HomeMy WebLinkAboutCC Resolution 11963 (Purchase Equipment)RESOLUTION NO. 1196-1
RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING USE OF
STATE OF CALIFORNIA DEPARTMENT OF BOATING AND WATERWAY
FUNDS IN THE AMOUNT OF $55,000 FOR EQUIPMENT PURCHASE BY
SEPTEMBER 30, 2006 AND AUTHORIZING THE MAYOR TO EXECUTE
CONTRACT
Whereas, the City of San Rafael has operated the police patrol boat, "Mission
City" continuously since 1985; and
Whereas, the City of San Rafael has been made aware that replacement parts
for the engines currently powering the "Mission City" are no longer manufactured
or available; and
Whereas, the State of California, Department of Boating and Waterways granted
the City of San Rafael $55,000.00 in grant funds; and
Whereas, this grant money may be spent to purchase and install two marine
engines for the San Rafael Police Department patrol boat, "Mission City"; and
Whereas, the Department will use those funds to purchase and install two
marine engines for the San Rafael Police Department patrol boat, "Mission City";
NOW, THEREFORE BE IT RESOLVED, that the Mayor of the City of San Rafael
is hereby authorized and directed to execute a contract with the Department of
Boating and Waterways (DBW) to fund equipment purchase and installation by
September 30, 2006.
I, Jeanne M. Leoncini, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular
meeting of the San Rafael City Council held on the 5th day of June, 2006 by the
following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Miller, Phillips and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Heller
pec
JET NE M. LEON INI, City Clerk
STANDARD AGREEMENT
STD. 213 (NEW 02/96)
SCPRS NUMBER AGREEMENT NUMBER
# 36500506121909 11 # 05-204-769
1. This Agreement is entered into between the State Agency and the Contractor named below
STATE AGENCY'S NAME
DEPARTMENT OF BOATING AND WATERWAYS
CONTRACTOR'S NAME
CITY OF SAN RAFAEL POLICE DEPARTMENT
2. The term of this
Agreement is: FIFTEEN (15) YEARS
3. The maximum amount $ 55,000.00
of this Agreement is:
4. The parties agree to comply with the terms and conditions of the following exhibits which are by this reference made
a part of the Agreement:
Exhibit A — Standard Terms and Conditions Page 3
Exhibit B — Administrative Requirements Page 17
Exhibit C — Audits of State and Local Governments Page 55
Exhibit D — Suggested Language for Certifications Page 64-70
*View at w-rw.dss.ca.eov/contracts
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CONTRACTOR
CONTRACTOR'S NAME (If other than an individual, state whether a corporation, partnership, etc.)
CITY OF SAN RAISEL POLICE DEPARTMENT
BY (Authorized4N I DATE SIGNED)
` 61-2i o C
PRINTED NAME AND TITLE OF M ON 51GNIN�i
Albert J. Bor✓o, Mayor
ADDRESS
1400 FIFTH AVENUE
SAN RAFAEL CA 94915
STATE OF CALIFORNIA
AGENCY NAME
DEPARTMENT OF BOATING AND WATERWAYS )II
BY (Authorized Sipature) I DATE SIGNED
PRINTED NAME AND TITLE OF PERSON SIGNING I
RAYNOR TSUNEYOSHI, DIRECTOR
ADDRESS
2000 Evergreen Street, Suite 100 Sacramento, CA 95815
CALIFORNIA
Department of General Services
Use Only
Exempt per
BOATING SAFETY AND ENFORCEMENT GRANT
EQUIPMENT AND OPERATION CONTRACT
CITY OF SAN RAFAEL POLICE DEPARTMENT
[EQUIPMENT -NEW ENGINES]
# 05-204-769
California Department of Boating and Waterways
INDEX
DESCRIPTION
CONTRACT
PAGE
CONTRACT DEFINITION....................................1
GRANT AMOUNT....................................1
PURCHASE COMPLETION DATE.................................1
SPECIAL PROVISIONS....................................2
EXHIBIT A STANDARD TERMS AND CONDITIONS
ARTICLE
I, DEFINITIONS....................................3
ARTICLE
II, TERM OF CONTRACT ...........................4
ARTICLE
III, DISBURSEMENT OF GRANT........................4
ARTICLE
IV, EQUIPMENT OWNERSHIP ..........................5
ARTICLE
V, OPERATION AND MAINTENANCE OF EQUIPMENT .........
5
ARTICLE
VI, TERMINATION OF CONTRACT ......................6
ARTICLE
VII, REVERSION OF EQUIPMENT TO DEPARTMENT .........
7
ARTICLE
VIII, LIABILITY...............................7
ARTICLE
IX, WAIVER OF RIGHTS ..............................8
ARTICLE
X, REMEDIES NOT EXCLUSIVE ........................8
ARTICLE
XI, OPINIONS AND DETERMINATIONS ...................9
ARTICLE
XII, ASSIGNMENT OR TRANSFER OF EQUIPMENT ..........
9
ARTICLE
XIII, PROCUREMENT PROCEDURES ......................9
DESCRIPTION
EXHIBIT A (continued)
PAGE
ARTICLE XIV, SUBJECT TO AUDIT .............................12
ARTICLE XV, NON-DISCRIMINATION CLAUSE ...................13
ARTICLE XVI, DISABLED VETERAN BUSINESS ENTERPRISE
PARTICIPATION REQUIREMENT .................... 14
ARTICLE XVII, RECYCLING CERTIFICATION ....................14
ARTICLE XVIII, CONTRACTORS CERTIFICATION CLAUSES .......... 16
ARTICLE XIX, DISPOSITION OF PROCEEDS FROM SALE ...........16
EXHIBIT B 49 CFR 18, UNIFORM ADMINISTRATIVE
REQUIREMENTS FOR GRANTS AND COOPERATIVE
AGREEMENTS TO STATE AND
LOCAL GOVERNMENTS ............................17
EXHIBIT C CIRCULAR NO. A-128, AUDITS OF STATE AND
LOCAL GOVERNMENTS ...........................55
EXHIBIT D SUGGESTED LANGUAGE FOR RECYCLING
CERTIFICATION, CONTRACTOR CERTIFICATION
CLAUSES, and DVBE ............................62
BOATING SAFETY AND ENFORCEMENT GRANT
EQUIPMENT AND OPERATION CONTRACT
This CONTRACT # 05-204-769, is entered into on May 22, 2006
between the California Department of Boating and Waterways
(DEPARTMENT) and the City of San Rafael Police Department (GRANTEE)
The DEPARTMENT and the GRANTEE agree as follows:
1. CONTRACT
This CONTRACT incorporates EXHIBIT A, Standard Terms and
Conditions, EXHIBIT B, 49 CFR Part 18, Uniform
Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments, and EXHIBIT C,
Circular No. A-128, Audits of State and Local Government.
2. GRANT
The DEPARTMENT will make a grant to the GRANTEE of up to
FIFTY FIVE THOUSAND DOLLARS AND N0/100 ($55,000.00). This
GRANT shall not exceed this amount, shall be made using
Federal funds, and shall be used to purchase MISCELLANEOUS
EQUIPMENT in accordance with EXHIBIT A.
3. PURCHASE COMPLETION DATE
The EQUIPMENT purchase shall be completed no later than September 30,
2006. The DEPARTMENT will make payment under this CONTRACT upon
receipt of a written request by the GRANTEE as specified in Article
III and XIII of EXHIBIT A attached hereto.
1
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 CONTRACT 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 CONTRACT is fully executed and equipment
specifications have been approved by the DEPARTMENT.
(c) GRANTEE hereby certifies that during the performance of
this CONTRACT, 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
CONTRACT 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, first-class postage fully prepaid
thereon.
2
EXHIBIT A
STANDARD TERMS AND CONDITIONS FOR
BOATING SAFETY AND ENFORCEMENT CONTRACT
ARTICLE I - DEFINITIONS
A. CONTRACT means the contract to which these standard terms and
conditions are appended.
B. EQUIPMENT means a DEPARTMENT approved electronics, power plar_:
and other equipment purchased for use in boating safety and law
enforcement activities.
C. PURCHASE COSTS means those costs incurred by the GRANTEE
purchasing the EQUIPMENT; such PURCHASE COSTS shall not include
any operation and maintenance costs, nor any costs incurred
prior to the effective date of this CONTRACT, nor any indirec=
or overhead costs claimed by the GRANTEE.
D. GRANTEE FUNDS mean any funds provided by the GRANTEE for t ---e
operation and maintenance of the EQUIPMENT.
E. GRANT means a grant, using FEDERAL FUNDS, made by the DEPAR=--.—
to the GRANTEE to finance all or part of the PURCHASE COSTS.
3
ARTICLE II - TERM OF CONTRACT
A. The term of this CONTRACT shall begin on the effective date of
the CONTRACT and shall continue for FIFTEEN [15] YEARS from such
date unless terminated earlier in accordance with the terms and
conditions of this CONTRACT.
B. No amendment or variation of the terms of this CONTRACT shall
be valid unless made in writing, signed by the DEPARTMENT,
GRANTEE, AND approved as required. No oral understanding or
CONTRACT not incorporated in the CONTRACT 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 EQUIPMENT and
attendant equipment.
B. The DEPARTMENT will reimburse the GRANTEE through the GRANT for
the PURCHASE COSTS of the EQUIPMENT.
C. The DEPARTMENT may make payment under this CONTRACT upon receipt
of a written payment request by the GRANTEE, such request sha_=
be substantiated by invoices or other such evidence of PURCHAS3
COSTS and a signed certification that the GRANTEE complied with
procurement procedures as outlined in ARTICLE XIII.
4
ARTICLE IV - EQUIPMENT OWNERSHIP
The DEPARTMENT shall be the legal owner of the EQUIPMENT and the
GRANTEE shall be the registered owner. The GRANTEE shall not assign,
mortgage, hypothecate or transfer its interest in the EQUIPMENT
without the prior written approval of the DEPARTMENT.
ARTICLE V - OPERATION AND MAINTENANCE OF EQUIPMENT
A. The GRANTEE shall use the EQUIPMENT for the purposes of
promoting boating safety and law enforcement and shall keep the
EQUIPMENT available for search and rescue operations.
B. The GRANTEE shall be responsible for the costs of operating and
maintaining the EQUIPMENT; the DEPARTMENT shall not be liable
for such costs.
C. The GRANTEE shall maintain the EQUIPMENT in good repair.
D. The GRANTEE, at its own expense, agrees to replace the EQUIPMENT
if it is destroyed or rendered useless prior to the expiration
of this CONTRACT.
E. Representatives, agents or employees of the GRANTEE in the
performance of this CONTRACT 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 EQUIPMENNT; 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.
5
ARTICLE VI - TERMINATION OF CONTRACT
A. Either DEPARTMENT or GRANTEE may unilaterally terminate this
CONTRACT if a material breach of the CONTRACT 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 CONTRACT if the GRANTEE becomes
financially or legally unable to comply with the terms and
conditions of this CONTRACT; 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 CONTRACT 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 CONTRACT shall terminate three years after the effective
date specified on page 1 of the CONTRACT if the GRANTEE has not
received all of the GRANT prior to such date.
ARTICLE VII - REVERSION OF EQUIPMENT TO DEPARTMENT
If, for any reason whatsoever, this CONTRACT is terminated prior to
the expiration of the term of the CONTRACT, then the GRANTEE shall
deliver the EQUIPMENT 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 o
this CONTRACT which may be available to the DEPARTMENT.
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 wick
or incident to this CONTRACT except claims arising from the
concurrent or sole negligence of the DEPARTMENT, its officers,
agents and employees.
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 c--'-
this
=this Agreement. GRANTEE warrants, represents and agrees that
it and its subcontractors, employees and representatives sha==
7
ARTICLE VIII - LIABILITY (CONTINUED)
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 pursuant
Government Code Sections 895, et seq, the GRANTEE shall noti=_-
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 tire
either party may waive certain of its rights under this CONTRACT. 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
CONTRACT 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 CONTRACT for the enforcement of this CONTRACT is nc:
exclusive and shall not deprive the party using such remedy of, c=
limit the application of, any other remedy provided by law.
0
ARTICLE XI - OPINIONS AND DETERMINATIONS
Where the terms of CONTRACT provide for action to be based upon the
opinion, judgment, approval, review, or determination of either t' ---e
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 EQUIPMENT
No assignment or transfer of this CONTRACT or any part hereof, righ:=s
hereunder, or interest herein by GRANTEE shall be valid unless a=d
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 standard's
identified in EXHIBIT B, 49 CFR Part 18, Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and
Local Governments, and the specifications prepared by to
GRANTEE and approved by the DEPARTMENT. There shall be no
changes, corrections, modifications or exceptions to DEPARTH=-
approved specifications without advance approval by the
DEPARTMENT.
9
ARTICLE XIII - PROCUREMENT PROCEDURES (CONTINUED)
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.
D. EQUIPMENT AND ELECTRONICS PROCCEDUREMENT PROCEDURES:
Grantee must obtain at least three (3) bids or rate quotations
from qualified sources for each item that has a unit cost o=
$1,000 or more. The bids may be obtained over the phone, but
must be verified with a fax or original copy from the vendor,
and must include the make, model, size, name of vendor, date,
and cost of item.
E. AWARDING AGENCY REVIEW
(1) Grantees and sub -grantees must make available, upon
request of the awarding agency, technical specifications
on proposed procurements where the awarding agency believes
such review is needed to ensure that the item and/or
services specified is the one being proposed for purchase.
This review generally will take place prior to the time the
10
specification is incorporated into a solicitation document.
However, if the grantee or sub -grantee 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 sub -grantees must on request make available for
Awarding agency pre -award review procurement documents, such
as requests for proposals or invitations for bids, independer_=
cost estimates, etc. when:
(i) A grantee's or sub -grantee's procurement procedures
or operation fails to comply with the procurement
standards in this section; or
(ii) The procurement is expected to be awarded without
competition or only one bid or offer is received in
response to a solicitation; or
(iii) The proposed award is to be awarded to other than
the apparent low.bidder under a sealed bid procurement; c=
(iv) A proposed contract modification changes the scope c=
a contract.
(3) A grantee or sub -grantee will be exempt from ,the pre -award
review in paragraph (D) (2) of this section if the awarding
agency determines that its procurement systems comply with
the standards of this section.
11
M A grantee or sub -grantee 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, a third -party contracts are awarded on a
regular basis.
(ii) A grantee or sub -grantee may self -certify its
Procurement system. Such self -certification shall not
Limit the warding agency's right to survey the system.
Under a self -certification procedure, awarding agencies
may wish to reply on written assurances from the grantee
or sub -grantee that it is complying with these standards.
A grantee or sub -grantee will cite specific procedures,
regulations, standards, etc., as being in compliance with
these requirements and have its system available for
review.
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 th=s
Agreement. GRANTEE agrees to maintain such records for possible aud_z
for a minimum of three (3) years after final payment, unless a longer
12
ARTICLE XIV - SUBJECT TO AUDIT (CONTINUED)
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 contract, 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 treatme=
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 thereunder (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),
13
are set forth in Chapter 5 of Division 4 of Title 2 of the
California Code of Regulations and are incorporated into this
CONTRACT 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 CONTRACT.
ARTICLE XVI - DISABLED VETERAN BUSINESS ENTERPRISE PARTICIPATION
REQUIR]MM
A. State law requires that State contracts have participation goals
of 3 percent 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.
C. The GRANTEE is responsible for reviewing all bids for
compliance with the Disabled Veteran Business Enterprise
Participation requirement.
14
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 produc=
contains zero recycled content. (PCC 10233, 10308.5, 10354)
ARTICLE XVII - RECYCLING CERTIFICATION (CONTINUED)
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.
15
ARTICLE XVIII - CONTRACTOR CERTIFICATION CLAUSES
A. The CONTRACTOR CERTIFICATION CLAUSES contained in documer_:�
CCC298 are hereby incorporated by reference and made a part c--7-
this
=
this Agreement by this reference as if attached hereto.
B. GRANTEE is responsible for advising all prospective bidders c=
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 to
EQUIPMENT after the expiration or termination of this CONTRACT or t= -
reversion of the EQUIPMENT to the DEPARTMENT, then the proceeds
ARTICLE XIX - DISPOSITION OF PROCEEDS FROM SALE OF PATROL
BOAT (CONTINUED)
of the EQUIPMENT sale shall be distributed between the DEPARTMEI-'
and the GRANTEE in proportion to their respective contributions
paying the PURCHASE COSTS, e.g.: if the PURCHASE COSTS totaled
$100,000 and the GRANT contribution amounts to $60,000, then t=_
DEPARTMENT would receive 60% of the EQUIPMENT sale proceeds and t -a
GRANTEE would receive 40%.
16
EXHIBIT B
[Code of Federal Regulations]
[Title 49, Volume 1, Parts 1 to 99]
[Revised as of October 1, 1997]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR181
TITLE 49 --TRANSPORTATION
Subtitle A --Office of the Secretary of 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 issuance's.
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 subgrant 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 Subawards
18.30 Changes.
18.31 Real property.
18.32 Equipment.
18.33 Supplies.
18.34 Copyrights.
18.35 Subawards to debarred and suspended parties.
18.36 Procurement.
18.37 Subgrants.
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.
17
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 subawards 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, subgrantees,
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.
18
Sec. 18.3 Definitions (Continued)
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:
(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 nonconstruction 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 particular component of the entity is
designated in the grant award document.
19
Sec. 18.3 Definitions (Continued)
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 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:
20
Sec. 18.3 Definitions (Continued)
(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.
(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).
21
Sec. 18 .4 Applicability (Continued).
(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); -HS 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), 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.
22
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 OMB under the Paperwork Reduction Act of
1980.
(2) Applicants are not required to submit more than the original and
two copies of preapplications 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 facesheet, Federal agencies may
shade out or instruct the applicant to disregard any line item that
is not needed.
23
Sec. 18. 10 Forms for applying for grants (continued).
(4) When a grantee applies for additional f-mding (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. =8.11 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's
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
(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, or
(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.
24
Sec. 18.12 Special grant or subgrant conditions for "high-risk''
Grantees (Continued).
(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 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, allowability, and
allocability 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.
25
Sec. 18.20 Standards for financial management systems (Continued).
(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, 19881
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 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 subgrantee's actual cash disbursements.
26
Sec. 18.21 Payment (Continued).
(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
(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
27
Sec. 18.22 Allowable costs (Continued).
(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.
For the costs of a --
State, local or Indian tribal government..
Private nonprofit organization other than
an (1) institution of higher education,
(2) hospital, or (3) organization named
in OMB Circular A-122 as not subject to
that circular.
Educational institutions ..................
For-profit organization other than a
hospital and an organization named in OBM
Circular A-122 as not subject to that
circular.
Use the principles in --
OMB Circular A-87.
OMB Circular A-122.
OMB Circular A-21.
48 CFR part 31. Contract
Cost Principles and
Procedures, or uniform cost
accounting standards that
comply with cost principles
acceptable to the Federal
agency.
(c) The overhead cost principles of OMB Circular A-87 shall not
apply to State 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, 19881
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.
28
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 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(8).)
(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
29
Sec. 18.24 Matching or cost sharing (Continued).
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 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(8)) 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."
30
Sec. 18.24 Matching or cost sharing (Continued).
(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 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.
31
153 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
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.
32
Sec. 18.25 Program income(Continued).
(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 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 laws and regulations;
33
Sec. 18.26 Non -Federal audits (Continued).
(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, 19971
Changes, Property, and Subawards
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 nonconstruction projects. When a grant
or subgrant provides funding for both construction and
nonconstruction activities, the grantee or subgrantee must obtain
prior written approval from the awarding agency before making any
fund or budget transfer from nonconstruction 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).
(2) Need to extend the period of availability of funds.
34
Sec. 18.30 Changes (Continued).
(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 nonconstruction projects, contracting out, subgranting (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 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
35
Sec. 18.31 Real property (Continued).
grantee or subgrantee 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 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.
36
Sec. 18.31 Real property (Continued).
(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 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.
37
Sec. 18.34 Copyrights.
The Federal awarding agency reserves a royalty -free, nonexclusive,
and irrevocable license to reproduce, publish or other -wise 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.
uspension."
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 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
subagreements. Grantee and subgrantees may set minimum rules
where the financial interest is not substantial or the gift is
an --.--isolicited 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.
38
Sec. 18. 35 Subawards to debarred and suspended parties (Continued).
(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 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:
01
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(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 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.
40
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(4) Grantees and subgrantees will ensure that all prequalified 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 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:
41
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(d) Methods of procurement to be followed (Continued).
(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;
(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
42
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(e) Contracting with small and minority firms, women's business
enterprise and labor surplus area firms (Continued).
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
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.
43
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(g) Awarding agency review (Continued).
(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;
ame"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:
(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.
44
Sec. 18.35 Subawards to debarred and suspended parties (Continued).
(h) Bonding requirements (Continued).
(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)
(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.
45
Sec. 18. 35 Subawards to debarred and suspended parties (Continued).
(h) Bonding requirements (Continued).
(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.
(1) 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 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.,
architecturaland 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.
46
[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11,
1988; 60 FR 19639, 19647, Apr. 19, 19953
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 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.
47
Sec. 18. 40 Monitoring and reporting program performance (Continued).
(b) Nonconstruction performance reports (Continued).
(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 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.
48
[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.
(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 nonconstruction 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.
49
Sec. 18.41 Financial Reporting (Continued).
(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.
(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 nonconstruction
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).
50
Sec. 18.41 Financial Reporting (Continued).
(e) Outlay report and request for reimbursement for construction
programs (Continued).
(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 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,
51
Sec. 18.41 Financial Reporting (Continued).
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 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 the original
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.
52
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 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 noncancellable, 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) By the awarding agency with the consent of the grantee or
subgrantee in which case the two parties shall agree upon the
termination conditions, including the effective date and in the case of
partial termination, the portion to be terminated, or
(b) By the grantee or subgrantee upon written notification to the
awarding agency, setting forth the reasons for such termination, the
effective date, and in the case of partial termination, the portion to
be terminated. However, if, in the case of a partial termination, the
awarding agency determines that the remaining portion of the award will
not accomplish the purposes for which the award was made, the awarding
agency may terminate the award in its entirety under either Sec. 18.43
or paragraph (a) of this section.
53
Subpart D--After-The-Grant Requirements
Sec. 18.50 Closeout.
(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.
(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.
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]
54
EXHIBIT C
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. Supersession. 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:
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:
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.
5. Definitions (Continued).
b. Federal financial assistance means assistance provided by a
55
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.
1. 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. Subrecipient 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 program. A
subrecipient may also be a direct recipient of Federal financial
assistance.
56
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.
rganizations."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
subrecipients and obtaining and acting on subrecipient 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.
57
8. Internal Control and Compliance Reviews (Continued).
(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 subrecipients; 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.
58
9. Subrecipients. State or local governments that receive Federal
financial assistance and provide $25,000 or more of it in a fiscal year
to a subrecipient shall:
a. Determine whether State or local subrecipients have met the audit
requirements of this Circular and whether subrecipients covered by
Circular A-110, "Uniform requirements for grants to universities,
hospitals, and other nonprofit organizations,'' have met that
requirement;
b. Determine whether the subrecipient spent Federal assistance funds
provided in accordance with applicable laws and regulations. This
may be accomplished by reviewing an audit of the subrecipient made
in accordance with this Circular, Circular A-110, or through other
means (e.g., program reviews) if the subrecipient 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 subrecipient audits necessitate adjustment of
the recipient's own records; and
e. Require each subrecipient 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 subrecipient 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 whether directly or
indirectly.
59
11. Cognizant Agency Responsibilities (Continued).
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
11 other Federal assistance.''
13. Audit Reports (Continued).
(2) The auditor's report on the study and evaluation of
internal control systems 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
comments on the findings and recommendations in the report,
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. Subrecipients 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 monitoring 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
61
14. Audit Resolution (Continued)
report by the Federal departments and agencies. Corrective action should
proceed as rapidly as possible.
15. Audit Workpapers and Reports. Workpapers 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 workpapers 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 O 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.
62
19. Small and Minority Audit Firms (Continued).
d. Encourage contracting with small audit firms or audit firms
owned and controlled by 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 consort'ums 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. 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:
------------------------------------------------------------------------
Total expenditures of Federal financial assistance Major Federal
for all programs assistance program
----------------------------------------------------- means any program
More than But less than that exceeds
------------------------------------------------------------------------
$100 million ....................
$1
billion........
$3
million.
$1
billion ......................
$2
billion.... ...
$4
million.
$2
billion ......................
$3
billion........
$7
million.
$3
billion ......................
$4
billion........
$10
million.
$4
billion ......................
$5
billion........
$13
million.
$5
billion ......................
$6
billion........
$16
million.
$6
billion ......................
$7
billion........
$19
million.
Over $7 billion .................
..................
$20
million.
63
EXHIBIT D
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 tha:
I am duly authorized to legally bind the prospective Contractor t=
the clause(s) listed below. This certification is made under the
laws of the State of California.
Print Name and Title of Person Signing Date Executed
Albert J. Boro.'Mavor
Autho e S71�
'uExecuted in the
��County of Marin
Ti / TELEPHONE NUMBER
Mayor (415 )485-3074
Legal Business Name Federal ID Number
City of San. -Rafael 94-6000424
The Contractor hereby certifies under penalty of perjury, tha=
50 percent of the materials, goods, supplies offered, cr
products used in the performance of this contract meets or exceed -s
the minimum percentage of recycled material as defined in Sections
12161 and 12200 of the Public Contract Code. The Contractor maw
certify that the product contains zero recycled content.
64
CCC298
EXHIBIT D
CERTIFICATION CLAUSES
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.
Print Name and Title of Person Signing
Albert J. Boro, Mayor
Authorize � ire
Title
Mayor
Legal Business Name
City of San Rafael
Date Executed
Executed in the
County of Marin
TELEPHONE NUMBER
( 415) 485-3074
Federal ID Number
94-6000424
CONTRACTOR CERTIFICATION CLAUSES
1. STATEMENT OF COMPLIANCE: Contractor has,. unless exempted,
complied with the nondiscrimination program requirements. (GC
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,
65
CONTRACTOR CERTIFICATION CLAUSES (CONTINUED)
4) penalties that may be imposed upon employees for drug
abuse violations.
c. Provide that every employee who works on the proposed
Agreement will:
1) receive a copy of the company's drug-free 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. (GC 8350
et seq.)
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. (PCC 10296) (Not applicable to
public entities.)
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.
a. Current State Employees (PCC 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.
M.
CONTRACTOR CERTIFICATION CLAUSES (CONTINUED)
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.
b. Former State Employees (PCC 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. (PCC 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. (PCC 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.)
67
CONTRACTOR CERTIFICATION CLAUSES (CONTINUED)
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.
S. 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 fc=
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.
CONTRACTOR CERTIFICATION CLAUSES (CONTINUED)
8. ANTITRUST CLAIMS:
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.
99
CONTRACTOR CERTIFICATION CLAUSES (CONTINUE)
9. VENDOR DATA RECORD FORM STD. 204: This form must be completed
by all contractors that are not another slate agency or other
government entity.
70
STATE OF CA41FOFiMA
VENDOR DATA RECORD
(Required in lieu of IRS W-9 when doing business with the State of California)
STD. 204 (REV. 12.94)
NOTE. Governmental entities, federal, state, and local (including school districts) are not required to submit this fol
SECTION 1 must be completed by the requesting state agency before forwaraing to the vendor
1 I
DEPARTMENT/OFFICE
tt
C PARTNERSHIP
STREET ADDRESS
PLEASE
RETURN
TO:
CITY. STATE ZIP CODE
EXEMPT CORPORATION (Non-profit)
TELEPHONE NUMBER
1
VENDORS
BUSINESS NAME
SOLE PROPRIETOR -ENTER OWNERS FULL NAME HERE (Last Fret. Ml)
NAILING ADDRESS/Nunnar ow Straw or P. O. Bar Nunow)
City. State. Ana Zu COW)
z 11 CHECK ONE BOX ONLY
1 PURPOSE: information contained in this fc
will be used by state agencies to prepare irr
oration Returns (Form 1099) and forwithhold
on payments to nonresident vendors. Proi
return of this fully completed form will prev
delays when processing payments.
(See Privacy Statement on reverse.)
VENDOR
RESIDENCY
STATUS
CERTIFYING
SIGNATURE
= /ENDCR ENTITY'„PE IS A CCRPORATION. PARTNER. .F VENDOR ENTITY TYPE IS INDIVIDUALISOLE PROPRIETOR.
:HIP E:'ATE OR TRUST. ENTER FEIN. ENTER SSN
HECK APPROPRIATE BOXES:
— California Resicent - Qualified to do business In CA or a permanent place of
— business In CA
— Nonresident (See Reverse) Payments for services Dy nonresidents
— may be subject to state withholding
WAIVER OF STATE WITHHOLDING FROM FRANCHISE TAX BOARD ATTACHED
SERVICES PERFORMED OUTSIDE OF CAUFORNIA
NOTE: State and
local govemmentF
entities, including
school districts an
not required to
submit this form.
NOTE: Payment v
not be processed
without an accom
panying ta=aver
I.D. number.
NOTE:
a. An estate is a
resident if
decedent was
California resld
at time of deatt
b. A trust is a
resident if at le
one trustee is
California resi-
dent.
(See reverse.)
! hereby certify under penalty of perjury that the information provided on this document
is true and correct. If my residency status should change, I will promptly inform you.
AUTHORIZED: VENDOR REPRESENTATIVE'S NAME (Type at Pnnt) TITLE
SIGNATURE DATE TELEPHONE NUMBER
b
-� MEDICAL CORPORATION 11.,any asm..
tt
C PARTNERSHIP
VENDOR
— o0may. psyvHmneraw. aarotnAtry, atuamctc arc./
ENTITY TYPE
EXEMPT CORPORATION (Non-profit)
ESTATE OR TRUST
J ALL OTHER CORPORATIONS
INDMDUAL/SOLE PROPRIETOR
SOCIAL SECURITY NUMBER REQUIRED FOR INDIVIDUALISOLE PROPRIETOR BY AUTHORITY OF THE
—
REVENUE AND TAXATION CODE SECTION 18646 (See reverse)
VENDOR'S
TAXPAYER
'EDERAL EMPLOYER'S IDENTIFICATION NUMBER (FEINT
SOCIAL SECURITY 4UMBER
1. D. NUMBER
VENDOR
RESIDENCY
STATUS
CERTIFYING
SIGNATURE
= /ENDCR ENTITY'„PE IS A CCRPORATION. PARTNER. .F VENDOR ENTITY TYPE IS INDIVIDUALISOLE PROPRIETOR.
:HIP E:'ATE OR TRUST. ENTER FEIN. ENTER SSN
HECK APPROPRIATE BOXES:
— California Resicent - Qualified to do business In CA or a permanent place of
— business In CA
— Nonresident (See Reverse) Payments for services Dy nonresidents
— may be subject to state withholding
WAIVER OF STATE WITHHOLDING FROM FRANCHISE TAX BOARD ATTACHED
SERVICES PERFORMED OUTSIDE OF CAUFORNIA
NOTE: State and
local govemmentF
entities, including
school districts an
not required to
submit this form.
NOTE: Payment v
not be processed
without an accom
panying ta=aver
I.D. number.
NOTE:
a. An estate is a
resident if
decedent was
California resld
at time of deatt
b. A trust is a
resident if at le
one trustee is
California resi-
dent.
(See reverse.)
! hereby certify under penalty of perjury that the information provided on this document
is true and correct. If my residency status should change, I will promptly inform you.
AUTHORIZED: VENDOR REPRESENTATIVE'S NAME (Type at Pnnt) TITLE
SIGNATURE DATE TELEPHONE NUMBER
b