HomeMy WebLinkAboutAgreement A-15-538 with Parks & Recreation Division.pdfAgreement No. 15-538
State of California -Natural Resources Agency
DEPARTMENT OF PARKS AND RECREATION
DIVISION OF BOATING AND WATERWAYS
GRANT AGREEMENT
GRANTEE: County of Fresno
THE TERM OF THIS AGREEMENT IS: October 1, 2015 through September 30, 2030
GRANT TITLE: LAW ENFORCEMENT EQUIPMENT GRANT PROGRAM
GRANT NUMBER: C15L0624
The Grantee agrees to the terms and conditions of this contract, hereinafter referred to as Agreement,
and the State of California, acting through its Director of Parks and Recreation, Division of Boating and
Waterways, agrees to fund the total State grant amount indicated below. The GRANTEE agrees to
complete the SCOPE OF WORK as defined in the Agreement.
The General and Special Provisions attached are made a part of and incorporated into the Agreement.
Grantee: County of Fresno
Address: PO Box 1788, 2200 Fresno St
Fresno, CA 93717 1788
Printed Name and Title of Authorized
Represent~X1 _
Date: lJLr
ATIEST:
BERNICE E. SEIDEL, Cieri<
Board of Supervisors
By ~1\s&.rx-.J r& shOll
Deputy
Agency: Department of Parks and Recreation
Division of Boating and Waterways
ATTN: Corrina Dugger
Address: One Capitol Mall, Suite 500
Sacramento, CA 95814
(Authorized Signature)
Ramona Fernandez, Chief of Operations
Printed Name and Title
Date:
CERTIFICATE OF FUNDING
(FOR STATE USE ONLY)
GRANTEE: County of Fresno
THE TERM OF THIS AGREEMENT IS: October 1, 2015 through September 30, 2030
GRANT TITLE: LAW ENFORCEMENT EQUIPMENT GRANT PROGRAM
GRANT NUMBER: C15L0624
CONTRACT NO
C15L0624
AMENDMENT NO CALSTARS VENDOR NO
400000002604
PROJECT NO
AMOUNT
ENCUMBERED BY
THIS DOCUMENT
$80,000.00
FUND TITLE
Federal Trust Fund #0890
AGENCY BILLING CODE NO
032011
PRIOR AMOUNT
ENCUMBERED BY
THIS DOCUMENT
$0
ITEM
3790-101-0890
CHAPTER
10
STATUTE
2015
FISCAL YEAR
2015/16
TOTAL AMOUNT
ENCUMBERED TO
DATE
$80,000.00
INDEX
1706
OBJECT CODE
702
PCA CODE
68113
PROJECT/WORK
PHASE
T.B.A. NO I hereby certify upon my own personal knowledge that the budgeted funds are available for this
encumbrance.
B.R.NO ACCOUNTING OFFICER’S SIGNATURE DATE
Contract # C15L0624, County of Fresno, Boating Safety and Enforcement Equipment Grant - FY 2015 / 16, Date: 09/14/2015
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BOATING SAFETY AND ENFORCEMENT
GRANT AGREEMENT
County of Fresno
PATROL BOAT GRANT # C15L0624
State of California
Department of Parks and Recreation
Division of Boating and Waterways
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INDEX
DESCRIPTION PAGE
SCOPE OF WORK
CONTRACT DEFINITION .........................................................................................5
GRANT AMOUNT ....................................................................................................5
PURCHASE COMPLETION DATE .............................................................................7
SPECIAL PROVISIONS ...........................................................................................7
EXHIBIT A STANDARD TERMS AND CONDITIONS
ARTICLE I, DEFINITIONS .........................................................................................8
ARTICLE II, TERMS OF CONTRACT ........................................................................8
ARTICLE III, DISBURSEMENT OF GRANT ..............................................................8
ARTICLE IV, PATROL BOAT OWNERSHIP ...............................................................8
ARTICLE V, OPERATION AND MAINTENANCE OF PATROL BOAT .......................9
ARTICLE VI, TERMINATION OF CONTRACT ..........................................................9
ARTICLE VII, REVERSION OF PATROL BOAT TO DEPARTMENT ..........................9
ARTICLE VIII, LIABILITY ..........;..................................................................................10
ARTICLE IX, WAIVER OF RIGHTS .............................................................................10
ARTICLE X, REMEDIES NOT EXCLUSIVE .................................................................10
ARTICLE XI, OPINIONS AND DETERMINATIONS .....................................................10
ARTICLE XII, ASSIGNMENT OR TRANSFER OF PATROL BOAT ............................10
ARTICLE XIII, PROCUREMENT PROCEDURES .......................................................10
ARTICLE XIV, SUBJECT TO AUDIT .....................................................................11
ARTICLE XV, NON-DISCRIMINATION CLAUSE .......................................................11
ARTICLE XVI, DVBE (DISABLED VETERANS) ........................................................11
ARTICLE XVII, RECYCLING CERTIFICATION .........................................................12
ARTICLE XVIII, CONTRACTORS CERTIFICATION CLAUSES .................................12
ARTICLE XIX, DISPOSITION OF PROCEEDS FROM SALE ...................................12
EXHIBIT B GENERAL TERMS AND CONDITIONS ................................................13
EXHIBIT C 49 CFR 18, UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS
AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS ....17
EXHIBIT D CIRCULAR NO. A-128, AUDITS OF STATE AND LOCAL GOVERNMENTS .. 58
EXHIBIT E SUGGESTED LANGUAGE FOR RECYCLING CERTIFICATION, CONTRACTOR
CERTIFICATION CLAUSES, DVBE, AND DARFUR ACT ....................................67
EXHIBIT F DARFUR CONTRACTING ACT ........................................................73
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BUDGET
Line Item Qty Rate UOM Total
1 Equipment
Law Enforcement Patrol Boats 1.0000 80000.000 EA 80,000.00
TOTAL EXPENDITURES 80,000.00
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3.PURCHASE COMPLETION DATE
The patrol boat purchase shall be completed no later than September 30, 2016. The
DEPARTMENT will make payment under this GRANT upon receipt of a written request by the
GRANTEE as specified in Article III and XIII of EXHIBIT A attached hereto.
4.SPECIAL PROVISIONS
(a)GRANTEE hereby certifies that the obligations created by this CONTRACT do not
violate the provisions of Sections 1090 to 1096 of the Government Code.
(b)This GRANT AGREEMENT is not fully executed until signed by the DEPARTMENT,
GRANTEE, and approved by the Department of General Services, if required.
Grantee may not go out to bid until GRANT AGREEMENT is fully executed and
equipment specifications have been approved by the DEPARTMENT.
(c)GRANTEE hereby certifies that during the performance of this GRANT AGREEMENT,
GRANTEE and any sub-grantees shall fully comply with State regulations regarding
the implementation of Disabled Veteran business participation goals as set forth in
ARTICLE XVI, Disabled Veteran Business Enterprise Participation Requirements,
ARTICLE XVII, Recycling Certification and ARTICLE XVIII, CONTRACTORS
CERTIFICATION CLAUSES.
(d)GRANTEE shall continue with the responsibilities of this GRANT AGREEMENT during
any dispute.
(e)Notices required between the DEPARTMENT and the GRANTEE shall be deemed to
have been given when mailed to the respective addresses below, first-class postage
fully prepaid thereon.
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EXHIBIT A
STANDARD TERMS AND CONDITIONS FOR
BOATING SAFETY AND ENFORCEMENT PATROL BOAT GRANT AGREEMENT
ARTICLE I — DEFINITIONS
A.GRANT AGREEMENT means the contract to which these standard terms and conditions are
appended.
B.PATROL BOAT means a DEPARTMENT approved, heavy aluminum or fiberglass, equipped boat [with
or without trailer and/or outboard motor] purchased for use in boating safety and law enforcement
activities.
C.PURCHASE COSTS means those costs incurred by the GRANTEE in purchasing the PATROL BOAT;
such PURCHASE COSTS shall not include any operation and maintenance costs, nor any costs
incurred prior to the effective date of this GRANT AGREEMENT, nor any indirect or overhead costs
claimed by the GRANTEE.
D.GRANTEE FUNDS mean any funds provided by the GRANTEE for the operation and maintenance of
the PATROL BOAT.
E.GRANT means a grant, using FEDERAL FUNDS, made by the DEPARTMENT to the GRANTEE to
finance all or part of the PURCHASE COSTS.
ARTICLE II — TERM OF GRANT AGREEMENT
A.The term of this GRANT AGREEMENT shall begin on the effective date of the GRANT AGREEMENT
and shall continue for FIFTEEN [15] YEARS from such date unless terminated earlier in accordance
with the terms and conditions of this GRANT AGREEMENT.
B.No amendment or variation of the terms of this GRANT AGREEMENT shall be valid unless made in
writing, signed by the DEPARTMENT, GRANTEE, AND approved as required. No oral understanding
or GRANT AGREEMENT not incorporated in the GRANT AGREEMENT is binding on any of the
parties.
ARTICLE III — DISBURSEMENT OF GRANT
A.The DEPARTMENT shall have no obligation to disburse the GRANT unless and until the GRANTEE
obtains the prior written approval of the DEPARTMENT of the type and cost of the PATROL BOAT and
attendant equipment.
B.The DEPARTMENT will reimburse the GRANTEE through the GRANT for the PURCHASE COSTS of
the PATROL BOAT.
C.The DEPARTMENT may make payment under this GRANT AGREEMENT upon receipt of a written
payment request by the GRANTEE, such request shall be substantiated by invoices or other such
evidence of PURCHASE COSTS and a signed certification that the GRANTEE complied with
procurement procedures as outlined in ARTICLE XIII.
ARTICLE IV — PATROL BOAT OWNERSHIP
The DEPARTMENT shall be the legal owner of the PATROL BOAT and the GRANTEE shall be the
registered owner. The GRANTEE shall not assign, mortgage, hypothecate or transfer its interest in the
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PATROL BOAT without the prior written approval of the DEPARTMENT.
ARTICLE V — OPERATION AND MAINTENANCE OF PATROL BOAT
A.The GRANTEE shall use the PATROL BOAT for the purposes of promoting boating safety and law
enforcement and shall keep the PATROL BOAT available for search and rescue operations.
B.The GRANTEE shall be responsible for the costs of operating and maintaining the PATROL BOAT; the
DEPARTMENT shall not be liable for such costs.
C The GRANTEE shall maintain the PATROL BOAT in good repair.
D.The GRANTEE, at its own expense, agrees to replace the PATROL BOAT if it is destroyed or rendered
useless prior to the expiration of this GRANT AGREEMENT.
E.Representatives, agents or employees of the GRANTEE in the performance of this GRANT
AGREEMENT shall act in independent capacity and not as officers, employees or agents of the
DEPARTMENT.
F.The GRANTEE shall keep complete and accurate records of all expenditures pertaining to the
purchase of additional equipment and the operation and maintenance of the PATROL BOAT; such
records shall be available and open to the DEPARTMENT at all reasonable times for inspection and
audit by any authorized representative of the DEPARTMENT.
ARTICLE VI — TERMINATION OF GRANT AGREEMENT
A.Either DEPARTMENT or GRANTEE may unilaterally terminate this GRANT AGREEMENT if a material
breach of the GRANT AGREEMENT is made by the other; such termination shall become effective
NINETY [90] DAYS following the date of receipt by either the DEPARTMENT or the GRANTEE of a
written notice of termination from the party initiating the termination.
B.The GRANTEE may terminate this GRANT AGREEMENT if the GRANTEE becomes financially or
legally unable to comply with the terms and conditions of this GRANT AGREEMENT; such termination
shall become effective NINETY [90] DAYS following receipt by the DEPARTMENT of a written notice of
termination from the GRANTEE.
C.The DEPARTMENT may terminate this GRANT AGREEMENT immediately and be relieved of any
payments should the legislative body of the GRANTEE fail to appropriate GRANTEE FUNDS or if the
GRANTEE fails to perform the requirements of this Agreement at the time and in the manner herein
provided; such termination to become effective upon receipt by the GRANTEE of a written termination
notice from the DEPARTMENT.
D.This GRANT AGREEMENT shall terminate three years after the effective date specified on page 1 of
the GRANT AGREEMENT if the GRANTEE has not received all of the GRANT prior to such date.
ARTICLE VII — REVERSION OF PATROL BOAT TO DEPARTMENT
If, for any reason whatsoever, this GRANT AGREEMENT is terminated prior to the expiration of the
term of the GRANT AGREEMENT, then the GRANTEE shall deliver the PATROL BOAT to the
DEPARTMENT and shall execute any document necessary to effect appropriate changes in pertinent
public records; the reversion of registered title is hereby declared to be in addition to, and not in lieu of,
any other remedies for breach of this GRANT AGREEMENT which may be available to the
DEPARTMENT.
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ARTICLE VIII — LIABILITY
A.The GRANTEE waives all claims and recourse against the DEPARTMENT, including the right to
contribution for any loss or damage arising from, growing out of or in any way connected with or
incident to this GRANT AGREEMENT.
B.Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and
employees from any and all claims and losses accruing or resulting to any and all contractors,
subcontractors, suppliers, laborers, and any other person, firm or corporation furnishing or supplying
work services, materials, or supplies in connection with the performance of this Agreement, and from
any and all claims and losses accruing or resulting to any person, firm or corporation who may be
injured or damaged by GRANTEE in the performance of this Agreement. GRANTEE warrants,
represents and agrees that it and its subcontractors, employees and representatives shall at all times
comply with all applicable State contracting laws, codes, rules and regulations in the performance of
this Agreement.
C.If the DEPARTMENT is named as a co-defendant, the GRANTEE shall notify the DEPARTMENT and
represent it unless the DEPARTMENT elects to represent itself. If the DEPARTMENT undertakes its
own defense, it shall bear its own litigation costs, expenses and attorney's fees.
ARTICLE IX — WAIVER OF RIGHTS
It is the intention of the parties hereto that from time to time either party may waive certain of its rights
under this GRANT AGREEMENT. Any waiver at this time by either party hereto of its rights with
respect to a default or any other matter arising in connection with this GRANT AGREEMENT shall not
be deemed to be a waiver with respect to any other default or matter.
ARTICLE X — REMEDIES NOT EXCLUSIVE
The use by either the DEPARTMENT or GRANTEE of any remedy specified in this GRANT
AGREEMENT for the enforcement of this GRANT AGREEMENT is not exclusive and shall not deprive
the party using such remedy of, or limit the application of, any other remedy provided by law.
ARTICLE XI — OPINIONS AND DETERMINATIONS
Where the terms of GRANT AGREEMENT provide for action to be based upon the opinion, judgment,
approval, review, or determination of either the DEPARTMENT or GRANTEE, such terms are not
intended to be and shall never be construed as permitting such opinion, judgment, approval, review, or
determination to be arbitrary, capricious, or unreasonable.
ARTICLE XII — ASSIGNMENT OR TRANSFER OF PATROL BOAT
No assignment or transfer of this GRANT AGREEMENT or any part hereof, rights hereunder, or
interest herein by GRANTEE shall be valid unless and until it is approved by the DEPARTMENT and
made subject to such reasonable terms and conditions as the DEPARTMENT may impose.
ARTICLE XIII — PROCUREMENT PROCEDURES
A.The GRANTEE may use its own procurement procedures which reflect applicable State and Local laws
and regulations, provided that the procedures conform to applicable Federal law, the standards
identified in EXHIBIT C, 49 CFR Part 18, Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments, and the specifications prepared by the
GRANTEE and approved by the DEPARTMENT. There shall be no changes, corrections, modifications
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or exceptions to DEPARTMENT¬- approved specifications without advance approval by the
DEPARTMENT.
B.Procurement procedures for boats must be invitation for Bids. Please pay special attention to the
specific procurement standards regarding advertising by your department, adequate purchase
descriptions, sealed bids, and public openings.
C.Procurement procedures used by the GRANTEE must conform to State law and regulations regarding
Disabled Veteran Business Enterprise Participation Requirements, ARTICLE XVI, Recycling
Certification, ARTICLE XVII, AND CONTRACTORS CERTIFICATION CLAUSES, ARTICLE XVIII. The
GRANTEE is responsible, in its sole discretion, for the review of all bids for compliance.
ARTICLE XIV — SUBJECT TO AUDIT
GRANTEE agrees that the awarding department, the Department of General Services, the Bureau of
State Audits, or their designated representative shall have the right to review and to copy any records
and supporting documentation pertaining to the Performance of this Agreement. GRANTEE agrees to
maintain such records for possible audit for a minimum of three (3) years after final payment, unless a
longer period of records retention is stipulated. GRANTEE agrees to allow the auditor(s) access to such
records during normal business hours and to allow interviews of any employees who might reasonably
have information related to such records. Further, GRANTEE agrees to include a similar right of the
State to audit records and interview staff in any subcontract related to performance of this Agreement
(GC 8546.7, PCC 10115 et seq., and CCR Title 2, Section 1896).
ARTICLE XV — NON-DISCRIMINATION CLAUSE
A.During the performance of this GRANT AGREEMENT, GRANTEE and its sub¬-grantees shall not
unlawfully discriminate, harass or allow harassment, against any employee or applicant for employment
because of sex, race, color, ancestry, religious creed, national origin, disability (including HIV and
AIDS), medical condition (cancer), age, marital status, denial of family and medical care leave and
denial of pregnancy disability leave. GRANTEES and sub-grantees shall insure that the evaluation and
treatment of their employees and applicants for employment are free of such discrimination and
harassment. GRANTEES and sub-grantees shall comply with the provisions of the Fair Employment
and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations
promulgated there under (California Code of Regulations, Title 2, Section 7285.0 et seq.). The
applicable regulations of the Fair Employment and Housing Commission implementing Government
Code, Section 12990 (a-f), are set forth in Chapter 5 of Division 4 of Title 2 of the California Code of
Regulations and are incorporated into this GRANT AGREEMENT by reference and made a part hereof
as if set forth in full. GRANTEE and sub-grantees shall give written notice of their obligations under this
clause to labor organization with which they have a collective bargaining or other agreement.
B.GRANTEE shall include the non-discrimination and compliance provisions of this clause in all sub-
grants to perform work under this GRANT AGREEMENT.
ARTICLE XVI — DISABLED VETERAN BUSINESS ENTERPRISE PARTICIPATION REQUIREMENT
A.State law requires that State contracts have participation goals of 3% for Disabled Veteran Business
Enterprises (DVBEs). Local governmental agency contracts where the State retains a proprietary
interest must comply with this requirement.
B.GRANTEE is responsible for advising all prospective bidders of responsibilities and requirements by
including specific language in any and all invitations for Bids and Requests for proposals.
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C.The GRANTEE is responsible for reviewing all bids for compliance with the DVBE participation
requirement.
ARTICLE XVII — RECYCLING CERTIFICATION
A.State law requires that state contracts shall have Recycling Certification in writing under penalty of
perjury, the minimum, if not exact, percentage of recycled content, both post consumer waste and
secondary waste as defined in the Public Contract Code, Sections 12161 and 12200, in materials,
goods, or supplies offered or products used in the performance of this Agreement, regardless of
whether the product meets the required recycled product percentage as defined in the Public Contract
Code, Sections 12161 and 12200. Contractor may certify that the product contains zero recycled
content. (PCC 10233, 10308.5, 10354)
B.GRANTEE is responsible for advising all prospective bidders of responsibilities and requirements by
including specific language in any and all Invitations for Bids and Requests for Proposals. Suggested
language and forms which may be used are attached to this exhibit.
C.The GRANTEE is responsible for reviewing all bids for compliance with Recycling Certification
requirement.
ARTICLE XVIII — CONTRACTOR CERTIFICATION CLAUSES
A.The CONTRACTOR CERTIFICATION CLAUSES contained in document CCC307 are hereby
incorporated by reference and made a part of this Agreement by this reference as if attached hereto.
B.GRANTEE is responsible for advising all prospective bidders of responsibilities and requirements by
including specific language in any and all Invitations for Bids and Requests for Proposals. Suggested
language and forms which may be used are attached to this exhibit.
C.The GRANTEE is responsible for reviewing all bids for compliance with Recycling Certification
requirement.
ARTICLE XIX — DISPOSITION OF PROCEEDS FROM SALE OF PATROL BOAT
If the GRANTEE has contributed money other than GRANT funds to cover the payment of PURCHASE
COSTS, and in the event of a sale of the PATROL BOAT after the expiration or termination of this
GRANT AGREEMENT or the reversion of the PATROL BOAT to the DEPARTMENT, then the
proceeds of the PATROL BOAT sale shall be distributed between the DEPARTMENT and the
GRANTEE in proportion to their respective contributions in paying the PURCHASE COSTS, e.g.: if the
PURCHASE COSTS totaled $100,000 and the GRANT contribution amounts to $60,000, then the
DEPARTMENT would receive 60% of the PATROL BOAT sale proceeds and the GRANTEE would
receive 40%.
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EXHIBIT B
GENERAL TERMS AND CONDITIONS
1.APPROVAL:
This Agreement is of no force or effect until signed by both parties and approved by the
Department of General Services, if required. Contractor may not commence performance until
such approval has been obtained.
2.AMENDMENT:
No amendment or variation of the terms of this Agreement shall be valid unless made in
writing, signed by the parties and approved as required. No oral understanding or Agreement
not incorporated in the Agreement is binding on any of the parties.
3.ASSIGNMENT:
This Agreement is not assignable by the Contractor, either in whole or in part, without the
consent of the State in the form of a formal written amendment.
4.AUDIT:
Contractor agrees that the awarding department, the Department of General Services, the
Bureau of State Audits, or their designated representative shall have the right to review and to
copy any records and supporting documentation pertaining to the performance of this
Agreement. Contractor agrees to maintain such records for possible audit for a minimum of
three (3) years after final payment, unless a longer period of records retention is stipulated.
Contractor agrees to allow the auditor(s) access to such records during normal business hours
and to allow interviews of any employees who might reasonably have information related to
such records. Further, Contractor agrees to include a similar right of the State to audit records
and interview staff in any subcontract related to performance of this Agreement. (Gov. Code
§8546.7, Pub. Contract Code §10115 et seq., CCR Title 2, Section 1896).
5.INDEMNIFICATION:
Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and
employees from any and all claims and losses accruing or resulting to any and all contractors,
subcontractors, suppliers, laborers, and any other person, firm or corporation furnishing or
supplying work services, materials, or supplies in connection with the performance of this
Agreement, and from any and all claims and losses accruing or resulting to any person, firm or
corporation who may be injured or damaged by Contractor in the performance of this
Agreement.
6.DISPUTES:
Contractor shall continue with the responsibilities under this Agreement during any dispute.
7.TERMINATION FOR CAUSE:
The State may terminate this Agreement and be relieved of any payments should the
Contractor fail to perform the requirements of this Agreement at the time and in the manner
herein provided. In the event of such termination the State may proceed with the work in any
manner deemed proper by the State. All costs to the State shall be deducted from any sum
due the Contractor under this Agreement and the balance, if any, shall be paid to the
Contractor upon demand.
8.INDEPENDENT CONTRACTOR:
Contractor, and the agents and employees of Contractor, in the performance of this
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Agreement, shall act in an independent capacity and not as officers or employees or agents of
the State.
9.RECYCLING CERTIFICATION:
The Contractor shall certify in writing under penalty of perjury, the minimum, if not exact,
percentage of post-consumer material as defined in the Public Contract Code Section 12200,
in products, materials, goods, or supplies offered or sold to the State regardless of whether the
product meets the requirements of Public Contract Code Section 12209. With respect to
printer or duplication cartridges that comply with the requirements of Section 12156(e), the
certification required by this subdivision shall specify that the cartridges so comply (Pub.
Contract Code §12205).
10.NON-DISCRIMINATION CLAUSE:
During the performance of this Agreement, Contractor and its subcontractors shall not
unlawfully discriminate, harass, or allow harassment against any employee or applicant for
employment because of sex, race, color, ancestry, religious creed, national origin, physical
disability (including HIV and AIDS), mental disability, medical condition (e.g., cancer), age
(over 40), marital status, and denial of family care leave. Contractor and subcontractors shall
insure that the evaluation and treatment of their employees and applicants for employment are
free from such discrimination and harassment. Contractor and subcontractors shall comply
with the provisions of the Fair Employment and Housing Act (Gov. Code §12990 (a-f) et seq.)
and the applicable regulations promulgated thereunder (California Code of Regulations, Title
2, Section 7285 et seq.). The applicable regulations of the Fair Employment and Housing
Commission implementing Government Code Section 12990 (a-f), set forth in Chapter 5 of
Division 4 of Title 2 of the California Code of Regulations, are incorporated into this Agreement
by reference and made a part hereof as if set forth in full. Contractor and its subcontractors
shall give written notice of their obligations under this clause to labor organizations with which
they have a collective bargaining or other Agreement.
Contractor shall include the nondiscrimination and compliance provisions of this clause in all
subcontracts to perform work under the Agreement.
11.CERTIFICATION CLAUSES:
The CONTRACTOR CERTIFICATION CLAUSES contained in the document CCC 307 are
hereby incorporated by reference and made a part of this Agreement by this reference as if
attached hereto.
12.TIMELINESS:
Time is of the essence in this Agreement.
13.COMPENSATION:
The consideration to be paid Contractor, as provided herein, shall be in compensation for all of
Contractor's expenses incurred in the performance hereof, including travel, per diem, and
taxes, unless otherwise expressly so provided.
14.GOVERNING LAW:
This contract is governed by and shall be interpreted in accordance with the laws of the State
of California.
15.ANTITRUST CLAIMS:
The Contractor by signing this agreement hereby certifies that if these services or goods are
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obtained by means of a competitive bid, the Contractor shall comply with the requirements of
the Government Codes Sections set out below.
a. The Government Code Chapter on Antitrust claims contains the following definitions:
1)"Public purchase" means a purchase by means of competitive bids of goods,
services, or materials by the State or any of its political subdivisions or public
agencies on whose behalf the Attorney General may bring an action
pursuant to subdivision (c) of Section 16750 of the Business and
Professions Code.
2)"Public purchasing body" means the State or the subdivision or agency
making a public purchase. Government Code Section 4550.
b.In submitting a bid to a public purchasing body, the bidder offers and agrees that if the
bid is accepted, it will assign to the purchasing body all rights, title, and interest in and
to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec.
15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2
of Division 7 of the Business and Professions Code), arising from purchases of goods,
materials, or services by the bidder for sale to the purchasing body pursuant to the bid.
Such assignment shall be made and become effective at the time the purchasing body
tenders final payment to the bidder. Government Code Section 4552.
c.. If an awarding body or public purchasing body receives, either through judgment or
settlement, a monetary recovery for a cause of action assigned under this chapter, the
assignor shall be entitled to receive reimbursement for actual legal costs incurred and
may, upon demand, recover from the public body any portion of the recovery, including
treble damages, attributable to overcharges that were paid by the assignor but were
not paid by the public body as part of the bid price, less the expenses incurred in
obtaining that portion of the recovery. Government Code Section 4553.
d.Upon demand in writing by the assignor, the assignee shall, within one year from such
demand, reassign the cause of action assigned under this part if the assignor has
been or may have been injured by the violation of law for which the cause of action
arose and (a) the assignee has not been injured thereby, or (b) the assignee declines
to file a court action for the cause of action. See Government Code Section 4554.
16.CHILD SUPPORT COMPLIANCE ACT:
For any Agreement in excess of $100,000, the contractor acknowledges in accordance with
Public Contract Code 7110, that:
a.The contractor recognizes the importance of child and family support obligations and
shall fully comply with all applicable state and federal laws relating to child and family
support enforcement, including, but not limited to, disclosure of information and
compliance with earnings assignment orders, as provided in Chapter 8 (commencing
with section 5200) of Part 5 of Division 9 of the Family Code; and
b.The contractor, to the best of its knowledge is fully complying with the earnings
assignment orders of all employees and is providing the names of all new employees
to the New Hire Registry maintained by the California Employment Development
Department.
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17.UNENFORCEABLE PROVISION:
In the event that any provision of this Agreement is unenforceable or held to be unenforceable,
then the parties agree that all other provisions of this Agreement have force and effect and
shall not be affected thereby.
18.PRIORITY HIRING CONSIDERATIONS:
If this GRANT AGREEMENT includes services in excess of $200,000, the Contractor shall
give priority consideration in filling vacancies in positions funded by the GRANT AGREEMENT
to qualified recipients of aid under Welfare and Institutions Code Section 11200 in accordance
with Pub. Contract Code §10353.
19.SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING
REQUIREMENTS:
a.If for this GRANT AGREEMENT Contractor made a commitment to achieve small
business participation, then Contractor must within 60 days of receiving final payment
under this Contract (or within such other time period as may be specified elsewhere in
this Contract) report to the awarding department the actual percentage of small
business participation that was achieved. (Govt. Code § 14841.)
b.If for this Contract Contractor made a commitment to achieve disabled veteran
business enterprise (DVBE) participation, then Contractor must within 60 days of
receiving final payment under this Contract (or within such other time period as may be
specified elsewhere in this Contract) certify in a report to the awarding department: (1)
the total amount the prime Contractor received under the Contract; (2) the name and
address of the DVBE(s) that participated in the performance of the Contract; (3) the
amount each DVBE received from the prime Contractor; (4) that all payments under
the Contract have been made to the DVBE; and (5) the actual percentage of DVBE
participation that was achieved. A person or entity that knowingly provides false
information shall be subject to a civil penalty for each violation. (Mil. & Vets. Code §
999.5(d); Govt. Code § 14841.)
20.LOSS LEADER:
If this contract involves the furnishing of equipment, materials, or supplies then the following
statement is incorporated: It is unlawful for any person engaged in business within this state to
sell or use any article or product as a “loss leader” as defined in Section 17030 of the
Business and Professions Code. (PCC 10344(e).)
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EXHIBIT C
[Code of Federal Regulations]
[Title 49, Volume 1, Parts 1 to 99]
From the U.S. Government Printing Office via GPO Access
TITLE 49—TRANSPORTATION
PART 18—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE
AGREEMENTS TO STATE AND LOCAL GOVERNMENTS
Subpart A—General
Sec
18.1 Purpose and scope of this part.
18.2 Scope of subpart.
18.3 Definitions.
18.4 Applicability.
18.5 Effect on other issuances.
18.6 Additions and exceptions.
Subpart B—-Pre-Award Requirements
18.10 Forms for applying for grants.
18.11 State plans.
18.12 Special grant or sub grant conditions for “high risk” grantees.
Subpart C—-Post-Award Requirements Financial Administration
18.20 Standards for financial management systems.
18.21 Payment.
18.22 Allowable costs.
18.23 Period of availability of funds.
18.24 Matching or cost sharing.
18.25 Program income.
18.26 Non-Federal audits.
Changes, Property, and Sub awards
18.30 Changes.
18.31 Real property.
18.32 Equipment.
18.33 Supplies.
18.34 Copyrights.
18.35 Sub awards to debarred and suspended parties.
18.36 Procurement.
18.37 Sub grants.
Reports, Records Retention, and Enforcement
18.40 Monitoring and reporting program performance.
18.41 Financial reporting.
18.42 Retention and access requirements for records.
18.43 Enforcement.
18.44 Termination for convenience.
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Subpart D--After-the-Grant Requirements
18.50 Closeout.
18.51 Later disallowance's and adjustments.
18.52 Collection of amounts due.
Subpart E—Entitlements [Reserved]
Authority: 49 U.S.C. 322(a).
Source: 53 FR 8086 and 8087, Mar. 11, 1988, unless otherwise noted. Editorial Note: For
additional information, see related documents published at 49 FR 24958, June 18, 1984, 52 FR
20198, May 29, 1987, and 53 FR 8028, March 11, 1988.
A - General
Sec. 18.1 Purpose and scope of this part.
This part establishes uniform administrative rules for Federal grants and cooperative
agreements and sub-awards to State, local and Indian tribal governments.
Sec. 18.2 Scope of subpart.
This subpart contains general rules pertaining to this part and procedures for control of
exceptions from this part.
Sec. 18.3 Definitions.
As used in this part:
Accrued expenditures mean the charges incurred by the grantee during a given period
requiring the provision of funds for:
(1) Goods and other tangible property received;
(2)services performed by employees, contractors, sub grantees, subcontractors,
and other payees; and
(3)other amounts becoming owed under programs for which no current services
or performance is required, such as annuities, insurance claims, and other
benefit payments.
Accrued income means the sum of:
(1)Earnings during a given period from services performed by the grantee and
goods and other tangible property delivered to purchasers, and
(2)amounts becoming owed to the grantee for which no current services or
performance is required by the grantee.
Acquisition cost of an item of purchased equipment means the net
invoice unit price of the property including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property usable for the
purpose for which it was acquired. Other charges such as the cost of installation,
transportation, taxes, duty or protective in-transit insurance, shall be included or
excluded from the unit acquisition cost in accordance with the grantee's regular
accounting practices.
Administrative requirements mean those matters common to grants in general, such as
financial management, kinds and frequency of reports, and retention of records. These
are distinguished from “programmatic” requirements, which concern matters that can be
treated only on a program-by-program or grant-by-grant basis, such as kinds of
activities that can be supported by grants under a particular program.
Awarding agency means:
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(1) with respect to a grant, the Federal agency, and
(2) with respect to a subgrant, the party that awarded the subgrant.
Cash contributions means the grantee's cash outlay, including the outlay of money
contributed to the grantee or subgrantee by other public agencies and institutions, and
private organizations and individuals.
When authorized by Federal legislation, Federal funds received from other assistance
agreements may be considered as grantee or subgrantee cash contributions.
Contract means (except as used in the definitions for “grant” and “subgrant” in this
section and except where qualified by “Federal”)a procurement contract under a grant
or subgrant, and means a procurement subcontract under a contract.
Cost sharing or matching means the value of the third party in-kind contributions and
the portion of the costs of a federally assisted project or program not borne by the
Federal Government.
Cost-type contract means a contract or subcontract under a grant in which the
contractor or subcontractor is paid on the basis of the costs it incurs, with or without a
fee.
Equipment means tangible, nonexpendable, personal property having a useful life of
more than one year and an acquisition cost of $5,000 or more per unit. A grantee may
use its own definition of equipment provided that such definition would at least include
all equipment defined above.
Expenditure report means:
(1) For non-construction grants, the SF-269
“Financial Status Report” (or other equivalent report);
(2)for construction grants, the SF-271 “Outlay Report and Request for
Reimbursement” (or other equivalent report).
Federally recognized Indian tribal government means the governing body or a
governmental agency of any Indian tribe, band, nation, or other organized group or
community (including any Native village as defined in section 3 of the Alaska Native
Claims Settlement Act, 85 Stat 688) certified by the Secretary of the Interior as eligible
for the special programs and services provided by him through the Bureau of Indian
Affairs.
Government means a State or local government or a federally recognized Indian tribal
government.
Grant means an award of financial assistance, including cooperative agreements, in
the form of money, or property in lieu of money, by the Federal Government to an
eligible grantee. The term does not include technical assistance which provides
services instead of money, or other assistance in the form of revenue sharing, loans,
loan guarantees, interest subsidies, insurance, or direct appropriations. Also, the term
does not include assistance, such as a fellowship or other lump sum award, which the
grantee is not required to account for.
Grantee means the government to which a grant is awarded and which is accountable
for the use of the funds provided. The grantee is the entire legal entity even if only a
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particular component of the entity is designated in the grant award document.
Local government means a county, municipality, city, town, township, local public
authority (including any public and Indian housing agency under the United States
Housing Act of 1937) school district, special district, intrastate district, council of
governments (whether or not incorporated as a nonprofit corporation under state law),
any other regional or interstate government entity, or any agency or instrumentality of
a local government.
Obligations means the amounts of orders placed, contracts and subgrants awarded,
goods and services received, and similar transactions during a given period that will
require payment by the grantee during the same or a future period.
OMB means the United States Office of Management and Budget.
Outlays (expenditures) mean charges made to the project or program. They may be
reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are
the sum of actual cash disbursement for direct charges for goods and services, the
amount of indirect expense incurred, the value of in-kind contributions applied, and the
amount of cash advances and payments made to contractors and subgrantees. For
reports prepared on an accrued expenditure basis, outlays are the sum of actual cash
disbursements, the amount of indirect expense incurred, the value of inkind
contributions applied, and the new increase (or decrease) in the amounts owed by the
grantee for goods and other property received, for services performed by employees,
contractors, subgrantees, subcontractors, and other payees, and other amounts
becoming owed under programs for which no current services or performance are
required, such as annuities, insurance claims, and other benefit payments.
Percentage of completion method refers to a system under which payments are made
for construction work according to the percentage of completion of the work, rather
than to the grantee's cost incurred.
Prior approval means documentation evidencing consent prior to incurring specific
cost.
Real property means land, including land improvements, structures and
appurtenances thereto, excluding movable machinery and equipment.
Share, when referring to the awarding agency's portion of real property, equipment or
supplies, means the same percentage as the awarding agency's portion of the
acquiring party's total costs under the grant to which the acquisition costs under the
grant to which the acquisition cost of the property was charged. Only costs are to be
counted—not the value of third-party in-kind contributions.
State means any of the several States of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, any territory or possession of the United States, or
any agency or instrumentality of a State exclusive of local governments. The term
does not include any public and Indian housing agency under United States Housing
Act of 1937.
Subgrant means an award of financial assistance in the form of money, or property in
lieu of money, made under a grant by a grantee to an eligible subgrantee. The term
includes financial assistance when provided by contractual legal agreement, but does
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not include procurement purchases, nor does it include any form of assistance which is
excluded from the definition of “grant” in this part.
Subgrantee means the government or other legal entity to which a subgrant is
awarded and which is accountable to the grantee for the use of the funds provided.
Supplies means all tangible personal property other than “equipment” as defined in this
part. Suspension means depending on the context, either:
(1)temporary withdrawal of the authority to obligate grant funds pending
corrective action by the grantee or subgrantee or a decision to terminate the
grant, or
(2)an action taken by a suspending official in accordance with agency
regulations implementing E.O. 12549 to immediately exclude a person from
participating in grant transactions for a period, pending completion of an
investigation and such legal or debarment proceedings as may ensue.
Termination means permanent withdrawal of the authority to obligate previously-
awarded grant funds before that authority would otherwise expire. It also means the
voluntary relinquishment of that authority by the grantee or subgrantee. “Termination”
does not include:
(1)Withdrawal of funds awarded on the basis of the grantee's underestimate of
the unobligated balance in a prior period;
(2) Withdrawal of the unobligated balance as of the expiration of a grant;
(3)Refusal to extend a grant or award additional funds, to make a competing or
noncompeting continuation, renewal, extension, or supplemental award; or
(4)voiding of a grant upon determination that the award was obtained
fraudulently, or was otherwise illegal or invalid from inception.
Terms of a grant or subgrant mean all requirements of the grant or subgrant, whether
in statute, regulations, or the award document.
Third party in-kind contributions mean property or services which benefit a federally
assisted project or program and which are contributed by non-Federal third parties
without charge to the grantee, or a cost-type contractor under the grant agreement.
Unliquidated obligations for reports prepared on a cash basis mean the amount of
obligations incurred by the grantee that has not been paid. For reports prepared on an
accrued expenditure basis, they represent the amount of obligations incurred by the
grantee for which an outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by the Federal agency
that has not been obligated by the grantee and is determined by deducting the
cumulative obligations from the cumulative funds authorized.
Sec. 18.4 Applicability.
(a)General. Subparts A through D of this part apply to all grants and subgrants to
governments, except where inconsistent with Federal statutes or with
regulations authorized in accordance with the exception provision of Sec.
18.6, or:
(1)Grants and subgrants to State and local institutions of higher education or
State and local hospitals.
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(2)The block grants authorized by the Omnibus Budget Reconciliation Act of
1981 (Community Services; Preventive Health and Health Services; Alcohol,
Drug Abuse, and Mental Health Services; Maternal and Child Health Services;
Social Services; Low-Income Home Energy Assistance; States' Program of
Community Development Block Grants for Small Cities; and Elementary and
Secondary Education other than programs administered by the Secretary of
Education under title V, subtitle D, chapter 2, Section 583—the Secretary's
discretionary grant program) and titles I-III of the Job Training Partnership Act
of 1982 and under the Public Health Services Act (Section 1921), Alcohol and
Drug Abuse Treatment and Rehabilitation Block Grant and part C of title V,
Mental Health Service for the Homeless Block Grant).
(3)Entitlement grants to carry out the following programs of the Social Security
Act.
(i)Aid to Needy Families with Dependent Children (title IV-A of the Act, not
including the Work Incentive Program (WIN) authorized by section
402(a)19(G); HHS grants for WIN are subject to this part);
(ii)Child Support Enforcement and Establishment of Paternity (title IV-D of
the Act);
(iii) Foster Care and Adoption Assistance (title IV-E of the Act);
(iv)Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and XVI-AABD of
the Act); and
(v)Medical Assistance (Medicaid) (title XIX of the Act) not including the
State Medicaid Fraud Control program authorized by section
1903(a)(6)(B).
(4)Entitlement grants under the following programs of The National School
Lunch Act:
(i) School Lunch (section 4 of the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) Special Meal Assistance (section 11 of the Act),
(iv) Summer Food Service for Children (section 13 of the Act), and
(v) Child Care Food Program (section 17 of the Act).
(5)Entitlement grants under the following programs of The Child Nutrition Act of
1966:
(i) Special Milk (section 3 of the Act), and
(ii) School Breakfast (section 4 of the Act).
(6)Entitlement grants for State Administrative expenses under The Food Stamp
Act of 1977 (section 16 of the Act).
(7)A grant for an experimental, pilot, or demonstration project that is also
supported by a grant listed in paragraph (a)(3) of this section;
(8)Grant funds awarded under subsection 412(e) of the Immigration and
Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the Refugee
Education Assistance Act of 1980 (Pub. L.96-422, 94 Stat. 1809), for cash
assistance, medical assistance, and supplemental security income benefits to
refugees and entrants and the administrative costs of providing the assistance
and benefits;
(9)Grants to local education agencies under 20 U.S.C. 236 through 241-1(a),
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and 242 through 244 (portions of the Impact Aid program), except for 20
U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for Handicapped
Children); and
(10)Payments under the Veterans Administration's State Home Per Diem
Program (38 U.S.C. 641(a)).
(b)Entitlement programs. Entitlement programs enumerated above in Sec.
18.4(a) (3) through (8) are subject to subpart E.
Sec. 18.5 Effect on other issuance's.
All other grants administration provisions of codified program regulations, program
manuals, handbooks and other nonregulatory materials which are inconsistent with this
part are superseded, except to the extent they are required by statute, or authorized in
accordance with the exception provision in Sec. 18.6.
Sec. 18.6 Additions and exceptions.
(a)For classes of grants and grantees subject to this part, Federal agencies may
not impose additional administrative requirements except in codified
regulations published in the Federal Register.
(b) Exceptions for classes of grants or grantees may be authorized only by OMB.
(1)All Departmental requests for exceptions shall be processed through the
Assistant Secretary of Administration.
(2) [Reserved]
(c)Exceptions on a case-by-case basis and for subgrantees may be authorized
by the affected Federal agencies.
(1)All case-by-case exceptions may be authorized by the affected
operating administrations or departmental offices, with the concurrence
of the Assistant Secretary for Administration.
(2) [Reserved]
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 60 FR 19646, Apr. 19, 1995] Subpart
B - Pre-Award Requirements
Sec. 18.10 Forms for applying for grants.
(a) Scope
(1)This section prescribes forms and instructions to be used by
governmental organizations (except hospitals and institutions of higher
education operated by a government) in applying for grants. This section
is not applicable, however, to formula grant programs which do not
require applicants to apply for funds on a project basis.
(2)This section applies only to applications to Federal agencies for grants,
and is not required to be applied by grantees in dealing with applicants
for subgrants. However, grantees are encouraged to avoid more
detailed or burdensome application requirements for subgrants.
(3)Forms and procedures for Federal Highway Administration (FHWA)
projects are contained in 23 CFR part 630, subpart B, 23 CFR part 420,
subpart A, and 49 CFR part 450.
(b) Authorized forms and instructions for governmental organizations.
(1)In applying for grants, applicants shall only use standard application
forms or those prescribed by the granting agency with the approval of
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OMB under the Paperwork Reduction Act of 1980.
(2)Applicants are not required to submit more than the original and two
copies of pre-applications or applications.
(3)Applicants must follow all applicable instructions that bear OMB
clearance numbers. Federal agencies may specify and describe the
programs, functions, or activities that will be used to plan,
budget, and evaluate the work under a grant. Other supplementary
instructions may be issued only with the approval of OMB to the extent
required under the Paperwork Reduction Act of 1980. For any standard
form, except the SF-424 face sheet, Federal agencies may shade out or
instruct the applicant to disregard any line item that is not needed.
(4)When a grantee applies for additional funding (such as a continuation
supplemental award) or amends a previously submitted application, only
the affected pages need be submitted. Previously submitted pages with
information that is still current need not be resubmitted.[53 FR 8086 and
8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 1988]Sec.
18.11 State plans.
(a)Scope. The statutes for some programs require States to submit plans
before receiving grants. Under regulations implementing Executive Order
12372, “Intergovernmental Review of Federal Programs,” States are allowed
to simplify, consolidate and substitute plans. This section contains additional
provisions for plans that are subject to regulations implementing the
Executive order.
(b)Requirements. A State need meet only Federal administrative or
programmatic requirements for a plan that are in statutes or codified
regulations.
(c)Assurances. In each plan the State will include an assurance that the State
shall comply with all applicable Federal statutes and regulations in effect
with respect to the periods for which it receives grant funding. For this
assurance and other assurances required in the plan, the State may:
(1)Cite by number the statutory or regulatory provisions requiring the
assurances and affirm that it gives the assurances required by those
provisions,
(2) Repeat the assurance language in the statutes or regulations, or
(3) Develop its own language to the extent permitted by law.
(d)Amendments. A State will amend a plan whenever necessary to reflect:
(1)New or revised Federal statutes or regulations or (2) a material change
in any State law, organization, policy, or State agency operation. The
State will obtain approval for the amendment and its effective date but
need submit for approval only the amended portions of the plan.
Sec. 18.12 Special grant or subgrant conditions for “high-risk” grantees.
(a)A grantee or subgrantee may be considered “high risk” if an awarding agency
determines that a grantee or subgrantee:
(1) Has a history of unsatisfactory performance, or
(2) Is not financially stable, or
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(3)) Has a management system which does not meet the management
standards set forth in this part, or
(4) Has not conformed to terms and conditions of previous awards;
(5)Is otherwise not responsible; and if the awarding agency determines that
an award will be made, special conditions and/or restrictions shall
correspond to the high risk condition and shall be included in the award.
(b) Special conditions or restrictions may include:
(1) Payment on a reimbursement basis;
(2)Withholding authority to proceed to the next phase until receipt of
evidence of acceptable performance within a given funding period;
(3) Requiring additional, more detailed financial reports;
(4) Additional project monitoring;
(5)Requiring the grantee or subgrantee to obtain technical or management
assistance; or
(6) Establishing additional prior approvals.
(c)If an awarding agency decides to impose such conditions, the awarding
official will notify the grantee or subgrantee as early as possible, in writing, of:
(1) The nature of the special conditions/restrictions;
(2) The reason(s) for imposing them;
(3)The corrective actions which must be taken before they will be removed
and the time allowed for completing the corrective actions; and
(4)The method of requesting reconsideration of the conditions/ restrictions
imposed.
Subpart C—Post-Award Requirements Financial Administration
Sec. 18.20 Standards for financial management systems.
(a)A State must expand and account for grant funds in accordance with State
laws and procedures for expending and accounting for its own funds. Fiscal
control and accounting procedures of the State, as well as its subgrantees
and cost-type contractors, must be sufficient to:
(1)Permit preparation of reports required by this part and the statutes
authorizing the grant, and
(2)Permit the tracing of funds to a level of expenditures adequate to
establish that such funds have not been used in violation of the
restrictions and prohibitions of applicable statutes.
(b)The financial management systems of other grantees and subgrantees must
meet the following standards:
(1)Financial reporting. Accurate, current, and complete disclosure of the
financial results of financially assisted activities must be made in
accordance with the financial reporting requirements of the grant or
subgrant.
(2)Accounting records. Grantees and subgrantees must maintain
records which adequately identify the source and application of funds
provided for financially-assisted activities. These records must contain
information pertaining to grant or subgrant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays or
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expenditures, and income.
(3)Internal control. Effective control and accountability must be
maintained for all grant and subgrant cash, real and personal property,
and other assets. Grantees and subgrantees must adequately
safeguard all such property and must assure that it is used solely for
authorized purposes.
(4)Budget control. Actual expenditures or outlays must be compared
with budgeted amounts for each grant or subgrant. Financial
information must be related to performance or productivity data,
including the development of unit cost information whenever
appropriate or specifically required in the grant or subgrant agreement.
If unit cost data are required, estimates based on available
documentation will be accepted whenever possible.
(5)Allowable cost. Applicable OMB cost principles, agency program
regulations, and the terms of grant and subgrant agreements will be
followed in determining the reasonableness, allow ability, of costs.
(6)Source documentation. Accounting records must be supported by
such source documentation as cancelled checks, paid bills, payrolls,
time and attendance records, contract and subgrant award documents,
etc.
(7)Cash management. Procedures for minimizing the time elapsing
between the transfer of funds from the U.S. Treasury and
disbursement by grantees and subgrantees must be followed
whenever advance payment procedures are used. Grantees must
establish reasonable procedures to ensure the receipt of reports on
subgrantees' cash balances and cash disbursements in sufficient time
to enable them to prepare complete and accurate cash transactions
reports to the awarding agency. When advances are made by letter-of-
¬credit or electronic transfer of funds methods, the grantee must make
drawdowns as close as possible to the time of making disbursements.
Grantees must monitor cash drawdowns by their subgrantees to
assure that they conform substantially to the same standards of timing
and amount as apply to advances to the grantees.
(c)An awarding agency may review the adequacy of the financial management
system of any applicant for financial assistance as part of a preaward review
or at any time subsequent to award.
(d)Certain Urban Mass Transportation Administration (UMTA) grantees shall
comply with the requirements of section 15 of the Urban Mass Transportation
(UMT) Act of 1964, as amended, as implemented by 49 CFR part 630,
regarding a uniform system of accounts and records and a uniform reporting
system for certain grantees.[53 FR 8086 and 8087, Mar. 11, 1988, as
amended at 53 FR 8086, Mar. 11, 1988]
Sec. 18.21 Payment.
(a)Scope. This section prescribes the basic standard and the methods under
which a Federal agency will make payments to grantees, and grantees will
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make payments to subgrantees and contractors.
(b)Basic standard. Methods and procedures for payment shall minimize the
time elapsing between the transfer of funds and disbursement by the
grantee or subgrantee, in accordance with Treasury regulations at 31 CFR
part 205.
(c)Advances. Grantees and subgrantees shall be paid in advance, provided
they maintain or demonstrate the willingness and ability to maintain
procedures to minimize the time elapsing between the transfer of the funds
and their disbursement by the grantee or subgrantee.
(d)Reimbursement. Reimbursement shall be the preferred method when the
requirements in paragraph (c) of this section are not met. Grantees and
subgrantees may also be paid by reimbursement for any construction grant.
Except as otherwise specified in regulation, Federal agencies shall not use
the percentage of completion method to pay construction grants. The
grantee or subgrantee may use that method to pay its construction
contractor, and if it does, the awarding agency's payments to the grantee or
subgrantee will be based on the grantee's or subgrantee's actual rate of
disbursement.
(e)Working capital advances. If a grantee cannot meet the criteria for advance
payments described in paragraph (c) of this section, and the Federal agency
has determined that reimbursement is not feasible because the grantee
lacks sufficient working capital, the awarding agency may provide cash or a
working capital advance basis.
Under this procedure the awarding agency shall advance cash to the
grantee to cover its estimated disbursement needs for an initial period
generally geared to the grantee's disbursing cycle. Thereafter, the awarding
agency shall reimburse the grantee for its actual cash disbursements. The
working capital advance method of payment shall not be used by grantees
or subgrantees if the reason for using such method is the unwillingness or
inability of the grantee to provide timely advances to the subgrantee to meet
the sub subgrantee's actual cash disbursements.
(f) Effect of program income, refunds, and audit recoveries on payment.
(1)Grantees and subgrantees shall disburse repayments to and interest
earned on a revolving fund before requesting additional cash payments
for the same activity.
(2)Except as provided in paragraph (f) (1) of this section, grantees and
subgrantees shall disburse program income, rebates, refunds, contract
settlements, audit recoveries and interest earned on such funds before
requesting additional cash payments.
(g) Withholding payments
(1)Unless otherwise required by Federal statute, awarding agencies shall
not withhold payments for proper charges incurred by grantees or
subgrantees unless;
(i) The grantee or subgrantee has failed to comply with grant award
conditions or
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(ii) The grantee or subgrantee is indebted to the United States.
(2)Cash withheld for failure to comply with grant award condition, but
without suspension of the grant, shall be released to the grantee upon
subsequent compliance. When a grant is suspended, payment
adjustments will be made in accordance with Sec. 18.43(c).
(3)A Federal agency shall not make payment to grantees for amounts that
are withheld by grantees or subgrantees from payment to contractors to
assure satisfactory completion of work. Payments shall be made by the
Federal agency when the grantees or subgrantees actually disburse the
withheld funds to the contractors or to escrow accounts established to
assure satisfactory completion of work.
(h) Cash depositories.
(1)Consistent with the national goal of expanding the opportunities for
minority business enterprises, grantees and subgrantees are
encouraged to use minority banks (a bank which is owned at least 50
percent by minority group members). A list of minority owned banks can
be obtained from the Minority Business Development Agency,
Department of Commerce, Washington, DC 20230.
(2)A grantee or subgrantee shall maintain a separate bank account only
when required by Federal-State agreement.
(i)Interest earned on advances. Except for interest earned on advances of funds
exempt under the Intergovernmental Cooperation Act (31 U.S.C. 6501 et
seq.) and the Indian Self¬ Determination Act (23 U.S.C. 450), grantees and
subgrantees shall promptly, but at least quarterly, remit interest earned on
advances to the Federal agency. The grantee or subgrantee may keep
interest amounts up to $100 per year for administrative expenses.
(j)23 U.S.C. 121 limits payments to States for highway construction projects to
the Federal share of the costs of construction incurred to date, plus the
Federal share of the value of stockpiled materials.
(k)Section 404 of the Surface Transportation Assistance Act of 1982 directs the
Secretary to reimburse States for the Federal share of costs incurred. [53 FR
8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 1988]
Sec. 18.22 Allowable costs.
(a)Limitation on use of funds. Grant funds may be used only for:
(1)The allowable costs of the grantees, subgrantees and cost-type
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
(2)Reasonable fees or profit to cost-type contractors but not any fee or
profit (or other increment above allowable costs) to the grantee or
subgrantee.
(b)Applicable cost principles. For each kind of organization, there is a set of
Federal principles for determining allowable costs. Allowable costs will be
determined in accordance with the cost principles applicable to the
organization incurring the costs. The following chart lists the kinds of
organizations and the applicable cost principles.
(c)The overhead cost principles of OMB Circular A-87 shall not apply to State
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highway agencies for FHWA funded grants.
(d)Sections 3(1) and 9(p) of the UMT Act of 1964, as amended, authorize the
Secretary to include in the net project cost eligible for Federal assistance, the
amount of interest earned and payable on bonds issued by the State or local
public body to the extent that the proceeds of such bonds have actually been
expended in carrying out such project or portion thereof. Limitations are
established in sections 3 and 9 of the UMT Act of 1964, as amended.
(e)Section 9 of the UMT Act of 1964, as amended, authorizes grants to finance
the leasing of facilities and equipment for use in mass transportation services
provided leasing is more cost effective than acquisition or construction.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 1988]
Sec. 18.23 Period of availability of funds.
(a)General. Where a funding period is specified, a grantee may charge to the
award only costs resulting from obligations of the funding period unless
carryover of unobligated balances is permitted, in which case the carryover
balances may be charged for costs resulting from obligations of the
subsequent funding period.
(b)Liquidation of obligations. A grantee must liquidate all obligations incurred
under the award not later than 90 days after the end of the funding period (or
as specified in a program regulation) to coincide with the submission of the
annual Financial Status Report (SF-269). The Federal agency may extend
this deadline at the request of the grantee.
Sec. 18.24 Matching or cost sharing.
(a)Basic rule: Costs and contributions acceptable. With the qualifications and
exceptions listed in paragraph (b) of this section, a matching or cost sharing
requirement may be satisfied by either or both of the following:
(1)Allowable costs incurred by the grantee, subgrantee or a cost-type
contractor under the assistance agreement. This includes allowable
costs borne by non-Federal grants or by others cash donations from
non-Federal third parties.
(2)The value of third party in-kind contributions applicable to the period to
which the cost sharing or matching requirements applies.
(b)Qualifications and exceptions¬.
(1)Costs borne by other Federal grant agreements. Except as provided by
Federal statute, a cost sharing or matching requirement may not be met
by costs borne by another Federal grant. This prohibition does not apply
to income earned by a grantee or subgrantee from a contract awarded
under another Federal grant.
(2)General revenue sharing. For the purpose of this section, general
revenue sharing funds distributed under 31 U.S.C. 6702 are not
considered Federal grant funds.
(3)Cost or contributions counted towards other Federal costs¬-sharing
requirements. Neither costs nor the values of third party in-kind
contributions may count towards satisfying a cost sharing or matching
requirement of a grant agreement if they have been or will be counted
towards satisfying a cost sharing or matching requirement of another
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Federal grant agreement, a Federal procurement contract, or any other
award of Federal funds.
(4)) Costs financed by program income. Costs financed by program
income, as defined in Sec. 18.25, shall not count towards satisfying a
cost sharing or matching requirement unless they are expressly
permitted in the terms of the assistance agreement. (This use of general
program income is described in Sec. 18.25(g).)
(5)Services or property financed by income earned by contractors.
Contractors under a grant may earn income from the activities carried
out under the contract in addition to the amounts earned from the party
awarding the contract. No costs of services or property supported by this
income may count toward satisfying a cost sharing or matching
requirement unless other provisions of the grant agreement expressly
permit this kind of income to be used to meet the requirement.
(6)Records. Costs and third party in-kind contributions counting towards
satisfying a cost sharing or matching requirement must be verifiable
from the records of grantees and subgrantee or cost-type contractors.
These records must show how the value placed on third party in-kind
contributions was derived. To the extent feasible, volunteer services will
be supported by the same methods that the organization uses to support
the allocability of regular personnel costs.
(7) Special standards for third party in-kind contributions.
(i)Third party in-kind contributions count towards satisfying a cost sharing
or matching requirement only where, if the party receiving the
contributions were to pay for them, the payments would be allowable
costs.
(ii)Some third party in-kind contributions are goods and services that, if the
grantee, subgrantee, or contractor receiving the contribution had to pay
for them, the payments would have been an indirect costs. Costs
sharing or matching credit for such contributions shall be given only if
the grantee, subgrantee, or contractor has established, along with its
regular indirect cost rate, a special rate for allocating to individual
projects or programs the value of the contributions.
(iii)A third party in-kind contribution to a fixed-price contract may count
towards satisfying a cost sharing or matching requirement only if it
results in:
(A)) An increase in the services or property provided under the contract
(without additional cost to the grantee or subgrantee) or
(B) A cost savings to the grantee or subgrantee.
(iv)The values placed on third party in-kind contributions for cost sharing or
matching purposes will conform to the rules in the succeeding sections
of this part. If a third party in-kind contribution is a type not treated in
those sections, the value placed upon it shall be fair and reasonable.
(8)23 U.S.C. 121(a) permits reimbursement for actual construction cost
incurred by States for highway construction projects. Except for private
donations of right-of-way, contributions and donations shall not be
considered State costs, and shall not be allowable for matching
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purposes for highway construction contracts. 23 U.S.C. 323 permits
private donations of right-of-way to be used for a State's matching
share, and establishes procedures for determining the fair market value
of such donated right-of-way.
(9)Section 4(a) of the UMT Act of 1964, as amended, provides that the
Federal grant for any project to be assisted under section 3 of the UMT
Act of 1964, as amended, shall be in an amount equal to 75 percent of
the net project costs. Net project cost is defined as that portion of the
cost of the project which cannot be reasonably financed from revenues.
(10)Section 18(e) of the UMT Act of 1964, as amended, limits the Federal
share to 80 percent of the net cost of construction, as determined by the
Secretary of Transportation. The Federal share for the payment of
subsidies for operating expenses, as defined by the Secretary, shall not
exceed 50 percent of the net cost of such operating expense projects.
(c)Valuation of donated services¬.
(1)Volunteer services. Unpaid services provided to a grantee or subgrantee
by individuals will be valued at rates consistent with those ordinarily paid
for similar work in the grantee's or subgrantee's organization. If the
grantee or subgrantee does not have employees performing similar
work, the rates will be consistent with those ordinarily paid by other
employers for similar work in the same labor market. In either case, a
reasonable amount for fringe benefits may be included in the valuation.
Employees of other organizations. When an employer other than a
grantee, subgrantee, or cost-type contractor furnishes free of charge the
services of an employee in the employee's normal line of work, the
services will be valued at the employee's regular rate of pay exclusive of
the employee's fringe benefits and overhead costs. If the services are in
a different line of work, paragraph (c)(1) of this section applies.
(3)Section 5(g) of the Department of Transportation Act (49 U.S.C.
1654(g)) limits in-kind service contributions under the local Rail Service
Assistance Program to “the cash equivalent of State salaries for State
public employees working in the State rail assistance program, but not
including overhead and general administrative costs.”
(d)Valuation of third party donated supplies and loaned equipment or space.(1) If
a third party donates supplies, the contribution will be valued at the market
value of the supplies at the time of donation.
(2)) If a third party donates the use of equipment or space in a building but
retains title, the contribution will be valued at the fair rental rate of the
equipment or space.
(e) Valuation of third party donated equipment, buildings, and land.
If a third party donates equipment, buildings, or land, and title passes to a
grantee or subgrantee, the treatment of the donated property will depend
upon the purpose of the grant or subgrant, as follows:
(1)Awards for capital expenditures. If the purpose of the grant or subgrant
is to assist the grantee or subgrantee in the acquisition of property, the
market value of that property at the time of donation may be counted as
cost sharing or matching,
(2)Other awards. If assisting in the acquisition of property is not the
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purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of this
section apply:
(i)If approval is obtained from the awarding agency, the market value at
the time of donation of the donated equipment or buildings and the fair
rental rate of the donated land may be counted as cost sharing or
matching. In the case of a subgrant, the terms of the grant agreement
may require that the approval be obtained from the Federal agency as
well as the grantee. In all cases, the approval may be given only if a
purchase of the equipment or rental of the land would be approved as
an allowable direct cost. If any part of the donated property was
acquired with Federal funds, only the non-federal share of the property
may be counted as cost¬sharing or matching.
(ii)If approval is not obtained under paragraph (e)(2)(i) of this section, no
amount may be counted for donated land, and only depreciation or use
allowances may be counted for donated equipment and buildings. The
depreciation or use allowances for this property are not treated as third
party in-kind contributions. Instead, they are treated as costs incurred by
the grantee or subgrantee. They are computed and allocated (usually as
indirect costs) in accordance with the cost principles specified in Sec.
18.22, in the same way as depreciation or use allowances for purchased
equipment and buildings. The amount of depreciation or use allowances
for donated equipment and buildings is based on the property's market
value at the time it was donated.
(f)Valuation of grantee or subgrantee donated real property for
construction/acquisition. If a grantee or subgrantee donates real property for a
construction or facilities acquisition project, the current market value of that
property may be counted as cost sharing or matching. If any part of the
donated property was acquired with Federal funds, only the non-federal share
of the property may be counted as cost sharing or matching.
(g)Appraisal of real property. In some cases under paragraphs (d),(e) and (f) of
this section, it will be necessary to establish the market value of land or a
building or the fair rental rate of land or of space in a building. In these cases,
the Federal agency may require the market value or fair rental value be set by
an independent appraiser, and that the value or rate be certified by the
grantee. This requirement will also be imposed by the grantee on
subgrantees.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 1988]
Sec. 18.25 Program income.
(a)General. Grantees are encouraged to earn income to defray program costs.
Program income includes income from fees for services performed, from the
use or rental of real or personal property acquired with grant funds, from the
sale of commodities or items fabricated under a grant agreement, and from
payments of principal and interest on loans made with grant funds. Except
as otherwise provided in regulations of the Federal agency, program income
does not include interest on grant funds, rebates, credits, discounts, refunds,
etc. and interest earned on any of them.
(b)Definition of program income. Program income means gross income
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received by the grantee or subgrantee directly generated by a grant
supported activity, or earned only as a result of the grant agreement during
the grant period. “During the grant period” is the time between the effective
date of the award and the ending date of the award reflected in the final
financial report.
(c)Cost of generating program income. If authorized by Federal regulations
or the grant agreement, costs incident to the generation of program income
may be deducted from gross income to determine program income.
(d)Governmental revenues. Taxes, special assessments, levies, fines, and
other such revenues raised by a grantee or subgrantee are not program
income unless the revenues are specifically identified in the grant agreement
or Federal agency regulations as program income.
(e)Royalties. Income from royalties and license fees for copyrighted material,
patents, and inventions developed by a grantee or subgrantee is program
income only if the revenues are specifically identified in the grant agreement
or Federal agency regulations as program income. (See Sec. 18.34.)
(f)Property. Proceeds from the sale of real property or equipment will be
handled in accordance with the requirements of Secs. 18.31 and 18.32.
(g)Use of program income. Program income shall be deducted from outlays
which may be both Federal and non-Federal as described below, unless the
Federal agency regulations or the grant agreement specify another
alternative (or a combination of the alternatives). In specifying alternatives,
the Federal agency may distinguish between income earned by the grantee
and income earned by subgrantees and between the sources, kinds, or
amounts of income. When Federal agencies authorize the alternatives in
paragraphs (g) (2) and (3) of this section, program income in excess of any
limits stipulated shall also be deducted from outlays.
(1)Deduction. Ordinarily program income shall be deducted from total
allowable costs to determine the net allowable costs. Program income
shall be used for current costs unless the Federal agency authorizes
otherwise. Program income which the grantee did not anticipate at the
time of the award shall be used to reduce the Federal agency and
grantee contributions rather than to increase the funds committed to the
project.
(2)Addition. When authorized, program income may be added to the
funds committed to the grant agreement by the Federal agency and the
grantee.
The program income shall be used for the purposes and under the
conditions of the grant agreement.
(3)Cost sharing or matching. When authorized, program income may be
used to meet the cost sharing or matching requirement of the grant
agreement. The amount of the Federal grant award remains the same.
(4)) Section 3(a)(1)(D) of the UMT Act of 1964, as amended, provides that
the Secretary shall establish requirements for the use of income derived
from appreciated land values for certain UMTA grants. Specific
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requirements shall be contained in grant agreements.
(5)UMTA grantees may retain program income for allowable capital or
operating expenses.
(6)For grants awarded under section 9 of the UMT Act of 1964, as
amended, any revenues received from the sale of advertising and
concessions in excess of fiscal year 1985 levels shall be excluded from
program income.
(7)23 U.S.C. 156 requires that States shall charge fair market value for the
sale, lease, or use of right-of-way airspace for non¬-transportation
purposes and that such income shall be used for projects eligible under
23 U.S.C.
(h)) Income after the award period. There are no Federal requirements
governing the disposition of program income earned after the end of the
award period (i.e., until the ending date of the final financial report, see
paragraph (a) of this section), unless the terms of the agreement or the
Federal agency regulations provide otherwise.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 1988]
Sec. 18.26 Non-Federal audits.
(a)Basic rule. Grantees and subgrantees are responsible for obtaining audits
in accordance with the Single Audit Act Amendments of 1996 (31 U.S.C.
7501-7507) and revised OMB Circular A-133, “Audits of States, Local
Governments, and Non-Profit Organizations.” The audits shall be made by
an independent auditor in accordance with generally accepted government
auditing standards covering financial audits.
(b)Subgrantees. State or local governments, as those terms are defined for
purposes of the Single Audit Act Amendments of 1996, that provide Federal
awards to a subgrantee, which expends $300,000 or more (or other amount
as specified by OMB) in Federal awards in a fiscal year, shall:
(1)Determine whether State or local subgrantees have met the audit
requirements of the Act and whether subgrantees covered by OMB
Circular A-110, “Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education, Hospitals, and Other
Non-Profit organizations,” have met the audit requirements of the Act.
Commercial contractors (private for-profit and private and governmental
organizations) providing goods and services to State and local
governments are not required to have a single audit performed. State
and local governments should use their own procedures to ensure that
the contractor has complied with laws and regulations affecting the
expenditure of Federal funds;
(2)Determine whether the subgrantee spent Federal assistance funds
provided in accordance with applicable laws and regulations. This may
be accomplished by reviewing an audit of the subgrantee made in
accordance with the Act, Circular A-110, or through other means (e.g.,
program reviews) if the subgrantee has not had such an audit;
(3)Ensure that appropriate corrective action is taken within six months after
receipt of the audit report in instance of noncompliance with Federal
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laws and regulations;
(4)Consider whether subgrantee audits necessitate adjustment of the
grantee's own records; and
(5)Require each subgrantee to permit independent auditors to have access
to the records and financial statements.
(c) Auditor selection. In arranging for audit services, Sec. 18.36 shall be followed.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 61 FR 21387, May 10, 1996; 62 FR
45939, 45947, Aug. 29, 1997]
Changes, Property, and Sub-awards
Sec. 18.30 Changes.
(a)General. Grantees and subgrantees are permitted to rebudget within the
approved direct cost budget to meet unanticipated requirements and may
make limited program changes to the approved project. However, unless
waived by the awarding agency, certain types of post-award changes in
budgets and projects shall require the prior written approval of the awarding
agency.
(b)Relation to cost principles. The applicable cost principles (see Sec. 18.22)
contain requirements for prior approval of certain types of costs. Except
where waived, those requirements apply to all grants and subgrants even if
paragraphs (c) through (f) of this section do not.
(c)Budget changes.
(1)Nonconstruction projects. Except as stated in other regulations or an
award document, grantees or subgrantees shall obtain the prior
approval of the awarding agency whenever any of the following changes
is anticipated under a nonconstruction award:
(i) Any revision which would result in the need for additional funding.
(ii)Unless waived by the awarding agency, cumulative transfers among
direct cost categories, or, if applicable, among separately budgeted
programs, projects, functions, or activities which exceed or are expected
to exceed ten percent of the current total approved budget, whenever
the awarding agency's share exceeds $100,000.
(iii)Transfer of funds allotted for training allowances (i.e., from direct
payments to trainees to other expense categories).
(2)Construction projects. Grantees and subgrantees shall obtain prior
written approval for any budget revision which would result in the need
for additional funds.
(3)Combined construction and non-construction projects. When a grant or
subgrant provides funding for both construction and non-construction
activities, the grantee or subgrantee must obtain prior written approval
from the awarding agency before making any fund or budget transfer
from non-construction to construction or vice versa.
(d)Programmatic changes. Grantees or subgrantees must obtain the prior
approval of the awarding agency whenever any of the following actions is
anticipated:
(1)Any revision of the scope or objectives of the project (regardless of
whether there is an associated budget revision requiring prior approval).
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(2) Need to extend the period of availability of funds.
(3)Changes in key persons in cases where specified in an application or a
grant award. In research projects, a change in the project director or
principal investigator shall always require approval unless waived by the
awarding agency.
(4)Under non-construction projects, contracting out, sub-granting (if
authorized by law) or otherwise obtaining the services of a third party to
perform activities which are central to the purposes of the award. This
approval requirement is in addition to the approval requirements of Sec.
18.36 but does not apply to the procurement of equipment, supplies, and
general support services.
(e)Additional prior approval requirements. The awarding agency may not
require prior approval for any budget revision which is not described in
paragraph (c) of this section.
(f)Requesting prior approval.
(1)A request for prior approval of any budget revision will be in the same
budget formal the grantee used in its application and shall be
accompanied by a narrative justification for the proposed revision.
(2)A request for a prior approval under the applicable Federal cost
principles (see Sec. 18.22) may be made by letter.
(3)A request by a subgrantee for prior approval will be addressed in writing
to the grantee. The grantee will promptly review such request and shall
approve or disapprove the request in writing. A grantee will not approve
any budget or project revision which is inconsistent with the purpose or
terms and conditions of the Federal grant to the grantee. If the revision,
requested by the subgrantee would result in a change to the grantee's
approved project which requires Federal prior approval, the grantee will
obtain the Federal agency's approval before approving the subgrantee's
request.
Sec. 18.31 Real property.
(a)Title. Subject to the obligations and conditions set forth in this section, title to
real property acquired under a grant or subgrant will vest upon acquisition in
the grantee or subgrantee respectively.
(b)Use. Except as otherwise provided by Federal statutes, real property will be
used for the originally authorized purposes as long as needed for that
purposes, and the grantee or subgrantee shall not dispose of or encumber
its title or other interests.
(c)Disposition. When real property is no longer needed for the originally
authorized purpose, the grantee or subgrantee will request disposition
instructions from the awarding agency. The instructions will provide for one
of the following alternatives:
(1)Retention of title. Retain title after compensating the awarding agency.
The amount paid to the awarding agency will be computed by applying
the awarding agency's percentage of participation in the cost of the
original purchase to the fair market value of the property. However, in
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those situations where a grantee or subgrantee is disposing of real
property acquired with grant funds and acquiring replacement real
property under the same program, the net proceeds from the disposition
may be used as an offset to the cost of the replacement property.
(2)Sale of property. Sell the property and compensate the awarding
agency. The amount due to the awarding agency will be calculated by
applying the awarding agency's percentage of participation in the cost of
the original purchase to the proceeds of the sale after deduction of any
actual and reasonable selling and fixing-up expenses. If the grant is still
active, the net proceeds from sale may be offset against the original cost
of the property. When a grantee or sub-grantee is directed to sell
property, sales procedures shall be followed that provide for competition
to the extent practicable and result in the highest possible return.
(3)Transfer of title. Transfer title to the awarding agency or to a third-party
designated/approved by the awarding agency. The grantee or
subgrantee shall be paid an amount calculated by applying the grantee
or subgrantee's percentage of participation in the purchase of the real
property to the current fair market value of the property.
(d)) If the conditions in 23 U.S.C. 103(e) (5), (6), or (7), as appropriate, are met
and approval is given by the Secretary, States shall not be required to repay
the Highway Trust Fund for the cost of right-of-way and other items when
certain segments of the Interstate System are withdrawn.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 1988]
Sec. 18.32 Equipment.
(a)Title. Subject to the obligations and conditions set forth in this section, title to
equipment acquired under a grant or subgrant will vest upon acquisition in
the grantee or subgrantee respectively.
(b)States. A State will use, manage, and dispose of equipment acquired under
a grant by the State in accordance with State laws and procedures. Other
grantees and subgrantees will follow paragraphs (c) through (e) of this
section.
(c)Use.
(1)) Equipment shall be used by the grantee or subgrantee in the program
or project for which it was acquired as long as needed, whether or not
the project or program continues to be supported by Federal funds.
When no longer needed for the original program or project, the
equipment may be used in other activities currently or previously
supported by a Federal agency.
(2)The grantee or subgrantee shall also make equipment available for use
on other projects or programs currently or previously supported by the
Federal Government, providing such use will not interfere with the work
on the projects or program for which it was originally acquired. First
preference for other use shall be given to other programs or projects
supported by the awarding agency. User fees should be considered if
appropriate.
(3)Notwithstanding the encouragement in Sec. 18.25(a) to earn program
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income, the grantee or subgrantee must not use equipment acquired
with grant funds to provide services for a fee to compete unfairly with
private companies that provide equivalent services, unless specifically
permitted or contemplated by Federal statute. (4) When acquiring
replacement equipment, the grantee or subgrantee may use the
equipment to be replaced as a trade-in or sell the property and use the
proceeds to offset the cost of the replacement property, subject to the
approval of the awarding agency.
(d)Management requirements. Procedures for managing equipment
(including replacement equipment), whether acquired in whole or in part with
grant funds, until disposition takes place will, as a minimum, meet the
following requirements:
(1)Property records must be maintained that include a description of the
property, a serial number or other identification number, the source of
property, who holds title, the acquisition date, and cost of the property,
percentage of Federal participation in the cost of the property, the
location, use and condition of the property, and any ultimate disposition
data including the date of disposal and sale price of the property.
(2)A physical inventory of the property must be taken and the results
reconciled with the property records at least once every two years.
(3)A control system must be developed to ensure adequate safeguards to
prevent loss, damage, or theft of the property. Any loss, damage, or theft
shall be investigated.
(4)Adequate maintenance procedures must be developed to keep the
property in good condition.
(5)If the grantee or subgrantee is authorized or required to sell the
property, proper sales procedures must be established to ensure the
highest possible return.
(e)Disposition. When original or replacement equipment acquired under a
grant or subgrant is no longer needed for the original project or program or
for other activities currently or previously supported by a Federal agency,
disposition of the equipment will be made as follows:
(1)Items of equipment with a current per-unit fair market value of less than
$5,000 may be retained, sold or otherwise disposed of with no further
obligation to the awarding agency.
(2)Items of equipment with a current per unit fair market value in excess of
$5,000 may be retained or sold and the awarding agency shall have a
right to an amount calculated by multiplying the current market value or
proceeds from sale by the awarding agency's share of the equipment.
(3) ) In cases where a grantee or subgrantee fails to take appropriate
disposition actions, the awarding agency may direct the grantee or
subgrantee to take excess and disposition actions.
(f)Federal equipment. In the event a grantee or subgrantee is provided
federally-owned equipment:
(1) Title will remain vested in the Federal Government.
(2)Grantees or subgrantees will manage the equipment in accordance with
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Federal agency rules and procedures, and submit an annual inventory
listing.
(3)When the equipment is no longer needed, the grantee or subgrantee will
request disposition instructions from the Federal agency.
(g)Right to transfer title. The Federal awarding agency may reserve the right
to transfer title to the Federal Government or a third part named by the
awarding agency when such a third party is otherwise eligible under existing
statutes. Such transfers shall be subject to the following standards:
(1)The property shall be identified in the grant or otherwise made known to
the grantee in writing.
(2)The Federal awarding agency shall issue disposition instruction within
120 calendar days after the end of the Federal support of the project for
which it was acquired. If the Federal awarding agency fails to issue
disposition instructions within the 120 calendar-day period the grantee
shall follow Sec. 18.32(e).
(3)When title to equipment is transferred, the grantee shall be paid an
amount calculated by applying the percentage of participation in the
purchase to the current fair market value of the property.
Sec. 18.33 Supplies.
(a)Title. Title to supplies acquired under a grant or subgrant will vest, upon
acquisition, in the grantee or subgrantee respectively.
(b)Disposition. If there is a residual inventory of unused supplies exceeding
$5,000 in total aggregate fair market value upon termination or completion of
the award, and if the supplies are not needed for any other federally
sponsored programs or projects, the grantee or subgrantee shall
compensate the awarding agency for its share.
Sec. 18.34 Copyrights.
The Federal awarding agency reserves a royalty-free, nonexclusive, and irrevocable
license to reproduce, publish or otherwise use, and to authorize others to use, for
Federal Government purposes:
(a)The copyright in any work developed under a grant, subgrant, or contract
under a grant or subgrant; and
(b)Any rights of copyright to which a grantee, subgrantee or a contractor
purchases ownership with grant support.
Sec. 18.35 Subawards to debarred and suspended parties.
Grantees and subgrantees must not make any award or permit any award (subgrant or
contract) at any tier to any party which is debarred or suspended or is otherwise
excluded from or ineligible for participation in Federal assistance programs under
Executive Order 12549, “Debarment and Suspension.”
Sec. 18.36 Procurement.
(a)States. When procuring property and services under a grant, a State will
follow the same policies and procedures it uses for procurements from its
non-Federal funds.
The State will ensure that every purchase order or other contract includes
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any clauses required by Federal statutes and executive orders and their
implementing regulations. Other grantees and subgrantees will follow
paragraphs (b) through (i) in this section.
(b)Procurement standards.
(1)Grantees and subgrantees will use their own procurement procedures
which reflect applicable State and local laws and regulations, provided
that the procurements conform to applicable Federal law and the
standards identified in this section.
(2)Grantees and subgrantees will maintain a contract administration
system which ensures that contractors perform in accordance with the
terms, conditions, and specifications of their contracts or purchase
orders.
(3)Grantees and subgrantees will maintain a written code of standards of
conduct governing the performance of their employees engaged in the
award and administration of contracts. No employee, officer or agent of
the grantee or subgrantee shall participate in selection, or in the award
or administration of a contract supported by Federal funds if a conflict of
interest, real or apparent, would be involved. Such a conflict would arise
when:
(i) The employee, officer or agent,
(ii) Any member of his immediate family,
(iii) His or her partner, or
(iv)An organization which employs, or is about to employ, any of the above,
has a financial or other interest in the firm selected for award. The
grantee's or subgrantee's officers, employees or agents will neither
solicit nor accept gratuities, favors or anything of monetary value from
contractors, potential contractors, or parties to sub-agreements. Grantee
and subgrantees may set minimum rules where the financial interest is
not substantial or the gift is an unsolicited item of nominal intrinsic value.
To the extent permitted by State or local law or regulations, such
standards or conduct will provide for penalties, sanctions, or other
disciplinary actions for violations of such standards by the grantee's and
subgrantee's officers, employees, or agents, or by contractors or their
agents. The awarding agency may in regulation provide additional
prohibitions relative to real, apparent, or potential conflicts of interest.
(4)Grantee and subgrantee procedures will provide for a review of
proposed procurements to avoid purchase of unnecessary or duplicative
items. Consideration should be given to consolidating or breaking out
procurements to obtain a more economical purchase. Where
appropriate, an analysis will be made of lease versus purchase
alternatives, and any other appropriate analysis to determine the most
economical approach.
(5)To foster greater economy and efficiency, grantees and subgrantees are
encouraged to enter into State and local intergovernmental agreements
for procurement or use of common goods and services.
(6)Grantees and subgrantees are encouraged to use Federal excess and
surplus property in lieu of purchasing new equipment and property
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whenever such use is feasible and reduces project costs.
(7)Grantees and subgrantees are encouraged to use value engineering
clauses in contracts for construction projects of sufficient size to offer
reasonable opportunities for cost reductions. Value engineering is a
systematic and creative analysis of each contract item or task to ensure
that its essential function is provided at the overall lower cost.
(8)Grantees and subgrantees will make awards only to responsible
contractors possessing the ability to perform successfully under the
terms and conditions of a proposed procurement. Consideration will be
given to such matters as contractor integrity, compliance with public
policy, record of past performance, and financial and technical
resources.
(9)Grantees and subgrantees will maintain records sufficient to detail the
significant history of a procurement. These records will include, but are
not necessarily limited to the following: rationale for the method of
procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price.
(10)Grantees and subgrantees will use time and material type contracts
only:
(i) After a determination that no other contract is suitable, and
(ii)If the contract includes a ceiling price that the contractor exceeds at its
own risk.
(11)Grantees and subgrantees alone will be responsible, in accordance with
good administrative practice and sound business judgment, for the
settlement of all contractual and administrative issues arising out of
procurements. These issues include, but are not limited to source
evaluation, protests, disputes, and claims. These standards do not
relieve the grantee or subgrantee of any contractual responsibilities
under its contracts. Federal agencies will not substitute their judgment
for that of the grantee or subgrantee unless the matter is primarily a
Federal concern. Violations of law will be referred to the local, State, or
Federal authority having proper jurisdiction.
(12)Grantees and subgrantees will have protest procedures to handle and
resolve disputes relating to their procurements and shall in all instances
disclose information regarding the protest to the awarding agency. A
protestor must exhaust all administrative remedies with the grantee and
subgrantee before pursuing a protest with the Federal agency. Reviews
of protests by the Federal agency will be limited to:
(i)Violations of Federal law or regulations and the standards of this section
(violations of State or local law will be under the jurisdiction of State or
local authorities) and
(ii)Violations of the grantee's or subgrantee's protest procedures for failure
to review a complaint or protest. Protests received by the Federal
agency other than those specified above will be referred to the grantee
or subgrantee.
(c)Competition.
(1)All procurement transactions will be conducted in a manner providing full
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and open competition consistent with the standards of Sec. 18.36. Some
of the situations considered to be restrictive of competition include but
are not limited to:
(i)Placing unreasonable requirements on firms in order for them to qualify
to do business,
(ii) Requiring unnecessary experience and excessive bonding,
(iii)Noncompetitive pricing practices between firms or between affiliated
companies,
(iv) Noncompetitive awards to consultants that are on retainer contracts,
(v) Organizational conflicts of interest,
(vi)Specifying only a “brand name” product instead of allowing “an equal”
product to be offered and describing the performance of other relevant
requirements of the procurement, and
(vii) Any arbitrary action in the procurement process.
(2)Grantees and subgrantees will conduct procurements in a manner that
prohibits the use of statutorily or administratively imposed in-State or
local geographical preferences in the evaluation of bids or proposals,
except in those cases where applicable Federal statutes expressly
mandate or encourage geographic preference. Nothing in this section
preempts State licensing laws. When contracting for architectural and
engineering (A/E) services, geographic location may be a selection
criteria provided its application leaves an appropriate number of qualified
firms, given the nature and size of the project, to compete for the
contract.
(3)Grantees will have written selection procedures for procurement
transactions. These procedures will ensure that all solicitations:
(i)Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such
description shall not, in competitive procurements, contain features
which unduly restrict competition.
The description may include a statement of the qualitative nature of the
material, product or service to be procured, and when necessary, shall
set forth those minimum essential characteristics and standards to
which it must conform if it is to satisfy its intended use. Detailed
product specifications should be avoided if at all possible. When it is
impractical or uneconomical to make a clear and accurate description
of the technical requirements, a “brand name or equal” description may
be used as a means to define the performance or other salient
requirements of a procurement. The specific features of the named
brand which must be met by offerors shall be clearly stated; and
(ii)Identify all requirements which the offerors must fulfill and all other
factors to be used in evaluating bids or proposals.
(4)Grantees and subgrantees will ensure that all pre-qualified lists of
persons, firms, or products which are used in acquiring goods and
services are current and include enough qualified sources to ensure
maximum open and free competition. Also, grantees and subgrantees
will not preclude potential bidders from qualifying during the solicitation
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period.
(d)Methods of procurement to be followed
(1)Procurement by small purchase procedures. Small purchase procedures
are those relatively simple and informal procurement methods for
securing services, supplies, or other property that do not cost more than
the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently
set at $100,000). If small purchase procedures are used, price or rate
quotations shall be obtained from an adequate number of qualified
sources.
(2)Procurement by sealed bids (formal advertising). Bids are publicly
solicited and a firm-fixed-price contract (lump sum or unit price) is
awarded to the responsible bidder whose bid, conforming with all the
material terms and conditions of the invitation for bids, is the lowest in
price. The sealed bid method is the preferred method for procuring
construction, if the conditions in Sec. 18.36(d)(2)(i) apply.
(i)In order for sealed bidding to be feasible, the following conditions should
be present:
(A)A complete, adequate, and realistic specification or purchase description
is available;
(B)Two or more responsible bidders are willing and able to compete
effectively and for the business; and
(C)The procurement lends itself to a firm fixed price contract and the
selection of the successful bidder can be made principally on the basis
of price.
(ii) If sealed bids are used, the following requirements apply:
(A)The invitation for bids will be publicly advertised and bids shall be
solicited from an adequate number of known suppliers, providing them
sufficient time prior to the date set for opening the bids;
(B)The invitation for bids, which will include any specifications and pertinent
attachments, shall define the items or services in order for the bidder to
properly respond;
(C)All bids will be publicly opened at the time and place prescribed in the
invitation for bids;
(D)A firm fixed-price contract award will be made in writing to the lowest
responsive and responsible bidder. Where specified in bidding
documents, factors such as discounts, transportation cost, and life cycle
costs shall be considered in determining which bid is lowest. Payment
discounts will only be used to determine the low bid when prior
experience indicates that such discounts are usually taken advantage of;
and
(E) Any or all bids may be rejected if there is a sound documented reason.
(3)Procurement by competitive proposals. The technique of competitive
proposals is normally conducted with more than one source submitting
an offer, and either a fixed-price or cost reimbursement type contract is
awarded. It is generally used when conditions are not appropriate for the
use of sealed bids. If this method is used, the following requirements
apply:
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(i)Requests for proposals will be publicized and identify all evaluation
factors and their relative importance. Any response to publicized
requests for proposals shall be honored to the maximum extent
practical;
(ii)Proposals will be solicited from an adequate number of qualified
sources;
(iii)Grantees and subgrantees will have a method for conducting technical
evaluations of the proposals received and for selecting awardees;
(iv)Awards will be made to the responsible firm whose proposal is most
advantageous to the program, with price and other factors considered;
and
(v)Grantees and subgrantees may use competitive proposal procedures for
qualifications-based procurement of architectural/engineering (A/E)
professional services whereby competitors' qualifications are evaluated
and the most qualified competitor is selected, subject to negotiation of
fair and reasonable compensation. The method, where price is not used
as a selection factor, can only be used in procurement of A/E
professional services. It cannot be used to purchase other types of
services though A/E firms are a potential source to perform the
proposed effort.
(4)Procurement by noncompetitive proposals is procurement through
solicitation of a proposal from only one source, or after solicitation of a
number of sources, competition is determined inadequate.
(i)Procurement by noncompetitive proposals may be used only when the
award of a contract is infeasible under small purchase procedures,
sealed bids or competitive proposals and one of the following
circumstances applies:
(A) The item is available only from a single source;
(B)The public exigency or emergency for the requirement will not permit a
delay resulting from competitive solicitation;
(C) The awarding agency authorizes noncompetitive proposals; or
(D)After solicitation of a number of sources, competition is determined
inadequate.
(ii)Cost analysis, i.e., verifying the proposed cost data, the projections of
the data, and the evaluation of the specific elements of costs and profits,
is required.
(iii)Grantees and subgrantees may be required to submit the proposed
procurement to the awarding agency for pre-award review in accordance
with paragraph (g) of this section.
(e)Contracting with small and minority firms, women's business enterprise
and labor surplus area firms.
(1)The grantee and subgrantee will take all necessary affirmative steps to
assure that minority firms, women's business enterprises, and labor
surplus area firms are used when possible.
(2) Affirmative steps shall include:
(i)Placing qualified small and minority businesses and women's business
enterprises on solicitation lists;
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(ii)Assuring that small and minority businesses, and women's business
enterprises are solicited whenever they are potential sources;
(iii)Dividing total requirements, when economically feasible, into smaller
tasks or quantities to permit maximum participation by small and
minority business, and women's business enterprises;
(iv)Establishing delivery schedules, where the requirement permits, which
encourage participation by small and minority business, and women's
business enterprises;
(v)Using the services and assistance of the Small Business Administration,
and the Minority Business Development Agency of the Department of
Commerce; and
(vi)Requiring the prime contractor, if subcontracts are to be let, to take the
affirmative steps listed in paragraphs (e)(2) (i) through (v) of this section.
(f)Contract cost and price.
(1)Grantees and subgrantees must perform a cost or price analysis in
connection with every procurement action including contract
modifications. The method and degree of analysis is dependent on the
facts surrounding the particular procurement situation, but as a starting
point, grantees must make independent estimates before receiving bids
or proposals. A cost analysis must be performed when the offeror is
required to submit the elements of his estimated cost, e.g., under
professional, consulting, and architectural engineering services
contracts. A cost analysis will be necessary when adequate price
competition is lacking, and for sole source procurements, including
contract modifications or change orders, unless price reasonableness
can be established on the basis of a catalog or market price of a
commercial product sold in substantial quantities to the general public or
based on prices set by law or regulation. A price analysis will be used in
all other instances to determine the reasonableness of the proposed
contract price.
(2)Grantees and subgrantees will negotiate profit as a separate element of
the price for each contract in which there is no price competition and in
all cases where cost analysis is performed. To establish a fair and
reasonable profit, consideration will be given to the complexity of the
work to be performed, the risk borne by the contractor, the contractor's
investment, the amount of subcontracting, the quality of its record of
past performance, and industry profit rates in the surrounding
geographical area for similar work.
(3)Costs or prices based on estimated costs for contracts under grants will
be allowable only to the extent that costs incurred or cost estimates
included in negotiated prices are consistent with Federal cost principles
(see Sec. 18.22). Grantees may reference their own cost principles that
comply with the applicable Federal cost principles.
(4)The cost plus a percentage of cost and percentage of construction cost
methods of contracting shall not be used.
(g)Awarding agency review.
(1)Grantees and subgrantees must make available, upon request of the
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awarding agency, technical specifications on proposed procurements
where the awarding agency believes such review is needed to ensure
that the item and/or service specified is the one being proposed for
purchase. This review generally will take place prior to the time the
specification is incorporated into a solicitation document. However, if the
grantee or subgrantee desires to have the review accomplished after a
solicitation has been developed, the awarding agency may still review
the specifications, with such review usually limited to the technical
aspects of the proposed purchase.
(2)Grantees and subgrantees must on request make available for awarding
agency pre-award review procurement documents, such as requests for
proposals or invitations for bids, independent cost estimates, etc. when:
(i)A grantee's or subgrantee's procurement procedures or operation fails to
comply with the procurement standards in this section; or
(ii)The procurement is expected to exceed the simplified acquisition
threshold and is to be awarded without competition or only one bid or
offer is received in response to a solicitation; or
(iii)The procurement, which is expected to exceed the simplified acquisition
threshold, specifies a “brand name” product; or
(iv)The proposed award is more than the simplified acquisition threshold
and is to be awarded to other than the apparent low bidder under a
sealed bid procurement; or
(v)A proposed contract modification changes the scope of a contract or
increases the contract amount by more than the simplified acquisition
threshold.
(3)A grantee or subgrantee will be exempt from the pre-award review in
paragraph (g)(2) of this section if the awarding agency determines that
its procurement systems comply with the standards of this section.
(i)A grantee or subgrantee may request that its procurement system be
reviewed by the awarding agency to determine whether its system
meets these standards in order for its system to be certified. Generally,
these reviews shall occur where there is a continuous high-dollar
funding, and third-party contracts are awarded on a regular basis.
(ii)A grantee or subgrantee may self-certify its procurement system. Such
self-certification shall not limit the awarding agency's right to survey the
system. Under a self¬-certification procedure, awarding agencies may
wish to rely on written assurances from the grantee or subgrantee that it
is complying with these standards. A grantee or subgrantee will cite
specific procedures, regulations, standards, etc., as being in compliance
with these requirements and have its system available for review.
(h)Bonding requirements. For construction or facility improvement contracts
or subcontracts exceeding the simplified acquisition threshold, the awarding
agency may accept the bonding policy and requirements of the grantee or
subgrantee provided the awarding agency has made a determination that
the awarding agency's interest is adequately protected. If such a
determination has not been made, the minimum requirements shall be as
follows:
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(1)A bid guarantee from each bidder equivalent to five percent of the bid
price. The “bid guarantee” shall consist of a firm commitment such as a
bid bond, certified check, or other negotiable instrument accompanying
a bid as assurance that the bidder will, upon acceptance of his bid,
execute such contractual documents as may be required within the time
specified.
(2)A performance bond on the part of the contractor for 100 percent of the
contract price. A “performance bond” is one executed in connection with
a contract to secure fulfillment of all the contractor's obligations under
such contract.
(h)Bonding requirements
(3) A payment bond on the part of the contractor for 100 percent of the
contract price. A “payment bond” is one executed in connection with a
contract to assure payment as required by law of all persons supplying
labor and material in the execution of the work provided for in the
contract.
(i)Contract provisions. A grantee's and subgrantee's contracts must
contain provisions in paragraph (i) of this section. Federal agencies are
permitted to require changes, remedies, changed conditions, access
and records retention, suspension of work, and other clauses approved
by the office of Federal Procurement Policy.
(1)Administrative, contractual, or legal remedies in instances where
contractors violate or breach contract terms, and provide for such
sanctions and penalties as may be appropriate. (Contracts more than
the simplified acquisition threshold)
(2)Termination for cause and for convenience by the grantee or subgrantee
including the manner by which it will be effected and the basis for
settlement. (All contracts in excess of $10,000)
(3)Compliance with Executive Order 11246 of September 24, 1965, entitled
“Equal Employment Opportunity,” as amended by Executive order
11375 of October 13, 1967, and as supplemented in Department of
Labor regulations (41 CFR chapter 60). (All construction contracts
awarded in excess of $10,000 by grantees and their contractors or
subgrantees)
(4)Compliance with the Copeland “Anti-Kickback” Act (18 U.S.C. 874) as
supplemented in Department of Labor regulations (29 CFR part 3). (All
contracts and subgrants for construction or repair)
(5)Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7) as
supplemented by Department of Labor regulations (29 CFR part 5).
(Construction contracts in excess of $2000 awarded by grantees and
subgrantees when required by Federal grant program legislation)
(6)Compliance with Sections 103 and 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-330) as supplemented by
Department of Labor regulations (29 CFR part 5). (Construction
contracts awarded by grantees and subgrantees in excess of $2000,
and in excess of $2500 for other contracts which involve the
employment of mechanics or laborers)
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(7)Notice of awarding agency requirements and regulations pertaining to
reporting.
(8)Notice of awarding agency requirements and regulations pertaining to
patent rights with respect to any discovery or invention which arises or is
developed in the course of or under such contract.
(9)Awarding agency requirements and regulations pertaining to copyrights
and rights in data.
(10)Access by the grantee, the subgrantee, the Federal grantor agency, the
Comptroller General of the United States, or any of their duly authorized
representatives to any books, documents, papers, and records of the
contractor which are directly pertinent to that specific contract for the
purpose of making audit, examination, excerpts, and transcriptions.
(11)Retention of all required records for three years after grantees or
subgrantees make final payments and all other pending matters are
closed.
(12)Compliance with all applicable standards, orders, or requirements
issued under section 306 of the Clean Air Act (42 U.S.C. 1857(h)),
section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order
11738, and Environmental Protection Agency regulations (40 CFR part
15). (Contracts, subcontracts, and subgrants of amounts in excess of
$100,000)
(13)Mandatory standards and policies relating to energy efficiency which are
contained in the state energy conservation plan issued in compliance
with the Energy Policy and Conservation Act (Pub. L. 94¬163, 89 Stat.
871).
(j)23 U.S.C. 112(a) directs the Secretary to require recipients of highway
construction grants to use bidding methods that are “effective in securing
competition.”
Detailed construction contracting procedures are contained in 23 CFR part
635, subpart A.
(k)Section 3(a)(2)(C) of the UMT Act of 1964, as amended, prohibits the use of
grant or loan funds to support procurements utilizing exclusionary or
discriminatory specifications.
(l)46 U.S.C. 1241(b)(1) and 46 CFR part 381 impose cargo preference
requirements on the shipment of foreign made goods.
(m)Section 165 of the Surface Transportation Assistance Act of 1982, 49 U.S.C.
1601, section 337 of the Surface Transportation and Uniform Relocation
Assistance Act of 1987, and 49 CFR parts 660 and 661 impose Buy America
provisions on the procurement of foreign products and materials.
(n)Section 105(f) of the Surface Transportation Assistance Act of 1982, section
106(c) of the Surface Transportation and Uniform Relocation Assistance Act
of 1987, and 49 CFR part 23 impose requirements for the participation of
disadvantaged business enterprises.
(o)Section 308 of the Surface Transportation Assistance Act of 1982, 49 U.S.C.
1068(b)(2), authorizes the use of competitive negotiation for the purchase of
rolling stock as appropriate.
(p)23 U.S.C. 112(b) provides for an exemption to competitive bidding
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requirements for highway construction contracts in emergency situations.
(q)23 U.S.C. 112 requires concurrence by the Secretary before highway
construction contracts can be awarded, except for projects authorized under
the provisions of 23 U.S.C. 171.
(r)23 U.S.C. 112(e) requires standardized contract clauses concerning site
conditions, suspension or work, and material changes in the scope of the
work for highway construction contracts.
(s)23 U.S.C. 140(b) authorizes the preferential employment of Indians on Indian
Reservation road projects and contracts.
(t)FHWA, UMTA, and Federal Aviation Administration (FAA) grantees and
subgrantees shall extend the use of qualifications-based (e.g., architectural
and engineering services) contract selection procedures to certain other
related areas and shall award such contracts in the same manner as Federal
contracts for architectural and engineering services are negotiated under Title
IX of the Federal Property and Administrative Services Act of 1949, or
equivalent State (or airport sponsor for FAA) qualifications-based
requirements. For FHWA and UMTA programs, this provision applies except
to the extent that a State adopts or has adopted by statute a formal procedure
for the procurement of such services.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 1988; 60
FR 19639, 19647, Apr. 19, 1995]
Sec. 18.37 Subgrants.
(a)States. States shall follow state law and procedures when awarding and
administering subgrants (whether on a cost reimbursement or fixed amount
basis) of financial assistance to local and Indian tribal governments. States
shall:
(1)Ensure that every subgrant includes any clauses required by Federal
statute and executive orders and their implementing regulations;
(2)Ensure that subgrantees are aware of requirements imposed upon them
by Federal statute and regulation;
(3)Ensure that a provision for compliance with Sec. 18.42 is placed in every
cost reimbursement subgrant; and
(4)Conform any advances of grant funds to subgrantees substantially to the
same standards of timing and amount that apply to cash advances by
Federal agencies.
(b)All other grantees. All other grantees shall follow the provisions of this part
which are applicable to awarding agencies when awarding and administering
subgrants (whether on a cost reimbursement or fixed amount basis) of
financial assistance to local and Indian tribal governments. Grantees shall:
(1)Ensure that every subgrant includes a provision for compliance with this
part;
(2)Ensure that every subgrant includes any clauses required by Federal
statute and executive orders and their implementing regulations; and
(3)Ensure that subgrantees are aware of requirements imposed upon them
by Federal statutes and regulations.
(c)Exceptions. By their own terms, certain provisions of this part do not apply to
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the award and administration of subgrants:
(1) Section 18.10;
(2) Section 18.11;
(3)The letter-of-credit procedures specified in Treasury Regulations at 31
CFR part 205, cited in Sec. 18.21; and
(4) Section 18.50.
Reports, Records, Retention, and Enforcement
Sec. 18.40 Monitoring and reporting program performance.
(a)Monitoring by grantees. Grantees are responsible for managing the day-
to-day operations of grant and subgrant supported activities. Grantees must
monitor grant and subgrant supported activities to assure compliance with
applicable Federal requirements and that performance goals are being
achieved. Grantee monitoring must cover each program, function or activity.
(b)Nonconstruction performance reports. The Federal agency may, if it
decides that performance information available from subsequent
applications contains sufficient information to meet its programmatic needs,
require the grantee to submit a performance report only upon expiration or
termination of grant support. Unless waived by the Federal agency this
report will be due on the same date as the final Financial Status Report.
(1)Grantees shall submit annual performance reports unless the awarding
agency requires quarterly or semi-annual reports. However,
performance reports will not be required more frequently than quarterly.
Annual reports shall be due 90 days after the grant year, quarterly or
semi-annual reports shall be due 30 days after the reporting period. The
final performance report will be due 90 days after the expiration or
termination of grant support. If a justified request is submitted by a
grantee, the Federal agency may extend the due date for any
performance report. Additionally, requirements for unnecessary
performance reports may be waived by the Federal agency.
(2)Performance reports will contain, for each grant, brief information on the
following:
(i)A comparison of actual accomplishments to the objectives established
for the period. Where the output of the project can be quantified, a
computation of the cost per unit of output may be required if that
information will be useful.
(ii) The reasons for slippage if established objectives were not met.
(iii)Additional pertinent information including, when appropriate, analysis
and explanation of cost overruns or high unit costs.
(3)Grantees will not be required to submit more than the original and two
copies of performance reports.
(4)Grantees will adhere to the standards in this section in prescribing
performance reporting requirements for subgrantees.
(c)Construction performance reports. For the most part, on-site technical
inspections and certified percentage-of-completion data are relied on heavily
by Federal agencies to monitor progress under construction grants and
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subgrants. The Federal agency will require additional formal performance
reports only when considered necessary, and never more frequently than
quarterly.
(1)Section 12(h) of the UMT Act of 1964, as amended, requires pre¬-award
testing of new buses models.
(2) [Reserved]
(d)Significant developments. Events may occur between the scheduled
performance reporting dates which have significant impact upon the grant or
subgrant supported activity. In such cases, the grantee must inform the
Federal agency as soon as the following types of conditions become known:
(1)Problems, delays, or adverse conditions which will materially impair the
ability to meet the objective of the award. This disclosure must include a
statement of the action taken, or contemplated, and any assistance
needed to resolve the situation.
(2)Favorable developments which enable meeting time schedules and
objectives sooner or at less cost than anticipated or producing more
beneficial results than originally planned.
(e)Federal agencies may make site visits as warranted by program needs.
(f)Waivers, extensions.
(1)Federal agencies may waive any performance report required by this
part if not needed.
(2)The grantee may waive any performance report from a subgrantee when
not needed. The grantee may extend the due date for any performance
report from a subgrantee if the grantee will still be able to meet its
performance reporting obligations to the Federal agency.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 1988]
Sec. 18.41 Financial Reporting.
(a)General.
(1)Except as provided in paragraphs (a) (2) and (5) of this section,
grantees will use only the forms specified in paragraphs (a) through (e)
of this section, and such supplementary or other forms as may from time
to time be authorized by OMB, for:
(i) Submitting financial reports to Federal agencies, or
(ii)Requesting advances or reimbursements when letters of credit are not
used.
(2)Grantees need not apply the forms prescribed in this section in dealing
with their subgrantees. However, grantees shall not impose more
burdensome requirements on subgrantees.
(3)Grantees shall follow all applicable standard and supplemental Federal
agency instructions approved by OMB to the extent required under the
Paperwork Reduction Act of 1980 for use in connection with forms
specified in paragraphs (b) through (e) of this section. Federal agencies
may issue substantive supplementary instructions only with the approval
of OMB. Federal agencies may shade out or instruct the grantee to
disregard any line item that the Federal agency finds unnecessary for its
decision making purposes.
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(4)Grantees will not be required to submit more than the original and two
copies of forms required under this part.
(5)Federal agencies may provide computer outputs to grantees to expedite
or contribute to the accuracy of reporting. Federal agencies may accept
the required information from grantees in machine usable format or
computer printouts instead of prescribed forms.
(6)Federal agencies may waive any report required by this section if not
needed.
(7)) Federal agencies may extend the due date of any financial report upon
receiving a justified request from a grantee.
(b)Financial Status Report.
(1) Form. Grantees will use Standard
Form 269 or 269A, Financial Status Report, to report the status of
funds for all non-construction grants and for construction grants when
required in accordance with Sec. 18.41(e)(2)(iii).
(2)Accounting basis. Each grantee will report program outlays and program
income on a cash or accrual basis as prescribed by the awarding
agency. If the Federal agency requires accrual information and the
grantee's accounting records are not normally kept on the accrual basis,
the grantee shall not be required to convert its accounting system but
shall develop such accrual information through and analysis of the
documentation on hand.
(3)Frequency. The Federal agency may prescribe the frequency of the
report for each project or program. However, the report will not be
required more frequently than quarterly. If the Federal agency does not
specify the frequency of the report, it will be submitted annually. A final
report will be required upon expiration or termination of grant support.
(4)Due date. When reports are required on a quarterly or semiannual basis,
they will be due 30 days after the reporting period. When required on an
annual basis, they will be due 90 days after the grant year. Final reports
will be due 90 days after the expiration or termination of grant support.
(c)Federal Cash Transactions Report
(1) Form.
(i)For grants paid by letter or credit, Treasury check advances or electronic
transfer of funds, the grantee will submit the Standard Form 272,
Federal Cash Transactions Report, and when necessary, its
continuation sheet, Standard Form 272a, unless the terms of the award
exempt the grantee from this requirement.
(ii)These reports will be used by the Federal agency to monitor cash
advanced to grantees and to obtain disbursement or outlay information
for each grant from grantees. The format of the report may be adapted
as appropriate when reporting is to be accomplished with the assistance
of automatic data processing equipment provided that the information to
be submitted is not changed in substance.
(2)Forecasts of Federal cash requirements. Forecasts of Federal cash
requirements may be required in the “Remarks” section of the report.
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(3)Cash in hands of subgrantees. When considered necessary and feasible
by the Federal agency, grantees may be required to report the amount
of cash advances in excess of three days needs in the hands of their
subgrantees or contractors and to provide short narrative explanations
of actions taken by the grantee to reduce the excess balances.
(4)Frequency and due date. Grantees must submit the report no later than
15 working days following the end of each quarter. However, where an
advance either by letter of credit or electronic transfer of funds is
authorized at an annualized rate of one million dollars or more, the
Federal agency may require the report to be submitted within 15 working
days following the end of each month.
(d)Request for advance or reimbursement¬.
(1)Advance payments. Requests for Treasury check advance payments
will be submitted on Standard Form 270, Request for Advance or
Reimbursement. (This form will not be used for drawdowns under a
letter of credit, electronic funds transfer or when Treasury check
advance payments are made to the grantee automatically on a
predetermined basis.)
(2)Reimbursements. Requests for reimbursement under non-construction
grants will also be submitted on Standard Form 270. (For
reimbursement requests under construction grants, see paragraph (e)(1)
of this section.)
(3)The frequency for submitting payment requests is treated in Sec.18.41
(b)(3).
(e)Outlay report and request for reimbursement for construction programs.
(1)Grants that support construction activities paid by reimbursement
method.
(i)Requests for reimbursement under construction grants will. be submitted
on Standard Form 271, Outlay Report and Request for Reimbursement
for Construction Programs. Federal agencies may, however, prescribe
the Request for Advance or Reimbursement form, specified in Sec.
18.41(d), instead of this form.
(ii)The frequency for submitting reimbursement requests is treated in Sec.
18.41(b)(3).
(e)Outlay report and request for reimbursement for construction programs.
(2)Grants that support construction activities paid by letter of credit,
electronic funds transfer or Treasury check advance.
(i)When a construction grant is paid by letter of credit, electronic funds
transfer or Treasury check advances, the grantee will report its outlays
to the Federal agency using Standard Form 271, Outlay Report and
Request for Reimbursement for Construction Programs. The Federal
agency will provide any necessary special instruction. However,
frequency and due date shall be governed by Sec. 18.41(b) (3) and (4).
(ii)When a construction grant is paid by Treasury check advances based
on periodic requests from the grantee, the advances will be requested
on the form specified in Sec. 18.41(d).
(iii) The Federal agency may substitute the Financial Status Report
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specified in Sec. 18.41(b) for the Outlay Report and Request for
Reimbursement for Construction Programs.
(3)Accounting basis. The accounting basis for the Outlay Report and
Request for Reimbursement for Construction Programs shall be
governed by Sec. 18.41(b)(2).
(f)Notwithstanding the provisions of paragraphs (a)(1) of this section,
recipients of FHWA and National Highway Traffic Safety Administration
(NHTSA) grants shall use FHWA, NHTSA or State financial reports.
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 1988]
Sec. 18.42 Retention and access requirements for records.
(a)Applicability.
(1)This section applies to all financial and programmatic records,
supporting documents, statistical records, and other records of grantees
or subgrantees which are:
(i)Required to be maintained by the terms of this part, program regulations
or the grant agreement, or
(ii)Otherwise reasonably considered as pertinent to program regulations or
the grant agreement.
(2)This section does not apply to records maintained by contractors or
subcontractors. For a requirement to place a provision concerning
records in certain kinds of contracts, see Sec. 18.36(i)(10).
(b)Length of retention period.
(1)Except as otherwise provided, records must be retained for three years
from the starting date specified in paragraph (c) of this section.
(2)If any litigation, claim, negotiation, audit or other action involving the
records has been started before the expiration of the 3-year period, the
records must be retained until completion of the action and resolution of
all issues which arise from it, or until the end of the regular 3-year
period, whichever is later.
(3)To avoid duplicate recordkeeping, awarding agencies may make special
arrangements with grantees and subgrantees to retain any records
which are continuously needed for joint use. The awarding agency will
request transfer of records to its custody when it determines that the
records possess long-term retention value. When the records are
transferred to or maintained by the Federal agency, the 3-year retention
requirement is not applicable to the grantee or subgrantee
(c)Starting date of retention period¬
(1)General. When grant support is continued or renewed at annual or other
intervals, the retention period for the records of each funding period
starts on the day the grantee or subgrantee submits to the awarding
agency its single or last expenditure report for that period. However, if
grant support is continued or renewed quarterly, the retention period for
each year's records starts on the day the grantee submits its
expenditure report for the last quarter of the Federal fiscal year.
In all other cases, the retention period starts on the day the grantee
submits its final expenditure report. If an expenditure report has been
waived, the retention period starts on the day the report would have
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been due.
(2)Real property and equipment records. The retention period for real
property and equipment records starts from the date of the disposition or
replacement or transfer at the direction of the awarding agency.
(3)Records for income transactions after grant or subgrant support. In
some cases grantees must report income after the period of grant
support. Where there is such a requirement, the retention period for the
records pertaining to the earning of the income starts from the end of the
grantee's fiscal year in which the income is earned.
(4)Indirect cost rate proposals, cost allocations plans, etc. This paragraph
applies to the following types of documents, and their supporting
records: indirect cost rate computations or proposals, cost allocation
plans, and any similar accounting computations of the rate at which a
particular group of costs is chargeable (such as computer usage
chargeback rates or composite fringe benefit rates).
(i)If submitted for negotiation. If the proposal, plan, or other computation is
required to be submitted to the Federal Government (or to the grantee)
to form the basis for negotiation of the rate, then the 3-year retention
period for its supporting records starts from the date of such submission.
(ii)If not submitted for negotiation. If the proposal, plan, or other
computation is not required to be submitted to the Federal Government
(or to the grantee) for negotiation purposes, then the 3-year retention
period for the proposal plan, or computation and its supporting records
starts from the end of the fiscal year (or other accounting period)
covered by the proposal, plan, or other computation.
(d)Substitution of microfilm. Copies made by microfilming, photocopying, or
similar methods may be substituted for original the records.
(e)Access to records
(1)Records of grantees and subgrantees. The awarding agency and the
Comptroller General of the United States, or any of their authorized
representatives, shall have the right of access to any pertinent books,
documents, papers, or other records of grantees and subgrantees which
are pertinent to the grant, in order to make audits, examinations,
excerpts, and transcripts.
(2)Expiration of right of access. The right of access in this section must not
be limited to the required retention period but shall last as long as the
records are retained.
(f)Restrictions on public access. The Federal Freedom of Information Act (5
U.S.C. 552) does not apply to records unless required by Federal, State, or
local law, grantees and subgrantees are not required to permit public access
to their records.
Sec. 18.43 Enforcement
(a)Remedies for noncompliance. If a grantee or subgrantee materially fails to
comply with any term of an award, whether stated in a Federal statute or
regulation, an assurance, in a State plan or application, a notice of award, or
elsewhere, the awarding agency may take one or more of the following
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actions, as appropriate in the circumstances:
(1)Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee or more severe enforcement
action by the awarding agency,
(2)Disallow (that is, deny both use of funds and matching credit for) all or
part of the cost of the activity or action not in compliance,
(3)Wholly or partly suspend or terminate the current award for the grantee's
or subgrantee's program,
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b)Hearings, appeals. In taking an enforcement action, the awarding agency
will provide the grantee or subgrantee an opportunity for such hearing,
appeal, or other administrative proceeding to which the grantee or
subgrantee is entitled under any statute or regulation applicable to the action
involved.
(c)Effects of suspension and termination. Costs of grantee or subgrantee
resulting from obligations incurred by the grantee or subgrantee during a
suspension or after termination of an award are not allowable unless the
awarding agency expressly authorizes them in the notice of suspension or
termination or subsequently. Other grantee or subgrantee costs during
suspension or after termination which are necessary and not reasonably
avoidable are allowable if:
(1)The costs result from obligations which were properly incurred by the
grantee or subgrantee before the effective date of suspension or
termination, are not in anticipation of it, and, in the case of a termination,
are non-cancellable, and,
(2)The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(d)Relationship to debarment and suspension. The enforcement remedies
identified in this section, including suspension and termination, do not
preclude grantee or subgrantee from being subject to “Debarment and
Suspension” under E.O. 12549 (see Sec. 18.35).
Sec. 18.44 Termination for convenience.
Except as provided in Sec. 18.43 awards may be terminated in whole or in part only as
follows:
(a)General. The Federal agency will close out the award when it determines
that all applicable administrative actions and all required work of the grant
has been completed.
(b)Reports. Within 90 days after the expiration or termination of the grant, the
grantee must submit all financial, performance, and other reports required as
a condition of the grant. Upon request by the grantee, Federal agencies may
extend this timeframe. These may include but are not limited to:
(1) Final performance or progress report.
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(2)Financial Status Report (SF 269) or Outlay Report and Request for
Reimbursement for Construction Programs (SF-271) (as applicable).
(3) Final request for payment (SF-270) (if applicable).
(4) Invention disclosure (if applicable).
(5)Federally-owned property report:In accordance with Sec. 18.32(f), a
grantee must submit an inventory of all federally owned property (as
distinct from property acquired with grant funds) for which it is
accountable and request disposition instructions from the Federal
agency of property no longer needed.
(c)Cost adjustment. The Federal agency will, within 90 days after receipt of
reports in paragraph (b) of this section, make upward or downward
adjustments to the allowable costs.
(d)Cash adjustments.
(1)The Federal agency will make prompt payment to the grantee for
allowable reimbursable costs.
(2)The grantee must immediately refund to the Federal agency any
balance of unobligated (unencumbered) cash advanced that is not
authorized to be retained for use on other grants.
Subpart D--After-the-Grant Requirements
Sec. 18.51 Later disallowances and adjustments.
The closeout of a grant does not affect:
(a)The Federal agency's right to disallow costs and recover funds on the basis of
a later audit or other review;
(b)The grantee's obligation to return any funds due as a result of later refunds,
corrections, or other transactions;
(c) Records retention as required in Sec. 18.42;
(d)Property management requirements in Secs. 18.31 and 18.32; and Audit
requirements in Sec. 18.26.
Sec. 18.52 Collection of amounts due.
(a)Any funds paid to a grantee in excess of the amount to which the grantee is
finally determined to be entitled under the terms of the award constitute a debt
to the Federal Government. If not paid within a reasonable period after
demand, the Federal agency may reduce the debt by:
(1)Making an administrative offset against other requests for
reimbursements,
(2) Withholding advance payments otherwise due to the grantee, or
(3) Other action permitted by law.
(b)Except where otherwise provided by statutes or regulations, the Federal
agency will charge interest on an overdue debt in accordance with the Federal
Claims Collection Standards (4 CFR Ch. II). The date from which interest is
computed is not extended by litigation or the filing of any form of appeal.
Subpart E—Entitlements [Reserved]
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EXHIBIT D
Appendix A to Part 96—Office of Management and Budget
Circular No. A-128—Uniform Audit Requirements for State and Local Governments
EXECUTIVE OFFICE OF THE PRESIDENT
Office of Management and Budget
CIRCULAR NO. A-128
April 12, 1985
To the Heads of Executive Departments and Establishments.
Subject: Audits of State and Local Governments.
1. Purpose.
This Circular is issued pursuant to the Single Audit Act of 1984, Pub. L. 98-502. It establishes
audit requirements for State and local governments that receive Federal aid, and defines
Federal responsibilities for implementing and monitoring those requirements.
2. Super-session.
The Circular supersedes Attachment P, “Audit Requirements,” of Circular A-102, “Uniform
requirements for grants to State and local governments.”
3. Background.
The Single Audit Act builds upon earlier efforts to improve audits of Federal aid programs. The
Act requires State or local governments that receive $100,000 or more a year in Federal funds
to have an audit made for that year. Section 7505 of the Act requires the Director of the Office
of Management and Budget to prescribe policies, procedures and guidelines to implement the
Act. It specifies that the Director shall designate “cognizant” Federal agencies, determine
criteria for making appropriate charges to Federal programs for the cost of audits, and provide
procedures to assure that small firms or firms owned and controlled by disadvantaged
individuals have the opportunity to participate in contracts for single audits.
4. Policy. The Single Audit Act requires the following:
4. Policy.
The Single Audit Act requires the following:
a.State or local governments that receive $100,000 or more a year in Federal financial
assistance shall have an audit made in accordance with this Circular.
b.State or local governments that receive between $25,000 and $100,000 a year shall
have an audit made in accordance with this Circular, or in accordance with Federal laws
and regulations governing the programs they participate in.
c.State or local governments that receive less than $25,000 a year shall be exempt from
compliance with the Act and other Federal audit requirements. These State and local
governments shall be governed by audit requirements prescribed by State or local law
or regulation.
d.Nothing in this paragraph exempts State or local governments from maintaining records
of Federal financial assistance or from providing access to such records to Federal
agencies, as provided for in Federal law or in Circular A-102, “Uniform requirements for
grants to State or local governments.”¬
5. Definitions.
For the purposes of this Circular the following definitions from the Single Audit Act apply:
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a.Cognizant agency means the Federal agency assigned by the Office of Management
and Budget to carry out the responsibilities described in paragraph 11 of this Circular.
b.Federal financial assistance means assistance provided by a Federal agency in the
form of grants, contracts, cooperative agreements, loans, loan guarantees, property,
interest subsidies, insurance, or direct appropriations, but does not include direct
Federal cash assistance to individuals.
It includes awards received directly from Federal agencies, or indirectly through other
units of State and local governments.
c.Federal agency has the same meaning as the term agency in section 551(1) of title 5,
U.S.C.
d.Generally accepted accounting principles has the meaning specified in the generally
accepted government auditing standards.
e.Generally accepted government auditing standards means the Standards For Audit of
Government Organizations, Programs, Activities, and Functions, developed by the
Controller General, dated February 27, 1981.
f. Independent auditor means:
(1)A State or local government auditor who meets the independence standards
specified in generally accepted government auditing standards; or
(2) A public accountant who meets such independence standards.
g.Internal controls means the plan of organization and methods and procedures adopted
by management to ensure that:
(1) Resource use is consistent with laws, regulations, and policies;
(2) Resources are safeguarded against waste, loss, and misuse; and
(3) Reliable data is obtained, maintained, and fairly disclosed in reports.
h.Indian tribe means any Indian tribe, band, nations, or other organized group or
community, including any Alaskan Native village or regional or village corporations (as
defined in, or established under, the Alaskan Native Claims Settlement Act) that is
recognized by the United States as eligible for the special programs and services
provided by the United States to Indians because of their status as Indians.
i.Local government means any unit of local government within a State, including a
county, a borough, municipality, city, town, township, parish, local public authority,
special district, school district, intrastate district, council of governments, and any other
instrumentality of local government.
j.Major Federal Assistance Program, as defined by Pub. L. 98-502, is described in the
Attachment to this Circular.
k.Public accountants means those individuals who meet the qualification standards
included in generally accepted government auditing standards for personnel performing
government audits.
l.State means any State of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific
Islands, any instrumentality thereof, and any multi-State, regional, or interstate entity
that has governmental functions and any Indian tribe.
m.Sub-recipient means any person or government department, agency, or establishment
that receives Federal financial assistance to carry out a program through a State or
local government, but does not include an individual that is a beneficiary of such a
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program. A sub-recipient may also be a direct recipient of Federal financial assistance.
6. Scope of Audit.
The Single Audit Act provides that:
a.The audit shall be made by an independent auditor in accordance with generally
accepted government auditing standards covering financial and compliance audits.
b.The audit shall cover the entire operations of a State or local government or, at the
option of that government, it may cover departments, agencies or establishments that
received, expended, or otherwise administered Federal financial assistance during the
year. However, if a State or local government receives $25,000 or more in General
Revenue Sharing Funds in a fiscal year, it shall have an audit of its entire operations. A
series of audits of individual departments, agencies, and establishments for the same
fiscal year may be considered a single audit.
c.Public hospitals and public colleges and universities may be excluded from State and
local audits and the requirements of this Circular.
However, if such entities are excluded, audits of these entities shall be made in
accordance with statutory requirements and the provisions of Circular A-110, “Uniform
requirements for grants to universities, hospitals, and other nonprofit organizations.”
d. The auditor shall determine whether:
(1)The financial statements of the government, department, agency or
establishment present fairly its financial position and the results of its financial
operations in accordance with generally accepted accounting principles;
(2)The organization has internal accounting and other control systems to provide
reasonable assurance that it is managing Federal financial assistance
programs in compliance with applicable laws and regulations; and
(3)The organization has complied with laws and regulations that may have
material effect on its financial statements and on each major Federal
assistance program.
7. Frequency of Audit.
Audits shall be made annually unless the State or local government has, by January 1, 1987, a
constitutional or statutory requirement for less frequent audits. For those governments, the
cognizant agency shall permit biennial audits, covering both years, if the government so
requests. It shall also honor requests for biennial audits by governments that have an
administrative policy calling for audits less frequent than annual, but only for fiscal years
beginning before January 1, 1987.
8. Internal Control and Compliance Reviews.
The Single Audit Act requires that the independent auditor determine and report on whether the
organization has internal control systems to provide reasonable assurance that it is managing
Federal assistance programs in compliance with applicable laws and regulations.
a.Internal control review. In order to provide this assurance the auditor must make a study
and evaluation of internal control systems used in administering Federal assistance
programs. The study and evaluation must be made whether or not the auditor intends to
place reliance on such systems. As part of this review, the auditor shall:
(1)Test whether these internal control systems are functioning in accordance
with prescribed procedures.
(2)Examine the recipient's system for monitoring sub-recipients and obtaining
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and acting on sub-recipient audit reports.
b.Compliance review. The law also requires the auditor to determine whether the
organization has complied with laws and regulations that may have a material effect on
each major Federal assistance program.
(1)In order to determine which major programs are to be tested for compliance,
State and local governments shall identify in their accounts all Federal funds
received and expended and the programs under which they were received.
This shall include funds received directly from Federal agencies and through
other State and local governments.
(2)The review must include the selection and testing of a representative number
of charges from each major Federal assistance program. The selection and
testing of transactions shall be based on the auditor's professional judgment
considering such factors as the amount of expenditures for the program and
the individual awards; the newness of the program or changes in its
conditions; prior experience with the program, particularly as revealed in
audits and other evaluations (e.g., inspections, program reviews); the extent
to which the program is carried out through sub-recipients; the extent to which
the program contracts for goods or services; the level to which the program is
already subject to program reviews or other forms of independent oversight;
the adequacy of the controls for ensuring compliance; the expectation of
adherence or lack of adherence to the applicable laws and regulations; and
the potential impact of adverse findings.
(a) In making the test of transactions, the auditor shall determine whether:
• The amounts reported as expenditures were for allowable services, and
• The records show that those who received services or benefits were
eligible to receive them.
(b) In addition to transaction testing, the auditor shall determine whether:
•Matching requirements, levels of effort and earmarking limitations were met,
•Federal financial reports and claims for advances and reimbursements
contain information that is supported by the books and records from which
the basic financial statements have been prepared, and
•Amounts claimed or used for matching were determined in accordance with
OMB Circular A-87, “Cost principles for State and local governments, “and
Attachment F of Circular A-102, “Uniform requirements for grants to State
and local governments.”
(c)The principal compliance requirements of the largest Federal aid programs
may be ascertained by referring to the Compliance Supplement for Single
Audits of State and Local Governments, issued by OMB and available from
the Government Printing Office. For those programs not covered in the
Compliance Supplement, the auditor may ascertain compliance requirements
by researching the statutes, regulations, and agreements governing individual
programs.
(2)Transactions related to other Federal assistance programs that are selected
in connection with examinations of financial statements and evaluations of
internal controls shall be tested for compliance with Federal laws and
regulations that apply to such transactions.
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9. Sub-recipients.
State or local governments that receive Federal financial assistance and provide $25,000 or
more of it in a fiscal year to a sub-recipient shall:
a.Determine whether State or local sub-recipients have met the audit requirements of this
Circular and whether sub-recipients covered by Circular A-110, “Uniform requirements
for grants to universities, hospitals, and other nonprofit organizations,” have met that
requirement;
b.Determine whether the sub-recipient spent Federal assistance funds provided in
accordance with applicable laws and regulations. This may be accomplished by
reviewing an audit of the sub-recipient made in accordance with this Circular, Circular
A-110, or through other means (e.g., program reviews) if the sub-recipient has not yet
had such an audit;
c.Ensure that appropriate corrective action is taken within six months after receipt of the
audit report in instances of noncompliance with Federal laws and regulations;
d.Consider whether sub-recipient audits necessitate adjustment of the recipient's own
records; and
e.Require each sub-recipient to permit independent auditors to have access to the
records and financial statements as necessary to comply with this Circular.
10. Relation to Other Audit Requirements.
The Single Audit Act provides that an audit made in accordance with this Circular shall be in lieu
of any financial or financial compliance audit required under individual Federal assistance
programs. To the extent that a single audit provides Federal agencies with information and
assurances they need to carry out their overall responsibilities, they shall rely upon and use
such information. However, a Federal agency shall make any additional audits which are
necessary to carry out its responsibilities under Federal law and regulation. Any additional
Federal audit effort shall be planned and carried out in such a way as to avoid duplication.
a.The provisions of this Circular do not limit the authority of Federal agencies to make, or
contract for audits and evaluations of Federal financial assistance programs, nor do
they limit the authority of any Federal agency Inspector General or other Federal audit
official.
b.The provisions of this Circular do not authorize any State or local government or sub-
recipient thereof to constrain Federal agencies, in any manner, from carrying out
additional audits.
c.A Federal agency that makes or contracts for audits in addition to the audits made by
recipients pursuant to this Circular shall, consistent with other applicable laws and
regulations, arrange for funding the cost of such additional audits. Such additional
audits include economy and efficiency audits, program results audits, and program
evaluations.
11. Cognizant Agency Responsibilities.
The Single Audit Act provides for cognizant Federal agencies to oversee the implementation of
this Circular.
a.The Office of Management and Budget will assign cognizant agencies for States and
their subdivisions and larger local governments and their subdivisions. Other Federal
agencies may participate with an assigned cognizant agency, in order to fulfill the
cognizance responsibilities. Smaller governments not assigned a cognizant agency will
be under the general oversight of the Federal agency that provides them the most funds
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whether directly or indirectly.
b. A cognizant agency shall have the following responsibilities:
(1)Ensure that audits are made and reports are received in a timely manner and
in accordance with the requirements of this Circular.
(2)Provide technical advice and liaison to State and local governments and
independent auditors.
(3)Obtain or make quality control reviews of selected audits made by non-
Federal audit organizations, and provide the results, when appropriate, to
other interested organizations.
(4)Promptly inform other affected Federal agencies and appropriate Federal law
enforcement officials of any reported illegal acts or irregularities. They should
also inform State or local law enforcement and prosecuting authorities, if not
advised by the recipient, of any violation of law within their jurisdiction.
(5)Advise the recipient of audits that have been found not to have met the
requirements set forth in this Circular. In such instances, the recipient will be
expected to work with the auditor to take corrective action. If corrective action
is not taken, the cognizant agency shall notify the recipient and Federal
awarding agencies of the facts and make recommendations for follow-up
action. Major inadequacies or repetitive substandard performance of
independent auditors shall be referred to appropriate professional bodies for
disciplinary action.
(6)Coordinate, to the extent practicable, audits made by or for Federal agencies
that are in addition to the audits made pursuant to this Circular; so that the
additional audits
upon such audits.
(7)Oversee the resolution of audit findings that affect the programs of more than
one agency.
12. Illegal Acts or Irregularities.
If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given
to recipient management officials above the level of involvement. (See also paragraph 13(a)(3)
below for the auditor's reporting responsibilities.) The recipient, in turn, shall promptly notify the
cognizant agency of the illegal acts or irregularities and of proposed and actual actions, if any.
Illegal acts and irregularities include such matters as conflicts of interest, falsification of records
or reports, and misappropriations of funds or other assets.
13. Audit Reports.
Audit reports must be prepared at the completion of the audit. Reports serve many needs of
State and local governments as well as meeting the requirements of the Single Audit Act.
a.The audit report shall state that the audit was made in accordance with the provisions of
this Circular. The report shall be made up of at least:
(1)The auditor's report on financial statements and on a schedule of Federal
assistance; the financial statements; and a schedule of Federal assistance,
showing the total expenditures for each Federal assistance program as
identified in the Catalog of Federal Domestic Assistance. Federal programs or
grants that have not been assigned a catalog number shall be identified under
the caption “other Federal assistance.”
(2)The auditor's report on the study and evaluation of internal control systems
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must identify the organization's significant internal accounting controls, and
those controls designed to provide reasonable assurance that Federal
programs are being managed in compliance with laws and regulations. It must
also identify the controls that were evaluated, the controls that were not
evaluated, and the material weaknesses identified as a result of the
evaluation.
(3) The auditor's report on compliance containing:
• A statement of positive assurance with respect to those items tested for compliance, including
compliance with law and regulations pertaining to financial reports and claims for advances and
reimbursements;
• Negative assurance on those items not tested;
• A summary of all instances of noncompliance; and
• An identification of total amounts questioned, if any, for each Federal assistance award, as a
result of noncompliance.
b.The three parts of the audit report may be bound into a single report, or presented at the
same time as separate documents.
c.All fraud abuse, or illegal acts or indications of such acts, including all questioned costs
found as the result of these acts that auditors become aware of, should normally be
covered in a separate written report submitted in accordance with paragraph 13f.
d.In addition to the audit report, the recipient shall provide including a plan for corrective
action taken or planned and comments on the status of corrective action taken. IF prior
corrective action is not necessary, a statement describing the reason it is not should
accompany the audit report.
e.The reports shall be made available by the State or local government for public
inspection within 30 days after the completion of the audit.
f.In accordance with generally accepted government audit standards, reports shall be
submitted by the auditor to the organization audited and to those requiring or arranging
for the audit. In addition, the recipient shall submit copies of the
reports to each Federal department or agency that provided Federal assistance funds to
the recipient. Sub-recipients shall submit copies to recipients that provided them
Federal assistance funds. The reports shall be sent within 30 days after the completion
of the audit, but no later than one year after the end of the audit period unless a longer
period is agreed to with the cognizant agency.
g.Recipients of more than $100,000 in Federal funds shall submit one copy of the audit
report within 30 days after issuance to a central clearinghouse to be designated by the
Office of Management and Budget. The clearinghouse will keep completed audits on file
and follow up with State and local governments that have not submitted required audit
reports.
h. Recipients shall keep audit reports on file for three years from their issuance.
14. Audit Resolution.
As provided in paragraph 11, the cognizant agency shall be responsible for monitory the
resolution of audit findings that affect the programs of more than one Federal agency.
Resolution of findings that relate to the programs of a single Federal agency will be the
responsibility of the recipient and that agency. Alternate arrangements may be made on a case-
by-case basis by agreement among the agencies concerned.
Resolution shall be made within six months after receipt of the report by the Federal
departments and agencies. Corrective action should proceed as rapidly as possible.
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15. Audit work papers and Reports.
Work papers and reports shall be retained for a -minimum of three years from the date of the
audit report, unless the auditor is notified in writing by the cognizant agency to extend the
retention period. Audit work papers shall be made available upon request to the cognizant
agency or its designee or the General Accounting Office, at the completion of the audit.
16. Audit Costs.
The cost of audits made in accordance with the provisions of this Circular are allowable charges
to Federal assistance programs.
a.The charges may be considered a direct cost or an allocated indirect cost, determined
in accordance with the provision of Circular A-87, “Cost principles for State and local
governments.”
b.Generally, the percentage of costs charged to Federal assistance programs for a single
audit shall not exceed the percentage that Federal funds expended represent of total
funds expended by the recipient during the fiscal year. The percentage may be
exceeded, however, if appropriate documentation demonstrates higher actual cost:
17. Sanctions.
The Single Audit Act provides that no cost may be charged to Federal assistance programs for
audits required by the Act that are not made in accordance with this Circular. In cases of
continued inability or unwillingness to have a proper audit, Federal agencies must consider
other appropriate sanctions including:
• Withholding a percentage of assistance payments until the audit is completed satisfactorily,
• Withholding or disallowing overhead costs, and
• Suspending the Federal assistance agreement until the audit is made.
18. Auditor Selection.
In arranging for audit services State and local governments shall follow the procurement
standards prescribed by Attachment 0 of Circular A-102, “Uniform requirements for grants to
State and local governments.” The standards provide that while recipients are encouraged to
enter into intergovernmental agreements for audit and other services, analysis should be made
to determine whether it would be more economical to purchase the services from private firms.
In instances where use of such intergovernmental agreements are required by State statutes
(e.g., audit services) these statutes will take precedence.
19. Small and Minority Audit Firms.
Small audit firms and audit firms owned and controlled by socially and economically
disadvantaged individuals shall have the maximum practicable opportunity to participate in
contracts awarded to fulfill the requirements of this Circular. Recipients of Federal assistance
shall take the following steps to further this goal:
a.Assure that small audit firms and audit firms owned and controlled by socially and
economically disadvantaged individuals are used to the fullest extent practicable.
b.Make information on forthcoming opportunities available and arrange time frames for
the audit so as to encourage and facilitate participation by small audit firms and audit
firms owned and controlled by socially and economically disadvantaged individuals.
c.Consider in the contract process whether firms competing for larger audits intend to
subcontract with small audit firms and audit firms owned and controlled by socially and
economically disadvantaged individuals.
d.Encourage contracting with small audit firms or audit firms owned and controlled by
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socially and economically disadvantaged individuals which have traditionally audited
government programs and, in such cases where this is not possible, assure that these
firms are given consideration for audit subcontracting opportunities.
e.Encourage contracting with consortiums of small audit firms as described in paragraph
(a) above when a contract is too large for an individual small audit firm or audit firm
owned and controlled by socially and economically disadvantaged
individuals.
f.Use the services and assistance, as appropriate, of such organizations as the Small
Business Administration in the solicitation and utilization of small audit firms or audit
firms owned and controlled by socially and economically disadvantaged individuals.
20. Reporting.
Each Federal agency will report to the Director of OMB on or before March 1, 1987, and
annually thereafter on the effectiveness of State and local governments in carrying out the
provisions of this Circular. The report must identify each State or local government or Indian
tribe that, in the opinion of the agency, is failing to comply with the Circular.
21. Regulations.
Each Federal agency shall include the provisions of this Circular in its regulations implementing
the Single Audit Act.
22. Effective Date.
This Circular is effective upon publication and shall apply to fiscal years of State and local
governments that begin after December 31, 1984. Earlier implementation is encouraged.
However, until it is implemented, the audit provisions of Attachment P to Circular A-102 shall
continue to be observed.
23. Inquiries.
Attachment P to Circular A-102 shall continue to be observed.
23. inquiries. All questions or inquiries should be addressed to Financial Management Division,
Office of Management and Budget, telephone number 202/395-3993.
24. Sunset Review Date.
This Circular shall have an independent policy review to ascertain its effectiveness three years
from the date of issuance.
David A. Stockman, Director.
Attachment - Circular A-128
Definition of Major Program as Provided in Pub. L. 98-502
Major Federal Assistance Program, for State and local governments having Federal assistance
expenditures between $100,000 and $100,000,000, means any program for which Federal
expenditures during the applicable year exceed the larger of $300,000, or 3 percent of such
total expenditures. Where total expenditures of Federal assistance exceed $100,000,000, the
following criteria apply:
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EXHIBITE
SUGGESTED LANGUAGE FOR RECYLING CERTIFICATION
State law requires that state contracts shall have Recycling Certification in writing under penalty of
perjury, the minimum, if not exact, percentage of recycled content, both post consumer
waste and secondary waste as defined in the Public Contract Code, Sections 12161 and 12200, in
materials, goods, or supplies offered or products used in the performance of this Agreement, regardless
of whether the product meets the required recycled product percentage as defined in the Public Contract
Code, Sections 12161 and 12200. Contractor may certify that the product contains zero recycled
content. (PCC 10233, 10308.5, 10354)
RECYCLED CONTENT CERTIFICATION
I, the official named below, CERTIFY UNDER PENALTY OF PERJURY that I am duly authorized to
legally bind the prospective Contractor to the clause(s) listed below. This certification is made under the
laws of the State of California.
Name and Title of Person Signing
Debbie A. Poochigian, Chairman
Title
Chairman
Legal Business Name
County of Fresno
Fresno
Telephone Number
(559) 600-2001
Federal ID Number
94-6000512
The Contractor hereby certifies under penalty of perjury, that zero
percent of the materials, goods, supplies offered, or products used in the performance of this contract
meets the or exceeds the minimum percentage of recycled material as defined in Sections
12161 and 12200 of the Public Contract Code. The Contractor may certify that the product contains zero
recycled content.
ATIEST:
BERNICE E. SEIDEL, Clerk
Board of Supervisors
By 3us6vvY ~shD'P Deputy
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EXHIBIT E (Cont.)
CCC-307
CERTIFICATION
I, the official named below, CERTIFY UNDER PENALTY OF PERJURY that I am duly authorized to
legally bind the prospective Contractor to the clause(s) listed below. This certification is made under the
laws of the State of California.
Contractor/Bidder Firm Name (Printed) FederaiiD Number
94-6000512
Printed Name and Title of Person Signing
, Debbie A. Poochigian, Chairman
Date Execute Executed in the County of
10 J..7 15 Fresno
CONTRACTOR CERTIFICATION CLAUSES
1. STATEMENT OF COMPLIANCE:
Contractor has, unless exempted, complied with the nondiscrimination program requirements.
(Gov. Code §12990 (a-f) and CCR, Title 2, Section 8103) (Not applicable to public entities.)
2. DRUG-FREE WORKPLACE REQUIREMENTS:
Contractor will comply with the requirements of the Drug-Free Workplace Act of 1990 and will
provide a drug-free workplace by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution,
dispensation, possession or use of a controlled substance is prohibited and specifying
actions to be taken against employees for violations.
b. Establish a Drug-Free Awareness Program to inform employees about
1) the dangers of drug abuse in the workplace;
2) the person's or organization's policy of maintaining a drug-free workplace;
3) any available counseling, rehabilitation and employee assistance programs;
and,
4) penalties that may be imposed upon employees for drug abuse violations.
c. Every employee who works on the proposed Agreement will:
1) receive a copy of the company's drug-free workplace policy statement; and,
2) agree to abide by the terms of the company's statement as a condition of
employment on the Agreement.
Failure to comply with these requirements may result in suspension of payments under the
Agreement or termination of the Agreement or both and Contractor may be ineligible for award
of any future State agreements if the department determines that any of the following has
occurred: the Contractor has made false certification, or violated the certification by failing to
carry out the requirements as noted above. (Gov. Code §8350 et seq.)
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3.NATIONAL LABOR RELATIONS BOARD CERTIFICATION:
Contractor certifies that no more than one (1) final unappealable finding of contempt of court by
a Federal court has been issued against Contractor within the immediately preceding two-year
period because of Contractor's failure to comply with an order of a Federal court, which orders
Contractor to comply with an order of the National Labor Relations Board. (Pub. Contract Code
§10296) (Not applicable to public entities.)
4.CONTRACTS FOR LEGAL SERVICES $50,000 OR MORE- PRO BONO REQUIREMENT:
Contractor hereby certifies that contractor will comply with the requirements of Section 6072 of
the Business and Professions Code, effective January 1, 2003.
Contractor agrees to make a good faith effort to provide a minimum number of hours of pro
bono legal services during each year of the contract equal to the lessor of 30 multiplied by the
number of full time attorneys in the firm’s offices in the State, with the number of hours
prorated on an actual day basis for any contract period of less than a full year or 10% of its
contract with the State.
Failure to make a good faith effort may be cause for non-renewal of a state contract for legal
services, and may be taken into account when determining the award of future contracts with
the State for legal services.
5.EXPATRIATE CORPORATIONS:
Contractor hereby declares that it is not an expatriate corporation or subsidiary of an expatriate
corporation within the meaning of Public Contract Code Section 10286 and 10286.1, and is
eligible to contract with the State of California.
6.SWEATFREE CODE OF CONDUCT:
a.All Contractors contracting for the procurement or laundering of apparel, garments or
corresponding accessories, or the procurement of equipment, materials, or supplies,
other than procurement related to a public works contract, declare under penalty of
perjury that no apparel, garments or corresponding accessories, equipment, materials,
or supplies furnished to the state pursuant to the contract have been laundered or
produced in whole or in part by sweatshop labor, forced labor, convict labor,
indentured labor under penal sanction, abusive forms of child labor or exploitation of
children in sweatshop labor, or with the benefit of sweatshop labor, forced labor,
convict labor, indentured labor under penal sanction, abusive forms of child labor or
exploitation of children in sweatshop labor. The contractor further declares under
penalty of perjury that they adhere to the Sweatfree Code of Conduct as set forth on
the California Department of Industrial Relations website located at www.dir.ca.gov,
and Public Contract Code Section 6108.
b.The contractor agrees to cooperate fully in providing reasonable access to the
contractor’s records, documents, agents or employees, or premises if reasonably
required by authorized officials of the contracting agency, the Department of Industrial
Relations, or the Department of Justice to determine the contractor’s compliance with
the requirements under paragraph (a).
7.DOMESTIC PARTNERS:
For contracts over $100,000 executed or amended after January 1, 2007, the contractor
certifies that contractor is in compliance with Public Contract Code section 10295.3.
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DOING BUSINESS WITH THE STATE OF CALIFORNIA
The following laws apply to persons or entities doing business with the State of California.
1.CONFLICT OF INTEREST:
Contractor needs to be aware of the following provisions regarding current or former state
employees. If Contractor has any questions on the status of any person rendering services or
involved with the Agreement, the awarding agency must be contacted immediately for
clarification.
Current State Employees (Pub. Contract Code §10410):
1)No officer or employee shall engage in any employment, activity or enterprise from
which the officer or employee receives compensation or has a financial interest and
which is sponsored or funded by any state agency, unless the employment, activity or
enterprise is required as a condition of regular state employment.
2)No officer or employee shall contract on his or her own behalf as an independent
contractor with any state agency to provide goods or services.
Former State Employees (Pub. Contract Code §10411):
1)For the two-year period from the date he or she left state employment, no former state
officer or employee may enter into a contract in which he or she engaged in any of the
negotiations, transactions, planning, arrangements or any part of the decision-making
process relevant to the contract while employed in any capacity by any state agency.
2)For the twelve-month period from the date he or she left state employment, no former
state officer or employee may enter into a contract with any state agency if he or she
was employed by that state agency in a policy-making position in the same general
subject area as the proposed contract within the 12-month period prior to his or her
leaving state service.
If Contractor violates any provisions of above paragraphs, such action by Contractor
shall render this Agreement void. (Pub. Contract Code §10420)
Members of boards and commissions are exempt from this section if they do not
receive payment other than payment of each meeting of the board or commission,
payment for preparatory time and payment for per diem. (Pub. Contract Code §10430
(e))
2.LABOR CODE/WORKERS' COMPENSATION:
Contractor needs to be aware of the provisions which require every employer to be insured
against liability for Worker's Compensation or to undertake self-insurance in accordance with
the provisions, and Contractor affirms to comply with such provisions before commencing the
performance of the work of this Agreement. (Labor Code Section 3700)
3.AMERICANS WITH DISABILITIES ACT:
Contractor assures the State that it complies with the Americans with Disabilities Act (ADA) of
1990, which prohibits discrimination on the basis of disability, as well as all applicable
regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et seq.)
4.CONTRACTOR NAME CHANGE:
An amendment is required to change the Contractor's name as listed on this Agreement. Upon
receipt of legal documentation of the name change the State will process the amendment.
Payment of invoices presented with a new name cannot be paid prior to approval of said
amendment.
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5.CORPORATE QUALIFICATIONS TO DO BUSINESS IN CALIFORNIA:
a.When agreements are to be performed in the state by corporations, the contracting
agencies will be verifying that the contractor is currently qualified to do business in
California in order to ensure that all obligations due to the state are fulfilled.
b."Doing business" is defined in R&TC Section 23101 as actively engaging in any
transaction for the purpose of financial or pecuniary gain or profit. Although there are
some statutory exceptions to taxation, rarely will a corporate contractor performing
within the state not be subject to the franchise tax.
c. Both domestic and foreign corporations (those incorporated outside of California) must
be in good standing in order to be qualified to do business in California. Agencies will
determine whether a corporation is in good standing by calling the Office of the
Secretary of State.
6.RESOLUTION:
A county, city, district, or other local public body must provide the State with a copy of a
resolution, order, motion, or ordinance of the local governing body which by law has authority to
enter into an agreement, authorizing execution of the agreement.
7.AIR OR WATER POLLUTION VIOLATION:
Under the State laws, the Contractor shall not be: (1) in violation of any order or resolution not
subject to review promulgated by the State Air Resources Board or an air pollution control
district; (2) subject to cease and desist order not subject to review issued pursuant to Section
13301 of the Water Code for violation of waste discharge requirements or discharge
prohibitions; or (3) finally determined to be in violation of provisions of federal law relating to air
or water pollution.
8.PAYEE DATA RECORD FORM STD. 204:
This form must be completed by all contractors that are not another state agency or other
governmental entity.
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Sample Bid/Proposal Attachment regarding the Darfur Contracting Act of 2008
Effective January 1, 2009, all Invitations for Bids (IFB) or Requests for Proposals (RFP) for goods or
services must address the requirements of the Darfur Contracting Act of 2008 (Act). (Public Contract
Code sections 10475, et seq.; Stats. 2008, Ch. 272). The Act was passed by the California Legislature
and signed into law by the Governor to preclude State agencies generally from contracting with
“scrutinized” companies that do business in the African nation of Sudan (of which the Darfur region is a
part), for the reasons described in Public Contract Code section 10475.
A scrutinized company is a company doing business in Sudan as defined in Public Contract Code
section 10476. Scrutinized companies are ineligible to, and cannot, bid on or submit a proposal for a
contract with a State agency for goods or services. (Public Contract Code section 10477(a)).
Therefore, Public Contract Code section 10478 (a) requires a company that currently has (or within the
previous three years has had) business activities or other operations outside of the United States to
certify that it is not a “scrutinized” company when it submits a bid or proposal to a State agency. (See #
1 on the sample Attachment).
A scrutinized company may still, however, submit a bid or proposal for a contract with a State agency
for goods or services if the company first obtains permission from the Department of General Services
(DGS) according to the criteria set forth in Public Contract Code section 10477(b). (See # 2 on the
sample Attachment).
The following sample Attachment may be included in an IFB or RFP to satisfy the Act’s certification
requirements of bidders and proposers.
Contract # C15L0624, County of Fresno, Boating Safety and Enforcement Equipment Grant - FY 2015 / 16, Date: 09/14/2015
__________________________________________________________________________
Page: 72 of 73
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Exhibit F
DARFUR CONTRACTING ACT
Pursuant to Public Contract Code section 10478, if a bidder or proposer currently or within the previous
three years has had business activities or other operations outside of the United States, it must certify
that it is not a "scrutinized" company as defined in Public Contract Code section 10476.
Therefore, to be eligible to submit a bid or proposal, please complete only one of the following three
paragraphs (via initials for Paragraph # 1 or Paragraph # 2, or via initials and certification for Paragraph
# 3):
1. ~ We do not currently have, or we have not had within the previous three years, business
I 2.
3.
activities or other operations outside of the United States.
OR
We are a scrutinized company as defined in Public Contract Code section 10476, but we have
received written permission from the Department of General Services (DGS) to submit a bid or
proposal pursuant to Public Contract Code section 10477(b). A copy of the written permission
from DGS is included with our bid or proposal.
OR
We currently have, or we have had within the previous three years, business activities or
other operations outside of the United States, but we certify below that we are not a
scrutinized company as defined in Public Contract Code section 10476.
CERTIFICATION For# 3.
I, the official named below, CERTIFY UNDER PENALTY OF PERJURY that I am duly authorized to
legally bind the prospective proposer/bidder to the clause listed above in # 3. This certification is made
under the laws of the State of California
Grantee Agency Name (Printed) Federal ID Number
County of Fresno 94-6000512
By (Authorized Signature)
Printed Name and Title of Person Signing
'
Date Executed Executed in the County of
Fresno
YOUR BID OR PROPOSAL WILL BE DISQUALIFIED UNLESS YOUR BID OR PROPOSAL
INCLUDES THIS FORM WITH EITHER PARAGRAPH #1 OR #2 INITIALED OR PARAGRAPH #3
INITIALED AND CERTIFIED
Contract# C15L0624, County of Fresno, Boating Safety and Enforcement Equipment Grant-FY 2015/16, Date: 09/1412015 Page: 73 of 73
1 Boating and Waterways Equipment Grant ($80,000) (Fiscal Year 2015-16)
2
3 REVIEWED & RECOMMENDED
FOR APPROVAL
4
5
6
7
8
MARGARET MIMS, Sheriff-oroner
APPROVED AS TO LEGAL FORM:
9 Daniel C. Cederberg, County Counsel
10
11
12
13
14
15
APPROVED AS TO ACCOUNTING FORM:
ATTEST:
BERNICE E. SEIDEL, Clerk
Board of Supervisors
16 VICKI CROW, Auditor-Controller!Treasurer-Tax Collector
17
18 By COf2u, ff/2vJf-
19
20 Fund
Subclass
21 ORG
Account
22
23
24
25
26
27
28
0001
10000
31113210
4375
1