HomeMy WebLinkAbout97-07 RESOLUTIONRESOLUTION NO. 97-07
A RESOLUTION AWARDING BID # 07-41 AND APPROVING
CONTRACTS WITH T -G EXCAVATING, INC. IN THE AMOUNT OF
$822,222.00 AND A CONTINGENCY IN THE AMOUNT OF $41,000.00
AND WITH INSITUFORM TECHNOLOGIES, INC. IN THE AMOUNT
OF $178,834.50 AND A CONTINGENCY IN THE AMOUNT OF $9,000.00
FOR CONSTRUCTION OF THE FARMINGTON SANITARY SEWER
REHABILITATION; AND APPROVING A BUDGET ADJUSTMENT IN
THE AMOUNT OF $395,000.00 TO ACCEPT FUNDS FROM THE CITY
OF FARMINGTON.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby
awards Bid # 07-41 and approves contracts with T -G Excavating, Inc. in the amount of
$822,222.00 and a contingency in the amount of $41,000.00 and with Insituform
Technologies, Inc. in the amount of $178,834.50 and a contingency in the amount of
$9,000.00 for construction of the Farmington Sanitary Sewer Rehabilitation. Copies of
the contracts, marked Exhibit "A," are attached hereto and made a part hereof.
Section 2. That the City Council of the City of Fayetteville, Arkansas hereby
approves a budget adjustment in the amount of $395,000.00 to accept funds from the
City of Farmington. "�RWTR"''�,,
' bA Y.O'C'%SG�
PASSED and APPROVED this 5th day of June, 2007. `
;FAYETTEVILLE°
IOW
By:
ATTEST: � a ,K
°Y/ G7
�'"rrur
SONDRA E. SMITH, City Clerk/Treasurer
CITY OF FAYETTEVILLE, ARKANSAS
AGREEMENT
SANITARY SEWER REPLACEMENT AND REHABILITATION
FARMINGTON SEWER REHABILITATION PROJECT
THIS AGREEMENT, made this 14 day of J tt_t1.QJ 2007, by and between
the City of Fayetteville, Arkansas, a municipal corporation and lnsituform Technologies, s. Inc.
hereinafter referred to as Contractor.
WHEREAS, the City of Fayetteville has heretofore solicited Bids for all the work and
improvements for the doing of all things included within the hereinafter specified Farmington
Sewer Rehabilitation Project.
WHEREAS, the City of Fayetteville did on the 8th day of May, 2007 find that the Contractor
was the lowest responsive, responsible Bidder for the hereinafter specified work and did award
the Contractor a Contract for said work.
NOW, THEREFORE, for and in consideration of their mutual promises, covenants, undertaking
and agreements, the parties do hereby agree as follows:
ARTICLE I - WORK TO BE DONE BY CONTRACTOR
The Contractor agrees, at its own cost and expense, to do all the work and to furnish all the labor,
materials, equipment and other property necessary to do, construct, install and complete all the
works and improvements included in Unit 2 of the Farmington Sewer Rehabilitation Project.
All in full accordance with and in compliance with and as required by the hereinafter specified
Contract Documents and any addenda for said work, and to do, at his own cost and expense, all
other things required of Contractor by said Contract Documents for said work.
ARTICLE II - CONTRACT DOCUMENTS
The Contract Documents are defined in the General Conditions.
Agreement
City of Fayetteville
Sewer System Improvements
ARTICLE III - CONTRACT AMOUNT
The Contractor agrees to receive and accept the attached contract unit prices and/or lump sum
prices as full compensation for furnishing all materials and equipment for doing all the work
contemplated and embraced in this Agreement; also for all loss or damage arising out of the
nature of the work aforesaid, or from the action of the elements, or from any unforeseen
difficulties or obstructions which may arise or be encountered in the prosecution of the work
• until its acceptance by the City of Fayetteville, and for all risks of every description connected
with the work; also for well and faithfully completing the work, and the whole thereof, in the
manner and according to and in compliance with the Contract Documents and the requirements
of the Engineer under them, also for any and all things required by the Contract Documents.
ARTICLE N - LIQUIDATED DAMAGES OR ACTUAL DAMAGES AND EXCESS
The Contractor shall, and agrees to, pay to excess engineering as described in the General
Conditions.
The Contractor shall, and agrees to, pay for liquidated damages or actual damages if Contractor
fails to complete the project within the specified time in accordance with the General Conditions.
ARTICLE V - STARTING AND COMPLETION
i
The Contractor agrees to commence work under this Agreement within ten calendar days of
receipt of written Notice to Proceed and to complete all work included in this Contract to the
point of substantial completion no later than 130 Calendar Days from the date of Notice to
l..i Proceed. The Contractor further agrees to complete all work to the point of final acceptance by
the City of Fayetteville no later than 160 Calendar Days from the date of Notice to Proceed.
The Contractor shall, and agrees to, furnish and deliver to the City of Fayetteville, the Faithful
Performance Bond, the Contractor's Labor and Material Bond, the Maintenance Bond and the
insurance certificates and policies of insurance required of him by provisions of the Contract
Documents, and to do, prior to starting work, all other things which are required of him by the
Contract Documents as a prerequisite of starting work.
i
ARTICLE VI - PAYMENTS TO CONTRACTOR
The City of Fayetteville agrees with said Contractor to employ, and does hereby employ, the said
Contractor to provide the materials and do all the work, and do all other things hereinabove
contained or referred to, for the prices aforesaid, and hereby contracts to pay the same at the
time, in the manner and upon the conditions set forth or referred to in the Contract Documents;
and the said parties for themselves, their heirs, executors, administrators, successors and assigns,
do hereby agree to the full performance of the covenants herein contained.
There shall be no measurement or separate payment for any items not listed and all costs
pertaining thereto shall be included in the Contract unit prices for other items listed.
Agreement 2
City of Fayetteville
!. Sewer System Improvements
ARTICLE VII — CHANGES TO CONTRACT
Changes, modifications or amendments in scope, price or fees to this contract shall not be
allowed without a prior formal contract amendment approved by the Mayor and the City Council
in advance of the change in scope, cost or fees.
ARTICLE VIII — FREEDOM OF INFORMATION ACT
City contracts and documents prepared while performing City contractual work are subject to the
Arkansas Freedom of Information Act. If a Freedom of Information Act request is presented to
the CITY OF FAYETTEVILLE, the Contractor will do everything possible to provide the
documents in a prompt and timely manner as prescribed in the Arkansas Freedom of Information
I' Act (A.C.A. §25-19-101 et seq.). Only legally authorized photocopying costs pursuant to the
FOIA may be assessed for this compliance.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed in three
original counterparts the day and year first above written.
(SEAL)
Insituform Technologies, Inc.
(Contractor)
Attest:
Name Joann Smith
Title
(please type)
By
0
H. Douglas Thomas
(please type)
Contracting & Attesting Officer Title Vice President, Special Projects
(SEAL) CITY OF F ETTEVILLE, AR
i
Atte By
NameO/1G:/t'� �— . �/N% / Name r✓ oa
(please type) (please t e)
Title �Tltle
„panurrn
1 `el71®% WTwe
o sG
�V. ,OZ
;FAYETTEVILLE;
Agreement
City of Fayetteville
Sewer System Improvements
City of Fayetteville, Arkansas
Budget Adjustment Form
Budget Year Department: �afer o .Wdk/u1alpr Date Requested Adjustment Number
2007 Division:
Program: S�A4W i ./� t/J-s irucox
Project or Item Addedlincreased: Project or Item Deleted/Reduced:
Increase Sewer Improvements account and sanitary No decrease. This adjustment is necessary to recognize
sewer rehabilitation by $3959000. 1 Farmington cost share in the amount of $395,000.
Justification of this Increase:
This BA is necessary to recognize Farmington cost share
revenue in the amount of.$395,000. Funds will be used
for sewer rehab improvements in Farmington.
Justification of this Decrease:
No decrease. This administrative budget adjustment is
necessary to recognize Farmington cost share revenue in
the amount of $395,000.
Increase Expense Budget (Decrease Revenue Budget)
Account Name Account Number Amount Project Number
Sewer improvements 5400 5700 5815 00 395,000 02017 0501
Decrease Expense Budget (Increase Revenue Budget)
Account Name Account Number Amount. Project Number
//A�rs%
StatgCost Share 5400 0940 4303 00 395,000 02017 0501
/Approval Signatures Budget Office Use Only
; Type: A B C LDD E
Requested By Date
B d t onager _ Date Posted to General Ledger
Initial Date
MAI 0
Dtm-on;tDiector Date Posted to Project Accounting
Q ` y,� S Z D7Initial Date
Financ Internal Services Director Date Entered in Category Log
Initial Date
Mayor Date
CITY OF FAYETTEVILLE, ARKANSAS
AGREEMENT
SANITARY SEWER REPLACEMENT AND REHABILITATION
FARMINGTON SEWER REHABILITATION PROJECT
THIS AGREEMENT, made this % day of J t.t.f1_Q_. 2007, by and between
the City of Fayetteville, Arkansas, a municipal corporation and T -G Excavating Inc.
hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, the City of Fayetteville has heretofore solicited Bids for all the work and
improvements for the doing of all things included within the hereinafter specified Farmington
Sewer Rehabilitation Project.
WHEREAS, the City of Fayetteville did on the 8th day of May, 2007 find that the Contractor
was the lowest responsive, responsible Bidder for the hereinafter specified work and did award
the Contractor a Contract for said work.
NOW, THEREFORE, for and in consideration of their mutual promises, covenants, undertaking
and agreements, the parties do hereby agree as follows:
ARTICLE I - WORK TO BE DONE BY CONTRACTOR
The Contractor agrees, at its own cost and expense, to do all the work and to furnish all the labor,
materials, equipment and other property necessary to do, construct, install and complete all the
works and improvements included in Unit I of the Farmington Sewer Rehabilitation Project.
All in full accordance with and in compliance with and as required by the hereinafter specified
Contract Documents and any addenda for said work, and to do, at his own cost and expense, all
other things required of Contraotror by said Contract Documents for said work.
ARTICLE II - CONTRACT DOCUMENTS
The Contract Documents are defined in the General Conditions.
Agreement
City of Fayetteville
Sewer System Improvements
47-07 1
ARTICLE III - CONTRACT AMOUNT
The Contractor agrees to receive and accept the attached contract unit prices and/or lump sum
prices as full compensation for famishing all materials and equipment for doing all the work
contemplated and embraced in this Agreement; also for all loss or damage arising out of the
nature of the work aforesaid, or from the action of the elements, or from any unforeseen
difficulties or obstructions which may arise or be encountered in the prosecution of the work
until its acceptance by the City of Fayetteville, and for all risks of every description connected
with the work; also for well and faithfully completing the work, and the whole thereof, in the
manner and according to and in compliance with the Contract Documents and the requirements
of the Engineer under them, also for any and all things required by the Contract Documents.
ARTICLE IV - LIQUIDATED DAMAGES OR ACTUAL DAMAGES AND EXCESS
ENGINEERING COSTS
The Contractor shall, and agrees to, pay to excess engineering as described in the General
Conditions.
i.
The Contractor shall, and agrees to, pay for liquidated damages or actual damages if Contractor
fails to complete the project within the specified time in accordance with the General Conditions.
ARTICLE V - STARTING AND COMPLETION
The Contractor agrees to commence work under this Agreement within ten calendar days of
receipt of written Notice to Proceed and to complete all work included in this Contract to the
point of substantial completion no later than 130 Calendar Days from the date of Notice to
Proceed. The Contractor further agrees to complete all work to the point of final acceptance by
the City of Fayetteville no later than 160 Calendar Days from the date of Notice to Proceed.
The Contractor shall, and agrees to, furnish and deliver to the City of Fayetteville, the Faithful
Performance Bond, the Contractor's Labor and Material Bond, the Maintenance Bond and the
insurance certificates and policies of insurance required of him by provisions of the Contract
Documents, and to do, prior to starting work, all other things which are required of him by the
Contract Documents as a prerequisite of starting work.
ARTICLE VI - PAYMENTS TO CONTRACTOR
The City of Fayetteville agrees with said Contractor to employ, and does hereby employ, the said
Contractor to provide the materials and do all the work, and do all other things hereinabove
contained or referred to, for the prices aforesaid, and hereby contracts to pay the same at the
time, in the manner and upon the conditions set forth or referred to in the ContractDocuments;
and the said parties for themselves, their heirs, executors, administrators, successors and assigns,
do hereby agree to the full performance of the covenants herein contained.
There shall be no measurement or separate payment for any items not listed and all costs
pertaining thereto shall be included in the Contract unit prices for other items listed.
Agreement 2
City of Fayetteville
Sewer System Improvements
�. ARTICLE VII — CHANGES TO CONTRACT
Changes, modifications or amendments in scope, price or fees to this contract shall not be
allowed without a prior formal contract amendment approved by the Mayor and the City Council
in advance of the change in scope, cost or fees.
ARTICLE VIII — FREEDOM OF INFORMATION ACT
f City contracts and documents prepared while performing City contractual work are subject to the
Arkansas Freedom of Information Act. If a Freedom of Information Act request is presented to
the CITY OF FAYETTEVILLE, the Contractor will do everything possible to provide the
documents in a prompt and timely manner as prescribed in the Arkansas Freedom of Information
Act (A.C.A. §25-19-101 et seq.). Only legally authorized photocopying costs pursuant to the
FOIA may be assessed for this compliance.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed in three
original counterparts the day and year first above written.
(SEAIL
-I Com .nc-
(Contractor )
Attest:
Name (/Ilkly
(please type)
Title g44XILe
(SEAL)
Name& vi d M E. S44
I
tic" type)
Titte ( 1 t7" �
Y 00
;FAYETTEVILLE•
By
''
IH
(please type)
Title 4es/D6irT
CITY OF FAYETTEVILLE. AR
am
Name [In NnLi�
(please t pe)
Title
Agreement
City of Fayetteville
Sewer System Improvements
i
Bond No. BD 92097
ARKANSAS STATUTORY PERFORMANCE AND PAYMENT BOND
We T -G Excavating, Inc.
26016 E. Admiral, Catoosa, OK 74015
Mid -Continent asua y Company
as Principal, hereinafter called Principal, and a corporation organized and
existing under the laws of the State of Arkansas and authorized to do business in the State of
Arkansas, as Surety, hereinafter called Surety, are held and firmly bound unto Cityof Fayetteville as
Obligee, in the amount of ***See Below*** Dollars ($ 822,222_00 _ ) for the
payment whereof Principal and Surety bind themselves, their heirs, personal representatives,
successors and assigns, jointly and severally, firmly by these presents.
***Eight hundred twenty-two thousand, two hundred twenty-two dollars and no/100 ----------------
Principal has by written agreement dated entered into a contract with City of
Fayetteville for Farmington Sewer Rehabilitation Project, which contract is by reference made a
part hereof, and is hereinafter referred to as the Contract.
THE CONDITIONS OF THIS OBLIGATION ARE SUCH that if the principal shall
faithfully perform the Contract on his part and shall fully indemnify and save harmless the City of
Fayetteville from all cost and damage which he may suffer by reason of failure to do so and shall
fully reimburse and repay the City of Fayetteville all outlay and expense which the City of
Fayetteville may incur in making good any such default, and further, drat if the Principal shall pay all
persons all indebtedness for labor or materials furnished or performed under said Contract, failing
which such persons shall have a direct right of action against the Principal and Surety, jointly and
severally, under this obligation, subject to the City ofFayetteville's priority, then this obligation shall
be null and void; otherwise it shall remain in full force and effect.
No suit, action or proceeding shall be brought on this bond outside the State of Arkansas. No
suit, action or proceeding shall be brought on this bond except by the City of Fayetteville after six
months from the date final payment is made on the Contract, nor shall any suit, action or proceeding
be brought by the City of Fayetteville after two years from the date on which the final payment under
the Contract falls due.
Any alterations which may be made in the terms of the Contract, or in the work to be done
under it, or the giving by the City of Fayetteville of any extension of time for the performance of the
contract, or any other forbearance on the part of either the City of Fayetteville or the Principal to the
other shall not in any way release the Principal and the Surety or Sureties, or either or any of them,
their heirs, personal representatives, succrtsnrs or assigns from their liability hereunder, notice to the
Surety or Sureties of any such alteration, extension or forbearance being hereby waived.
Performance Bond
City of Fayetteville
Sanitary Sewer Improvements
In
no
event
shall
the aggregate liability of the
Surety exceed the sum set out herein.
Executed
on
tlus
4th
day of June
, 2007
T -G Excavating, Inc.
Principal
Mid -Continent Casually Company /
Performance Bond 2
City of Fayetteville
Sanitary Sewer Improvements
MAINTENANCE BOND BOND NUMBER BD 92097
KNOW ALL MEN BY THESE PRESENTS, That we, T -G Excavating, Inc.
26016 E. Admiral, Catoosa, OK 74015
(hereinafter called the Principal), and Mid -Continent Casualty Company
a corporation (hereinafter called the Surety), are held and firmly bound unto
City of Fayetteville, 113 W. Mountain, Fayetteville, AR 72701
hereinafter called the Obligee), in the full and just sum of
Eight hundred twenty-two thousand, two hundred twenty-two dollars and no/100------ Dollars,
lawful money of the United States, for the payment of which, well and truly to be made, we bind ourselves, our heirs,
administrators, executors, successors and assigns, jointly and severally, firmly by these presents.
WHEREAS, said Principal has entered into a certain contract with the Obligee dated
which contract has been or is about to be accepted.
AND WHEREAS, specifications and contract provided that Farmington Sewer Rehabilitation
- Unit 1
should guarantee the project free frmn defects caused by faulty workmanship and materials for a period of two years after
substantial completion, general wear and tear excepted.
NOW, THEREFORE, if the said project shall be free from defects of workmanship and materials, general wear and
tear excepted, for a period of two years after substantial completion, then this obligation shall be null and void; otherwise to
remain in full force and effect.
Signed, sealed and delivered June 4, 2007
Witness as to
Principal
Maintenance Bond
City of Fayetteville
Sanitary Sewer Improvements
MID-CONTINENT CASUALTY COMPANY
Tulsa, Oklahoma
Know all Men by these presents .That the MID-CONTINENT•CASUALTY COMPANY; a corporation of the State of Oklahoma, having 16
principal' office in the city of Tulsa; Oklahoma, pursuant to the following By -Law, which was adopted by the Stockholders of the said Company
on March 13th, 19473 to -wit:
"Article IV, Section 7 -`The Executive -Officers of tie Company shall have power and authority to appoint, for purposes only of executing
and attesting bonds.and undertakings and other wrilingsobligatory in=the nature thereof, one more Resident :Vice President, Resident Assistant
`f Secretaries andAifomeys-in-Fact and at any time to.removo any such Resident-Vice-President,Besident As§istant$ecietary, or Attorney -in -Fact
• and revoke the power and authority given him; None of such appointees need be. Directors of the Company."'
%-The Company does hereby constitute and appoint' `'Jamie Burris, John Kelly Deer, Vaughn P. -.Graham,
Mark Edward Long, Robbie Loyd, Mark O. Mandeville; Stephen M. Poleman and Michael J.
Swenton, in&vidually of TULSA, OK
its true and lawful attomey(s)-in=tact%, to execute seal and'delim for and on its behalf as Surety,. and as its act and deed, _
Any and all bonds4md underwkingsedf Suretyship .
` And the execution of such uistrumem(s) in pursuance of these presents, shall tie as binding .upoq'th'e said MID-CONTINENT CASUALTY
COMPANY, as fully and amply; to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected
officers at its principal office in Tulsa, Oklahoma.
IN WITNESS WHEREOF MID-CONTINENT CASUALTY COMPANY has executed slid attested these
P this .,16% day of May 2006
I ATTEST:o-�-�
SARA•ANDERSON ASSISTANT SECRETARY TODD BAZATA VICE PRESIDENT
On this 116. day of :.:May. 2006 , before me `a Notary; Public of the State of Oklahoma in and`.
for the ,County of Tulsa, came the individual to me personally known. to be the officer descnbed ri and who executed the preceding instrument,
and he`acknowledged the execution sof the same and being by me dulysworn, said, that he isthe therein described and authorized officer of the
`1 MID'CONTINENT CASUALTY COMPANY aforesaid, and that the seat affixed to the preceding instrument is the corporate of said Company,
and the said corporate seal and his signature as such officer were duly affixed to the said instrument by the authority and direction of the said
?, Company, and that Article IV, Section 7, of the By -Laws of said Company, referred to in the preceding instrument, is now in force.
49
IN TESTIMONY WHEREOF, I have hereunto set my handmd affixed my official seal at the City of Tulsa, the day and'ycar first above written.
�p1 LAy� Commission H 99009381
STATE OFOKLAHOIdL� �ARi' ommi"ssionexp es '06-07-07
—
cotrrrrY Or TULI = ' U
A
ed4
U CALLAHAN Notary Public
I
SARA �,S�y if'�3ecretary.of.MID-CONTINENT CASUALTY: COMPANY do hereby,ce tify`thatthe foregoing-
extracts.of )lie By-laws and o `3fResdluUon of the Board of Directors of thus corporation, and of a Power of Attorney issued pursuant thereto; are
true arid correct, and that both the By -Laws, the Resolution and the Power of Attorney are still in ftill'force and effect'. "-
,This certifies that any facsimile or mechanitsily-produced signature of any officer ofthe Company and Company seal, wherever appearing upon a power of attorney issued:. -
s by the Company, shall be valid and binding upon the Company with the same force and effect as though manually affixed.
IN WITNESS wIffREOF I havg hereunto set my hand and affixed the facsimile seal of said corporation
:.j. ,�,.1O,trt11 Uni,4i/
`i��A\•CASL,�Ir,`'�%19 this day of
t 4 Q�svfi r,� r� e
}
SARA ANDERSON Assistant Secretary
B-Baaa MC.'r �q 141t'„i�. i BNPA00401 9
C�C�
THE GRAY INSURANCE COMPANY
CERTIFICATE OF INSURANCE NO
CERTIFICATE HOLDER
NAMED INSURED
City
of
Fayetteville
113
Mountain
T -G Excavating, Inc.
26016 East Admiral Place
Fayetteville, Arkansas
CatDDsa, OK 74015
72701
®
YES
❑
NO
Do all policies contain a Waiver of Subrogation in
favor of Certificate Holder if required by written cmuract^.
®
YES
❑
,NO
Do all policies except the Workers' Compensation
name the Certificate Holder as Additional Insured if required by written contract?
®
YES
❑
NO
Do policies provide 30 days written notice of
cancellation to Certificate Holder!
I@
YES
❑
NO
Is coverage under all insurance carried by Named
Insured Primary Insurance if required by written contract.)
LIMITS OF LIABILITY
IN
CONFIRMATION
OFCOVERAGE
TYPE OF INSURANCE
POLICY
NUMBER
POLICY
PERIOD
THOUSANDS
- (000)
WORKERS' COMPENSATION &
XSWC-070433
0610112006
WORKERS COMPENSATION
Statutory
EMPLOYERS LIABILITY
0610112009
EMPLOYERS LIABILITY
®
YES
❑
NO
U. S. Longshoremen's and Harbor Workers'
Each Accident
®
®
YES
YES
❑
❑
NO
NO
Compensation Act Coverage
Outer Continental Shelf Land Act
Junes Act (including Trancponation, Wages,
Disease - Policy Limit
Disease - Each Employee
$ LOW
$ 1,000
Maintenance, and Cure). Death on the High
MARITIME EMPLOYERS
Seas Act & General Maritime Law
LIABILITY
S 1,000
®
YES
❑
NO
Voluntary Compensation Endorsement
®
YES
❑
NO
Other States Insurance
®
YES
❑
NO
Alternate Employer/Durrowed Servant Endorsement
R
YES
❑
NO
"ht Rein" Endorsement
®
YES
❑
NO
Gulf of Mexico Territorial Extension
GENERAL LIABILITY
XSG1:073089
06/01/2006
Form & Edition Date ISO CG 00 01 11/88
0610112009
General Aggregate
Unlimited
Products-Comp/OPS Agg.
$ 3.000
IN
YES
❑
NO
Broad Form Property Damage Liability
Personal & Advertising Injury
$ 1.000
including X, C. U
-
Each Occurrence
$ 1,000
®
YES
❑
NO
Products/Completed Operations
Fire Damage
$ 50
®
YFS
❑
NO
Commcmal Liability
(Any Line fire)
®
YES
❑
NO
Sudden and Accidental Pollution Liability
Medical Expense
$ 5
®
YES
❑
NO
Occurrence Form
(Any one person)
®
YES
❑
NO
Personal Injury
®
YES
❑
NO
"In Rem" Endorsement
®
YES
❑
NO
Crass Liability
IH
YES
❑
NO
Watercraft exclusion has been modified by the
vessels endorsement on scheduled equipment
Coil
C'
c�
c�
CONFIRMATION
-
TYPE OF INSURANCE
POLICY
POLICY
LIMITS OF LIABILITY IN
OF COVERAGE
NUMBER
PERIOD
THOUSANDS
(troll)
AUTOMOBILE LIABILITY
XSAL-072887
06/01/2006
06/01/2009
® YES ❑ NO
Any Auto
Bodily Injury & Property S 1,000
® YES ❑ NO.
All Owned Autos
Damage Combined
❑ YES ❑ NO
Scheduled Autos
IN YES ❑ NO
Hired Autos
® YES ❑ NO
Non -Owned Autos
EXCESS LIABILITY
GXS-042028
06/01/2006
® YES ElNO
Excess Pnn
06/012007n
Each Occurrence $ 4.000
Aggregate $ 4.000
JO R PROJECT D RJ
CPT N
�armingon fewer Rehabilitation Project, Unit 1, Farmington , A
SPECIAL CONDITIONS
RJN Group, Inc. Consulting Engineers, 12160 Abrams Rd, #206
Dallas, TX 75243 is additional insured as respas their written
contractual interests.
Should the insurance herein described be cancelled, assigned or changed in such a manner as to affect this certificate. THE GRAY INSURANCE
COMPANY will endeavor to give thirty ( 30) days written notice to the certificate bolder, but failure to do so shall impose no obligation or liability
upon THE GRAY INSURANCE COMPANY.
7
THE GRAY INSURANCE OMPANY
3601 N. 1-10 Service Road West, Metairie, LA 70002
DATE:
FORM NO. 135 REV. 1/01
c�
c-1
ACORD_ CERTIFICATE OF LIABILITY INSURANCE OP ID C2 DATE(MMIDBIYYYYI
TGEXCAI 06 04 07
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATIO
RICH 6 CARTMILL
2736 East 51st #400
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW
Tulsa OK 74105
06/01/08
EACH OCCURRENCE
Phone: 918-743-8811 Fax:918-744-8429
INSURERS AFFORDING COVERAGE
NAIC #
INSURED
INSURER A'. The Gray Insurance Company
MED EXP(Myme person)
INSURER B',
X
PERSONAL S ADV INJURY
City of Fayetteville, Arkansas
113 W. Mountain
Fayetteville AR 72701
INSURER
GENERAL AGGREGATE
INSURERD.
GEN.
INSURER E
PRODUCTS. COMPIOP AGO
$
X I
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING
ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR
MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH
POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
HER RUUL
LTR INSRE TYPE OF INSURANCE POLICY NUMBER PULIGY EFFECTIVE POLICY EMMATRIT
DATE MMq)WYY DATE MMRIWY LIMITS
A
X
GENERAL
LIABILITY
COMMERWAL GENERAL LIABILITY-
-
CLAIMS MADE ❑OCCUR
Owner/Cont Prot.
XSGL-073089
06/01/07
06/01/08
EACH OCCURRENCE
52,000,000
PREMISES aomarance)
$
MED EXP(Myme person)
S
X
PERSONAL S ADV INJURY
s
-
GENERAL AGGREGATE
$1,000,000
GEN.
AGGREGATE LIMIT APPLIES PER
POLICY JET LOC
PRODUCTS. COMPIOP AGO
$
X I
AUTOMOBILE
LIABILITY
ANY AUTO
ALL OWNED AUTOS
SCHEDULED AUTOS
HIRED AUTOS
NON -0 VNED AUTOS
'
COMBSINGLE LIMIT
(Ea ecddenddent)q
$
BODILY
(Perrpen:m)
$
BODILY INJURY
(Per accident)
$
PROPERTY DAMAGE
(Pereccidenl)
$
GARAGE LIABILITY
ANY AUTO
AUTO ONLY -EA ACCIDENT
S
OONLY: EA ACC
AUTOUTO ONLY: AGG
S
S
EXCESSAIMBRELLA
LIABILITY
OCCUR CLAIMS MADE
DEDUCIBLE
RETENTION S
EACHOCCURRENCE
$
AGGREGATE
S
S
S
S
"
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY
ANY PROPRIETORMARTNERIEXECUTNE
OFFICERRAEMBER EXCLUOED7
R s, dexdEe abler
SPECIAL PROVISIONS EeIay.•
TORY LIMBS STATU
ER
E.L. EACH ACCIDENT
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OTHER
DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES I EXCLUSIONS ADDED BY ENDORSEMENT I SPECIAL PROVISIONS
RE: Farmington Sewer Rehabilitation Project Unit #1, Farmington, AR. RJN
Group, Inc Consulting Engineers, 12160. Abrams Rd, #206, Dallas, TX 75243 is
included as Additional Insured as respects the OCP Liability coverage.
t,crc I IrwsA I nLJL.uen CANCELLATION
CITYFAY SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRDTEN
City of Fayetteville NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO 00 SO SHALL
113 W. Mountain IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR
Fayetteville AR 72701 REPRESENTATIVES.
25
S 707
1
1 March 2007
Contract
1 Documents
1
1 Farmington Sewer Rehabilitation Project
XUA Unit 2
1 Farmington, Arkansas
1 Prepared for the
1 City of Fayetteville
Fayetteville, Arkansas
:1 WATE CKZ
ARE�SAS
prepared by * #
' REGISTERED
RJ1rI Group,Inc.PROFESSIONAL
A ENGINEER 0
Consulting Engineers ' j Na ' Q
Dallas, Texas S A. N�'
3y
1
CITY OF FAYETTEVILLE, ARKANSAS
FARMINGTON SEWER RE HABILITATION PROJECT
UNIT 1 AND UNIT 2
BID 4 07-41
STAG GRANT NO, XP -96606201 -STAG -6
ADDENDUM NO. 1
April 30, 2007
TO: ALL PROSPECTIVE BIDDERS
The following changes shall be made part of the Construction Documents for the above project
and area as follows:
CLARIFICATION
The lump sum bid items for point repairs shall include a maximum of eight (8) linear feet of
service line replacement unless otherwise noted on the Drawings.
INSTRUCTIONS TO BIDDERS
Page 3
Delete Paragraph J.
Page 10
Add attached page to Instructions to Bidders.
BID PROPOSAL
Unit 1 Bid Proposal
Replace Unit 1 Bid Proposal with the attached.
Unit 2 Bid Proposal
Replace Unit 2 Bid Proposal with the attached.
Page 1
SECTION D2-11
' Page D2-11(1)
' Change Paragraph A.2.6 to read:
Work associated with sanitary sewer line point repairs shall include replacement of defective
' building service lateral connections and building service lateral pipes as shown on the Drawings
or a maximum of eight (8) linear feet of service lateral pipe.
' Page D2-11(5)
Change paragraph D.3. to read:
3. Payment for extension of service lateral pipe beyond 8 linear feet unless
otherwise noted on the Drawings shall be at the Contract Unit Price indicated.
' Payment shall include trench backfill, restoration, testing, and all incidental work.
Change D3 to DA
SECTION D2-12
' Page D2-12(6)
Replace Paragraph C.8 with the following:
' The Contractor shall be responsible to reinstate each service without excavation, utilizing a
remote controlled cutting device, monitored by a video TV camera. The service connection shall
' be cut at 95% transition from the main line to the service lateral. The Contractor shall certify he
has a minimum of two complete working cutters plus spare key components on the site before
each inversion. The City reserves the right to reinstate service connections externally with its
own forces. The City will coordinate with the Contractor after the pre -TV video has been
reviewed to determine which services, if any, will be reinstated externally. Additional
reinstatements by Contractor may be required if external excavation is deemed inappropriate by
the City. The Contractor must provide with his bid demonstrated successful experience with
internal reinstatement of services located on 6 -inch diameter sewer mains.
' SECTION D243
Page D2-13(8)
Paragraph C.6 — Change four (4) in second line of paragraph to eight (8).
' Paragraph DA — Change four (4) in first line of paragraph to eight (8).
1
Page 2
Each Bidder shall acknowledge receipt of this Addendum by affixing his signature below, by
noting this Addendum on his Bid Form and by attaching this Addendum to his Bid.
(Engineer)
ACKNOWLEDGEMENT
The undersigned acknowledges receipt of this Addendum and the Bid submitted is in accordance
with information, instructions and stipulations set forth herein.
Bidder: Insituform Technologies, Inc.
By:
H. Douglas Thomas, V.P., Special Projects
Date: May 8, 2007
t
11
11
II
CITY OF FAYETTEVILLE, ARKANSAS
FARMINGTON SEWER RE HABILITATION PROJECT
UNIT 1 AND UNIT 2
BID # 0741
STAG GRANT NO, XP -96606201 -STAG -6
ADDENDUM NO, 2
May 3, 2007
TO: ALL PROSPECTIVE BIDDERS
The following changes shall be made part of the Construction Documents for the above project
and area as follows:
Unit 1 Bid Proposal
Replace Unit 1 Bid Proposal with the attached.
Unit 2 Bid Proposal
Replace Unit 2 Bid Proposal with the attached.
Each Bidder shall acknowledge receipt of this Addendum by affixing his signature below, by
noting this Addendum on his Bid Form and by attaching this Addendum to his Bid.
(Engineer)
ACKNOWLEDGEMENT
The undersigned acknowledges receipt of this Addendum and the Bid submitted is in accordance
with information, instructions and stipulations set forth herein.
Bidder: Insituform Technologies c.
By. XX
H. Douglas Thomas, V.P.-,Special Projects
Date: May 8, 2007
Page 1
Insituform Technologies, Inc.
Contractor
17988 Edison Avenue
Street Address
Chesterfield, MO 63005
City & State
636-530-8000
Telephone
CONTRACT DOCUMENTS
SANITARY SEWER IMPROVEMENTS
FARMINGTON SEWER REHABILITATION PROJECT
UNIT 1 AND UNIT 2
CITY OF FARMINGTON
FOR
FAYETTEVILLE,ARKANSAS
PREPARED BY
RJN GROUP INC.
CONSULTING ENGINEERS
DALLAS, TEXAS
MARCH 2007
CONTRACT DOCUMENTS
SANITARY SEWER IMPROVEMENTS
FARMINGTON SEWER REHABILITATION PROJECT
UNIT 1 AND UNIT 2
CITY OF FAYETTEVILLE
FAYETTEVILLE, ARKANSASCZEGISTERED
oMARCH 2007
I hereby state that these Contract Documents were prepared under
' my direct supervision and that I am a duly Registe Pr ional
Engineer underthe laws of the S
Thomas A. Har
Date: % a 7 Registration No. 8589
CONTRACT DOCUMENTS
FOR THE
CITY OF FAYETTEVILLE
SEWER SYSTEM IMPROVEMENTS
TABLE OF CONTENTS
TITLE SECTION Pages
BIDDING DOCUMENTS A
INVITATION TO BID
INSTRUCTIONS TO BIDDERS*
#BID
# BID BOND
# BONDING COMPANY INFORMATION
#SUBCONTRACTORS
# STATEMENT OF EXPERIENCE OF BIDDER
# STATEMENT OF COMMITMENT
# QUALIFICATION STATEMENT
' CONTRACTUAL DOCUMENTS B
AGREEMENT
' ARKANSAS STATUTORY PERFORMANCE AND PAYMENT BOND
MAINTENANCE BOND
1
CONDITIONS OF THE CONTRACT
GENERAL CONDITIONS* C
SUPPLEMENTARY CONDITIONS C 1
EPA SUPPLEMENTARY CONDITIONS (PINK SHEETS)
PREVAILING WAGE RATE DETERMINATION
SWPP CONSTRUCTION SITE NOTICE / NOI
' * Section has individual Table of Contents
# Items to be included in bid package.
1-65
1-3
1-102
1-8
1-10
TABLE OF CONTENTS (Continued)
TITLE SECTION Pages
CONSTRUCTION FORMS D
SUBMITTAL RECORD 1
PERIODIC PAYMENT FORMS 1-5
CHANGE ORDER 1-3
CONSTRUCTION LETTER I
TREE REMOVAL REQUEST I
SPECIFICATIONS
DIVISION I - GENERAL REQUIREMENTS* DI
DIVISION
2
-SITE
WORK*
D2
DIVISION
3 —
CIPP
SITE LOCATIONS
D3
INSURANCE FORMS 4 E
EASEMENT DOCUMENTS F 1-22
*
Section has
individual
Table of Contents
4
Items to be
included in
bid package.
L
City of Fayetteville
Fayetteville, Arkansas
Invitation to Bid
Bid 07-41, Farmington Sewer Rehabilitation - Unit 1 and Unit 2
Project Name: Sanitary Sewer Main Replacement and Rehabilitation
Contract Name: Farmington Sewer Rehabilitation Project — Unit 1 and Unit 2
STAG Grant No.: XP -96606201 -STAG -6
' Bid Deadline: May 08, 2007
Advertisement Dates: April 3, 2007
April 10, 2007
DESCRIPTION OF WORK OF THIS CONTRACT
All properly licensed General Contractors, and all other properly licensed subcontractors or suppliers are
invited to bid on a general construction contract. The Farmington Sewer Rehabilitation Project Contract
provides for improvements to the sanitary sewer system in various locations of Farmington, Arkansas.
Unit 1 of the project includes replacing 3,719 linear feet of sewer by open cut and point repairs at 66
locations. Unit 2 of the project includes the installation of 5,493 linear feet of cured -in-place lining as
' shown in exhibits 3001 to 3021 in Division 3 of these specifications.
BID INFORMATION
Separate sealed bids for Unit 1 (Open Cut and Point Repair portion) and Unit 2 (CIP Liner portion) bids
will be received by the City of Fayetteville, Arkansas (the Owner) until 1:30 p.m., Central Standard Time
(CST), May 8, 2007. Bids received after this time will not be accepted. The City of Fayetteville will not
be held responsible for lost or misdirected bids. Bids will be opened and publicly read aloud immediately
after specified closing time in Room 326 at 113 W. Mountain, Fayetteville, Arkansas. All interested
' parties are invited to attend.
Bids must be received at the followine location by 1:30 PM, CST on May 8,2007:
' Purchasing Agent's Office (Room 306) at City Hall
' 113 West Mountain Street
Fayetteville, Arkansas 72701
I City of Fayetteville
Invitation to Bid
Sanitary Sewer Improvements
I
1
1
1]
This document is designated as two (2) separate contracts (Unit 1 and Unit 2) and shall not be construed
as being a single project. The proposal sections are provided as two (2) individual bids and are arranged
in units to allow prospective bidders to submit bids on one unit or both units. Award of contract, if made,
shall be to the responsive low bidders for each individual unit. if the contractor is the responsive low
bidder on two units, then such units will be combined into a combined project with one single contract
award. The major items of work on the above projects are:
Unitl
3,719 LF - 8" Dia. Sanitary Sewer by Open Cut Replacement
66 EA - 6" Dia. and 8" Dia. Point Repair Replacements
Unit2
5,493 — 6" Dia. and 8" Dia. Cured -in Place Liner Installation (Exhibits 3001-3021)
Sealed envelopes or packages containing bids shall be marked or endorsed "Bid 07-41, Farmington Sewer
Rehabilitation Project, Units 1 and 2" and the State of Arkansas Contractor's License Number shall be
clearly marked on the outside of the envelope.
Copies of the Bid Documents may be obtained for bidding purposes from RJN Group, Inc. at a purchase
price of Two Hundred Dollars ($200.00) for each set [one (1) copy of Project Manual, one (1) set of
Contract Drawings, and one (1) bid packet] of documents. Bid Documents may be obtained at the
following Issuing Office:
RJN Group, Inc.
12160 Abrams Road, Ste. 400
Dallas TX 75243
Phone: 972-437-4300; Fax: 972437-2707
Payment must be received prior to shipment of the Bid Documents. NO REFUND of payment will be
made and no partial sets will be issued. No half-size or partial sets will be issued prior to bid opening.
Bid documents may be examined at the following locations:
McGraw Hill Construction Dodge/Little Rock
Kroger Center, Redding Building
1701 Centerview Drive, Suite 1 10
' Little Rock, AR 722114311
(501)225-9453; Fax (501)225-9534
City of Fayetteville 2
Invitation to Bid
Sanitary Sewer Improvements
McGraw Hill Construction Dodge/Springfield
3275 E. Ridgeview, Ste. B
Springfield, MO 65804-4092
(417)883-6600; Fax (417)883-6607
McGraw Hill Construction Dodge/Dallas McGraw Hill Construction Dodge/Tulsa
' 9155 Sterling Drive, Suite 160 12101 E. 51" Street, Suite 105
Irving, TX 75063 Tulsa, OK 74146
(972)819-1400; Fax (972)819-1409 (918)307-1786; Fax (918)307-1788
' Northwest Arkansas Planning Room Reed Construction Data
103-A Apple Blossom Road 30 Technology Pkwy, Ste. 100
Lowell, AR 72745 Norcross, GA 30092
' (479)750-7704; Fax (479)750-7709 www.recdconstructiondata.com
Southern Reprographics, Inc.
' 2905 Pointe Circle
Fayetteville, AR 72703
(479)582-0022; Fax (479)582-4021
' A non -mandatory pre-bid conference will be held on April 18, 2007 at 1:30 pm, CST at the Fayetteville
City Hall, Room 326 at 113 W. Mountain in Fayetteville, Arkansas. All interested parties are encouraged
' to attend.
Bidders shall be qualified to do business and licensed in accordance with all applicable laws of the state .
and local governments where the Project is located. The City of Fayetteville will evaluate Bidders in
' accordance with the Instructions to Bidders.
Bid security in the form of a certified or bank cashier's check or a Bid Bond in the amount of 5 percent of
the Bid Amount shall accompany each Bid in accordance with the Instructions to Bidders. Upon award of
a contract, a 100 percent performance and payment bond is required in the amount of the bid.
Bids shall be in accordance with the Bid Documents.
' COMPLETION
Completion time shall be as follows:
' The Work included in Unit I and Unit 2 shall be Substantially Completed within One Hundred Thirty
(130) days after the date when the Contract Times commence to run as provided in the GENERAL
CONDITIONS, and completed and ready for final payment in accordance with the GENERAL
' CONDITIONS within One Hundred Sixty (160) days after the date when the Contract Times commence
to run.
ADDrnONAL PROVISIONS
The Bid shall be conditioned upon compliance with all applicable labor related requirements including the
regulations and stipulations concerning equal employment opportunity, minority manpower utilization,
' 3 City of Fayetteville
Invitation to Bid
Sanitary Sewer Improvements
' affirmative action requirements, and minimum wage rates. The greater of the Arkansas Department of
' Labor Prevailing Wage Rate or the U. S. Department of Labor Prevailing Wage Rate shall establish the
minimum wages to be paid to workers under this Contract.
"Pursuant to Ark. Code Annotated 22-9-203, the City of Fayetteville encourages all qualified small,
t minority and women business enterprises to bid on and receive contracts for goods, services, and
construction. Also, City of Fayetteville encourages all general contractors to subcontract portions of their
contract to qualified small, minority, and women business enterprises."
OWNER'S RIGHT TO REJECT
The City of Fayetteville (Owner) reserves the right to reject any or all Bids and to waive irregularities
therein, and all Bidders shall agree that such rejection shall be without liability on the part of the City of
Fayetteville for any damage or claim brought by any Bidder because of such rejections, nor shall the
Bidders seek any recourse of any kind against the City of Fayetteville because of such rejections. The
filing of any Bid in response to this invitation shall constitute an agreement of the Bidder to these
conditions.
AWARD OF CONTRACT
Any contract or contracts awarded under this Invitation for Bids will be subject to the requirements of the
USEPA State and Tribal Assistance Grant Program as described in the Contract Documents.
OWNER
CITY OF FAYETTEVILLE
' By Peggy Vice
Title: Purchasing Manager
U
City of Fayetteville 4
Invitation to Bid
Sanitary Sewer Improvements
TABLE OF CONTENTS
' FOR
INSTRUCTIONS TO BIDDERS
' SUBJECT PAGE
A EXAMINATION OF SITE........................................................................................1
BEASEMENTS............................................................................................................I
C EXAMINATION OF BIDDING DOCUMENTS......................................................I
D INTERPRETATION OF CONTRACT DOCUMENTS............................................1
E MATERIAL SUBSTITUTION..................................................................................2
F APPROXIMATE QUANTITIES...............................................................................2
G PREPARATION OF BID...........................................................................................2
HSIGNING OF BID......................................................................................................3
IBID SECURITY.........................................................................................................3
J RETURN OF BID SECURITIES...............................................................................3
K AGREEMENT, BONDS, INSURANCE...................................................................3
L DESIGNATION OF SUBCONTRACTORS.............................................................4
' M BID SUBMITTAL.....................................................................................................4
NWITHDRAWAL OF BID..........................................................................................4
O QUALIFICATION OF BIDDERS.............................................................................4
' P DISQUALIFICATION OF BIDDERS.......................................................................5
QPENALTY FOR COLLUSION..................................................................................5
RLICENSE....................................................................................................................6
S PRECONSTRUCTION CONFERENCE...................................................................6
TBID OPENING...........................................................................................................6
U AWARD OF CONTRACT........................................................................................6
V EFFECTIVE DATE OF AWARD.............................................................................7
W EXECUTION OF AGREEMENT.............................................................................7
X FAILURE TO EXECUTE AGREEMENT AND FILE BONDS AND
INSURANCE............................................................................................................7
Y PAYMENT FOR EXCESS COSTS AND LIQUIDATED DAMAGES...................8
Z COMMENCEMENT AND COMPLETION OF WORK..........................................8
AA INFORMATION NOT GUARANTEED...................................................................8
BB COVENANT AGAINST CONTINGENT FEES.......................................................9
' CC GRATUITIES.............................................................................................................9
DD SUBCONTRACTS UNDER CONSTRUCTION CONTRACTS ...........................10
EE PREVAILING WAGE DETERMINATION...........................................................10
' FF FREEDOM OF INFORMATION ACT...................................................................10
1
I
u
INSTRUCTIONS TO BIDDERS
' A. Examination of Site
Before submitting his Bid, each prospective Bidder shall familiarize himself with the
' Work, the site where the Work is to be performed, local labor conditions and all laws,
regulations, and other factors affecting performance of the Work. He shall carefully
correlate his observations with the requirements of the Contract Documents and
' otherwise satisfy himself of the expense and difficulties attending performance of the
Work. The submission of a Bid will constitute a representation of compliance by the
Bidder. There will be no subsequent financial adjustment for lack of familiarization.
1
B. Easements
' Portions of the improvements under this project may involve construction on private
' property for which easements have been secured by the City of Farmington. Work
performed on, or use of such easements, shall be subject to the provisions of the easement
agreements on file and open to inspection in the office of the City of Farmington.
' C. Examination of Bidding Documents
Each Bidder by making his Bid represents that he has read and understands the Bidding
Documents. The Bidder shall include in his bid prices any and all costs that may be
' necessary to complete the work in accordance with the requirements of the Contract
Documents.
ID. Interpretation of Contract Documents
Questions regarding documents, discrepancies, omissions, or intent of the Specifications
or drawings shall be submitted in writing to the City of Fayetteville through the Engineer,
at least ten days prior to opening of bids to provide time for issuing and forwarding an
' addendum. Any interpretation of the Contract Documents will be made only by
addendum duly issued or delivered by the City of Fayetteville to each person receiving a
set of documents. The City of Fayetteville will not be responsible for any other
' explanations or interpretations of the Contract Documents.
' E. Material Substitution
' Each Bidder shall base his Bid upon the materials and equipment as described in the
Bidding Documents. The successful Contractor will not be allowed to make any
substitutions on his own initiative, but in each instance will be required to obtain
authorization from the City of Fayetteville before installing any work in variance with
requirements of the Contract Documents.
1 Instructions to Bidders
tCity of Fayetteville
Sanitary Sewer Improvements
INSTRUCTIONS TO BIDDERS (Cont.) '
F. Approximate Quantities
On all items on which Bids are to be received on a unit price basis the quantities stated in '
the Bid will not be used in establishing final payment due the Contractor. The quantities
stated, on which unit prices are invited, are approximate only. Bids will be compared on ,
the basis of number of units stated in the Bidding Schedule. Payment on the Contract on
unit price items will be based on the actual number of units installed in the completed
work. '
G. Preparation of Bid t
All prospective bidders and proposed subcontractors on this contract must demonstrate
that they have comparable experience in this type of work for their bid to be considered '
responsive. Each bidder and subcontractor must show evidence of having successfully
completed a minimum of three sewer rehabilitation contracts with construction cost of at ,
least $1,000,000 each during the last three years.
Bids submitted by prospective bidders who do not show demonstrated qualifications will ,
be considered nonresponsive and will be rejected.
Only bids which are made out on the Bid Form included in this document will be '
considered. The Bid Form must not be separated from this document. Amounts are to be
shown in both words and figures where indicated. In case of discrepancy between words
and figures the words shall prevail, unless it clearly appears in City of Fayetteville's '
opinion that the words rather than the figures are in error. If any portion of the Bid is
required to be given in unit prices and totals and a discrepancy exists between the unit
pricetotals, the unit prices shall prevail, unless it clearly appears in City of Fayetteville's '
opinion that the unit prices rather than the total are in error. If a discrepancy exists
between the total base Bid and the true sum of the individual Bid items, the true sum shall
prevail. A Bid will be rejected if it does not contain a price for each and every item '
named in the bidding schedule. Bidders are warned against making any erasures or
alterations of any kind, and Bids which contain omissions, erasures, conditions,
alterations, or additions not called for may be rejected. If a deficiently prepared bid is not '
rejected, the City of Fayetteville may demand correction of any deficiency and award the
Contract to .the bidder upon satisfactory compliance with the Instructions. '
I
t
Instructions to Bidders 2
City of Fayetteville '
'Sanitary;Sewer Improvements
' INSTRUCTIONS TO BIDDERS (Cont.)
H. Signing of Bid
If the Bidder is a corporation, the legal name of the corporation shall be set forth together
with the signature of the officer or officers authorized to sign contracts on behalf of the
corporation. If Bidder is a co -partnership, the true name of the firm shall be set forth
together with the signatures of all the partners. If Bidder is an individual, his signature
' shall be inscribed. If signature is by an agent, other than an officer of a corporation or a
member of a partnership, a power of attorney must be on file with the City of Fayetteville
prior to opening Bids or submitting Bids; otherwise,, the Bid may be regarded as irregular.
1
I. Bid Security
No Bid will be considered unless accompanied by a Bid security as defined in the
Invitation to Bid, as a guarantee that if the Bid is accepted the Bidder will execute the
Agreement and file bonds and insurance as required by the Contract Documents within 10
days from the date of the award of the Contract. For the bid bond to be acceptable, the
' name of the surety company issuing said bond shall be licensed to do business in the State
of Arkansas and shall be included on the current U.S. Treasury list of acceptable sureties,
and the amount of the bond written by any one acceptable company shall not exceed the
amount shown on the Treasury list for that company.
' J. Return of Bid Securities
The security of the two lowest Bidders will be returned after the execution of the
' agreement with the successful Bidder and the approval of his bonds and insurance. The
security of all other Bidders will be returned promptly after the Bids have been opened
and reviewed by the City of Fayetteville. If all Bids are rejected the securities will be
returned at the time of rejection.
K. Agreement, Bonds, Insurance
The attention of Bidders is specifically directed to the forms of agreement and bonds to
be executed and types of insurance to be taken out in the event a contract award is made.
1
3 Instructions to Bidders
' City of Fayetteville
Sanitary Sewer Improvements
INSTRUCTIONS TO BIDDERS (Cont.)
L. Designation of Subcontractors
Each bidder shall list on the form included in these documents the names and addresses
of all subcontractors who will perform work or labor or render service to the Bidder '
on or about the construction site in an amount in excess of five percent of the Bidder's
total base Bid. Each Bidder shall show on the form the portion of the work to be done by
each subcontractor. The Contractor shall be required to perform a minimum of thirty (30) '
percent of the contract amount with his own crews.
M. Bid Submittal
1, Each Bid, properly signed, -together with the Bid security and all documents bound '
herewith, shall be enclosed in a sealed envelope addressed and entitled as specified
in the Invitation to Bid and delivered to the office designated in the Invitation to
Bid.
2. Each Bidder shall submit with his Bid one copy of Volume I of the Contract '
Documents with all Addendum and the "Subcontractors" form contained in this
document.
N. Withdrawal of Bid
Any Bid may be withdrawn at any time prior to the hour fixed in the Invitation to Bid for
the opening of Bids, provided that a request in writing, executed by the Bidder, or his
duly authorized representative, for the withdrawal of such Bid is filed with the City of
Fayetteville prior to the time specified for opening of Bids. The withdrawal of a Bid will
not prejudice the right of a Bidder to file a new Bid.
O. Qualification of Bidders
It is the intention of the City.of.Fayetteville to award a Contract only to a Bidder
who furnishes satisfactory evidence that he has the requisite experience and ability
and that he has sufficient capital, facilities, and plant to enable him to prosecute the
work successfully and promptly, and to complete the work within the time specified
in the Contract Documents.
2. Each 'Bidder shall submit with his Bid the executed Bidder's "Statement of
Experience" form, "Statement of Commitment", and "Qualification Statement"
form contained in this document.
I
I
11
Instructionsto'Bidders 4
City of Fayetteville '
Sanitary Sewer,Improvements
I
i
1
INSTRUCTIONS TO BIDDERS (Cont.)
The City of Fayetteville reserves the right to require the three lowest Bidders to file
proof within seven (7) calendar days of the Bid opening of their ability to finance
and execute the project. This proof shall include, but not be limited to, a financial
statement certified by a CPA for the last three years, a list of equipment owned by
Bidder, a backlog of jobs under contract and amounts, and a record of successful
completion of similar projects.
4. The successful bidder shall conform to the Rules and Regulations of Arkansas
' Department of Finance and Administration concerning nonresident contractor's
notice and bond requirements.
5. The prospective bidders must meet the statutorily prescribed requirements before
Award of Contract by the City of Fayetteville.
6. In order to perform public work, the successful Bidder shall, as applicable, hold at
time of Bid Opening, such Contractors and Business Licenses as required by State
statutes and the Rules and Regulations of the Arkansas Contractor's Licensing
Board.
P. Disqualification of Bidders
More than one Bid for the same work described in this document from an individual, firm
or partnership, a corporation or an association under the same or different names, will not
be considered. Reasonable grounds for believing that any bidder is interested in more
than one Bid for the work contemplated will cause the rejection of all Bids in which such
Bidder is interested. If there is reasonable grounds for believing that collusion exists
among the Bidders, the Bids of the participants in such collusion will not be considered.
Q. Penalty for Collusion
If at any time it shall be found that the person, firm, or corporation to whom the Contract
' has been awarded has, in presenting any Bid or Bids, colluded with any other party or
parties, then the Contract so awarded shall be null and void, and the Contractor and his
sureties shall be liable to the City of Fayetteville for all loss or damage which the City of
' Fayetteville may suffer thereby, and the City of Fayetteville may advertise for new Bids
for said work.
5 Instructions to Bidders
' City of Fayetteville
Sanitary Sewer Improvements
INSTRUCTIONS TO BIDDERS (Cont.) ,
R. License I
Each Bidder shall possess state and local licenses as are required by law, and shall furnish
satisfactory proof to the City of Fayetteville upon request that the licenses are in effect
during'the entire period of the Contract.
