42 C.F.R. § 56.204
(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which, in his judgment, will provide needed health services in a catchment area which will not be served by another project funded under this part and meet the applicable requirements of section 319(c)(1)(A) of the Act and this part, in accordance with priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part; Provided, That in the case of applicants which propose to serve substantially the same catchment areas or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107,
(2) Where all such applicants are community-based organizations representative of the population to be served by the project, the Secretary shall award the grant to the applicants which will, in his judgment, best promote the purposes of section 319(c)(1)(A) of the Act and the applicable regulations of this part, taking into account with respect to each application: