LIHWAP: A Primer for the Community Action Network
A vendor agreement is an agreement between a public utility and a Recipient or Subrecipient in which the Recipient or Subrecipient agrees to pay certain expenses to the public utility for the benefit of an eligible household. Since LIHWAP funds cannot be paid directly to eligible households, vendor agreements are the method by which program benefits are administered. Depending on the State’s LIHWAP plan, either Recipients or Subrecipients are responsible for negotiating and entering into vendor agreements to provide LIHWAP benefit payments on behalf of eligible households.
A CAA responsible for negotiating vendor agreements should allocate the costs associated with negotiations to its share of administrative costs, as designated in the State LIHWAP plan and its subaward. OCS has provided a webinar and sample vendor agreements that may help save time during the negotiation process. Use of the sample materials is not required, but all vendor agreements must be consistent with the LIHWAP Terms and Conditions, which require (among other things) that all vendors provide regular written reconciliation and confirmation that they credited benefits appropriately to households and either restored services on a timely basis or removed disconnection status, if applicable. Some key vendor agreement terms to be negotiated by the CAA include:
- The amount of assistance necessary to prevent disconnection or pay the client’s past due bills;
- The reduction in a client’s water bill each month (a rate reduction);
- A minimum period of time for maintaining the client’s water connection following a LIHWAP payment;
- The frequency and content of vendor invoices; and
- Any data the CAA seeks to collect for its reporting requirements to the State.
In many areas, different companies provide water services, making it particularly challenging to coordinate benefit payments because each vendor requires a separate vendor agreement. In these situations, CAAs should work with their State to create a prioritization process to ensure timely completion of vendor agreements. OCS recommends prioritizing vendors based on size and reaching out to the vendors serving the largest number of households first. Consider setting aside funding for the households served by water vendors for which it will likely take more time and effort to finalize agreements. CAAs may start making benefit payments to vendors with executed agreements in place, and do not need to wait until all vendor agreements are finalized. Contact the State water board or one of the following nonprofit associations for more information about water vendors in a specific area:
This resource is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance Center. It was created by CAPLAW in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services, Cooperative Agreement Award Number 90ET0482-02. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.