S. Preconstruction Conference I
A preconstruction conference shall be held after the time of the Contract award and
before the Notice to Proceed to discuss the responsibility of each party in the project and
to clarify any questions. Representatives of the Contractor shall be required to attend the
conference. ,
T. Bid Opening ,
Bids will be
opened and the
prices bid will be read aloud publicly at
the time and place
indicated in
the Invitation to Bid. Bidders or their agents are invited
'
to be present. All
bids shall remain open for a
period of 90 days after Bids are opened,
but City of
Fayetteville
may, at its sole
discretion, release any Bid and return the Bid security at any
time prior to that date.
'
U. Award of Contract ,
1.. The City of Fayetteville shall award a contract to the Bidder whom, in the City of '
Fayetteville's judgement, is the lowest responsive, responsible Bidder. The City of
Fayetteville reserves the right to reject all Bids, to waive informalities, and to reject
nonconforming, nonresponsive, or conditional Bids. '
2. In evaluating Bids, City of Fayetteville shall consider the qualifications of the
Bidders whether or not the Bids comply with the prescribed requirements, and ,
alternatives and unit prices if requested in the Bid Form. City of Fayetteville may
consider the qualifications and experience of subcontractors and other persons and
organizations (including those who are to furnish the principal items of material or '
equipment), and may reject the Bid of any Bidder who does not pass any such
evaluation to City of Fayetteville's satisfaction.
3. A responsive Bidder shall be one who has responded accurately to all requirements ,
of these Contract Documents and the preparation and submission of his Bid. If any
alterations, erasures or changes are made to the printed Bid Form, the Bid shall be '
considered nonresponsive.
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Instructions ,to Bidders 6
;City of Fayetteville '
Sanitary,'SeweOinprovements
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INSTRUCTIONS TO BIDDERS (Cont.)
4. The City of Fayetteville reserves the right to accept and incorporate corrections,
clarifications or modifications following bid opening when to do so would not, in
the City of Fayetteville's opinion, prejudice the bidding process or create any
improper advantage to any bidder; and to waive irregularities and informalities in
any proposal submitted or in the bidding process; provided, however, that the
waiver of any prior defect or informality shall not be considered a waiver of any
future or similar defects or informalities and bidders should not rely upon, or
anticipate, such waivers in submitting their proposals.
5. If the Contract is awarded, City of Fayetteville shall give the apparent successful
Bidder a Notice to Proceed within ten (10) days after council approval.
IV. Effective Date of Award
' If a Contract is awarded by the City of Fayetteville, such award shall be effective when
formal notice of such award, signed by the authorized representative of the City of
Fayetteville, has been delivered to the intended awardee, by some officer or agent of the
City of Fayetteville duly authorized to give such notice or received by mail at the main
business address shown on his Bid.
W. Execution of Agreement
' Contractor shall deliver a signed Contract to the City of Fayetteville within seven days of
bid opening. Contractor must submit required bonds and insurance within ten days of
Notice of Award by the City. Effective date of bonds shall be the same or later than the
' date of Agreement. The City of Fayetteville will within ten days from receipt of
acceptable Performance Bonds and Agreement (signed by Contractor) sign the Agreement
and return to the Contractor an executed duplicate of the Agreement.
X. Failure to Execute Agreement and File Bonds and Insurance
Failure of a successful Bidder to execute the Agreement and file required bonds and
insurance within the required time shall be just cause for the annulment of the awards.
On failure of a successful Bidder to execute the Agreement and file the required bonds
and insurance within the required time, he shall forfeit his Bid security as agreed
hereinbefore. Upon annulment of an award as aforesaid, the City of Fayetteville may then
award a Contract to the next lowest responsible Bidder.
7 Instructions to Bidders
' City of Fayetteville
Sanitary Sewer Improvements
LI
INSTRUCTIONS TO BIDDERS (Cont.) '
Y. Payment for Excess Costs and Liquidated Damages '
The successful Contractor will be required to pay for excess cost of field engineering and
inspection and liquidated damages as defined in the General Conditions of the Contract, if
extensions of time are not granted by City of Fayetteville because of avoidable delays as
defined in the General Conditions of the Contract.
Z. Commencement and Completion of Work
The Notice to Proceed shall be issued within ten days of the execution of the Agreement ,
by.the City of Fayetteville.
The successful Bidder shall commence work within ten calendar days from and after the
issuance by the City of Fayetteville of a written Notice to Proceed, shall substantially
complete all work in accordance with the terms and conditions of the Contract ,
Documents no later than 130 calendar days from Notice to Proceed, and shall complete
all work in accordance with the terms and conditions of the Contract Documents no later
than 160 calendar days from Notice to Proceed. The Notice to Proceed will be issued ,
after receipt of acceptable insurance, bonds, and other required items.
AA. Information Not Guaranteed 1
I . All information given on the Drawings or in the other Contract Documents relating '
to subsurface and other conditions, natural phenomena, existing pipes, and other
structures is from the best sources at present available to the City of Fayetteville.
All such information is furnished only for the information and convenience of '
bidders and is not guaranteed.
2. It is agreed and understood that the City of Fayetteville neither warrants nor '
guarantees that the subsurface or other conditions, natural phenomena, existing
pipes or other structures encountered during construction will be the same as those
indicated on the Drawings or in the other Contract Documents.
3. It is agreed further and understood that no bidders or contractors shall use or be '
entitled to use any of the information made available to him or obtained in any
examination made by him in any manner as a basis of or ground for any claim or
demand against the City of Fayetteville or the Engineer, arising from or by reason ,
of any variance which may exist between the information made available and the
actual subsurface or other conditions, natural phenomena, existing pipes or other
structures actually encountered during the construction work, except as may ,
otherwise be expressly provided for in the Contract Documents.
Instructions to Bidders 8
City of Fayettevill.e ,
.Sanitary Sewer•Improvements
BB.
INSTRUCTIONS TO BIDDERS (Cont.)
Covenant Against Contingent Fees
The contractor warrants that no person or selling agency has been employed or retained to
solicit or secure this contract upon an agreement or understanding for a commission,
percentage, brokerage, or contingent fee. For breach or violation of this warranty, the
City of Fayetteville shall have the right to annul this contract without liability or in its
discretion to deduct from the contract price or consideration, or otherwise recover, the full
amount of such commission, percentage, brokerage, or contingent fee.
' CC. Gratuities
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The City of Fayetteville may, by written notice to the contractor, terminate the right
of the contractor to proceed under this contract if it is found, after notice and
hearing, by the City of Fayetteville that gratuities (in the form of entertainment,
gifts, or otherwise) were offered or given by the contractor or any agent or
representative of contractor, to any official or employee of the City of Fayetteville
with a view toward securing a contract or securing favorable treatment with respect
to the awarding or amending, or the making of any determinations with respect to
the performance of this contract: Provided, that if the existence of the facts upon
which the City of Fayetteville makes such findings are in issue, they may be
reviewed in proceedings pursuant to Article 30 (Arbitration) of the General
Conditions of this contract.
2. In the event this contract is terminated as provided in the paragraph (1) above, the
City of Fayetteville shall be entitled:
a)
to pursue
the same remedies against the contractor
as it could pursue in the
event of a
breach of the
contract by the contractor,
and
b) as a penalty in addition to any other damages to which it may be entitled by
law, to exemplary damages in an amount (as determined by the City of
Fayetteville) which shall be not less than three nor more than ten times the
costs incurred by the contractor of providing any such gratuities to any such
officer or employee.
3. The rights and remedies of the City of Fayetteville provided in this clause shall not
be exclusive and are in additions to any rights and remedies provided by law or
under this contract.
9 Instructions to Bidders
City of Fayetteville
Sanitary Sewer Improvements
INSTRUCTIONS TO BIDDERS (Cont.)
DD. Subcontracts Under Construction Contracts
The award or execution of all subcontracts by a prime contractor and the procurement and
negotiation procedures used by such prime contractor in awarding or executing such
subcontracts shall comply with:
All provisions of State and local law;
2. All provisions of these General Conditions with respect to fraud and other unlawful
or corrupt practices; and
3. All provisions of these General Conditions with respect to access to facilities and
records and audit of records.
EE. Prevailing Wage Determination
This Determination is included in these Contract Documents and is a part thereof. The
Contractor shall post this Determination at the job site in a prominent and easily
accessible place.
FF. Freedom of Information Act
City contracts and documents prepared while performing city contractual work are subject
to the Arkansas Freedom of Information Act. if a Freedom of Information Act is
presented to the City of Fayetteville, the (contractor) will do everything possible to
provide the documents in a prompt and timely manner as prescribed in the Arkansas
Freedom of Information Act (A.C.A. '25-19-101 et. seq.). Only legally authorized
photocopying costs pursuant to the FOIA may assessed for this compliance.
Instructions to Bidders
City of Fayetteville
Sanitary Sewer Improvements
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TO BIDDERS (Cont.)
Bidder has examined and carefully studied the Bid Documents, and the following
Addenda, receipt of all which is hereby acknowledged:
Number Date Aclnowled
No. 1 Anri130.2007 --1
No. 2 May 3,2007✓�
Addendum I ] ] Instructions to Bidders
City of Fayetteville
Sanitary Sewer Improvements
BID SUMMARY —UNIT I
wOPEN CUT CONSTRUCTION OF $ Iva—`^ff
SANITARY SEWERS 7 '�
' SUBTOTAL POINT REPAIRS $ /fir �{��
/
TOTAL $ [ V 0
(IN WRITING)
It is understood and agreed by the undersigned that the City of Fayetteville reserves the
unrestricted privilege to reject any or all the foregoing unit prices in this paragraph which
' it may consider excessive or unreasonable, or to accept any or all of them as unit prices
applicable in the event additions to or deduction from the work to be performed on this
project are ordered by the City of Fayetteville. Rejection at any time of such Unit Prices
for Construction changes shall not otherwise affect the balance of the Bid or Construction
Contract. The selection of the lowest bid shall be based on the total amount bid.
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Unit 1 (29) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
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CITY OF FAYETTEVILLE, AR
UNIT 2 BID
FARMINGTON SEWER REHABILITATION PROJECT
Name of Bidder: Insituform Technolgies, Inc.
Business Address: 17988 Edison Avenue
Chesterfield, MO 63005
Phone No: 636-530-8000
To: The City of Fayetteville, AR
The undersigned, as Bidder, declares that the only person or parties interested in this Bid as
principals are those named herein; that this Bid is made without collusion with any person, firm
or corporation; that he has carefully examined the location of the proposed work, the proposed
forms of Agreement and Bonds, and the Contract Drawings and Specifications for the above
designated work, all other documents referred to or mentioned in the Contract Documents, the
Contract Drawings and Specifications, including Addenda Nos. 1 2, and issued thereto;
and he proposes and agrees if this bid is accepted that he will contract with the City of
Fayetteville, AR, in the form of the copy of the Agreement included in these Contract
Documents, to provide all necessary machinery, tools, apparatus, and other means of
construction, including utility and transportation services necessary to do all the work and furnish
all materials and equipment specified or referred to in the Contract Documents, in the manner
and time therein prescribed and according to the requirements of the City of Fayetteville, AR as
therein set forth to furnish the Contractor's Bonds and Insurance, and to do all other things
required of the Contractor by the Contract Documents, and that he will take in full payment
therefor the sums set forth in the following Bid Schedule.
PROJECT LOCATIONS CAN BE FOUND IN THE BACK OF THE CONTRACT
DOCUMENTS.
' I. BID SCHEDULE
Bidder agrees to perform all the work described in the Contract Document for the following unit
prices.
Note: Bids shall include sales tax and all other applicable taxes.
Unit 2 (1) Addendum 2
City of Fayetteville
Sanitary Sewer Improvements
CURED -IN-PLACE LINING OF SANITARY SEWERS
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
PRICE
BID
3001 1 LS 300 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of
Nine Thousand One Hundred
Fifty Dollars &
No Cents per LS
3002 1 LS 250 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Seven Thousand Six Hundred
Twenty -Five Dollars &
No Cents per LS
3003 1 LS 360 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Ten Thousand Nine Hundred
Eighty Dollars &
No Cents per LS
Unit 2 (2) Addendum 2
$ 9.150.50 $ 91150.00
$ 71625.00 $ 7,625.00
$ 10,980.00 $ 10.980.00
City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
PRICE
BID
3004 1 LS 376 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Eleven Thousand Four Hundred
Sixty -Eight Dollars &
No Cents per LS $ 119468.00 $ 11,468.00
3005 1 LS 368 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Eleven Thousand Two Hundred
Twenty -Four Dollars &
No Cents per LS $ 11,224.00 $ 11,224.00
3006 1 LS 395 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Twelve Thousand
Forty -Seven Dollars &
Fifty Cents per LS $ 12,047.50 $ 12,047.50
Unit 2 (3) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS PRICE
BID
3007 1 LS 198 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Six Thousand
Thirty -Nine Dollars &
No Cents per LS $ 6,039.00 $ 61039.00
3008 1 LS 165 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Five Thousand
Thirty -Two Dollars &
Fifty Cents per LS $ 5,032.50 $ 5,032.50
3009 1 LS 367 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Eleven Thousand One Hundred
Ninety -Three Dollars &
Fifty Cents per LS $ 11,193.50 $ 11,193.50
Unit 2 (4) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
3010 1 LS 344 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Ten Thousand Four Hundred
Ninety -Two Dollars &
No Cents per LS
3011 1 LS 333 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Ten Thousand One Hundred
Fifty -Six Dollars &
Fifty Cents per LS
3012 1 LS 247 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Seven Thousand Five Hundred
Thirty -Three Dollars &
Fifty Cents per LS
Unit 2 (5) Addendum 2
UNIT AMOUNT
PRICE BID
$ 10,492.00 $ 10,492.00
S 10,156.50 $ 10,156.50
$ 79533.50 $ 7,533.50
City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
PRICE
BID
3013 1 LS 248 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Seven Thousand Five Hundred
Sixty -Four Dollars &
No Cents per LS $ 74564.00 $ 7,564.00
3014 1 LS 372 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Eleven Thousand Three Hundred
Forty -Six Dollars &
No Cents per LS $ 11,346.00 $ 11,346.00
3015 1 LS 317 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Nine Thousand Six Hundred
Sixty -Eight Dollars &
Fifty Cents per LS $ 9,668.50 $ 9,668.50
Unit 2 (6) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
PRICE
BID
3016 1 LS 275 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of
Eight Thousand Three Hundred
Eighty -Seven Dollars &
Fifty Cents per LS $ 8387.50 $ 8,387.50
3017 1 LS 55 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
One Thousand Six Hundred
Seventy -Seven Dollars &
Fifty Cents per LS $ 1,677.50 $ 19677.50
3018 1 LS 197 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIDP Lining,
Complete in Place for the sum of:
Six Thousand
Eight Dollars &
Fifty Cents per LS $ 6,008.50 $ 6,008.50
Unit 2 (7) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
PAY
APPROXIMATE
DESCRIPTION OF ITEMS
WITH
UNIT
AMOUNT
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
PRICE
BID
3019 1 LS 274 LF of 6" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Eight Thousand Three Hundred
Fifty -Seven Dollars &
No Cents per LS $ 8.357.00 $ 8,357.00
3020 1 LS 104 LF of 8" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Four Thousand Three Hundred
Sixty -Eight Dollars &
No Cents per LS $ 4,368.00 $ 4,368.00
3021 1 LS 123 LF of 8" Trenchless Rehabilitation
of Sanitary Sewer by CIPP Lining,
Complete in Place for the sum of:
Five Thousand One Hundred
Sixty -Six Dollars &
No Cents per LS
$ 5,166.00 $ 5,166.00
Unit 2 (8) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
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APPROXIMATE
DESCRIPTION OF ITEMS
WITH
ITEM
QUANTITY
BID PRICES WRITTEN IN
WORDS
3022 67 EA Internal Reinstatement of Service
Lateral, Complete in Place for the sum
of:
Fifty Dollars &
Cents per EA
UNIT AMOUNT
PRICE BID
$ 50.00 $ 3,350.00
SUBTOTAL CIDP LINING OF SANITARY $178,834.50
SEWERS
One Hundred Seventy Eight Thousand Eight Hundred
Thirty -Four Dollars and Fifty Cents
(IN WRITING)
BID SUMMARY — UNIT 2
CURED -IN-PLACE LINING OF $178,834.50
SANITARY SEWERS TOTAL
One Hundred Seventy Eight Thousand Eight Hundred
Thirty -Four Dollars and Fifty Cents
(IN WRITING)
It is understood and agreed by the undersigned that the City of Fayetteville reserves the
unrestricted privilege to reject any or all the foregoing unit prices in this paragraph which
it may consider excessive or unreasonable, or to accept any or all of them as unit prices
applicable in the event additions to or deduction from the work to be performed on this
project are ordered by the City of Fayetteville. Rejection at anytime of such Unit Prices
for Construction changes shall not otherwise affect the balance of the Bid or Construction
Contract. The selection of the lowest bid shall be based on the total amount bid.
Unit 2 (9) Addendum 2
City of Fayetteville
Sanitary Sewer Improvements
tII. BID CONDITIONS
It is expressly understood and agreed that the preceding total Bid is the basis for establishing the
amount of the Bid security on this Bid for Farmington Sewer Rehabilitation Project for the City
of Fayetteville, AR, and that this total Bid is not to be construed to be a Lump Sum Bid.
It is further understood that quantities in the bidding schedule for unit price items are
approximate only, and that payment of a Contract will be made only on the actual quantities of
' work completed in place, measured on the basis defined in the General Conditions, .
Specifications, or other Contract Documents.
' There shall be no measurement or separate payment for any items not listed and all costs
pertaining thereto shall be included in the unit prices for other items listed in the Proposal.
The undersigned has carefully checked the above bidding schedule against the Contract
Drawings, Specifications, and other Contract Documents before preparing this Bid and accepts
the said quantities to be substantially correct, both as to classification and amount, and as
' correctly listing the complete work to be done in accordance with the Contract Drawings,
Specifications, and other Contract Documents.
If this Bid is accepted and the undersigned shall fail to contract as aforesaid and to give the
Arkansas Statutory Performance and Payment Bond, and Maintenance Bond required by the
' Conditions of Contract or by law, and to provide all insurance as required by the Contract
Documents within ten (10) days after the date of the notice of award of the Contract, the City of
Fayetteville may, at its option, determine that the Bidder has abandoned his Contract, and
thereupon this proposal and the acceptance thereof shall be null and void, and the forfeiture of
such security accompanying this proposal shall operate and the same shall be the property of the
City of Fayetteville as liquidated damages.
The undersigned agrees to fully complete all work covered by this Bid to the point of substantial
completion no later than 130 calendar days from Notice to Proceed. The undersigned further
' agrees to fully complete all work covered by this Bid to the point of final acceptance by the City
of Fayetteville no later than 160 calendar days from Notice to Proceed. If the undersigned fails to
complete the work within the contract time, or extension of time granted by the City of
1 Fayetteville for unavoidable delays, then the undersigned shall pay to the City of Fayetteville
liquidated damages for each calendar day beyond the day stipulated in the Contract Documents.
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1 Unit 2 (10) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
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By submission of this Bid, the undersigned certifies, and in the case of a joint bid, each party
thereto certifies as to his own organization, that in connection with the proposal:
A. The prices in the proposal have been arrived at independently, without consultation,
communication, or agreement, for the purpose of restricting competition, as to any matter
relating to such prices with any other bidder or with any competitor;
B. Unless otherwise required by law, the prices which have been quoted in the bid have not
knowingly been disclosed by the Bidder prior to opening, directly or indirectly to any
other Bidder or to any competitor; and,
No attempt has been
made or will
be made by the
Bidder to induce any other person or
IC.
firm to submit or not
submit a bid
for the purpose
of restricting competition.
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D. He is the person in the Bidder's organization responsible within that organization for the
decision as to the prices being bid and shall also certify that he has not participated, and
will not participate in any action contrary to Paragraphs A through C above.
E. He is not the person in the Bidder's organization responsible within that organization for
the decision as to the prices being bid but that he has been authorized to act as agent for
the persons responsible for such decision in certifying that such persons have not
participated, and will not participate, in any action contrary to Paragraphs A through C
above, and as their agent shall so certify; and shall also certify that he has not
participated, and will not participate in any action contrary to Paragraphs A through C
above.
Unit 2 (11) Addendum 2
City of Fayetteville
Sanitary Sewer Improvements
III. BID SECURITY
Accompanying this Bid is a Bid Bond in the amount of Five Percent (5%).
Note: The total amount of Bid security shall be based on the
Total Bid of this Contract.
IV. BIDDER'S SIGNATURE
Accompanying this Bid is a Bid Bond in the amount of
Five Percent of the Amount Bid Dollars. ($ 5% of Amount Bid)
Note: The total amount of Bid security shall be based on the Total Bid of this Contract.
IV. BIDDER'S SIGNATURE
A. An Individual N/A
By
(Individual's Name)
doing business
Business address:
Phone No.:
B. A Partnership N/A
By
Business address:
Phone
(Firm Name)
(General Partner)
(SEAL)
Unit 2 (12) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
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C. A Corporation
By Insituform Technologies, Inc.
(Corporation Name)
Delaware
(State of
By %.4,
H. Douglas Thomas(Name ofYerson Authorized to
..
Vice President, Special Projects
(Title)
(Corporate Seal) f� _ (2 -
Business address: 17988 Edison Avenue
Chesterfield, MO 63005
Phone No.: 636-530-8000
D. A Joint Venture N/A
M
0
(Name)
(Address)
(Name)
(Address)
)Contracting S Attesting Officer
h joint venturer must sign. The manner of signing for each individual, partnership and
1;rporation that is a party to the joint venture should be in the manner indicated above).
bscribed and swom to beforeme this 8th day of May 2007,
A5
Sod Notary
stab � Ntseaal
SL LO* ICMswgMey� 792M
� Issbn i 0692918/
Unit 2 (13) Addendum 2 City of Fayetteville
Sanitary Sewer Improvements
BID BOND
1
KNOW ALL MEN BY THESE PRESENTS, That we Technologies, Inc.
17988 discn Ay-eme. Chesterfield, MO 63005
(hereinafter called the Principal) and Travelers Casualty and Surety canpany of America
One Towel Square, Hartford, CT 06183-9079
' (hereinafter called the Surety), a corporation chartered and existing under the laws of the State of
Cn Mecticut with its principal office in the City of Hartford
and authorized to do business in the State of Arkansas are held and firmly bound unto the City of
Fayetteville, AR, in the full and just sum of Five Percent of the Amount Bid
r Dollars ($ 58 of bid ) good and lawful money of the United States of
America,to be paid upon.demand of the City of.Fayetteville, to which payment well and truly to
be.made, the Principal and the Surety bind themselves, their heirs, executors, administrators, and
1 assigns; jointly and severally and firmly by the presents.
=Y v"
:.:,WHEREAS, the Principal is about to submit, or has submitted to the City of Fayetteville, a Bid
"%r furnishing all labor, materials, equipment and incidentals necessary to perform, as described
a'4 :these Contract Documents, Farmington Sewer Rehabilitation Project, Unit 2
Bid 07-41 STAG Grant No. XP-96606201-STAG-6
WFIEREAS, the Contractor desires to file this bond in accordance with law, in lieu of a certified
' bl'ddet's cheek otherwise required to accompany this Bid
;: .
OW, THEREFORE: The conditions of this obligation are such that if the Bid is accepted, the
cipal shall, within ten (10) days after the date of receipt of.a written notice of award of
nL*act, execute a contract in accordance with the Bid and upon the terms, conditions and
'e(g) set forth therein, of form and manner required by the City of Fayetteville, and execute a
tient and.satisfactory contract Performance Bond, Labor and Material Bond, and
' $intenance Bond, eachpayable to the City of Fayetteville, in an amount of One Hundred
icpnt (10(r) of the total Contract price in form and with security satisfactory to said City of
"tEeville, then this obligation to be void; otherwise to be and remain in full force and virtue in
'land the Surety shall, upon failure of the Principal to comply with any or all of the foregoing
nts within the time specified above, immediately pay to the aforesaid City of
ettpville, upon demand, the amount hereof in good and lawful money of the United States of
ca not as a penalty but as liquidated damages.
companies executing Bonds must hold Certificates of Authority as Acceptable Sureties,
€=appear on the Treasury Department's most current list "AA" Rating or better) (Circular 570'
bled), and be authorized to transact business in the State of Arkansas.
Bid Bond
City of Fayetteville
Sanitary Sewer Improvements
�F
TAI TESTIMONY THEREOF, the Principal and Surety have caused these presents to be duly
signed and sealed this 8 day of May 2002.
Insituform Technologies, Inc,
Principal
BY /✓ �� ���
H.. Douglas'Thomas, (Seal)Vice•.President; Special Projects
Travers Casua$ty'and Surety Caapany of America
a Surety
4 ,
Andrew P. (Seal). Attorney -In -Fact
Coumtersigned ; Co. 7
Caroline A. Cory
local Resident Producing Agent for Rebsamen Insurance. 1500 Riverf*�t Dr; ve
Little Rock, AR 72202
Sewer Improvements
F1
. .. .. .�..
I
/
�
. seof Missouri
County aSt. U6 .
On May8,207 before me, .Alm Public in and for said County and State, resiA&+=ein, duly
� T
commissioned and __,P_�§��\ Anaw£z_e kno_e�@&A_ey in
Fact ez _Rn� Casualty _a S_« Company ofA_ria U corporationa �� % that
, \executed U within and tregoin/instrument, and known to me to be the person who executed U said
instrument 5behalf asaid corporation, and & duly acknowledged mme that such corporation
�EkU,_�
/7�t. . ..
�
\ .N wrrNEss WHEREOF -
stated in thiscertificate a�a.........
Jug N P. WEBFA
\!
\ ^ Ion/ .: .
l ƒJu ine P. WeberNotary Public
l % y
46ya.
I
WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER
TRAVELERS POWER OF ATTORNEY
Farmington Casualty Company SL Paul Guardian Insurance Company
Fidelity and Guaranty Insurance Company St. Paul Mercury Insurance Company
' Fidelity and Guaranty Insurance Underwriters, Inc. 7Yavelers Casually and Surety Company
Seaboard Surety Company Travelers Casualty and Surety Company of America
SL Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company
'
pttomey-In Fact No. 218407 Certificate No.0 015 53 9 5 0
,
' r',':KNOW ALL MEN BY THESE PRESENTS: That Seaboard Surety Company is a corporation duly organized under the laws of the State of New York, that SL Paul
F ::Fuc and Maria insurance Company, St. Paul Guardian Insurance Company and SL Paul Mercury Insurance Company are corporations duly organized under the laws
the State of Minnesota, that Farmington Casualty Company, Travelers Casualty and Surety Company, and Travelers Casualty and Surety Company of America are
¢iorpoiations duly organized under the laws of the State of Connecticut, that United Stites Fidelity and Guaranty Company is a corporation duly organized under the
' §Taws of the State of Maryland, that Fidelity and Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa, and that Fidelity and
avanty insurance Underwriters, Inc. is a corporation duly organized under the laws of the Slate of Wisconsin (bme!n collectively called the "Companies'), and that
11' ;tlti Companiesdo hereby make, constitute and appoint
�ititdraw P. Thorne, Dena A. Dragoy, Justine P. Weber, Kristen L Lucas, Anne M. Gliedt, Stephanie L Mannikin, Peter J. Malts, and Helen A Antoine
1 ;.d
c
o the City of Chesterfield . State of Missouri , their We and lawful Aaomey(s}in-Fact,
_ ju:ih r separate capacity if more than one is named above, to sign, execute, seal and acknowledge any and all bonds, recognisances, conditional undertakings and
' .;.vin=p obligatory in the nature thereof on behalf of the Companies in cher sytess of aranteeing the fidelity of persons, guaranteeing the performance of
-
kis and executing or guaranteeing bonds and undertakings required or m ons or cedings allowed by law.
Q0
'- APnWHEREOF, the CompanZtrs hpve caused this inspam�itgtdbe ygn d 3rd
11U f �� ic� �te uals to be hereto affixed, this
��. Farmington Casualty CP �j'y' �®� t1SL Paul Guardian Insurance Company
i Fidelity and Guaranty 3a paper®9 SL Paw Mercury Ivsorance Company
Fidelity and Guaranty 1 Underwn ers, Inc. Travelers Casualty and Surety Company
���'• . Seaboard Surety Company Travelers Casualty and Surely Company of America
St. Paw Fire and Marine Insurance Company United States Fidelity and Guaranty Company
1
SON
OF/Q41
1927 calls1951 '.res:, sear. i caw g 7977 O :� Of O O
ectiNt By:
oral -as. A�e ampsOa. 'm ice President
3rd �y of April 2O07 before me personalty appeared George W. Thompson, who acknowledged
the Senior Vice President of F•anulngton Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Underwriters,
Surety Company, St. Paw Fuc and Marine Insurance Company, SL Paw Guardian Insurance Company, SL Pont Memny insurance Company, Travelers
a¢dSurety Company, Travelers Casualty and Surety Company of America, and United States Fidelity and Guaranty Company, and that he, as such, being
to do, executed the foregoing instmme n for the purposes therein contained by signing on behalf of the corporations by himself as a duly authorized offices
Ix;aTA^.I.
s _ t I hereunto set my band and official sell. � W sem/" C . �./
o expires the 30th day of June, 2011. # # rp * Marie c Tetremie Notary Public
'ad in U.S.A. .
WARNING:THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER
1
11
I
1
�.J
1
1
1
11
I
RESOLVED, that the Chairman, the President, any Vice Chairman, any Executive Vice President, any Senior Vice Resident, any Vice President. arty Second Vice
President. the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Secretary may appoint Attorneys -in -Fact and Agents to act for and on behalf
of the Company and rosy give such appointee such authority as his or bei certificate of authority may prescribe to sign with the Company's time and seal with die
Company's seal bonds, recognizances, contracts of indemnity, and other writings obligatory in the nature of a bond, recognizance, or conditional undertaking, and any
of said officers in the Board of Directors at any time may remove any such appointee and revoke the power given him or her, and it is
FURTHER RESOLVED, that the Chairman, the Resident, any Vice Chairman, any Executive Vice Resident. any Senior Vice President or any Vice President may
delegate all or any part of the foregoing authority to one or more officers or employees of this Company, provided that each such delegation is in writing and a copy
thereof is filed in the office of the Secretary; and it is
FURTHER RESOLVED, that any bond, mcognixanee, contract of indemnity, or writing obligatory in the nature of a bond, recognizance, or conditional undertaking
shall be valid and binding upon the Company when (a) signed by the President, any Vice Chairman, any Executive Vice President. any Senior Vice Resident or any Vice
Resident, any Second Vice President, the Treasurer, any Assistant Treasurer, the Corporate Secretary oc my Assistant Secretary and duly attested and sealed with the .•
Company's seal by a Secretary or Assistant Secretary; or (b) duly executed (under seal, if required) by one or more Attomeys-in-Fact and Agents pursuant to the power
prescribed in his or her certificate or thew certificates of authority or by one m mom Company officers pursuant to a written delegation of authority; and it it
FURTHER RESOLVED, that the signature of each of the following officers: President, any Executive Vice President, any Senior Vice Resident, arty Vice President
any Assistant Vice President, any Secretary, any Assistant Secretary, and the seal of the Company may be affixed by facsimile to any power of attorney or to ant
certificate relating thereto appointing Resident Vice Residents, Resident Assistant Secretaries or Anomeys-in-Fact for purposes only of executing and attesting bard;
and undertakings and other writings obligatory in the nature thereof, and any such power of attorney or certificate bearing such facsimile signature or facsimile seal shad
be valid and binding upon the Company and any such power so executed and certified by such facsimile signature end facsimile seal shall be valid and binding on th,
Company in the futbre with respect to any bond or understanding to which it is attached.
1, Kori M. Johanson, the undersigned, Assistant Secretary, of Farmington Casualty Company, Fidelity and Guaranty la ni ance Company, Fidelity and Gmam ity Insurano
Underwriters, Inc., Seaboard Surety Company, St. Paul Fuc and Marine Insurance Compact , SL Paul Guardian Insurance Company. St. Paul Mercury liummoe
Company, Travelers Casualty and Surety Company. Travelers Casualty and S mpAmeriSaeand United States Fidelity and Guaranty Company do haeb.
certify that the above and foregoing is ae and correct copy of the PE$` NiWCCompam". which is in Poll force and effect and has no[ has
w
revoked.
IN TESTIMONY WHEREOF, I have hereunto sea my hand a> §x .d ifils a aes this 8 day of May —.20
Kori M. JoAssistant Secretary
UaWt j 4/EIl err 'oil ,ra&' nrq 4 C11%.
No
s g fawgsq s ? F
Tb verify the authenticity of this Power of Attorney, call 1-800-021-3880 or contact us at www.stpaultravelersbond.com. Please refer to the Attomey-In-Fact numbe j;
the above-named individuals and the details of the bond to which the power is attached-
OF
ttached
OF ATTORNEY IS
BONDING COMPANY INFORMATION
The following person, firm, or corporation has agreed to execute the required payment and
performance bonds in the event this contract is awarded to the bidder.
Name of Surety: Travelers Casualty and Surety Company of America
Mailing Address: One Tower Square
City, State, Zip: Hartford, CT 06183-9079
Telephone Number: 800-421-3880
Date: May 8, 2007
Is surety authorized to operate in Arkansas? Yes
Is surety aware of size of project? Yes
Does surety have adequate authorization and resources to cover bonds for the amount of this
contract? YAQ
Rating from U.S. Treasury List
A+ IX
Project: Farmington Sewer Rehabilitation Project
Unit 1 and Unit 2
Owner: City of Fayetteville, Arkansas
Insituform Technologies, Inc,
Name of Bidder
Bonding Company Information
City of Fayetteville
1 Sanitary Sewer Improvements
SUBCONTRACTORS
List of Maior Subcontractors
The Bidder expressly agrees that:
1. if awarded a Contract as a result of this Bid, the major subcontractors used in the
prosecution of the work will be those listed below, and
2. The following list includes all subcontractors who will perform work on this contract.
3. The Bidder represents that the subcontractors listed below are financially responsible and
are qualified to perform the work required.
Category Name of Subcontractor Address Meets Oualifications
-TV 6 Clean Arkansas Clean b.TV Litt a Rocndy Lane
Little Rock, AR 72204 Yes
Subcontractors
City of Fayetteville
I Sanitary Sewer Improvements
STATEMENT OF EXPERIENCE OF BIDDER
The Bidder shall state below the work of similar magnitude or character which he has done, and
shall give reference to his experience, skill and business standing and of his ability to conduct the
work as completely and as rapidly as required under the terms of the contract. References shall
include the name and telephone number of the project representative to be contacted.
Project Name
# of
Contract
Class of
Date
Name & Address
& Location
LF
Amount
Work
Completed
of Owner
SEE ATTACHED LIST
1 Statement of Experience
City of Fayetteville
Sanitary Sewer Improvements
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' QUALIFICATION STATEMENT
' Submitted to: City of Fayetteville, Arkansas (Corporation)
By: Insituform Technologies, Inc.
' Principal Office: 17988 Edison Avenue, Chesterfield, MO 63005
' The signatory of this questionnaire guarantees the truth and accuracy of all statements
and of all answers.
' 1. What is the name of the trenchless pipe enlargement process to be used for the
work included in this Contract?
' N/A We are bidding only Unit 2, CIPP, by the InsituforrO Process
' 2. In the past three most recent and consecutive years, what is the total length in
linear feet of trenchless pipe enlargement work completed by your firm? (A
minimum of 15,000 Linear Feet within the last three consecutive years using the
approved manufacturer's system(s), per specification D2-19(1) AA.a., is
required).
N/A We are bidding only Unit 2, CIPP, by the Insituform0P Method
1
3. In the past three most recent and consecutive years, what is the average annual
contract amount of related sanitary sewer construction work, similar in nature to
' this contract, completed by your firm?
j For this area... approximately $1,000,000
1
4. In the past five most recent and consecutive years, what is the total length in
linear feet of pipe reaming completed by your firm? (See Specification D2-24.)
N/A We are bidding only Unit 2, CIPP, by the InsituforrrO Method
t5. How many years have the Contractor and Subcontractors performed sanitary
sewer work, similar in nature to this contract, under its present primary name?
' (A minimum of five (5) years is required.)
Insituform Technologies, Inc. has performed work under it's present name
' for over fourteen years.
' Qualification Statement
City of Fayetteville
1 Sanitary Sewer Improvements
1
1
I
NOTE: If the Bidder intends to use a Subcontractor for trenchless pipe
enlargement work and/or horizontal drilling included in this Contract, he
must complete this form based on the Subcontractor's information as
submitted on a Statement of Experience form.
Note: We are bidding only Unit 2 ... CIPP, by the InsituforTro Method
6. Have you ever failed to complete any work awarded to you? No
If so, where and why?
N/A
7. In what manner have you inspected this proposed work? Our people have
visited site'and reviewed all plans and specification
Explain your plan or layout for performing the proposed work.
See attached for the CIPP Method for performance for proposed work.
We anticipate that the lining only work will be completed in
approximately four weeks.
Project: Farmington Sewer Rehabilitation Project
Unit 1 and Unit 2
Owner: City of Fayetteville, Arkansas
Qualification Statement
City of Fayetteville
2 Sanitary Sewer Improvements
Attest:
cr
s14 of Corporation
Joann Smith
Contracting & Attesting Officer
(Seal) If Bidder is a Corporation
BIDDER: Insituform Technologies, Inc.
BY: H.Douglas Thomas, V.P.,Special Proje
ADDRESS: 17988 Edison Avenue
Chesterfield, MO 63005
PHONE: 636-530-8000
Bidder's Signature
H. Douglas Thomas
V.P., Special Projects
N
Qualification Statement
City of Fayetteville
3 Sanitary Sewer Improvements
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., Pfflik
EPA Pmied control Nomber
United States Envirormental Protection Agency
Washington, OC 20660
Certification Regarding
Debarment, Suspension, and Other Responsibility Matters
The prospective participant certifies to the best of its knowledge and belief that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from
covered transactions by any Federal department or agency.
(b) Have not within a three year period preceding this proposal been convicted of or had a civil judgment rendered
against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or
performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal
or State antitrust statutes or commission of embezzlement, theft, forgery, falsification or destruction of records,
making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a government entity (Federal, State, or
. local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and
(d) Have not within a three-year period preceding this application/proposal had one or more public transactions
(Federal, State, or local) terminated for cause or default -
1 understand that a false statement on this certification may be grounds for rejection of this proposal or termination of
the award. In addition, under 18 USC Sec. 1001, a false statement may result in a fine of up to $10,000 or
imprisonment for up to 5 years, or both.
H. Douglas Thomas, V.P., Special Projects, Insituform Technologies, Inc.
Typed Name & Title of Authorized Representative
Signature of Authorized Representative Date
r May 8, 2007
Q I am unable to certify to the above statements. My explanation is attached-
EPA.
Form 5700-09 (11-88)
Instructions
Under Executive Order 12549, an individual or organization debarred or excluded from participation in
Federal assistance or benefit programs may not receive any assistance award under a Federal
program, or a subagreement thereunder for $25,000 or more.
Accordingly, each prospective recipient of an EPA grant, loan, or cooperative agreement and any
contract or subagreement participant thereunder must complete the attached certification or provide
an explanation why they cannot For further details, see 40 CFR 32.510, Participants'
responsibilities, in the attached regulation.
NTIM ICIMM [i
The prospective EPA grant, loan, or cooperative agreement recipient must return the signed
certification or explanation with its application to the appropriate EPA Headquarters or Regional
office, as required in the application instructions.
A prospective prime contractor must submit a completed certification or explanation to the individual
or organization awarding the centrad.
Each prospective subcontractor must submit a completed certification or explanation to the prime
contractor for the project.
How To Obtain Forms:
EPA includes the certification form, instructions, and a copy of its implementing regulation (40 CFR
Part 32) in each application kit Applicants may reproduce these materials as needed and provide
them to their prospective prime contractor, who, in tum, may reproduce and provide hem to
prospective subcontractors.
Additional copieslassistance may be requested from:
Compliance Branch
Grants Administration Division (PM -216F)
U.S. Environmental Protection Agency
401 M Street SW
Washington, DC 20460
(Telephone: 202/475-6025)
EPA Form 570049 (11-88)
CONTRACTUAL DOCUMENTS
SECTION B
I
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CITY OF FAYETTEVILLE, ARKANSAS
SANITARY SEWER REPLACEMENT AND REHABILITATION
FARMINGTON SEWER REHABILITATION PROJECT
THIS AGREEMENT, made this 1 day of J urpb 2007, by and between
the City of Fayetteville, Arkansas, a municipal corporation and Insituform Technologies, Inc.
hereinafter referred to as Contractor.
' WITNESSETH:
WHEREAS, the City of Fayetteville has heretofore solicited Bids for all the work and
improvements for the doing of all things included within the hereinafter specified Farmington
Sewer Rehabilitation Project,
' WHEREAS, the City of Fayetteville did on the 8th day of May, 2007 find that the Contractor
was the lowest responsive, responsible Bidder for the hereinafter specified work and did award
the Contractor a Contract for said work.
NOW, THEREFORE, for and in consideration of their mutual promises, covenants, undertaking
and agreements, the parties do hereby agree as follows:
' ARTICLE I - WORK TO BE DONE BY CONTRACTOR
' The Contractor agrees, at its own cost and expense, to do all the work and to furnish all the labor,
materials, equipment and other property necessary to do, construct, install and complete all the
works and improvements included in Unit 2 of the Farmington Sewer Rehabilitation Project.
' All in full accordance with and in compliance with and as required by the hereinafter specified
Contract Documents and any addenda for said work, and to do, at his own cost and expense, all
' other things required of Contractor by said Contract Documents for said work.
ARTICLE II - CONTRACT DOCUMENTS
' The Contract Documents are defined in the General Conditions.
1
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1 Agreement
' City of Fayetteville
Sewer System Improvements
I
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ARTICLE III - CONTRACT AMOUNT
The Contractor agrees to receive and accept the attached contract unit prices and/or lump sum
prices as full compensation for furnishing all materials and equipment for doing all the work
contemplated and embraced in this Agreement; also for all loss or damage arising out of the
nature of the work aforesaid, or from the action of the elements, or from any unforeseen
difficulties or obstructions which may arise or be encountered in the prosecution of the work
until its acceptance by the City of Fayetteville, and for all risks of every description connected
with the work; also for well and faithfully completing the work, and the whole thereof, in the
manner and according to and in compliance with the Contract Documents and the requirements
of the Engineer under them, also for any and all things required by the Contract Documents.
ARTICLE IV - LIQUIDATED DAMAGES OR ACTUAL DAMAGES AND EXCESS
ENGINEERING COSTS
The Contractor shall, and agrees to, pay to excess engineering as described in the General
Conditions.
The
Contractor shall, and agrees to, pay for liquidated
damages or
actual damages if Contractor
fails
to complete the project
within the specified time in accordance
with the General Conditions.
ARTICLE V - STARTING AND COMPLETION
The Contractor agrees to commence work under this Agreement within ten calendar days of
receipt of written Notice to Proceed and to complete all work included in this Contract to the
point of substantial completion no later than 130 Calendar Days from the date of Notice to
Proceed. The Contractor further agrees to complete all work to the point of final acceptance by
the City of Fayetteville no later than 160 Calendar Days from the date of Notice to Proceed.
The Contractor shall, and agrees to, furnish and deliver to the City of Fayetteville, the Faithful
Performance Bond, the Contractor's Labor and Material Bond, the Maintenance Bond and the
insurance certificates and policies of insurance required of him by provisions of the Contract
Documents, and to do, prior to starting work, all other things which are required of him by the
Contract Documents as a prerequisite of starting work.
ARTICLE VI - PAYMENTS TO CONTRACTOR
The City of Fayetteville agrees with said Contractor to employ, and does hereby employ, the said
Contractor to provide the materials and do all the work, and do all other things hereinabove
contained or referred to, for the prices aforesaid, and hereby contracts to pay the same at the
time, in the manner and upon the conditions set forth or referred to in the Contract Documents;
and the said parties for themselves, their heirs, executors, administrators, successors and assigns,
do hereby agree to the full performance of the covenants herein contained.
There shall be no measurement or
separate payment for any items
not
listed and all costs
pertaining thereto shall be included in
the Contract unit prices for other
items
listed.
Agreement 2
' City of Fayetteville
Sewer System Improvements
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ARTICLE VII — CHANGES TO CONTRACT
Changes, modifications or amendments in scope, price or fees to this contract shall not be
allowed without a prior formal contract amendment approved by the Mayor and the City Council
in advance of the change in scope, cost or fees.
ARTICLE VIII — FREEDOM OF INFORMATION ACT
City contracts and documents prepared while performing City contractual work are subject to the
Arkansas Freedom of Information Act. If a Freedom of Information Act request is presented to
the CITY OF FAYETTEVILLE, the Contractor will do everything possible to provide the
documents in a prompt and timely manner as prescribed in the Arkansas Freedom of Information
Act (A.C.A. §25-19-101 et seq.). Only legally authorized photocopying costs pursuant to the
FOIA may be assessed for this compliance.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed in three
original counterparts the day and year first above written.
(SEAL)
Insituform Technologies, Inc.
(Contractor)
Attest: 7L
' Name Joann Smith
(please type)
1
Contracting & Attesting Officer Title Vice President, Special Projects
By /_ , � c 2
Name
H. Douglas Thomas
(please type)
Title
(SEAL) CITY OFF ETTEVILLE, AR
Atte By
' Name �O/� �, �/!1 /`/ `� Name
' (please type) (please t e)
Title Title
TRr
(41e/1�07GAS Y p
FAYETTEVILLE
N.
ytNo 5
'- s :�KgNSP.J�a 3 Agreement
''Zee, TON ��`���` City of Fayetteville
���"� Sewer System Improvements
' Executed in six counterparts
Bond No. 109950176
' ArjLkNS_46 STATUTORYPERFORMANCE ANDYAYbM'N"TvBOND
' VJe Insituform Technolo4ies, Inc.
17988 Edison Avenue Chesterfield,.MO 63005
luvelers Casualn, and Sumty
as PrinClpal;hereinafter Galled 1171IlCloal. and Comnanv of America 'a .Corporation organized and
' vxisting under the laws of .the State of °atslatit authorized Ao .do .business in .fne State of
Arkansas, as Surety, hereinafter allcdd Su>oty. areg bound.unto City of-Fayett:nrille as
' Obligee, in the .amount of Ei WX o Lars ($ 178, 839.50 ), for .the
payment whereof Principal and Surety bind themselves; Ihauw heirs; personal Tepresentatives,
tsucomsors and.assignsjointly and sever, ally, 'firmly bythese presents.
Principal 'has :by written agreement .dated entered into .a .contras with City of
' Fayetteville for Farmington Sewer Rehabilitation Project; .which conGaGt is b3 Jerance made.a
va! � hereof; .and is hereinafter referred to as the Contract.
'1 HE CONDITIONS OF THIS OBLIGATION' ._ lI .SUCH that if the principal .shall
' fa'tnfullyperformthe Contract on his part and shall fully indemnify and save h=less.thee City of
Fayettevillearom.el]-:ost.and damage-which-he.--may suffenbyTeason offailure.to do so-and shall
fully reimburse and :repay the .City of Fayetteville .all outlay and .=pease which the City of
' ?.ayettevillemaS ince .inmal:ing eood any such default;.and furEn; that iflite?'rincipa shallpay all
vctsons all indebtedness.for.labor.or materials f==ished orperiormed under said Contract, -failing
' which such persons shall have:a direct-right of action.against :the.Principal:and Surety; jointly:and
severally, undcrtnis obligation, sugject to the City ot.:.avettevilie's prtority,.tnentnis ob11.1 or. shat
be null and void; otherwise it shall remain in-full force and effect.
' lv o suit, action o: proceeditt; shall be brought on this bond outside the 5tate.of. Arlansas.:No
' suit; action orproeeeding shall be brought on this bond �,:cwt:bythe City ofrayetteville after six
-months from the.date final-payment is made on Contract, nor shall any suit, .action or,proceeaing
' be'brougirr by fne City ofrayetteveiliaftc, two years iron the date on which fne nnalpayment under
the: Contraet.falls flue.
' Any alterations which may bemade in the terns of the Contract, or in .the wort, to be done
tinder i.. or the giving by the City of =evctteville of any extension of time for the performance of the
' contract, or any other forbearance on the part of either the City of Fayetteidlle or the Principal to the
other shall not in any way release the Principal and the Surety or Sureties, or either or any of them,
theirheirs, personal representatives, successors or assigns frvmfhei liability hereunder, notice to the
' Surety or Sureties of any suzh alteration, gttension or.forbearance being hereby waived.
1 Performance Bond
' City ofFzyetteville
Sanitary Sewer lmprovern=ts
' In. no event shall the aggregate liability of the Surety exceed the sum set out herein.
' Executed on this day of
CI
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' Performance Bond
' City of Fayetteville
Sanitary Sewer Improvements
PJ
20_
Insituion Technologies, :Inc..
Principal
By. Z.Z
Doug=Ts Thomas
Vice P:esideni. Soecisl Pxojeca
?rawJjm:s Cbl lty and Sleety Com. CE P TEnca
surety
By I /�
fcttorneq-in-fact
Andrew P. Thome
Countersigned By:
Caroline A. Cory
Rebsamen Insurance
1500 Riverfront Drive
Little Rock, AR 72202
Executed in six counterparts
' %WIAMTENANCLMOND BONDNUMBEP, 104950176
' IaOw AI L'IK) �' $1' IH) SL DE1 eENT&, Tnat.we, Insi tuform Technologies, Inc.
17988 Edison Avenue, Chesterfield, MO 63005
' (heremaf= called the Prinuipal),:and Travelers Casualty and Surety Companv of America
Z cotporetiot (h reinafret.cslicd fnu Surety), are held and firmiy bound unto, City of Fayetteville, AP
Farmington Sewer Rehabilitation Project
huruinaftr,.called the O'oliges), in the iull and just sum of One Hundred Seventv Eiqht Thousand,
'Eight Hundred Thirty Four and 50/100 ($178,834.50) dollar ,
lawful-mono). of the united States, for the psymm: o`.which, wolf and tr-Wy to 'Im made, .we 'bind ourscives,.ou heirs,
' adrninistratom executors, sucuesson and asFurm, jointly and severaliy,'iirm!y tw these presents.
M=EAS: said Principal has entered into:a curtain contras with the Obligee dated
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which contract has bca or is about to be accented.
AND WHEP.LAE, maciiioations and comae: provide:: tha. Insituform Technologies, Inc.
Should guarantee the nroiez free tram detects caused b faulnp woricmanship and materials iar.a period o: two yez s.after
substantial completion, gen: al wca: and tear e cored.
NOW, TIMMFOU, ifthu said prole: ! shall be fresirom defects of we:l:msnshio and mata'iais. general wear and
tca excepted, io: a period of two years aft. substantial comnietion, than this obligation shall be null and void; othurwisc to
r_mair, iniull iore and effect,
Signed, suaied and dsnv�ed
Vrimess 95 to
Principal
D<n_sd Ca oll
Cor-*rac_itago A:t==_ino%/D//:_ic��,rC���
Caroline A. Cory
Rebsamen Insurance
1500 Rive_rfront Drive
Little Rock, AT, 72202
^s+tu_<o=m Techno n—es Ittn,
77 Douglas Tnomas
Vice D_esSient, Spec_al(Stijec.s
TravelersCasualty and Surety
Company o£ kyuaraica (Sa)
rnsv-ia-Enol
Andrew P. Thom=_
hdaintenan.^._ Bmr]
Cin' o: Yavatet•ille
' Sanitary SawC7iMDroI?ZM=ts
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State of Missouri
County of St. Louis
On before me, a Notary Public in and for said County and State, residing therein,
duly commissioned and sworn, personally appeared. ANDREW P. THOME known to me to be
Attorney -in -Fact of
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA
the corporation described in and that executed the within and foregoing instrument, and known to me to
be the person who executed the said instrument in behalf of said corporation, and he duly acknowledged
to me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year
stated in this certificate above.
My Commission
STEPHANIE L. KLEARMAN
Notary Public- Notary Seal
State of Missouri
St. Louis County
My Commission Expires Nov. 12, 2010
Cam Ion a M 06966528
Expires
.,��G(//G(-�
Stephanie L. Mearman, Notary Public
WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER
TRAVELERS POWER OF ATTORNEY
Farmington Casualty Company SL Paul Guardian Insurance Company
Fidelity and Guaranty Insurance Company St. Paul Mercury Insurance Company
Fidelity and Guaranty Insurance Underwriters, Inc. Travelers Casually and Surety Company
Seaboard Surely Company Travelers Casualty and Surety Company of America
Sl. Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company
Attorney -In Fact No. 218407
Certificate No. 0 016 3110 6
KNOW ALL MEN BY THESE PRESENTS: That Seaboard Surety Company is a corporation duly organized under the laws of the State of New York, that St. Paul
Fire and Marine Insurance Company, SL Paul Guardian Insurance Company and St. Paul Mercury Insurance Company are corporations duly organized under the laws
of the State of Minnesota, that Farmington Casualty Company, Travelers Casualty and Surety Company, and Travelers Casualty and Surety Company of America are
corporations duly organized under the laws of the State of Connecticut, that United States Fidelity and Guaranty Company is a corporation duly organized under the
laws of the State of Maryland, that Fidelity and Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa, and that Fidelity and
Guaranty Insurance Underwriters, Inc. is a corporation duly organized under the laws of the State of Wisconsin (herein collectively called the "Companies")- and that
the Companies do hereby make, constitute and appoint
Andrew P. Thome, Dana A. Dragoy, Justine P. Weber, Kristen L. Lucas, Anne M. Gliedt, Stephanie L. Kleannan, Peter J. Mohs, and Helen A. Antoine
of the City of Chesterfield , State of Missouri , their true and lawful Attorney(s)-in-Fact,
each in their separate capacity if more than one is named above, to sign, execute, seal and acknowledge any and all bonds, recognizances, conditional undertakings and
other writings obligatory in the nature thereof on behalf of the Companies in thein business of.guarantecing the fidelity of persons, guaranteeing the performance of
contracts and executing or guaranteeing bonds and undertakings required or pertmAc An any achons or proceedings allowed by law.
Vol C�_Sls 11m
IN WITNF�4 WHEREOF, the Comp lave caused this inst�senoru�mt'be-signedfa� eii�corpomte seals to be hereto affixed, this
day of ay W✓ YiYi✓✓.. i'
Farmington Casualty Core yI ®� ���� SL Paul Guardian Insurance Company
Fidelity and Guaranty Insurance Company ® Sl. Paul Mercury Insurance Company
Fidelity and Guaranty Insuiaricc Underwrrs, Inc. Travelers Casualty and Surety Company
Seaboard Surety Company Travelers Casualty and Surety Company of America
St. Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company
1 1927 ♦�az \M IYSG! yo q� ,.\OWL ±f �O�
J
19/]6 0 fur® 192%..arA i. `p6 n�rf'tn alarroco, turtneimt
19$1 ma r c �ySEAL%o' is`58AL t° E
ara:a <,wrs 'O�
State of Connecticut
City of Hartford ss.
By:
Georg Thompson, nior rce President
11th May 2007
On this the day of , before me personally appeared George W. Thompson, who acknowledged
himself to be the Senior Vice President of Farmington Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Underwriters,
Inc., Seaboard Surety Company, St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Travelers
Casualty and Surety Company, Travelers Casualty and Surety Company of America, and United States Fidelity and Guaranty Company, and that he, as such, being
authorized so to do, executed the foregoing instrument for the purposes therein contained by signing on behalf of the corporations by himself as a duly authorized officer.
p.TlT
In Witness Whereof, I hereunto set my hand and official seal. T*An
My Commission expires the 30th day of June, 2011. C+ pllBllps
58440-8-06 Printed in U.S.A.
Marie C. Tetmault, Notary Public
This Power of Attorney is granted under and by the authority of the following resolutions adopted by the Boards of Directors of Farmington Casualty Company, Fidelity
and Guaranty Insurance Company. Fidelity and Guaranty Insurance Underwriters, Inc.. Seaboard Surety Company, St. Paul Fire and Marine Insurance Company,
St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of
America, and United States Fidelity and Guaranty Company, which resolutions are now in full force and effect, reading as follows:
RESOLVED, that the Chairman, the President, any Vice Chairman, any Executive Vice President, any Senior Vice President, any Vice President, any Second Vice
President, the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Secretary may appoint Attomeys-in-Fact and Agents to act for and on behalf
of the Company and may give such appointee such authority as his or her certificate of authority may prescribe to sign with the Company's name and seal with the
Company's seal bonds, recognizances, contracts of indemnity, and other writings obligatory in the nature of a bond, recognizance, or conditional undertaking, and any
of said officers or the Board of Directors at any time may remove any such appointee and revoke the power given him or her; and it is
FURTHER RESOLVED, that the Chairman, the President, any Vice Chairman, any Executive Vice President, any Senior Vice President or any Vice President may
delegate all or any part of the foregoing authority to one or more officers or employees of this Company, provided that each such delegation is in writing and a copy
thereof is filed in the office of the Secretary; and it is
FURTHER RESOLVED, that any bond, recognizance, contract of indemnity, or writing obligatory in the nature of a bond, recognizance, or conditional undertaking
shall be valid and binding upon the Company when (a) signed by the President, any Vice Chairman, any Executive Vice President, any Senior Vice President or any Vice
President, any Second Vice President. the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Secretary and duly attested and sealed with the
Company's seal by a Secretary or Assistant Secretary: or (b) duly executed (under seal, if required) by one or more Attorneys -in -Fact and Agents pursuant to the power
prescribed in his or her certificate or their certificates of authority or by one or more Company officers pursuant to a written delegation of authority: and it is
FURTHER RESOLVED, that the signature of each of the following officers: President, any Executive Vice President, any Senior Vice President, any Vice President,
any Assistant Vice President, any Secretary, any Assistant Secretary, and the seal of the Company may be affixed by facsimile to any power of attorney or to any
certificate relating thereto appointing Resident Vice Presidents, Resident Assistant Secretaries or Attomeys-in-Fact for purposes only of executing and attesting bonds
and undertakings and other writings obligatory in the nature thereof, and any such power of attorney or certificate bearing such facsimile signature or facsimile seal shall
be valid and binding upon the Company and any such power so executed and certified by such facsimile signature and facsimile seal shall be valid and binding on the
Company in the future with respect to any bond or understanding to which it is attached.
1. Kuri M. Johanson, the undersigned, Assistant Secretary, of Farmington Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance
Underwriters. Inc., Seaboard Surety Company, St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance
Company. Travelers Casualty and Surety Company, Travelers Casualty and Surety Company.of�America: and United States Fidelity and Guaranty Company do hereby
certify that the above and foregoing is a me and correct copy of the Powe r�+OfflAromey oxe°cuted by saidlCompanies, which is in full force and effect and has not been
revoked. �ggy1 a �.4 �1 V
IN TESTIMONY WHEREOF, I have hereunto set my hand and affix th s of said`mlpaniee>
is
11 ®��
�����i������
Kori M. Johann Assistant Secretary
day of
20 _.
r6.R or ~'o..�c ORra
r
3 -^.-"mitt _ a/-RV_Iit�F �rrOR1I�� < r
1995 0 � 1927 a s. — � xurtmro. auviwtq
'sOi �� 1951 ,rO � � SOL �8 CIVIL
�R
', �.+�E �•AIQ
To verify the authenticity of this Power of Attorney, call 1-800421-3880 or contact us at www.sipaultravelersbond.com. Please refer to the Attomey-In-Fact number,
the above-named individuals and the details of the bond to which the power is attached.
TABLE OF CONTENTS
FOR
GENERAL CONDITIONS
i
SUBJECT
PAGE
ADEFINITIONS
......................................................................................................I
B
CONTRACT DOCUMENTS: DEFINITIONS....................................................5
C
PRELIMINARY MATTERS ................................................................................6
D
CONTRACT DOCUMENTS: INTENT AND REUSE.......................................8
E
AVAILABILITY OF LANDS; PHYSICAL CONDITIONS;
REFERENCEPOINTS.......................................................................................1
I
F
BONDS AND INSURANCI...........................................................................14
G
CONTRACTOR'S RESPONSIBILITIES...........................................................23
11
OTHER WORK...................................................................................................33
1
CITY OF FAYETFEVILLE'S RESPONSIBILITIES........................................34
J
ENGINEER'S STATUS DURING CONSTRUCTION......................................35
K
CHANGES IN WORK........................................................................................38
L
CHANGES IN CONTRACT PRICE..................................................................39
M
CHANGES IN CONTRACT TIME....................................................................45
N
WARRANTY AND GUARANTEE; TESTS AND OBSERVATIONS;
CORRECTION, REMOVAL OR ACCEPTANCE OF
DEFECTIVEWORK..........................................................................................47
O
PAYMENTS TO CONTRACTOR AND COMPLETION.................................51
P
SUSPENSION OF WORK AND TERMINATION...........................................59
Q
ARBITRATION .(This Section Deleted)............................................................62
R
LIQUIDATED DAMAGES OR ACTUAL DAMAGES
FORDELAY.......................................................................................................62
S
EXCESS ENGINEERING COSTS.....................................................................64
TMISCELLANEOUS
............................................................................................64
i
INDEX TO GENERAL CONDITIONS
ii
I
1
11
1
1
1
Page
Paragraph
Number
Number
Acceptance
0.12
58
Access to the Work
N.2
47
Addenda; definition of
A.l
1
Adjusting Progress Schedule
G.3
24
Agreement, definition of
A.2. B.3.a
1,6
All Risk Insurance
F.2.a
15
Amendment, Written
A.42, D.2
5, 9
Application for Progress
Payment Request
0.2
51
Arbitration (This Section Deleted)
Q
62
As Directed, definition of
A.3
1
As Shown, definition of
AA
1
Availability of Lands
EA
11
Avoidable Delays
M.2.b
47
Award, Notice of, definition of
A.23
3
Before Starting Construction
C.5
7
Bid, definition of
A.5
I
Bidder, definition
A.6
1
Bidding Documents
B.2
5
Bonds and Insurance
F.1, F.2
14, 15
Bonds, definition of
A.7
1
Bonds, delivery of
C.I, F.1
6, 14
Bonds, Performance and Other
B.3.b, F.1
6, 14
Cash Allowances
L.6
43
Certificate of Insurance
F.2.c
18
Changes in Contract Price
L
39
Changes in Contract Time
M
45
Change Order, definition of
A.8
I
Change Orders, Engineer's
Responsibility
J.5
35
Change Orders; to be Executed
K.4
38
Changes in Work
K
38
City of Fayetteville May Correct Defective Work
N.9
50
City of Fayetteville May Stop Work
N.5
49
City of Fayetteville May Suspend Work, Terminate
P.15 P.2
59, 60
City of Fayetteville's Duty to Execute Change Orders
1.7
36
City of Fayetteville's Liability Insurance
F.3.a.
19
City of Fayetteville's Representative
J.1
35
City of Fayetteville's Responsibilities
I
34
Claims, Waiver of, on Final Payment
0.14
59
Clarifications and Interpretations
J.4
35
Cleaning
G.1 O.b
29
ii
I
1
11
1
1
1
11
1
1
1
1
F
I
I
1
1
I
1
1
1
1
1
11
1
Paragraph
Number
Page
Number
Completion
O
51
Completion, Substantial
0.8
55
Commencement of Contract Time
C.3
7
Conditions of Contract
BA
6
Conference, Pre -Construction
C.6
8
Conflict, Error, Discrepancy - Contractor to Report
C.5.a, D. Ix
7, 9
Construction Machinery, Equipment, etc.
G.2.b
24
Continuing the Work
G.15
32
Contract Documents - Amending and Supplementing
D.2
9
Contract Documents, definition of
A.91 B
13 5
Contract Documents, Discrepancies and
Omissions
DA
10
Contract Documents: Intent and Reuse
D.1
8
Contract Documents: Titles and Headings
D.5
11
Contract Price, Change of
L
39
Contract Price, definition of
A.10
2
Contract Time, Change of
M
45
Contract Time, Commencement of
C.3
7
Contract Time, definition of
A,11
2
Contractor, definition of
A.12
2
Contractor May Stop Work or Terminate
P3
62
Contractor's Continuing Obligation
0.13
58
Contractor's Duty to Report
Discrepancy in Documents
C.S.a,D.l.c
7, 9
Contractor's Fee, Costs Plus
L.S.a
42
Contractor's Liability Insurance
F.2.a
15
Contractor's Responsibilities - in General
G
23
Contractor's Warranty of Title
0.6
53
Contractor's - Other
H
33
Contractual Documents
B.3
6
Contractual Liability Insurance
F.2.a
15
Coordinating Contractor, definition of
H.2
34
Coordination
11.2
34
Copies of Documents
C.2
7
Correction or Removal of Defective Work
N.6
49
Correction Period, One Year
N.7
49
Correction, Removal or Acceptance of
Defective Work - in General
N.6 thru N.9
49, 50
Cost, Net Decrease
L.5.a.(2)
42
Cost of Work
L.4,O.4
393 53
Costs, Supplemental
L.4.a.(5)
40
rrr
1
Page ,
Paragraph Number Number
Day, definition of A.13 2 '
Defective, definition of A.14 2
Defective Work, Acceptance of N.8 50
Defective Work, Correction or Removal of N.6 49 '
Defective Work, Rejecting J.6 36
Definitions A I
Delays M.2, M.3 46, 47 '
Delivery of Bonds C.1 6
Determination for Unit Prices 3.8 36
Differing Conditions E.2.c 12
Disputes, Decisions by Engineer 1.9 36 ,
Documents, Copies of C.2 7
Documents, Record GA 1 29
Documents, Reuse of D.3 10 '
Drawings and/or Plans, definition of A.15 2
Easements E.1 11 '
Effective Date of Agreement, definition of A.16 2
Emergencies G.13 30
Engineer, definition of A.17 2 '
Engineering Cost, Excess S 64
Engineers Decisions J.8, J.9 36
Engineer's, Notice Work is Acceptable 0.12 58 '
Engineer's Recommendation of Payment 0.7, 0.11 53, 57
Engineer's Responsibilities, Limitations on J.10 37
Engineer's Review E.2.d 12 '
Engineer's Status During Construction J 35
Equipment, Labor, Materials G.2 23
Equivalent Materials and Equipment GA 24 ,
Excess Engineering Costs S 64
Extension of Time M.3 47
Explorations of Physical Conditions E.2.a 11 '
Fee, Contractor's Costs Plus L.5 42
Field Order - definition of A.18 2 ,
Field Order - Issued by Engineer J.5 36
Final Acceptance, definition of A.19 2
Final Application for Payment 0.11 57 '
Final Observation 0.10 57
Final Payment and Acceptance 0.12 58
Final Payment, Recommendation of 0.12 58 ,
Finalizing Schedules C.7 8
iv ,
' Page
Paragraph Number Number
General Requirements, definition of A.20 2
General Provisions T.3 65
Giving Notice "r.1 64
Guarantee of Work, by Contractor N.1 .47
headings, Titles and D.5 1 I
Hold Harmless Agreement G.16 32
' Indemnification G.16 32
Insurance, Amount of Coverage F.2.b 16
Insurance, Bonds and F 14
' Insurance, Certificates of C.5.c, F.2.c 8, 18
Insurance, Completed Operations F.2.b(2). 16
Insurance, Contractor's Liability F.2. 15
' Insurance, Contractual Liability F.2.a 15
Insurance Companies, Notification of F.6 22
Insurance, City of Fayetteville's Liability F.3 19
' Insurance, Property F.2, F.4.a 15, 19
Insurance, Waiver of Rights F. Lb 14
Insurance, Workmen's Compensation F.2.b(1) 16
Insurance, Workmen's Occupational Diseases F.2.b.(1) 16
Interpretations and Clarifications J.4 35
Investigations of Physical Conditions E.2 I 1
Labor, Materials and Equipment G.2 23
Laws and Regulations A.22,G.8 2, 28
Liability Insurance, Contractor's F.2.a. 15
Liability Insurance, City of Fayetteville's and Engineer's F.2.a. 15
Limitations on Engineer's Responsibilities J.10 37
Limits of Authority L.8 45
Liquidated Damages R.2 62
Materials and Equipment, Furnished by Contractor G.2.a, G.2.c 23, 24
Materials and Equipment, Not Incorporated in Work O.2.b 51
Materials or Equipment, Equivalent GA 24
' Miscellaneous, Provisions T 66
Notice, Giving T.1 64
Notice of Award, definition of A.23 3
Notice of Acceptability of Project 0. 12.a 58
Notice to Proceed, definition of A.24 3
' Notice to Proceed C.3 7
Observation, Final 0.10 57
Observation, Tests and N.3 47
"Or -Equal" items G.4.a 24
' v
Page
Paragraph Number Number
Other Contractors, Work by Others 11 33
Other Work H 33
Overtime Work, Prohibition of G.2.a 23
Owner, definition of A.25 3
Partial Utilization, definition of
Partial Utilization
Partial Utilization, Property Insurance
Partial Waiver of Liens
Patent Fees and Royalties
Payment Request, definition of
Payment Request, Final
Payment Request, Progress
Payments to Contractor and Completion
Payments, Recommendation of
Payments to Contractor
Payments to Contractor, when due
Payments to Contractor, Withholding
Payments, Reporting and Invoicing Cost -of -Work
Payments, Unit Prices
Performance, Bonds
Permits
Physical Conditions
Physical Conditions, Engineer's Review
Physical Conditions, Existing Structures
Physical Conditions, Exploration and Reports
Physical Conditions, Possible Document Change
Physical Conditions, Price and Time Adjustment
Physical Conditions, Report to Differing Conditions
Physical Conditions, Underground Facilities
Pre -Construction Conference
Preliminary Matters
Premises, Use of
Price, Change in Contract
Price, Contract, definition of
Progress Payment, Applications for
Progress Payment, Review of Applications
Progress Schedule
Progress Schedule, Adjusting
Project, definition of
Project Representative
Project Starting
Property Insurance
Property Insurance - Partial Utilization
Protection, Safety and
yr
A.26
0.9
F.4.b
0.5
G.6
A.27
0.8.a
0.2
O
0.7
O
0.7.b, 0.12.a
0.7.d
0.4
0.3
F.l.a
G.7
E.2
E.2.d
E.2.b
E.2.a
E.2.e
E.2.f
E.2.c
E.3
C.6
C
G.10
L
A.10
0.2
0.7
C.5.b(1), 0.1
G.3
A.28
J.3
CA
F.4.a
F.4.b.
G.12
3
56
20
53
27
3
55
51
51
53
51
54, 58
54
53
52
14
27
11
12
11
11
12
12
12
13
8
6
28
39
2
51
53
7, 51
24
3
35
7
19
20
29
r
1
1
I
I
1
I
I
11
I�J
Page
Paragraph Number Number
Provide
A.29
3
Recommendation of Payment
O.7.a, 0.1 1
53, 57
Record Documents
GA 1
29
Reference Points
EA
14
Regulations, Laws and
6.8
28
Rejecting Defective Work
1.6
36
Related Work at Site
H.1
33
Remedies Not Exclusive
T.3.b
65
Removal or Correction of Defective Work
N.6
49
Resident Engineer
A.31
3
Resident Project Representative, definition of
A.30
3
Resident Project Representative
1.3
35
Responsibilities, Contractor's
G
23
Responsibilities, Engineer's
1
35
Responsibilities, City of Fayetteville's
I
34
Retainage
O.2.d
52
Reuse of Documents
D.3
10
Rights -of -Way
E. I
I 1
Royalties, Patent Fees and
G.6
27
Safety and Protection
G.12
29
Samples, and Shop Drawings
6.14
30
Schedule of Shop Drawing Submissions
C.5.b(2), O.1
7, 51
Schedule of Values
C.5.b.(3),O.I
87 51
Schedule of Progress
C.5,C.6,C.7,6.3,G.14,P.2.a.(6)
7,8,24130260
Schedules, Finalizing
C.7
8
Shop Drawings and Samples
GA I, G.14
29, 30
Shop Drawings, definition of
A.32
3
Shop Drawings, Use of Substitutions
G.4.a
24
Site, Visits to by Engineer
1.2
35
Specifications, definition of
A.33
3
Specifications and Drawings
B.5
6
Starting Construction, Before
C.S, C.6
7, 8
Starting the Project
CA
7
Stopping Work, by Contractor
P.3
62
Stopping Work, by City of Fayetteville
N.5
49
Subcontractor Bond
F.7
22
Subcontractor, definition of
A.34
4
Subcontractors - in General
G.S.a
26
Subcontractors, Required Provisions
G.S.a
26
Substitute or "Or -Equal" Items
GA
24
Substantial Completion, Statement of
0.8
55
Substantial Completion, definition of
A.35
4
Subsurface Conditions
E.2.a, E.3
11, 13
vii
viii
LJ
11
I
J
[1
[I
Page
Paragraph
Number
Number
Supplemental Costs
L.4.a.(5)
40
Supplementary Conditions, definition of
A.36
4
Supplementing Contract Documents
D.2
9
Supplier, definition of
A.37
4
Surety, Consent to Payment
0.11
57
Surety, Engineer's Duties
J.1 O.a
37
Surety, Notice of Changes
K.5
38
Surety, Qualification of
F.1
14
Suspending Work, by City of Fayetteville
P.l.a
59
Suspension of Work and Termination
P
59
Superintendent, Contractor's
G.l .b
23
Supervision and Superintendent
G.1
23
Taxes
G.9
28
Termination, by Contractor
P.3
62
Termination, by City of Fayetteville
P.2
60
Termination, Suspension of Work
P
59
Tests and Observations
N.3
47
Time, Change of Contract
M
.45
Time, Computation of
T.2
65
Time, Contract, definition of
A.1 1
2
Titles and Headings
D.5
I 1
Unavoidable Delays
M.2.b
46
Uncovering Work
NA
48
Underground Facilities, definition of
A.38
4
Underground Facilities, Not Shown or Indicated
E.3.b
13
Underground Facilities, Protection of
E.3.a.(2),G.12
13, 29
Underground Facilities, Shown or Indicated
E.3.a
13
Unforseen Physical Conditions
E.3
13
Unit Price Work, definition of
A.39
4
Unit Price Work, general
L.7,O.1,O.3,O.7.c
44151,52154
Unit Prices
L.3.a, 0.3
39, 52
Unit Prices, Adjustment of
L.7.c
44
Use of Premises
G.10
28
Utility Owners
G.7,G. I 2.a.(3),H. I (b)
27, 29, 33
Values, Schedule of
0.1
51
Variations in Work, Authorized
G.13,J.5
30, 35
Visits to Site - by Engineer
J.2
35
viii
LJ
11
I
J
[1
[I
Paragraph
Number
Page
Number
Waiver of Claims, on Final Payment
0.14
59
Waiver of Rights
F.6
22
Waivers of Subrogation
F.4.h
21
Warranty and Guarantee
ICI
47
Warranty of Title, Contractor's
0.6
53
Work, Access to
N.2
47
Work by Others
H
33
Work, Cost -of-
L.4
39
Work, Continuing During Disputes
G.15
32
Work, definition of
A.40
4
Work Directive Change, definition of
A.41
4
Work Directive Change
D.2.a.(3)
9
Work, Neglected by Contractor
N.9
50
Work, Stopping by Contractor
P.3
62
Work, Stopping by City of Fayetteville
P.17 P.2
59, 60
Written Amendment, definition of
A.42
5
Written Amendment
D.2,K.1,L.2,M.1
93 38, 39, 45
ix
[1
IGENERAL CONDITIONS
1 A. Definitions
' Whenever used in these General Conditions or in the other Contract Documents, the
following terms have the meanings indicated which are applicable to both the singular and
plural thereof:
' I . Addenda - Written or graphic instruments issued prior to the opening of Bids which
clarify, correct or change the Bidding Documents or the Contract Documents.
' 2. Agreement - The written agreement between City of Fayetteville and Contractor
covering the work to be performed; other Contract Documents are attached to the
' Agreement and made a part thereof as provided therein.
3. "As directed", "as permitted", "reviewed", or words of similar import mean the
' direction, requirements, or permission of the Engineer, unless stated otherwise.
4. "As shown", "as indicated", "as detailed", or words of similar import refer to the
Contract Drawings unless stated otherwise.
5. Bid - The offer or proposal of the Bidder submitted on the prescribed form setting
forth the prices for the work to be performed.
6. Bidder - Any person, partnership, corporation, association, or affiliation submitting a
bid for the work.
1 7. Bonds - Bid, performance, and labor and material bonds and other instruments of
security.
t8. Change Order - A document recommended by the Engineer, which is signed by the
Contractor and the City of Fayetteville authorizing an addition, deletion or revision
' in the work, or an adjustment in the contract price or the contract time, issued on or
after the
' 9. Contract Documents - The Agreement, Addenda (which pertain to the Contract
Documents), Contractor's Bid (including documentation accompanying the Bid and
any post -Bid documentation submitted prior to the Notice of Award) when attached
' as an exhibit to the Agreement, the Bonds, these General Conditions, Conditions of
Contract, the Specifications, the Plans and/or Drawings as the same are more
specifically identified in the Agreement, together with all amendments,
' modifications, and supplements issued on or after the execution of the Agreement.
I General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
I
10. Contract Price - The moneys payable by the City of Fayetteville to the Contractor
under the Contract Documents as stated in the Agreement.
1 1. Contract Time - The number of days (computed as provided in paragraph T.2) or the '
date stated in the Agreement for the completion of the work.
12. Contractor - The person, firm or corporation with whom the City of Fayetteville has
entered into the Agreement.
13. Day - A calendar day of twenty-four hours measured from midnight to the next
midnight.
14. Defective - An adjective which when modifying the word work refers to work that is
faulty or deficient, or does not conform to the Contract Documents, or does not meet
the requirements of any observation, reference standards test or review referred to in
the Contract Documents, or has been damaged prior to Engineer's recommendation
of final payment (unless responsibility for the protection thereof has been assumed
by City of Fayetteville at Substantial Completion).
15. Drawings and/or Plans - The drawings and/or plans which show the character and
scope of the work to be performed and which have been prepared or reviewed by the
Engineer and are referred to in the Contract Documents.
16. Effective date of the Agreement - The date indicated in the Agreement on which it
becomes effective, but if no such date is indicated it means the date on which the
Agreement is signed and delivered by the last of the two parties to sign and deliver.
17. Engineer - The firm of RJN Group, Inc., Consulting Engineers, Dallas, Texas, acting
through its authorized representatives.
18. Field Order - A written order issued by the Engineer which orders minor changes in
the work in accordance with paragraph J.5 but which does not involve a change in
the contract price or the contract time.
19. Final Acceptance - The date when the construction of the project is complete in
accordance with the Contract Documents so that the entire project can be utilized for
purposes for which it is intended and all monies due the Contractor have been paid
him in the final payment estimate.
20. General Requirements - Sections of the Specifications.
21. Construction Observer - The authorized representative of the Engineer who is
assigned to the site or any part thereof.
22. Laws and Regulations; Laws or Regulations - Laws, rules, regulations, ordinances,
codes and/or orders.
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
[l
1
1
1
I
1
1
1
1
' 23. Notice of Award - The written notice by the City of Fayetteville to the apparent
successful Bidder stating that upon compliance by the apparent successful Bidder
with the conditions precedent enumerated therein, within the time specified, City of
' Fayetteville will sign and deliver the Agreement.
24. Notice to Proceed - A written notice given by the City of Fayetteville to the
Contractor (with a copy to Engineer) fixing the date on which the Contract Time will
commence to run and on which Contractor shall start to perform his obligation under
the Contract Documents.
' 25. Owner - The public body or authority, corporation, association, partnership, or
individual with whom the Contractor has entered into the Agreement and for whom
' the work is to be provided.
26. Partial Utilization - Placing a portion of the Work to be provided under the Contract
' Documents into the service for which it was intended, for the benefit of the City of
Fayetteville.
27. Payment Request - The form reviewed by the Engineer which is to be used by the
Contractor in requesting progress or final payment and which is to include such
supporting documentation as is required by the Contract Documents.
' 28. Project - The total construction of which the work to be provided under the Contract
Documents may be the whole, or a part as indicated elsewhere in the Contract
Documents.
' 29. Provide - means "furnish and install".
30. Resident Project Representative - the authorized representative of the Engineer who
is assigned to the site or any part thereof.
t 31. Resident Engineer - The authorized representative of the Engineer who is assigned to
the overall project and may have engineering personnel responsibility.
' 32. Shop Drawings - All drawings, diagrams, illustrations, schedules and other data
which are specifically prepared by the Contractor, a Subcontractor, manufacturer,
fabricator, supplier or distributor to illustrate some portion of the work and all
' illustrations, brochures, standard schedules, performance charts, instructions,
diagrams and other information prepared by a manufacturer, fabricator, supplier or
distributor and submitted by Contractor to illustrate material or equipment for some
portion of the work.
33. Specifications - Those portions of the Contract Documents consisting of written
' technical descriptions of materials, equipment, construction systems, standards and
workmanship as applied to the work and certain administrative details applicable
thereto.
3 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
34. Subcontractor - An individual, firm or corporation having a direct contract with
Contractor or with any other Subcontractor for the performance of a part of the work
at the site.
35. Substantial Completion - A time at which the work (or a specified part thereof) has
progressed to the point where, in the opinion of Engineer as evidenced by his
definitive Statement of Substantial Completion, it is sufficiently complete, in
accordance with the Contract Documents, so that the work (or specified part) can be
utilized for the purposes for which it was intended; or if there be no such statement
issued, when final payment is due in accordance with paragraph 0.8. The terms
"substantially complete" and "substantially completed" as applied to any work refer
to Substantial Completion thereof.
36. Supplementary Conditions - The part of the Contract Documents which amends or
supplements these General Conditions.
37. Supplier - A manufacturer, fabricator, supplier, distributor, materialman or vendor.
38. Underground Facilities - All pipelines, conduits, ducts, cables, wires, manholes,
vaults, tanks, tunnels or other such facilities or attachments, and any encasements
containing such facilities which have been installed underground to furnish any of
the following services or materials; electricity, gases, steam, liquid petroleum
products, telephone or other communications, cable television, sewage and drainage
removal, traffic or other control systems or water.
39. Unit Price Work - Work to be paid for on the basis of unit prices.
40. Work - The entire completed construction or the various separately identifiable parts
thereof required to be furnished under the Contract Documents. Work is the result of
performing services, furnishing labor and furnishing and incorporating materials and
equipment into the construction, all as required by the Contract Documents.
41. Work Directive Change - A written directive to Contractor, issued on or after the
Effective Date of the Agreement and signed by the City of Fayetteville and
recommended by the Engineer, ordering an addition, deletion or revision in the
Work, or responding to differing or unforeseen physical conditions under which the
Work is to be performed as provided in paragraph E.2 or E.3 or to emergencies under
paragraph G.13. A Work Directive Change may not change the Contract Price or the
Contract Time, but is evidence that the parties expect that the change directed or
documented by a Work Directive Change will be incorporated in a subsequently
issued Change Order following negotiations by the parties as to its effect, if any, on
the Contract Price or Contract Time as provided in paragraph L and M.
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City of Fayetteville
Sanitary Sewer Improvements
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42. Written Amendment - A written amendment of the Contract Documents, signed by
City of Fayetteville and Contractor on or after the Effective Date of the Agreement
and normally dealing with the nonengineering or nontechnical rather than strictly
Work-related aspects of the Contract Documents.
B. Contract Documents: Definitions
General
The Contract Documents comprise the following general classifications of
documents, including all additions, deletions, and modifications incorporated therein
before the execution of the Agreement:
' Bidding Documents
' Contractual Documents
Conditions of the Contract
1 Specifications
Drawings and/or Plans
2. Bidding Documents
' The Bidding Documents issued by the City of Fayetteville to assist Bidders in
preparing their Bids include:
' a. Invitation to Bid bound herewith.
b. Instructions to Bidders bound herewith.
'C. The Bid which is the offer of a Bidder to perform the work described in the
Contract Documents, made out and submitted on the prescribed Bid form
' bound herewith, properly signed and guaranteed.
d. Any Addenda issued during the time of Bidding, or forming a part of the
t Contract Documents used by the Bidder for the preparation of his Bid, shall be
covered in the Bid, and shall be made a part of the contract. Receipt of each
Addendum shall be acknowledged in the Bid.
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
3. Contractual Documents
a. Agreement
The Agreement covers the performance of the work described in the Contract
Documents, including all supplemental Addenda thereto and all general and
special provisions pertaining to the work or materials therefor. The Agreement
form is bound herewith.
b. Bonds
(1) Arkansas Statutory Performance and Payment Bond.
4. Conditions of the Contract
a. General Conditions of the Contract bound herewith and of which this
paragraph is a part.
b. Supplementary Conditions of this Contract bound herewith.
C. Federal/State laws and regulations applicable to this Contract and bound
herewith.
d. Wage requirements applicable to this Contract and bound herewith.
5. Specifications and Drawings
a. Contract Specifications bound herewith, which are listed in the table of
contents for these Contract Documents.
b. Contract Drawings including but not limited to those listed in the drawing
index of the Contract Drawings.
C. Preliminary Matters
I. Delivery of Bonds
When Contractor delivers the executed Agreements to City of Fayetteville,
Contractor shall also deliver to City of Fayetteville such Bonds as Contractor may be
required to furnish in accordance with paragraph F.1.
General Conditions 6
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' 2. Copies of Documents
City of Fayetteville shall furnish to Contractor up to five copies (unless otherwise
' specified) of the Contract Documents. Additional copies will be furnished, upon
request, at the cost of reproduction.
' 3. Commencement of Contract Time; Notice to Proceed
The Contract Time will commence to run on the thirtieth day after the Effective Date
of The Agreement, or, if a Notice to Proceed is given, on the day indicated in the
Notice to Proceed. A Notice to Proceed shall be given contingent to the receiving
and approval of the Construction Schedule which is to be submitted at or before the
Pre -Construction Conference.
4. Starting the Project
' a. Contractor shall start to perform the work within ten (10) calendar days from
the date when the Contract Time commences to run, but nothing shall be done
at the site prior to the date on which the Contract Time commences to run.
b. The Contractor shall notify the City of Fayetteville in writing 48 hours before
' starting at the site or his intentions to do so. In case of a temporary suspension
of work, he shall give reasonable notice before resuming work.
5. Before Starting Construction
' a. Before undertaking each part of the work, Contractor shall carefully study and
compare the Contract Documents and check and verify pertinent figures shown
' thereon and all applicable field measurements. Contractor shall promptly
report in writing to Engineer any conflict, error or discrepancy which
Contractor may discover and shall obtain a written interpretation or
clarification from Engineer before proceeding with any Work affected thereby;
however, Contractor shall not be liable to City of Fayetteville or Engineer for
failure to report any conflict, error or discrepancy in the Contract Documents,
' unless the Contractor had actual knowledge thereof or should reasonably have
known thereof.
Ib. On or before the Pre -Construction Conference (Unless otherwise specified),
Contractor shall submit to Engineer for review:
' (1) An estimated progress schedule indicating the starting and completion
dates of the various stages of the Work as set forth in Division 1 of these
Contract Documents.
' (2) A preliminary schedule of Shop Drawing submissions.
7 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
(3) A preliminary schedule of values for all of the Work which will include
quantities and prices of items aggregating the Contract Price and will
subdivide the Work into component parts in sufficient detail to serve as
the basis for progress payments during construction. Such prices will
include an appropriate amount of overhead and profit applicable to each
item of work which will be confirmed in writing by Contractor at the
time of submission.
C. Before a Notice to Proceed will be issued, the Contractor shall deliver to the
City of Fayetteville, with a copy to the Engineer, certificates (and other
evidence of insurance requested by City of Fayetteville) of insurance which the
Contractor is required to purchase and maintain.
d. Before beginning work in each Basin or Mini System, Contractor shall
complete and furnish the Surface Video Documentation to the Engineer for
approval. The Contractor may begin work in the respective area upon
authorization from the Engineer in writing.
6. Pre -Construction Conference
Within ten (10) days after the effective date of the Agreement, but before Contractor
starts the work at the site, a conference will be held for review of the schedules
referred to in paragraph C.5.b, to establish procedures for handling Shop Drawings
and other submittals and for processing Applications for Payment, and to establish a
working understanding among the parties as to the work.
Finalizing Schedules
a. At least ten (10) days before submission of the first Application for Payment a
conference attended by Contractor, Engineer and others as appropriate will be
held to finalize the schedules submitted in accordance with paragraph C.5.b.
The finalized progress schedule will provide an orderly progression of the
work to completion within the Contract Time, but review by the Engineer will
neither impose on Engineer responsibility for the progress or scheduling of the
work nor relieve Contractor from full responsibility therefore. The finalized
schedule of Shop Drawing submissions will provide a workable arrangement
for processing the submissions. The finalized schedule of values will be
reviewed by the Engineer as to form and substance.
D. Contract Documents: Intent and Reuse
Intent
a. The Contract Documents comprise the entire Agreement between City of
Fayetteville and Contractor concerning the work. The Contract Documents will
be construed in accordance with the law of the place of the Project.
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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b. It is the intent of the Specifications and Drawings to describe a complete
project (or part thereof) to be constructed in accordance with the Contract
Documents. Any work that may reasonably be inferred from the
Specifications or Drawings as being required to produce the intended result
shall be supplied whether or not it is specifically called for. When words
which have a well-known technical or trade meaning are used to describe
work, materials or equipment, such words shall be interpreted in accordance
with such meaning. Reference to standard specifications, manuals or codes of
any technical society, organization or association, or to the code of any
governmental authority, whether such reference be specific or by implication,
shall mean the latest standard specification, manual or code in effect at the
time of opening of Bids (or, on the effective date of the Agreement if there
were no Bids), except as may be otherwise specifically stated. However, no
provision of any referenced standard specification, manual or code (whether or
not specifically incorporated by reference in the Contract Documents) shall
change the duties and responsibilities of City of Fayetteville, Contractor or
Engineer, or any of their agents or employees from those set forth in the
Contract Documents, nor shall it be effective to assign to Engineer, or any of
Engineer's consultants, agents or employees, any duty or authority to supervise
or direct the furnishing or performance of the work or any duty or authority to
undertake responsibility contrary to the provisions of paragraph J.10.c or
1.10.d. Clarifications and interpretations of the Contract Documents shall be
issued by Engineer.
C. If, during the performance of the work, Contractor finds a conflict, error or
discrepancy in the Contract Documents, Contractor shall so report to Engineer
in writing at once and before proceeding with the work affected thereby shall
obtain a written interpretation or clarification from Engineer; however,
Contractor shall not be liable to City of Fayetteville or Engineer for failure to
report any conflict, error or discrepancy in the Contract Documents unless
Contractor had actual knowledge thereof or should reasonably have known
thereof.
Amending and Supplementing Contract Documents
a. The Contract Documents may be amended to provide for additions, deletions
and revisions in the work or to modify the terms and conditions thereof in one
or more of the following ways:
(1) A formal written amendment.
(2) A Change Order (pursuant to paragraph KA).
(3) A work directive change (pursuant to paragraph K.1).
Contract Price and Contract Time may only be changed by a Change Order or
a written amendment as indicated in paragraphs L.2 and M.1.
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
b. In addition, the requirements of the Contract Documents may be
supplemented, and minor variations and deviations in the work may be
authorized by:
(1) Field Order (pursuant to paragraph J.5).
(2) Engineer's review of a Shop Drawing or sample (pursuant to paragraphs '
G.I4.b.(1) or G. 14.d).
(3) or Engineers written interpretation or clarification (pursuant to
paragraph 14).
Reuse of Documents
Neither Contractor nor any Subcontractor, or Supplier or other person or
organization performing or furnishing any of the work under a direct or indirect
contract with City of Fayetteville shall have or acquire any title to or ownership
rights in any of the Drawings, Specifications or other documents (or copies of any
thereof) prepared by or bearing the seal of Engineer; and they shall not reuse any of
them on extensions of the Project or any other project without written consent of
City of Fayetteville and Engineer and specific written verification or adaptation by
Engineer.
4. Discrepancies and Omissions
a. Should anything which is necessary for a clear understanding of the work be
omitted from the Contract Documents, or should it appear that various
instructions are in conflict, the Contractor shall secure written instructions
from the Engineer before proceeding with the work affected by such omissions
or discrepancies.
b. In resolving inconsistencies among two or more sections of the Contract
Documents, precedence shall be given in the following order:
First Agreement
Second Laws and Regulations
Third Supplementary Conditions
Fourth General Conditions
Fifth Specifications
Sixth Contract Drawings
C. Figured dimensions on Plans shall take precedence over scale dimensions.
Detailed Plans in the Documents shall take precedence over general Plans.
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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5. Titles and Headings
a. The titles and headings printed on the Contract Drawings, in the General
' Conditions, in the Contract Specifications, and elsewhere in the Contract
Documents are inserted for convenience and reference only, and shall not be
taken or considered as having any bearing on the interpretation thereof.
' b. Separation of the Contract Specifications into Divisions and Sections shall not
operate to make the Engineer an arbiter to establish limits of work between the
Contractor and Subcontractors, or between trades.
E. Availability of Lands, Physical Conditions: Reference Points
1. Availability of Lands
City of Fayetteville shall furnish, as indicated in the Contract Documents, the lands
upon which the work is to be performed, rights-of-way for access thereto, and such
other lands which are designated for the use of Contractor. Easements for permanent
structures or permanent changes in existing facilities will be obtained and paid for by
City of Fayetteville, unless otherwise provided in the Contract Documents. If
Contractor believes that any delay in City of Fayetteville's furnishing these lands,
' rights-of-way or easements entitles Contractor to an extension of the Contract Time,
Contractor may make a claim thereof as provided in Paragraph M. Contractor shall
provide for all additional lands and access thereto that may be required for temporary
construction facilities or storage of materials and equipment.
' 2. Physical Conditions
' a. Explorations and Reports
Reference is made to the Instructions to Bidders for identification of those
reports of explorations and tests of subsurface conditions at the site that have
been utilized by Engineer in preparation of the Contract Documents.
Contractor may rely upon the accuracy of the technical data contained in such
' reports, but not upon nontechnical data, interpretations or opinions contained
therein or for the completeness thereof for Contractor's purposes. Except as
indicated in the immediately preceding sentence and in paragraph E.21,
' Contractor shall have full responsibility with respect to subsurface conditions
at the site.
' b. Existing Structures
Reference is made to the Instructions to Bidders for identification of those
' drawings of physical conditions in or relating to existing surface and
subsurface structures (except Underground Facilities referred to in paragraph
E.3) which are at or contiguous to the site that have been utilized by Engineer
' 1 I General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
in preparation of the Contract Documents. Contractor may rely upon the
accuracy of the technical data contained in such drawings, but not for the
completeness thereof for Contractor's purposes. Except as indicated in the .
immediately preceding sentence and in paragraph E.2.17, Contractor shall have
full responsibility with respect to physical conditions in or relating to such
structures.
C. Report of Differing Conditions
If Contractor believes that any technical data on which Contractor is entitled to
rely as provided in paragraphs E.2.a and E.2.b is inaccurate, or any physical
condition uncovered or revealed at the site differs materially from that
indicated, reflected or referred to in the Contract Documents, Contractor shall,
promptly after becoming aware thereof and before performing any work in
connection therewith (except in an emergency as permitted by paragraph
G.13), notify City of Fayetteville and Engineer in writing about the inaccuracy
or difference.
d. Engineer's Review
Engineer will promptly review the pertinent conditions, determine the
necessity of obtaining additional explorations or tests with respect thereto and
advise City of Fayetteville in writing (with a copy to Contractor) of Engineer's
findings and conclusions.
C. Possible Document Change
If Engineer concludes that there is a material error in the Contract Documents
or that because of newly discovered conditions a change in the Contract
Documents is required, a Work Directive Change or a Change Order will be
issued as provided in Paragraph K to reflect and document the consequences of
the inaccuracy or difference.
Possible Price and Time Adjustments
In each such case, an increase or decrease in the Contract Price or an extension
or shortening of the Contract Time, or any combination thereof, will be
allowable to the extent that they are attributable to any such inaccuracy or
difference. If City of Fayetteville and Contractor are unable to agree as to the
amount or length thereof, a claim may be made therefore as provided in
Paragraph L and M.
General Conditions 12
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Sanitary Sewer Improvements
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Physical Conditions - Underground Facilities
a.
b.
Shown or Indicated
The information and data shown or indicated in the Contract Documents with
respect to existing Underground Facilities at or contiguous to the site is based
on information and data furnished to City of Fayetteville or Engineer by the
owners of such Underground Facilities or by others. Unless it is otherwise
expressly provided in the Supplementary Conditions:
(1) City of Fayetteville and Engineer shall not be responsible for the
accuracy or completeness of any such information or data; and,
(2) Contractor shall have full responsibility for reviewing and checking all
such information and data, for locating all underground facilities shown
or indicated in the Contract Documents, for coordination of the work
with the owners of such underground facilities during construction, for
safety and protection thereof and repairing any damage thereto resulting
from the work, the cost of all of which will be considered as having been
included in the contract price.
Not Shown or Indicated
If an underground facility is uncovered or revealed at or contiguous to the site
which was not shown or indicated in the Contract Documents and which
Contractor could not reasonably have been expected to be aware of, Contractor
shall, promptly atter becoming aware thereof and before performing any work
affected thereby (except in an emergency as permitted by paragraph G.13),
identify the owner of such underground facility and give written notice thereof
to that owner and to City of Fayetteville and Engineer. Engineer will promptly
review the underground facility to determine the extent to which the Contract
Documents should be modified to reflect and document the consequences of
the existence of the underground facility, and the Contract Documents will be
amended or supplemented to the extent necessary. During such time,
Contractor shall be responsible for the safety and protection of such
underground facility as provided in paragraphs G.12.a and G.12.b. Contractor
shall be allowed an increase in the Contract Price or an extension of the
Contract Time, or both, to the extent that they are attributable to the existence
of any underground facility that was not shown or indicated in the Contract
Documents and which Contractor could not reasonably have been expected to
be aware of If the parties are unable to agree as to the amount or length
thereof, Contractor may make a claim therefore as provided in Paragraphs L
and M.
13 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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4. Reference Points
City of Fayetteville shall provide engineering surveys for construction to establish
reference points which in his judgment are necessary to enable Contractor to proceed
with the work (unless otherwise specified), Contractor shall be responsible for laying
out the work shall protect and preserve the established reference points, and shall
make no changes or relocations without the prior written approval of City of
Fayetteville. Contractor shall report to Engineer whenever any reference point is
lost, destroyed, or requires relocation because of necessary changes in grades or
locations, and shall be responsible for replacement or relocation of such reference
points by professionally qualified personnel.
Bonds and Insurance
Performance and Other Bonds
The Contractor shall, at the time he executes the Agreement, furnish bonds payable
to the City of Fayetteville in the form set forth herein, secured by a surety company
acceptable to the City of Fayetteville, as follows:
a. Arkansas Statutory Performance and Payment Bond in an amount equal to 100
percent of the total contract price conditioned upon the faithful performance of
all covenants and stipulations under the contract and holding good for a period
of two years after the date when final payment becomes due, except as
otherwise provided by law or regulation or by the Contract Documents to
protect the City of Fayetteville against the results of defective materials,
workmanship, and equipment during that time.
b. It is the responsibility of the Contractor to notify all surety companies and
other signers of any of the bonds listed above, to familiarize themselves with
all of the conditions and provisions of this Contract. All surety companies and
other signers shall waive their right of notification by the City of Fayetteville
of any change or modification of this Contract, or of decreased or increased
work, or of the cancellation of this Contract, or of any other acts by the City of
Fayetteville or its authorized employees or agents under the terms of this
Contract. The waiver by the surety companies and other signers shall in no
way relieve the surety companies and other signers of their obligations under
this Contract.
C. If the Surety on any Bond furnished by Contractor is declared bankrupt, or
becomes insolvent, or its right to do business is terminated in any state where
any part of the Project is located, or it ceases to meet the requirements herein,
Contractor shall within five days thereafter substitute another Bond and Surety,
both of which shall be acceptable to City of Fayetteville.
General Conditions 14
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' d. All Bonds shall be in the forms prescribed by law or regulation or by the
Contract Documents and be executed by such sureties as are named in the
current list of "Companies Holding Certificates of Authority as Acceptable
' Sureties on Federal Bonds and as Acceptable Reinsuring Companies" as
published in Circular 570 (amended) by the Audit Staff Bureau of Accounts,
U.S. Treasury Department. All Bonds signed by an agent must be
' accompanied by a certified copy of the authority to act.
2. Contractor's Liability Insurance
a. The Contractor shall obtain, purchase, and maintain throughout the duration of
the contract, including all excepted time extensions, all insurance coverages
' described below. The Contractor shall purchase from and maintain in a
company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located, such insurance as will protect the contractor from
' claims set forth below which may arise out of or result from the Contractor's
operations under the Contract, and for which the Contractor may be legally
liable, whether such operations be by the Contractor or by a Subcontractor or
' by anyone directly or indirectly employed by any of them, or by anyone for
whose acts any of them may be liable:
(1) claims under workers' or workmens' compensation, disability benefit
1 and other similar employee benefit acts which are applicable to the
Work to be performed;
' (2) claims for damages because of bodily injury, occupational sickness or
disease, or death of the Contractor's employees;
' (3) claims for damages because of bodily injury, sickness or disease, or
death of any person other than the Contractor's employees;
' (4) claims for damages insured by usual personal injury liability coverage
which are sustained (1) by a person as a result of an offense directly or
indirectly related to employment of such person by the Contractor, or
' (2) by another person;
(5) claims for damages, other than to the Work itself, because of injury to
' or destruction of tangible property, including loss of use resulting
therefrom;
' (6) claims for damages because of bodily injury, death of a person or
property damage arising out of ownership, maintenance or use of any
motor vehicle; and
(7) claims involving contractual liability insurance applicable to the
Contractor's obligations under Paragraph G.16.
' 15 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
b. The insurance required by Subparagraph F.2.a shall be written for not less than
limits of liability specified in the Contract Documents, Supplemental
Conditions, or required by law, whichever coverage is greater. Coverages,
whether written on an occurrence or claims -made basis, shall be maintained
without interruption from date of commencement of the work until date of
final payment and termination of any coverage required to be maintained after
final payment. Notwithstanding the above, the insurance required by
paragraph F.2 shall be on an occurrence basis.
Such insurance shall be written to include the following coverages and for not
less than the following minimum limits or greater if required by law:
(1) Workers Compensation, Occupational Disease and Employer's
Liability Insurance:
(a) State: Arkansas - Statutory limits.
(b) Applicable Federal (if any) - Statutory limits.
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(c) Employer's Liability - if applicable in state ,
Bodily Injury by Accident - $500,000 each accident
Bodily Injury by Disease - $500,000 each employee
Bodily Injury by Disease - $500,000 each policy limit
(2) Commercial General Liability Insurance including as minimum
coverages:
(a)
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
-Premises - Operations Liability
-Independent Contractor's Protective Liability
-Products and Completed Operations Liability
-Broad Form Property Damage Endorsement
-Blanket Contractual
-Personal Injury, with Employment Exclusion deleted
Special Requirements:
i. Property Damage Liability Insurance will provide "X, C, and
U" (Explosion, collapse and underground hazard) coverage
as applicable.
ii. Products and Completed Operations to be maintained for
(2)* years after final payment.
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iii. The City of Fayetteville, Engineer, their consultants, agents and
employees, shall be named as "additional insureds" on the
commercial general liability policy of the general contractor
and/or subcontractor of any tier.
(b) Limits of Liability:
$1,000,000 Each occurrence as respects Bodily
Injury Liability or Property Damage
Liability, or both combined.
$2,000,000
$1,000,000
$1,000,000
(3) Automobile Liability Insurance:
(a) Special Requirements:
(4)
General Aggregate
Products/Completed Operations
Aggregate
Personal and Advertising Injury
i. All owned, hired, and non -owned vehicles including the
loading or unloading thereof.
ii. The City of Fayetteville, Engineer, their consultants, agents
and employees, shall be named as "additional insureds" on
the commercial automobile liability policy of the general
contractor and/or subcontractor of any tier.
(b) Limits of Liability:
$1,000,000 Each occurrence as respects Bodily
Injury Liability or Property Damage
Liability, or both combined.
City of Fayetteville's and Contractor's Protective LiabilityInsurance:
The Contractor will furnish and maintain this separate policy during the
entire period of construction an City of Fayetteville's Protective
Liability Policy written in the name of the City of Fayetteville,
engineer, and engineer's consultants, with the following limits of
liability:
17 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
Limits of Liability
$1,0001000 Each occurrence as respects Bodily
Injury Liability or Property Damage
Liability, or both combined.
$2,000,000 General Aggregate
(5) Umbrella/Excess Liability Insurance:
Limits of Liability
$5,000,000 Each Occurrence (minimum)
$5,0001000 Aggregate (minimum)
C. Certificates of Insurance for the above coverages and the City of Fayetteville's
Protective Policy shall be submitted to the Engineer for transmittal to the City
of Fayetteville for his approval prior to the start of construction. The
Contractor shall certify to the City of Fayetteville that he has obtained or will
obtain similar certificates of insurance from each of his Subcontractors before
their work commences. Each Subcontractor must be covered by insurance of
the same character and in the same amounts as the Contractor unless the
Contractor and City of Fayetteville agree that a reduced coverage is adequate.
Each subcontractor's insurance shall cover the City of Fayetteville, Engineer,
their agents and employees. The Contractor shall submit a statement with each
monthly affidavit stating that he has obtained certificates of insurance, or other
satisfactory evidence, that all required insurance is in force for each of the
Subcontractors listed on his affidavit. If the "additional insureds" have other
insurance which is applicable to the loss, it shall be on an excess or contingent
basis. The amount of the company's liability under this policy shall not be
reduced by the existence of such other insurance. Contractors certificates shall
be in duplicate on standard Acord forms.
Certificate of insurance shall contain a statement therein or a rider attached
thereto incorporating the indemnity clause stated in Paragraph G. 16
(Indemnification) of the General Conditions, and including the changes and
additions made in those subparagraphs or within the Supplemental General
Conditions.
These Certificates and the insurance policies required by this Paragraph F.2
shall contain a provision that coverages afforded under the policies will not be
canceled or allowed to expire until at least thirty (30) days' prior written notice
has been given to the City of Fayetteville and Engineer. If any of the
foregoing insurance coverages are required to remain in force after final
payment and are reasonably available, an additional certificate evidencing
General Conditions 18
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' continuation of such coverage shall be submitted with the final Application for
Payment. Information concerning reduction of coverage shall be furnished by
the Contractor with reasonable promptness in accordance with the Contractor's
' information and belief.
The obligations of the Contractor under the provisions of this article shall not
extend to the liability of the Engineer, his agents or employees arising out of
(1) the preparation or approval of maps, drawings, opinions, reports, surveys,
change orders, designs, or specifications, or (2) the giving of or the failure to
' give directions or instructions by the Engineer, his agents or employees to the
extent that such giving or failure to give is the cause of the injury or damage.
' 3. City of Fayetteville's Liability Insurance
a. The City of Fayetteville shall be responsible for purchasing and maintaining
the City of Fayetteville's usual liability insurance. Optionally, the City of
Fayetteville may purchase and maintain other insurance for self-protection
against claims which may arise from operations under the Contract. The
Contractor shall not be responsible for purchasing and maintaining this
' optional City of Fayetteville's liability insurance unless specifically required by
the Contract Documents.
' 4. Property Insurance
a. Unless otherwise provided, the Contractor shall purchase and maintain, in a
' company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located, property insurance in the amount of the initial
Contract Sum as well as subsequent modifications thereto for the entire Work
' at the site on a replacement cost basis without voluntary deductibles. Such
property insurance shall be maintained, unless otherwise provided in the
Contract Documents or otherwise agreed in writing by all persons and entities
who are beneficiaries of such insurance, until final payment has been made as
' provided in Paragraph 0.12 or until no person or entity other than the City of
Fayetteville has an insurable interest in the property required by this Paragraph
F.3 to be covered, whichever is earlier. This insurance shall include interests
' of the City of Fayetteville, Engineer, the Contractor, Subcontractors and Sub -
subcontractors in the Work.
' Property insurance shall be on all-risk policy form and shall insure against the
perils of fire and flood and extended coverage and physical loss or damage
including, without duplication of coverage, theft, vandalism, malicious
mischief, collapse, false -work, temporary buildings and debris removal
including demolition occasioned by enforcement of any applicable legal
requirements, and shall cover reasonable compensation for Engineer's services
and expenses required as a result of such insured loss. Coverage for other
perils shall not be required unless otherwise provided in the Contract
Documents.
' 19 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
Property Insurance provided by Contractor shall not cover any tools, apparatus,
machinery, scaffolding, hoists, forms, staging, shoring and other similar items
commonly referred to as construction equipment, which may be on the site and
the capital value of which is not included in the Work. The Contractor shall
make his own arrangements for any insurance he may require on such
construction equipment.
If the Contractor does not intend to purchase such property insurance required
by the Contract and with all of the coverages in the amount described above,
the Contractor shall so inform the City of Fayetteville in writing prior to
commencement of the Work. The City of Fayetteville may then effect
insurance which will protect the interests of the City of Fayetteville, .
Contractor, Subcontractors and Sub -subcontractors in the Work, and by
appropriate Change Order the cost thereof shall be charged to the Contractor.
If the City of Fayetteville is damaged by the failure or neglect of the
Contractor to purchase or maintain insurance as described above, without so
notifying the City of Fayetteville, the Contractor shall bear all reasonable costs
properly attributable thereto.
If the property insurance required minimum deductibles and such deductibles
are identified in the Contract Documents, the Contractor shall pay costs not
covered because of such deductibles. If the City of Fayetteville or insurer
increases the required minimum deductibles above the amounts so identified or
if the City of Fayetteville elects to purchase this insurance with voluntary
deductible amounts, the City of Fayetteville shall be responsible for payment
of the additional costs not covered because of such increased or voluntary
deductibles. If deductibles are not identified in the Contract Documents, the
Contractor shall pay costs not covered because of deductibles. The property
insurance for the Work requires a maximum deductible of. $10,000 per claim.
b. Partial Utilization - Property Insurance
If City of Fayetteville finds it necessary to occupy or use a portion or portions
of the work prior to substantial completion of all the work, such use or
occupancy may be accomplished in accordance with the provision for partial
utilization; provided that no such use or occupancy shall commence before the
insurers providing the property insurance have acknowledged notice thereof
and in writing effected the changes in coverage necessitated thereby. The
insurers providing the property insurance shall consent by endorsement on the
policy or policies, but the property insurance shall not be canceled or lapse on
account of any such partial use or occupancy.
General Conditions 20
City of Fayetteville
Sanitary Sewer Improvements
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The Contractor shall purchase and maintain boiler and machinery insurance
required by the Contract Documents or by law, which shall specifically cover
such insured objects during installation and until final acceptance or unless
agreed otherwise by the City of Fayetteville; this insurance shall include
interests of the City of Fayetteville, Contractor, Subcontractors and Sub -
subcontractors in the Work, and the City of Fayetteville and Contractor shall
be named insureds.
1 d. Loss of Use Insurance
The City of Fayetteville, at the City of Fayetteville's option, may purchase and
1 maintain such insurance as will insure the City of Fayetteville against loss of
use of the City of Fayetteville's property due to fire or other hazards, however
caused.
1 e. If the City of Fayetteville requests in writing that insurance for risks other than
those described herein or for other special hazards be included in the property
1 insurance policy, the Contractor shall, if possible, include such insurance, and
the cost thereof shall be charged to the City of Fayetteville by appropriate
Change Order.
1 f. If during the Project construction period the City of Fayetteville insures
properties, real or personal or both, adjoining or adjacent to the site by property
insurance under policies separate form those insuring the Project, or if after
1 final payment property insurance is to be provided on the completed Project
through a policy or policies other than those insuring the Project during the
construction period, the City of Fayetteville shall waive all right in accordance
1 with the terms of Subparagraph F.4.h for damages caused by fire or other perils
covered by this separate property insurance. All separate policies shall provide
this waiver of subrogation by endorsement or otherwise.
1 g. Before an exposure to loss may occur, the Contractor shall file with the City of
Fayetteville a copy of each policy that includes insurance coverages required
by the Paragraph F.4. Each policy shall contain all generally applicable
1 conditions, definitions, exclusions and endorsements related to this Project.
Each policy shall contain a provision that the policy will not be canceled or
allowed to expire until at least 30 days prior written notice has been given to
1 the City of Fayetteville.
It. Waivers of Subrogation
1 If permitted by the City of Fayetteville's and Contractor's insurance companies,
without penalties, the City of Fayetteville and Contractor waive all rights
1 against (1) each other and any of their Subcontractor, Sub -subcontractors,
agents and employees, each of the other, and (2) the Engineer, Engineer's
consultants, separate contractors if any, and any of their Subcontractors, Sub-
1 21 General Conditions
City of Fayetteville
1 Sanitary Sewer Improvements
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subcontractors, agents and employees, for damages caused by fire or other '
perils to the extent covered by property insurance obtained pursuant to this
Paragraph FA or other property insurance applicable to the Work, except such
rights as they have to proceeds of such insurance held by the City of '
Fayetteville as fiduciary. The City of Fayetteville or Contractor, as
appropriate, shall require of the Engineer, Engineer's consultants, separate
contractors if any, and the Subcontractors, Sub -subcontractors, agents and '
employees of any of them, by appropriate agreements, written where legally
required for validity, similar waivers each in favor of other parties enumerated
herein. The policies shall provide such waivers of subrogation by endorsement
or otherwise. A waiver of subrogation shall be effective as to a person or '
entity even though that person or entity would otherwise have a duty of
indemnification, contractual or otherwise did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.
Miscellaneous Requirements ,
a. All insurance coverage shall be provided by insurance companies having
policy holder ratings no lower than "A" and financial ratings not lower than '
"XII" in the Best's Insurance Guide, latest edition in effect as of the date of the
Contract.
b. The Contractor is responsible for determining that Subcontractors are ,
adequately insured against claims arising out of or relating to the Work. The
premium cost and charges for such insurance shall be paid by each
Subcontractor. '
C. The limits of liability as stated, may be arrived at using a Split -Limit or a
Combined Single Limit basis. However, the total limit of liability shall not be '
less than that stated in the requirements.
6. Notification of Insurance Companies '
It is the responsibility of the Contractor to notify all insurance companies to
familiarize themselves with all of the conditions and provisions of this Contract. The ,
insurance companies shall waive their right of notification by the City of Fayetteville
of any change or modification of this Contract, or of decreased or increased work, or
of the cancellation of this Contract, or of any other acts by the City of Fayetteville or
its authorized employees or agents under the terms of this Contract. The waiver by '
the insurance companies shall in no way relieve the insurance companies of their
obligations under this Contract.
T Subcontractor Bond ,
The Contractor must secure from listed subcontractors a payment and performance '
bond if subcontractor bid is in excess of fifty thousand dollars ($50,000); and for
other purposes as prescribed in Arkansas Senate Bill, Act 190 as enacted 1/28/93.
General Conditions 22 '
City of Fayetteville
Sanitary Sewer Improvements '
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' G. Contractor's Responsibilities
1. Supervision and Superintendent
a. Contractor shall supervise and direct the work competently and efficiently,
devoting such attention thereto and applying such skills and expertise as may
be necessary to perform the work in accordance with the Contract Documents.
Contractor shall be solely responsible for the means, methods, techniques,
sequences and procedures of construction, but Contractor shall not be solely
' responsible for the negligence of others in the design or selection of a specific
means, method, technique, sequence or procedure of construction which is
indicated in and required by the Contract Documents. Contractor shall be
' responsible to see that the finished work complies accurately with the Contract
Documents.
b. Contractor shall keep on the work at all times during its progress a competent
resident superintendent, who shall not be replaced without written notice to
City of Fayetteville and Engineer except under extraordinary circumstances.
The superintendent will be Contractor's representative at the site and shall have
authority to act on behalf of Contractor. All communications given to the
superintendent shall be as binding as if given to Contractor.
C. During the performance of this Contract, the Contractor shall maintain a
suitable office at the site of the work which shall be the headquarters of the
foreman or superintendent authorized to receive drawings, instructions, or
other communications, articles, or things from the City of Fayetteville or its
agents; and any such thing given to the said foreman or superintendent or
delivered to the Contractor's office at the site of the work in his absence shall
' be deemed to have been given to the Contractor. The Contractor shall have a
telephone installed in this office.
' 2. Labor, Materials and Equipment
a. Contractor shall provide competent, suitably qualified personnel to survey and
' lay out the work and perform construction as required by the Contract
Documents. Contractor shall at all times maintain good discipline and order at
the site. Except in connection with the safety or protection of persons, or the
' work, or property at the site or adjacent thereto, all work at the site shall be
performed during regular working hours, and Contractor will not permit
overtime work or the performance of work on Saturday, Sunday or any legal
' holiday without City of Fayetteville's written consent given after prior written
notice to Engineer. Regular working hours shall be a consecutive eight hour
period between the hours of seven o'clock A.M. and six o'clock P.M., Monday
through Friday.
t23 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
b. Unless otherwise specified in the General Requirements, Contractor shall
furnish all materials, equipment, labor, transportation, construction equipment
and machinery, tools, appliances, fuel, power, light, heat, telephone, water and
sanitary facilities, and all other facilities and incidentals necessary for the
execution, testing, initial operation and completion of the work.
C. All materials and equipment shall be of good quality and new, except as
otherwise provided in the Contract Documents. If required by Engineer,
Contractor shall famish evidence (including reports or required tests) as to the
kind and quality of materials and equipment. All materials and equipment
shall be applied, installed, connected, erected, used, cleaned and conditioned in
accordance with the instructions of the applicable Supplier except as otherwise
provided in the Contract Documents; but no provision of any instructions will
be effective to assign to Engineer, or any of Engineer's consultants, agents or
employees, any duty or authority to supervise or direct the furnishing or
performance of the work or any duty or authority to undertake responsibility
contrary to the provisions of paragraph J.I O.c or J.I O.d.
3. Adjusting Progress Schedule
Contractor shall submit to Engineer for review (to the extent indicated in paragraph
C.7) adjustments in the progress schedule to reflect the impact thereon of new
developments; these will conform generally to the progress schedule then in effect
and additionally will comply with any provisions of the General Requirements
applicable thereto.
4. Substitute or "Or -Equal" Items
a. Whenever materials or equipment are specified or described in the Drawings or
Specifications by using the name or a proprietary item of the name of a
particular Supplier, the naming of the item is intended to establish the type,
function and quality required. Unless the name is followed by words
indicating that no substitution is permitted, materials or equipment of other
Suppliers may be reviewed by Engineer if sufficient information is submitted
by Contractor to allow Engineer to determine that the material or equipment
proposed is equivalent to that named. The procedure for review by Engineer
will include the following as supplemented in the General Requirements.
Requests for review of substitute items of material and equipment will not be
reviewed by Engineer from anyone other than Contractor. If Contractor
wishes to furnish or use a substitute item of material or equipment, Contractor
shall make written application to Engineer for review thereof, certifying that
the proposed substitute will perform adequately the functions and achieve the
results called for by the general design, be similar and of equal substance to
that specified and be suited to the same use and capable of performing the
same function as that specified. The application will state that the evaluation
and review of the proposed substitute will not prejudice Contractor's
General Conditions 24
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Sanitary Sewer Improvements
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achievement of Substantial Completion on time, whether or not review of the
substitute for use in the work will require a change in any of the Contract
Documents (or in the provisions of any other direct contract with City of
' Fayetteville for work on the Project) to adapt the design to the proposed
substitute and whether or not incorporation or use of the substitute in
connection with the work is subject to payment of any license fee or royalty.
All variations of the proposed substitute from that specified shall be identified
in the application and available maintenance, repair and replacement service
will be indicated. The application will also contain an itemized estimate of all
costs that will result directly or indirectly for use of such substitute, including
costs or redesign and claims of other contractors affected by The resulting
change, all of which shall be considered by Engineer in evaluating the
proposed substitute. Engineer may require Contractor to furnish at
Contractor's expense additional data about the proposed substitute. Engineer
will be the sole reviewer, and no substitute will be ordered or installed unless
' Engineer has agreed to the use of the substitute in writing. City of Fayetteville
may require Contractor to furnish at Contractors expense a special
performance guarantee or other surety with respect to any substitute.
' Contractor will not be entitled to a change in Contract Time and/or Contract
Price for any additional expenses associated with providing substitutions or
"or -equal" items.
b. If a specific means, method, technique, sequence or procedure of construction
is indicated in or required by the Contract Documents, Contractor may furnish
or utilize a substitute means, method, sequence, technique or procedure of
' construction to be reviewed by the Engineer, if Contractor submits sufficient
information to allow Engineer to determine that the substitute proposed is
equivalent to that indicated or required by the Contract Documents. The
' procedure for review by Engineer will be similar to that provided in paragraph
GAa as applied by Engineer and as may be supplemented in the General
Requirements.
'C. Engineer will be allowed a reasonable time within which to evaluate each
proposed substitute. Engineer will be the sole reviewer, and no substitute will
be ordered, as evidenced by either a Change Order or an approved Shop
Drawing. City of Fayetteville may require Contractor to furnish at Contractor's
expense a special performance guarantee or other surety with respect to any
substitute. Engineer will record time required by Engineer and Engineer's
consultants in evaluating substitutions proposed by Contractor and in making
changes in the Contract Documents occasioned thereby. Whether or not
Engineer reviews a proposed substitute, Contractor shall reimburse City of
Fayetteville for the charges of Engineer and Engineers consultants for
evaluating each proposed substitute.
1
25 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
Concerning Subcontractors, Suppliers and Others
Contractor shall not employ any Subcontractor, Supplier or other person, or
organization (including those reviewed by the City of Fayetteville and
Engineer as indicated in paragraph G.5.b), whether initially or as a substitute,
against whom City of Fayetteville or Engineer may have reasonable objection.
Contractor shall not be required to employ any Subcontractor, Supplier or
other person or organization to furnish or perform any of the work against
whom Contractor has reasonable objection.
b. If the Specifications require the identity of certain Subcontractors, Suppliers or
other persons or organizations (including those who are to furnish the principal
items of materials and equipment) to be submitted to City of Fayetteville in
advance of the specified date prior to the Effective Date of the Agreement for
review by City of Fayetteville and Engineer and if Contractor has submitted a
list thereof in accordance with the Specifications, City of Fayetteville's or
Engineers review (either in writing or by failing to make written objection
thereto by the date indicated for review or objection in the bidding documents
or the Contract Documents) of any such Subcontractor, Supplier or other
person or organization so identified may be revoked on the basis of reasonable
objection after due investigation, in which case Contractor shall submit a
substitute, the Contract Price will be increased by the difference in the cost
occasioned by such substitution and an appropriate Change Order will be
issued or Written Amendment signed. No review by City of Fayetteville or
Engineer of any such Subcontractor, Supplier or other person or organization
shall constitute a waiver of any right of City of Fayetteville or Engineer to
reject defective work.
C. If the Bid requires the listing of Suppliers for certain equipment items, the
Contractor will be required to provide a Supplier that conforms to the
Specifications and performs adequately the functions and achieves the results
called for by the general design. The Contractor will not be entitled to an
increase in Contract Price or Contract Time if the listed Supplier does not
conform to the Specifications. The Engineer and City of Fayetteville will not
accept or approve the listed Suppliers prior to the Effective Date of the
Agreement. The Engineer's review of Suppliers shop drawings will determine
general conformance to the Specifications and shall not constitute a waiver of
any right of City of Fayetteville or Engineer to reject defective work. This
paragraph waives the requirements in paragraph G.5.b.
d. Contractor shall be fully responsible to City of Fayetteville and Engineer for
all acts and omissions of the Subcontractor, Suppliers and other persons and
organizations performing or furnishing any of the work under a direct or
indirect contract with Contractor just as Contractor is responsible for
Contractors own acts and omissions. Nothing in the Contract Documents shall
create any contractual relationship between City of Fayetteville or Engineer
and any such Subcontractor, Supplier or other person or organization, nor shall
it create any obligation on the part of City of Fayetteville or Engineer to pay or
General Conditions 26
City of Fayetteville
Sanitary Sewer Improvements
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to see to the payment of any moneys due any such Subcontractor, Supplier or
other person or organization except as may otherwise be required by Laws and
Regulations.
e. The divisions and sections of the Specifications and the identifications of any
Drawings shall not control Contractor in dividing the work among
Subcontractors or Suppliers or delineating the work to be performed by any
specific trade.
All work performed for Contractor by a Subcontractor will be pursuant to an
appropriate agreement between Contractor and the Subcontractor which
specifically binds the Subcontractor to the applicable terms and conditions of
the Contract Documents for the benefit of City of Fayetteville and Engineer
and contains waiver provisions as required by paragraph F.6. Contractor shall
pay each Subcontractor a just share of any insurance monies received by
Contractor on account of losses under policies issued pursuant to paragraph
F.2.d.
6. Patent Fees and Royalties
Contractor shall pay all license fees and royalties and assume all costs incident to the
use in the performance of the work or the incorporation in the work of any invention,
design, process, product or device which is the subject of patent rights or copyrights
held by others. If a particular invention, design, process, product, or device is
specified in the Contract Documents for use in the performance of the work, and if to
the actual knowledge of City of Fayetteville or Engineer, its use is subject to patent
rights or copyrights calling for the payment of any license fee or royalty to others.
The existence of such rights shall be disclosed by City of Fayetteville in the Contract
Documents. Contractor shall indemnify and hold harmless the City of Fayetteville,
Engineer, and anyone directly or indirectly employed by either of them from and
against all claims, damages, losses and expenses (including attomeys' fees and court
and arbitration costs) arising out of any infringement of patent rights or copyrights
incident to the use in the performance of the work or resulting from the incorporation
in the work of any invention, design, process, product, or device not specified in the
Contract Documents, and shall defend all such claims in connection with any alleged
infringement of such rights.
Permits
Contractor shall obtain and pay for all construction permits and licenses unless
otherwise stated. City of Fayetteville shall assist Contractor, when necessary, in
obtaining such permits and licenses. Contractor shall pay all governmental charges
' and construction observation fees necessary for the prosecution of the work, which
are applicable at the time of opening of Bids, or if there are no Bids on the Effective
Date of the Agreement. Contractor shall pay all charges of utility service companies
' for connections to the work, and City of Fayetteville shall pay all charges of such
companies for capital costs related thereto such as plant investment fees.
' 27 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
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8. Laws and Regulations '
a. Contractor shall give all notices and comply with all Laws and Regulations
applicable to furnishing and performance of the Work. Except where
otherwise expressly required by applicable Laws and Regulations, neither City
of Fayetteville nor Engineer shall be responsible for monitoring Contractor's '
compliance with any Laws or Regulations. ,
b. If Contractor observes that the Specifications or Drawings are at variance with
any Laws or Regulations, Contractor shall give Engineer prompt written notice
thereof, and any necessary changes will be authorized by one of the methods
indicated in paragraph D.2. if Contractor performs any Work knowing or
having reason to know that it is contrary to such Laws or Regulations, and '
without such notice to Engineer, Contractor shall bear all costs arising
therefrom; however, it shall not be Contractor's primary responsibility to make
certain that the Specifications and Drawings are in accordance with such Laws
and Regulations. '
9. Taxes
Contractor shall pay all sales, consumer, use and other similar taxes required to be '
paid by Contractor in accordance with the Laws and Regulations of the place of the
Project which are applicable during the performance of the Work. '
10. Use of Premises
a. Contractor shall confine construction equipment, the storage of materials, and ,
equipment and the operations of workers to the Project site and land and areas
identified in and permitted by the Contract Documents and other land and ,
areas permitted by Laws and Regulations, rights-of-way, permits and
easements, and shall not unreasonably encumber the premises with
construction equipment, or other materials, or equipment. Contractor shall '
assume full responsibility for any damage to any such land or area, or to the
owner or occupant thereof or of any land or areas contiguous thereto, resulting
from the performance of the Work. Should any claim be made against City of '
Fayetteville or Engineer by any such owner or occupant because of the
performance of the Work, Contractor shall promptly attempt to settle with such
other party by agreement or otherwise resolve the claim by arbitration or at '
law. Contractor shall, to the fullest extent permitted by Laws and Regulations,
indemnify and hold City of Fayetteville and Engineer harmless from and
against all claims, damages, losses and expenses (including, but not limited to,
fees of engineers, architects, attorneys and other professionals and court and
arbitration costs) arising directly, indirectly or consequentially out of any
action, legal or equitable, brought by any such other party against City of
Fayetteville or Engineer to the extent based on a claim arising out of '
Contractors performance of the Work.
General Conditions 28 ,
City of Fayetteville
Sanitary Sewer Improvements '
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b. During the progress of the work, Contractor shall keep the work site free from
accumulations of waste materials, rubbish, and other debris resulting from the
work. At the completion of the work Contractor shall remove all waste
materials, rubbish, and debris from and about the premises as well as all tools,
appliances, construction equipment, and machinery, and surplus materials, and
shall leave the site clean and ready for occupancy by City of Fayetteville.
Contractor shall restore to their original condition those portions of the site not
designated for alteration by the Contract Documents.
C. Contractor shall not load nor permit any part of any structure to be loaded in
any manner that will endanger the structure, nor shall Contractor subject any
part of the work or adjacent property to stresses or pressures that will endanger
it.
11. Record Documents
' Contractor shall maintain in a safe place at the site one record copy of all Drawings,
Specifications, Addenda, Written Amendments, Change Orders, Work Directive
Changes, Field Orders and written interpretations and clarifications (issued pursuant
to paragraph J.4) in good order and annotated to show all changes made during
construction. These record documents together with all approved samples and a
counterpart of all approved Shop Drawings will be available to Engineer for
' reference. Upon completion of the Work, these record documents, samples and Shop
Drawings will be delivered to Engineer for City of Fayetteville.
12. Safety and Protection
a. Contractor shall be responsible for initiating, maintaining and supervising all
safety precautions and programs in connection with the work. Contractor shall
1 take all necessary precautions for the safety of, and shall provide the necessary
protection to prevent damage, injury, or loss to:
(I) All employees on the work site and other persons who may be affected
thereby.
(2) All the work and all materials or equipment to be incorporated therein,
whether in storage on or off the site.
(3) Other property at the site or adjacent thereto, including trees, shrubs,
lawns, walks, pavements, roadways, structures and utilities not
designated for removal, relocation, or replacement in the course of
construction.
b. Contractor shall comply with all applicable Laws and Regulations of any
public body having jurisdiction for the safety of persons or property or to
' protect them from damage, injury or loss; and shall erect and maintain all
necessary safeguards for such safety and protection. Contractor shall notify
' 29 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
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owners of adjacent property, Underground Facilities, and utility owners when '
prosecution of the Work may affect them, and shall cooperate with them in the
protection, removal, relocation and replacement of their property. All damage,
injury or loss to any property referred to in paragraph G.12.a.(]) or G.12.a.(3) 1
caused, directly or indirectly, in whole or in part, by Contractor, any Supplier
or any other person or organization directly or indirectly employed by any of
them or anyone for whose acts any of them may be liable, shall be remedied by 1
Contractor (except damage or loss attributable to the fault of Drawings or
Specifications or to the acts or omissions of City of Fayetteville or Engineer or
anyone employed by either of them or anyone for whose acts either of them
may be liable, and not attributable, directly or indirectly, in whole or in part, to 1
the fault or negligence of Contractor). Contractors duties and responsibilities
for the safety and protection of the work shall continue until such time as all
the work is completed and Engineer has issued a notice to City of Fayetteville 1
and Contractor in accordance with paragraph 0.12 that the work is acceptable
(except as otherwise expressly provided in connection with Substantial
Completion). ,
C. Contractor shall designate a responsible member of his organization at the site
whose duty shall be the prevention of accidents. This person shall be '
Contractor's superintendent unless otherwise designated in writing by
Contractor to City of Fayetteville.
13. Emergencies '
In emergencies affecting the safety or protection of persons, the work, or property at '
the site or adjacent thereto, Contractor, without special instruction or authorization
from Engineer or City of Fayetteville, is obligated to act to prevent threatened
damage, injury, or loss. Contractor shall give Engineer prompt written notice of any
significant changes in the work or deviations from the Contract Documents caused
thereby. If Engineer determines that a change in the Contract Documents is required
because of the action taken in response to an emergency, a Work Directive Change
or Change Order will be issued to document the consequences of the changes or 1
variations.
14. Shop Drawings and Samples
a. After checking and verifying all field measurements and after complying with
applicable procedures specified in the General Requirements, Contractor shall 1
submit to Engineer for review, in accordance with the Special Conditions
section of this specification, submissions which will bear a stamp or specific
written indication that Contractor has performed Contractors responsibilities
under the Contract Documents with respect to the review of the submission.
All submissions will be identified as Engineer may require. The data shown
on the Shop Drawings will be complete with respect to dimensions, design
criteria, materials of construction, and like information to enable Engineer to
review the information as required.
General Conditions 30 1
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b. Contractor shall also submit to Engineer for review with such promptness as to
cause no delay in work, all samples required by the Contract Documents. All
samples will have been checked by and accompanied by a specific written
indication that Contractor has performed Contractor's responsibilities under the
Contract Documents with respect to the review of the submission and will be
identified clearly as to material, Supplier, pertinent data such as catalog
numbers and the use for which intended.
(1) Before submission of each Shop Drawing or sample Contractor shall
have determined and verified all quantities, dimensions, specified
performance criteria, installation requirements, materials, catalog
numbers and similar data with respect thereto and reviewed or
coordinated each Shop Drawing or sample with other Shop Drawings
and samples and with the requirements of the Work and the Contract
Documents.
(2) At the time of each submission, Contractor shall, in writing, call
Engineers attention to any deviations that the Shop Drawings or
samples may have from the requirements of the Contract Documents,
and, in addition, shall cause a specific notation to be made on each
Shop Drawing submitted to Engineer for review and approval of each
such variation.
C. Engineer will review with reasonable promptness Shop Drawings and samples,
but Engineer's review shall be only for conformance with the design concept of
the Project and for compliance with the information given in the Contract
Documents and shall not extend to means, methods, sequences, techniques or
procedures of construction (except where a specific means, method, technique,
sequence or procedure of construction is indicated in or required by the
Contract Documents) or to safety precautions or programs incident thereto.
The review of a separate item as such will not indicate compliance of the
assembly in which the item functions. Contractor shall make any corrections
required by Engineer and shall return the required number of corrected copies
of Shop Drawings and resubmit new samples for review. Contractor shall
direct specific attention in writing to revisions other than the corrections called
for by Engineer on previous submittals.
d. Engineer's review of Shop Drawings or samples shall not relieve Contractor
from responsibility for any variation from the requirements of the Contract
Documents unless Contractor has in writing called Engineeris attention to each
such variation at the time of submission as required by paragraph G. 14.b.(2)
and Engineer has given written review of each such variation by a specific
written notation thereof incorporated in or accompanying the Shop Drawing or
sample approval; nor will any review by Engineer relieve Contractor from
responsibility for errors or omissions in the Shop Drawings or from
responsibility for having complied with the provisions of paragraph G. 14.b.(]).
31 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
I
e. Where a Shop Drawing or sample is required by the Specifications, any related ,
Work performed prior to Engineer's review of the pertinent submission will be
the sole expense and responsibility of Contractor.
15. Continuing the Work '
Contractor shall carry on the work and maintain the progress schedule during all
disputes or disagreements with City of Fayetteville. No work shall be delayed or
postponed pending resolution of any disputes or disagreements, except as permitted
by paragraph P.3 or as Contractor and City of Fayetteville may otherwise agree in
writing.
16. Indemnification (Hold Harmless Agreement)
a. To the fullest extent permitted by Laws and Regulations, Contractor shall
indemnify and hold harmless City of Fayetteville and Engineer and their
consultants, agents and employees from and against all claims, damages, losses
and expenses direct, indirect or consequential (including but not limited to fees
and charges of engineers, architects, attorneys and other professionals and
court and arbitration costs) arising out of or resulting from the performance of ,
the work, provided that any such claim, damage, loss or expense (a) is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the work itself) including the loss '
of use resulting therefrom and (b) is caused in whole or in part by any
negligent act or omission of Contractor, any Subcontractor, any person or
organization directly or indirectly employed by any of them to perform or
furnish any of the Work or anyone for whose acts any of them may be liable,
regardless of whether or not it is caused in part by a party indemnified
hereunder or arises by or is imposed by Law and Regulations regardless of the
negligence of any such party.
b. The foregoing Subparagraph shall, but not by way of limitation, specifically
include all claims and judgements which may be made against the City of
Fayetteville, Engineer, Engineer's consultants, and agents and employees of
any of them under laws of other state or governmental body having
jurisdiction; and further, against claims and judgements arising from violations
of public ordinances and requirements of governing authorities due to the
Contractor's or Subcontractors method of execution of the work. '
C. In any and all claims against City of Fayetteville or Engineer or any of their
consultants, agents or employees by any employee of Contractor, any
Subcontractor, any person or organization directly or indirectly employed by
any of them to perform or furnish any of the Work or anyone for whose acts
any of them may be liable, the indemnification obligation described
hereinbefore shall not be limited in any way by any limitation on the amount or '
type of damages, compensation or benefits payable by or for Contractor or any
General Conditions 32 '
City of Fayetteville
Sanitary Sewer Improvements '
' Subcontractor under workers' or workmen's compensation acts, disability
benefit acts, or other employee benefit acts.
' d. The obligations of Contractor under paragraph G.16 shall not extend to the
liability of Engineer, Engineer's consultants, agents or employees arising out of
the preparation or review of maps, drawings, opinions, reports, surveys,
Change Orders, designs, or Specifications.
H. Other Work
1. Related Work at Site
' a. City of Fayetteville may perform other work related to the Project at the site by
City of Fayetteville's own forces, have other work performed by utility owners
or let other direct contracts therefore which shall contain General Conditions
similar to these. If the fact that such other work is to be performed was not
noted in the Contract Documents, written notice thereof will be given to
Contractor prior to starting any such other work; and, if Contractor believes
that such performance will involve additional expense to Contractor or requires
additional time and the parties are unable to agree as to the extent thereof,
Contractor may make a claim therefore as provided in paragraphs L and M.
b. Contractor shall afford each utility owner and other contractor who is a party to
such a direct contract (or City of Fayetteville, if City of Fayetteville is
performing the additional work with City of Fayetteville's employees) proper
and safe access to the site and a reasonable opportunity for the introduction and
storage of materials and equipment and the execution of such work, and shall
properly connect and coordinate the Work with theirs. Contractor shall do all
cutting, fitting and patching of the Work that may be required to make its
several parts come together properly and integrate with such other work.
Contractor shall not endanger any work of others by cutting, excavating or
otherwise altering their work and will only cut or alter their work with the
written consent of Engineer and the others whose work will be affected. The
duties and responsibilities of Contractor under this paragraph are for the
benefit of such utility owners and other contractors to the extent that there are
comparable provisions for the benefit of Contractor in said direct contracts
between City of Fayetteville and such utility owners and other contractors.
'C. If any part of Contractor's Work depends for proper execution or results upon
the work of any such other contractor or utility owner (or City of Fayetteville),
Contractor shall inspect and promptly report to Engineer in writing any delays,
defects or deficiencies in such work that render it unavailable or unsuitable for
such proper execution and results. Contractors failure so to report will
constitute an acceptance of the other work as fit and proper for integration with
Contractor's Work except for latent or nonapparent defects and deficiencies in
the other work.
