  The private sector, particularly the private for-profit sector, should be involved in the development and implementation of each project.

OAA Title V funds, in the amount of $1 million, are available for obligation and expenditure for 502(e) projects in Program Year (PY) 2003.

4.        ACTION: Funds for the 502(e) projects must be obligated by September 30,         2003. Because of time and resource limitations, the following procedures have         been instituted on a one-time basis:

• The available $1,000,000 has been divided into two accounts a.) $725,000 for national grantees and b) $275,000 for a selected group of 11 State grantees.
• Each national grantee is eligible for an award of $ 55,000.  Each selected State grantees is eligible for an award of $25,000.
• The State grantees selected as potential recipients of an award are those who, for program year 2001, either fell slightly short of the minimum unsubsidized placement goal of 20 percent or marginally exceeded it. ETA identified these states as those where 502 (e) resources may have a significant impact on their capacity to develop private sector placement opportunities and positively influence the attainment of their unsubsidized placement goal. These States are Missouri, Michigan, Kentucky, Indiana, New Mexico, Rhode Island, Maryland, Arkansas, Hawaii, Minnesota and North Carolina.
• Both the national grantees and the selected States grantees must notify the Division of Older Worker Programs, in writing, of their intention to accept or reject the award by September 12, 2003.  The written acceptance must be accompanied by a completed SF 424, Application for Federal Assistance.  These documents should transmitted together by overnight mail.
• Should an organization decline an award the funds shall be distributed among the remaining eligible grantees. 
• Final funding is contingent upon submission of an acceptable project plan. This plan must be submitted by October 10, 2003
• The plan is subject to negotiation including content and performance levels.

5.      SECTION 502(e) PROJECT PLAN  OUTLINE:Applicants must prepare their plan using the following outline.   

a. Target Populations.  Describe the participant and employer populations to be targeted.  Include such information as:

• Where are they located?
• Are the locations rural, urban, or suburban?
•  What are the recent poverty and unemployment rates for those areas?
• What are the expected participants' skill and education levels?
• What barriers to employment, if any, do your expected participants face, including those who are minorities, have limited English proficiency or disabilities, or are Indian-eligible individuals?
• What additional services will the project provide to assist those with barriers to employment? 
• b. Service Strategy, Benefits to Participants. Describe the service strategy you propose to meet the needs of participants you plan to serve by indicating:
•   How will participants benefit from participation in the Section 502(e) program?
•   How will you recruit and select participants?
•   How will your service strategy prepare participants for the skills and positions employers require?
•   How do you propose to match participants' skills and interests with employers?
•   How will you ensure that participants have the support they need to stay in their positions (transportation and dependent care assistance, other supportive services)?
•   What is the expected average wage at placement? 
• c. Service Strategy, Benefits to Employers.  The Project Plan should provide an indication of the benefits to employers and the service strategy that will prepare participants to succeed in unsubsidized jobs.  The plan should answer the following questions:
•   How will employers benefit from participation in the Section 502(e) program?
•   What employer needs will be addressed?
•   How will the service strategy prepare participants for the skills and positions employers require?
• Successful applicants for Section 502(e) projects generally have expected entered employment rates (EER) of 75 percent and above.  The plan should indicate:
•   The project's expected EER (The EER is calculated by dividing the number of participants placed in unsubsidized jobs by the total number of Section 502(e) project participants.)
•   What is The expected retention rate 6 months after placement
•   How will you recruit and select employers for participation in the program?  Describe the steps you will take to ensure your program is meeting the needs of the employers you are serving.
•   How employers have been or will be involved in designing your Section 502(e) program and which employers or employer associations will be involved in the program? 
• d. Cost Considerations.
• Project plans should address the following:
•   What is the expected cost per placement (the total Federal cost of the project divided by the number of participants placed)?
•   Are additional non-Federal resources provided, such as donations or contributions from the private sector?
•   Describe how the project will coordinate with the WIA's adult and dislocated worker services and participate in the One-Stop system in the project's service area.
•   Does the applicant coordinate with a Workforce Investment Act (WIA) partner?
•   Does this increase the value and quality of services offered to the participants?
•   To what extent are there firm commitments through any partner, which would result in lower costs and/or increase the quality of the training?

The budget should include the Federal share of funds allocated among the following categories:

Administration:  This category includes the cost of providing adequate management of the project. 

Enrollee Wages and Fringe Benefits (EWFB):  This category includes the cost of wages and fringe benefits connected with work experience, or stipends to attend classroom or other special training.  The narrative should identify:

  Number of slots,

  Expected number of participants to move through the slots,

  Hours of training per enrollee, and

  Anticipated cost per enrollee for training leading to unsubsidized placement.

(NOTE:  Reimbursement to employers for the costs of on-the-job training should be charged to the EWFB cost category). 

Other Enrollee Costs:  This category includes the costs of providing training, counseling and supportive services. 

A budget form SF 424 A (Sections A and B only) should be completed for the project.  Budgets should include a detailed cost breakout in the same format as used in the regular SCSEP grants.

e. Administration/Ability to Implement Project Quickly.  Briefly describe how the project will be administered, including the staff structure, lines of authority, and potential sub-grantees, if any.   

Applicants must discuss the strategy for project implementation. Provide a timeline for implementation that includes how many days after award it will take recruit participants,  provide training to participants, place participants in assignments, and any other major steps, using the service strategy (Criteria b and c) as a guide.  Project implementation must begin within one month after funding.

f. Emphasis on New Work Arrangements.  Describe the steps that will be taken in response to Section 502(e) (2) (A) that the stipulates that projects involve second career training, innovative work arrangements such as flex-time, job sharing, flexi-place, and reduced physical activity. 

6. SCHEDULE: 

Those grantees accepting the opportunity to conduct a project must advise the Department by September 12, 2003.  Acceptance should be in writing and include a completed SF 424, Application for Assistance.

By October 10, 2003, send by over night mail,the completed and signed project plan with two copies to:

U.S. Department of Labor - ETA

Division of Federal Assistance

ATTN:  Lorraine Saunders

200 Constitution Avenue NW, Room S-4203

Washington D.C. 20210

10.    RECISION:  Older Worker Bulletin No. 02-9

11.    INQUIRIES: Questions should be directed to your Federal Project Officer at (202) 693-3842 or Lorraine Saunders at 693-3336.

___________________________          ____________________________
Ria Moore BenedictJohn R. Beverly, III  
Chief                                                 Administrator
Division of Older Worker Programs         Office of Adult Services

                        ________________________________

LORRAINE H. SAUNDERS
Grant Officer
Division of Federal Assistance
Office of Grants and Contract Management

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