' 33 General Conditions
City of Fayetteville
eSanitary Sewer Improvements
2. Coordination
If City of Fayetteville contracts with others for the performance of other work on the
Project at the site, the person or organization who will have authority and
responsibility for coordination of the activities among the various prime contractors
will be identified in the Supplementary Conditions, and the specific matters to be
covered by such authority and responsibility will be itemized, and the extent of such
authority and responsibilities will be provided, in the Supplementary Conditions.
Unless otherwise provided in the Supplementary Conditions, neither City of
Fayetteville nor Engineer shall have any authority or responsibility in respect of such
coordination.
I. City of Fayetteville's Responsibilities '
1. City of Fayetteville shall issue all communications to Contractor through Engineer.
2. In case of termination of the employment of Engineer, City of Fayetteville shall
appoint an Engineer against whom Contractor makes no reasonable objection, whose
status under the Contract Documents shall be that of the former Engineer. Any
dispute in connection with such appointment may be subject to arbitration.
3. City of Fayetteville shall furnish the data required of City of Fayetteville under the ,
Contract Documents promptly and shall make payments to Contractor promptly after
they are due as provided in paragraphs 0.2 and 0.7.
4. City of Fayetteville's will provide lands and easements and provide engineering
surveys to establish reference points as set forth in paragraphs E.1 and EA,
Paragraph E.2 refers to City of Fayetteville's identifying and making available to
Contractor copies of reports of explorations and tests of subsurface conditions at the
site and in existing structures which have been utilized by Engineer in preparing the
Drawings and Specifications.
5. City of Fayetteville's responsibilities in respect of purchasing property insurance is
set forth in paragraph F.7.
6. City of Fayetteville is obligated to execute Change Orders as indicated in paragraph
K.4.
7. City of Fayetteville's responsibility in respect of certain observations, tests, and
reviews is set forth in paragraph N.3.b. ,
8. In connection with City of Fayetteville's right to stop Work or suspend Work, see
paragraphs N.5 and P.1. Paragraph P.2 deals with City of Fayetteville's right to
terminate services of Contractor under certain circumstances.
General Conditions 34 ,
City of Fayetteville
Sanitary Sewer Improvements
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Engineer's Status During Construction
City of Fayetteville's Representative
Engineer will be City of Fayetteville's representative during the construction period.
The duties and responsibilities of the Engineer as City of Fayetteville's representative
during construction are set forth in the Contract Documents and shall not be
extended without written consent of City of Fayetteville and Engineer.
2. Visits to Site
Engineer shall provide an on-site representative to observe the progress and quality
of the executed Work and to determine, in general, if the Work is proceeding in
accordance with the Contract Documents. Engineer's efforts will be directed toward
providing for City of Fayetteville a greater degree of confidence that the completed
work will conform to the'Contract Documents. On the basis of such visits and on-
site observations as an experienced and qualified design professional, Engineer will
keep City of Fayetteville informed of the progress of the Work and will endeavor to
guard City of Fayetteville against defects and deficiencies in the Work.
3. Project Representative
Engineer will furnish a Resident Project Representative to assist Engineer in
observing the performance of the Work. The duties and responsibilities of any such
Resident Project Representative and assistants will be the same as the Engineer
unless otherwise designated in the Supplementary Conditions.
4. Clarifications and Interpretations
Engineer will issue with reasonable promptness such written clarifications or
interpretations of the requirements of the Contract Documents (in the form of
Drawings or otherwise) as Engineer may determine necessary, which shall be
consistent with or reasonably inferable from the overall intent of the Contract
Documents. If Contractor believes that a written clarification or interpretation
justifies an increase in the Contract Price or an extension of the Contract Time and
the parties are unable to agree to the amount or extent thereof, Contractor may make
a claim therefor as provided in paragraphs L or M.
' 5. Authorized Variations in Work
Engineer may authorize minor variations in the work from the requirements of the
Contract Documents which do not involve an adjustment in the Contract Price or the
Contract Time and are consistent with the overall intent of the Contract Documents.
LIQ
35 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
These may be accomplished by a Field Order and will be binding on City of '
Fayetteville, and also on Contractor who shall perform the Work involved promptly.
If Contractor believes that a Field Order justifies an increase in the Contract Price or
an extension of the Contract Time and the parties are unable to agree as to the ,
amount or extent thereof, Contractor may make a claim therefor as provided in
paragraphs L or M.
6. Rejecting Defective Work ,
Engineer will have authority to reject Work which Engineer believes to he defective,
and will also have authority to require special review, observation, or testing of the
Work as provided in paragraph NA.b, whether or not the Work is fabricated,
installed or completed.
Shop Drawings, Change Orders, and Payments ,
a. In connection with Engineer's responsibility for Shop Drawings and samples, '
see paragraphs G. 14.
b. In connection with Engineer's responsibilities as to Change Orders, see
paragraphs K, L, and M.
C. In connection with Engineer's responsibilities in respect of Applications for ,
Payment, etc., see paragraph O.
8. Determinations for Unit Prices ,
Engineer will have authority to determine the actual quantities and classifications of
items of Unit Price Work performed by contractor, and the written decisions of
Engineer on such matters will be final, binding on City of Fayetteville and '
Contractor and not subject to appeal (except as modified by Engineer to reflect
changed factual conditions).
9. Decisions on Disputes ,
a. Engineer will be the initial interpreter of the requirements of the Contract
Documents and judge of the work thereunder. Claims, disputes and other
matters relating to the Work or the interpretation of the requirements of the
Contract Documents pertaining to the performance and furnishing of the Work '
and claims under paragraphs L and M in respect of changes in the Contract
Price or Contract Time will be referred initially to Engineer in writing with a
request for a formal decision in accordance with this paragraph, which
Engineer will render in writing within a reasonable time. Written notice of
each such claim, dispute and other matter will be delivered by the claimant to
Engineer and the other party to the Agreement promptly (but in no event later ,
than thirty days) after the occurrence of the event giving rise thereto, and
written supporting data will be submitted to Engineer and the other party
General Conditions 36 '
City of Fayetteville
Sanitary Sewer Improvements
Ci
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within sixty (60) days after such occurrence unless Engineer allows an
additional period of time to ascertain more accurate data in support of the
claim.
b. When functioning as interpreter and judge under paragraphs 1.4 and J.9,
Engineer will not show partiality to City of Fayetteville or Contractor and will
not be liable in connection with any interpretation or decision rendered in good
faith in such capacity. The rendering of a decision by Engineer pursuant to
paragraphs J.4 and J.9 with respect to any such claim, dispute or other matter
I (except any which have been waived by the making or acceptance of final
payment as provided in paragraph 0.14) will be a condition precedent to any
exercise by City of Fayetteville or Contractor of such rights or remedies as
either may otherwise have under the Contract Documents or by Laws or
Regulations in respect of any such claim, dispute or other matter.
10. Limitations on Engineers Responsibilities
a. Neither Engineer's authority to act under this paragraph I or elsewhere in the
Contract Documents nor any decision made by Engineer in good faith either to
exercise or not exercise such authority shall give rise to any duty or
responsibility of Engineer to Contractor, any Subcontractor, Supplier, or any of
their agents or employees or any other person performing any of the Work, or
1 to any surety for any of them.
b. Whenever in the Contract Documents the terms "as ordered", "as directed", "as
required", "as allowed" or terms of like effect or import are used, or the
adjectives "reasonable", "suitable", "proper" or adjectives of like effect or
import are used to describe requirement, direction, review orjudgment of
Engineer as to the work, it is intended that such requirement, direction, review
1 or judgment will be solely to evaluate the work for compliance with the
Contract Documents (unless there is a specific statement indicating otherwise).
The use of any such term or adjective shall not be effective to assign to
Engineer any duty to authority, to perform construction observation or direct
performance of the Work or authority to undertake responsibility contrary to
the provisions of paragraph 1.8.c or 1.8.d.
tC. Engineer will not be responsible for Contractor's means, methods, techniques,
sequences or procedures of construction, or the safety precautions and
programs incident thereto, and Engineer will not be responsible for
Contractor's failure to perform the Work in accordance with the Contract
Documents.
d. Engineer will not be responsible for the acts or omissions of Contractor or of
any Subcontractors, or of the agents or employees of any Contractor or
Subcontractor, any Supplier, or of any other person or organization performing
or furnishing any of the Work.
' 37 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
I
K. Changes in Work
I. Without invalidating the Agreement and without notice to any surety, City of
Fayetteville may, at any time or from time to time, order additions, deletions or ,
revisions in the Work; these will be authorized by a Written Amendment, a Change
Order, or a Work Directive Change. Upon receipt of any such document, Contractor
shall promptly proceed with the Work involved which will be performed under the
applicable conditions of the Contract Documents (except as otherwise specifically
provided).
2. If City of Fayetteville and Contractor are unable to agree as to the extent, if any, of '
an increase or decrease in the Contract Price or an extension or shortening of the
Contract Time that should be allowed as a result of a Work Directive Change, a
claim may be made therefor as provided in paragraph L or M.
3. Contractor shall not be entitled to an increase in the Contract Price or an extension of
the Contract Time with respect to any Work performed that is not required by the
Contract Documents as amended, modified and supplemented as provided in
paragraph D.2 except in the case of an emergency as provided in paragraph G.13 and
except in the case of uncovering Work as provided in paragraph NA.b.
4. City of Fayetteville and Contractor shall execute appropriate Change Orders (or
Written Amendments) covering:
a. Changes in the Work which are ordered by City of Fayetteville pursuant to
paragraph K.1, are required because of defective Work under paragraph N.8 or
correcting defective Work under paragraph N.9, or are agreed to by the parties; ,
b. Changes in the Contract Price or Contract Time which are agreed to by the
parties; and '
C. Changes in the Contract Price or Contract Time which embody the substance
of any written decision rendered by Engineer pursuant to paragraph 1.9. ,
provided that, in lieu of executing any such Change Order, an appeal may be taken
from any such decision in accordance with the provisions of the Contract Documents ,
and applicable Laws and Regulations, but during any such appeal, Contractor shall
carry on the Work and adhere to the progress schedule as provided in paragraph
G.15.
5. If notice of any change affecting the general scope of the Work or the provisions of
the Contract Documents (including, but not limited to, Contract Price or Contract
Time) is required by the provisions of any Bond to be given to a surety, the giving of
any such notice will be Contractor's responsibility, and the amount of each applicable
Bond will be adjusted accordingly.
General Conditions 38 ,
City of Fayetteville
Sanitary Sewer Improvements '
I
Changes in Contract Price
1. The Contract Price constitutes the total compensation (subject to authorized
1 adjustments) payable to Contractor for performing the Work. All duties,
responsibilities and obligations assigned to or undertaken by Contractor shall be at
his expense without change in the Contract Price.
2. The Contract Price may only be changed by a Change Order or by a Written
Amendment. Any claim for an increase or decrease in the Contract Price shall be
I based on written notice delivered by the party making the claim to the other party
and to Engineer promptly (but in no event later than thirty (30) days) after the
occurrence of the event giving rise to the claim and stating the general nature of the
claim. Notice of the amount of the claim with supporting data shall be delivered
within sixty (60) days after such occurrence (unless Engineer allows an additional
period of time to ascertain more accurate data in support of the claim) and shall be
accompanied by claimant's written statement that the amount claimed covers all
1 known amounts (direct, indirect and consequential) to which the claimant is entitled
as a result of the occurrence of said event. All claims for adjustment in the Contract
Price shall be determined by Engineer in accordance with paragraph J.9.a if City of
>, Fayetteville and Contractor cannot otherwise agree on the amount involved. No
claim for an adjustment in the Contract Price will be valid if not submitted in
accordance with this paragraph L.2.
3. The value of any Work covered by a Change Order or of any claim for an increase or
decrease in the Contract Price shall be determined in one of the following ways:
' a. Where the Work involved is covered by unit prices contained in the Contract
Documents, by application of unit prices to the quantities of the items involved
1 (subject to the provisions of paragraph L.7).
b. By a mutually agreed lump sum (which may include an allowance for
overhead and profit not necessarily in accordance with paragraph L.5.a.(2)(a)).
'C. On the basis of the Cost of the Work (determined as provided in paragraphs
LA.a and L.5.b) plus a Contractor's Fee for overhead and profit (determined as
1 provided in paragraphs L.5.a and L.5.b).
4. Cost -of -Work
a. The term Cost -of -Work means the sum of all costs necessarily incurred and
paid by Contractor in the proper performance of the Work. Except as
otherwise may be agreed to in writing by City of Fayetteville, such costs shall
be in amounts no higher than those prevailing in the locality of the Project,
shall include only the following items and shall not include any of the costs
' itemized in paragraph LA.b:
39 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
(1) Payrol I costs for employees in the direct employ of Contractor in the
performance of the Work under schedules of job classifications agreed
upon by City of Fayetteville and Contractor. Payroll costs for
employees not employed full time on the Work shall be apportioned on
the basis of their time spent on the Work. Payroll costs shall include,
but not be limited to, salaries and wages plus the cost of fringe benefits
which shall include social security contributions, unemployment, excise
and payroll taxes, workers' or workmen's compensation, health and
retirement benefits, bonuses, sick leave, vacation and holiday pay
applicable thereto. Such employees shall include superintendents and
foremen at the site. The expenses of performing Work after regular
working hours, on Sunday or legal holidays, shall be included in the
above to the extent authorized by City of Fayetteville.
(2) Cost of all materials and equipment furnished and incorporated in the
Work, including costs of transportation and storage thereof, and
Supplier's field services required in connection therewith. All cash
discounts shall accrue to Contractor unless City of Fayetteville deposits
funds with Contractor with which to make payments, in which case the
cash discounts shall accrue to City of Fayetteville. All trade discounts,
rebates and refunds, and all returns from sale of surplus materials and
equipment shall accrue to City of Fayetteville and Contractor shall
make provisions so that they may be obtained.
(3) Payments made by Contractor to the Subcontractors for Work
performed by Subcontractors. If required by City of Fayetteville,
Contractor shall obtain competitive bids from Subcontractors
acceptable to Contractor and shall deliver such bids to City of
Fayetteville who will then determine, with the advice of Engineer,
which bids may be accepted. If a Subcontract, provided that the
Subcontractor is to be paid on the basis of Cost of the Work Plus a Fee,
the Subcontractor's Cost of the Work shall be determined in the same
manner as Contractors Cost of the Work. All subcontracts shall be
subject to the other provisions of the Contract Documents insofar as
applicable.
(4) Costs of special consultants (including, but not limited to, engineer,
architects, testing laboratories, surveyors, lawyers and accountants)
employed for services specifically related to the Work.
(5) Supplemental costs including the following:
(a) The proportion of necessary transportation, travel and subsistence
expenses of Contractor's employees incurred in discharge of
duties connected with the Work.
General Conditions 40
City of Fayetteville
Sanitary Sewer Improvements
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(b) Cost, including transportation and maintenance, of all materials,
supplies, equipment, machinery, appliances, office and temporary
facilities at the site and hand tools not owned by the workmen,
which are consumed in the performance of the work, and cost
less market value of such items used but not consumed which
remain the property of Contractor.
(c) Rentals of all construction equipment and machinery and the
parts thereof whether rented from Contractor or others in
accordance with rental agreements reviewed by City of
Fayetteville with the advice of Engineer, and the cost of
transportation, loading, unloading, installation, dismantling and
removal thereof - all in accordance with terms of said rental
agreements. The rental of any such equipment, machinery or
parts shall cease when the use thereof is no longer necessary for
the Work.
(d)
Sales,
consumer,
use or similar taxes related
to the work, and for
which
Contractor
is liable, imposed by Laws
and Regulations.
(e) Deposits lost for causes other than negligence of Contractor, any
Subcontractor or anyone directly or indirectly employed by any
of them or for whose acts any of them may be liable, and royalty
payments and fees for permits and licenses.
(f) Losses and damages (and related expenses), not compensated by
insurance or otherwise, to the Work or otherwise sustained by
Contractor in connection with the execution of the work,
provided they have resulted from causes other than the
negligence of Contractor, any Subcontractor, or anyone directly
or indirectly, employed by any of them or for whose acts any of
them may be liable. Such losses shall include settlements made
with the written consent and review of City of Fayetteville. No
such losses, damages and expenses shall be included in the Cost
of the Work for the purpose of determining Contractor's Fee. If,
however, any such loss or damage requires reconstruction and
Contractor is placed in charge thereof, Contractor shall be paid
for services a proportionate fee to that stated in paragraph
L.5.a.(2).
(g) The cost of utilities, fuel and sanitary facilities at the site.
(h) Minor expenses such as telegrams, long distance telephone calls,
telephone service at the site, expressage and similar petty cash
items in connection with the Work.
41 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
(i) Cost of premiums for additional Bonds and insurance required
because of changes in the Work.
b. The term Cost -of -Work shall not include any of the following:
(1) Payroll costs and other compensation of Contractor's officers,
executives, principals (of partnership and sole proprietorships), general
managers, engineers, architects, estimators, lawyers, auditors,
accountants, purchasing and contracting agents, expeditors,
timekeepers, clerks and other personnel employed by Contractor
whether at the site or in Contractor's principal or a branch office for
general administration of the Work and not specifically included in the
agreed upon schedule of job classifications referred to in paragraph
L.4.a.(]) or specifically covered by paragraph LA.a.(4) - all of which
are to be considered administrative costs covered by the Contractor's
Fee.
(2) Expenses of Contractors principal and branch offices other than
Contractor's office at the site.
(3) Any part of Contractor's capital expenses, including interest on
Contractor's capital employed for the Work and charges against
Contractor for delinquent payments.
(4) Cost of premiums for all Bonds and for all insurance whether or not
Contractor is required by the Contract Documents to purchase and
maintain the same (except for the cost of premiums covered by
paragraph LA.a.(5)(i)).
(5) Costs due to the negligence of Contractor, any Subcontractor, or
anyone directly or indirectly employed by any of them or for whose
acts any of them may be liable, including but not limited to, the
correction of defective Work, disposal of materials or equipment
wrongly supplied and making good any damage to property.
(6) Other overhead or general expense costs of any kind and the costs of
any item not specifically and expressly included in paragraph LA.a.
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5. Contractor's Fee
a. The Contractor's Fee allowed to Contractor for overhead and profit shall be
determined as follows: ,
(1) A mutually agreed fixed fee; or if none can be agreed upon,
(2) A fee based on the following percentages of the various portions of the '
Cost of the Work:
General Conditions 42
City of Fayetteville
Sanitary Sewer Improvements '
(a) The Contractor's Fee shall be fifleen (15) percent for payroll costs
and the cost of materials and equipment as defined in paragraphs
L.4.a.(1) and LA.a.(2);
(b) The Contractor's Fee shall be five (5) percent on the work
performed by Subcontractors as defined in paragraph LA.a.(3);
and if a Subcontract is on the basis of Cost -of -Work plus a Fee,
the maximum allowable to the Subcontractor as a fee for
overhead and profit shall be fifteen (15) percent;
(c) No fee shall be payable on costs defined in paragraphs LA.a.(4),
LA.a.(5), and L.5 (costs associated with supplemental costs or
special consultants);
(d) The amount of credit to be allowed by Contractor to City of
Fayetteville for any such change which results in a net decrease
in cost, will be the amount of the actual net decrease plus a
deduction in Contractor's Fee by an amount equal to ten (10)
percent of the net decrease; and
' (e) When both additions and credits are involved in any one change,
the adjustment in Contractor's Fee shall be computed on the basis
I of the net change in accordance with paragraphs L.5.a (2)(a)
through L.5.a.(2)(d),inclusive,
' b. Whenever the cost of any Work is to be determined pursuant to paragraph LA,
Contractor will submit an itemized cost breakdown together with supporting
data.
1 6. Cash Allowances:
a. It is understood that Contractor has included in the Contract Price all
allowances so named in the Contract Documents and shall cause the Work so
covered to be done by such Subcontractors or Suppliers and for such sums
within the limit of the allowances as may be reviewed by the Engineer.
Contractor agrees that:
(1) The allowances include the cost to Contractor (less any applicable trade
discounts) of materials and equipment required by the allowances to be
delivered to the site, and all applicable taxes; and
(2) Contractor's costs for unloading and handling on the site, labor,
installation costs, overhead, profit and other expenses contemplated for
the allowances have been included in the Contract Price and not in the
allowances. No demand for additional payment on account of any
thereof will be valid.
r43 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
b. Prior to final payment, an appropriate Change Order will be issued as
recommended by Engineer to reflect actual amounts due Contractor on account
of Work covered by allowances, and the Contract Price shall be
correspondingly adjusted.
Unit Price Work:
Where the Contract Documents provide that all or part of the Work is to be
Unit Price Work, initially the Contract Price will be deemed to include for all
Unit Price Work an amount equal to the sum of the established unit prices for
each separately identified item of Unit Price work times the estimated quantity
of each item as indicated in the Agreement. The estimated quantities of items
of Unit Price Work are not guaranteed and are solely for the purpose of
comparison of Bids and determining an initial Contract Price. Determinations
of the actual quantities and classifications of Unit Price Work performed by
Contractor will be made by Engineer in accordance with Paragraph J.8.
b. Each unit price will be deemed to include an amount considered by Contractor
to be adequate to cover Contractors overhead and profit for each separately
identified item.
C. The unit price of an item of Unit Price Work shall be subject to re-evaluation
and adjustment under the following conditions:
(]) If the total cost of a particular item of Unit Price Work amounts to 115
percent or more of the Contract Price and the variation in the quantity
of that particular item of Unit Price Work performed by Contractor
differs by more than 15 percent from the estimated quantity of such
item indicated in the Agreement; and
(2) If there is no corresponding adjustment with respect to any other item
of Work; and
(3) If Contractor believes that it has incurred additional expense as a result
thereof; or
(4) If City of Fayetteville believes that the quantity variation entitles it to
an adjustment in the unit price, either City of Fayetteville or Contractor
may make a claim for a adjustment in the Contract Price in accordance
with Paragraph L if the parties are unable to agree as to effect of any
such variations in the quantity of Unit Price Work performed.
General Conditions 44
City of Fayetteville
Sanitary Sewer Improvements
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8. Limits of Authority:
a. The contractor shall note and abide by the following City of Fayetteville's and
1 Engineer's limits of authority for changes in the Work which require a change
in the Contract Price and Contract Time.
Except in the case of extreme emergency to protect the public safety, public
welfare or substantial Work, the following limits of authority to the City of
Fayetteville and Engineer shall apply:
' Engineer's Representative - No authority
Water/Sewer Maintenance Superintendent — No authority
Public Works Director — No authority
Mayor - $20,000.00 or any City Council pre -approved contingency.
All accumulative changes which result in Contract Price changes in excess of
' $20,000.00 or any City Council pre -approved contingency shall require the
formal approval of the Fayetteville City Council.
' M. Chanties in Contract Time
I. General
a. The Contract Time may only be changed by a Change Order or a Written
Amendment. Any claim for an extension or shortening of the Contract Time
shall be based on written notice delivered by the party making the claim to the
other party and to Engineer promptly (but in no event later than thirty (30)
days) after the occurrence of the event giving rise to the claim and stating the
general nature of the claim. Notice of the extent of the claim with supporting
data shall be delivered within sixty (60) days after such occurrence (unless
Engineer allows an additional period of time to ascertain more accurate data in
support of the claim) and shall be accompanied by the claimant's written
statement that the adjustment claimed is the entire adjustment to which the
claimant has reason to believe it is entitled as a result of the occurrence of said
event. All claims for adjustment in the Contract Time shall be determined by
Engineer in accordance with paragraph 1.8 if City of Fayetteville and
Contractor cannot otherwise agree. No claim for an adjustment in the Contract
Time will be valid if not submitted in accordance with the requirements of this
paragraph M. La.
b. The Contract Time may be extended in an amount equal to time lost due to
delays (unavoidable delays) beyond the control of Contractor if a claim is
made as provided in paragraph M. La. Such delays shall include, but not be
limited to, acts or neglect by City of Fayetteville or others performing
additional work as contemplated by paragraph H, or to fires, floods, labor
disputes, epidemics, abnormal weather conditions, or acts of God.
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45 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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C. All time limits stated in the Contract Documents are of the essence of the '
Agreement. Provisions of this paragraph M.l shall not exclude recovery for
damages (including but not limited to fees and charges of engineers, architects,
attorneys and other professionals and court and arbitration costs) for delay by ,
either party.
2. Delays
a. Avoidable Delays
(1) Avoidable delays in the prosecution or completion of the Work shall '
include all delays which might have been avoided by the exercise of
care, prudence, foresight, or diligence on the part of the Contractor.
(2) Delays in the prosecution of parts of the Work which may in
themselves be unavoidable but do not necessarily prevent or delay the
prosecution of other parts of the work nor the completion of the whole ,
work within the time herein specified; reasonable loss of time resulting
from the necessity of submitting drawings to the Engineer for approval
and from the making of surveys, measurements, and observations; and ,
such interruptions as may occur in the prosecution of the work on
account of the reasonable interference of other Contractors employed
by the City of Fayetteville, which do not necessarily prevent the ,
completion of the whole work within the time herein specified, will be
deemed avoidable delays within the meaning of this Contract.
b. Unavoidable Delays 1
Unavoidable delays in the prosecution or completion of the Work under this ,
Contract shall include all delays which may result through causes beyond the
control of the Contractor and which he could not have provided against by the
exercise of care, prudence, foresight, or diligence. Such delays shall include,
but not be limited to, acts or neglect by City of Fayetteville or others ,
performing additional work as contemplated by paragraph H or to fires, floods,
labor disputes, epidemics, abnormal weather conditions or acts of God. Orders
issued by the City of Fayetteville changing the amount of Work to be done, the ,
quantity of material to be furnished, or the manner in which the Work is to be
prosecuted; failure of the City of Fayetteville to provide rights -of- way; and
unforeseen delays in the completion of the Work of other contractors under ,
contract with the City of Fayetteville will be considered unavoidable delays, so
far as they necessarily interfere with the Contractor's completion of the whole
unavoidable delays as the Contractor should understand that such conditions .
are to be expected and plan his Work accordingly.
II
General Conditions 46 ,
City of Fayetteville
Sanitary
Sewer Improvements '
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' 3. Extension of Time
a. For Unavoidable Delays
For delays which are unavoidable as provided in paragraph M.2.b, as
determined by the City of Fayetteville, the Contractor will be allowed, if he
applies for the same, an extension of time beyond the time specified for
completion, proportionate to such unavoidable delay or delays, within which to
complete the Contract. The Contractor will not be charged, because of any
' extension of time for such unavoidable delay, any liquidated damage and/or
actual damages as provided in paragraph R.
1 b. For Avoidable Delay
(1) Extensions of time will not be granted because of avoidable delays.
(2) Contractor will be charged liquidated damages or actual damages as
provided in paragraph R for avoidable delays.
' N. Warranty and Guarantee: Tests and Observations; Correction Removal or Acceptance of
Defective Work
. Warranty and Guarantee
Contractor warranties and guarantees to City of Fayetteville and Engineer that all
work will be in accordance with the Contract Documents and will not be defective.
Prompt notice of all defects shall be given to Contractor. All defective Work,
whether or not in place, may be rejected, corrected or agreed to as provided in this
' paragraph N.
2. Access to Work
Engineer and Engineer's representatives, other representatives of City of Fayetteville,
testing agencies and governmental agencies with jurisdictional interests will have
access to the work at reasonable times for observation and testing. Contractor shall
provide proper and safe conditions for such access.
3. Tests and Observations
a. Contractor shall give Engineer timely notice of readiness of the Work for all
required observations, tests, or reviews.
b. If Laws or Regulations of any public body having jurisdiction requires any
Work (or part thereof) to specifically be observed or tested. Contractor shall
assume full responsibility therefor, pay all costs in connection therewith and
furnish Engineer with the required certificates of inspection, testing, or
approval. Contractor shall also be responsible for and shall pay all costs in
47 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
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connection with any inspection or testing required in connection with City of ,
Fayetteville's or Engineer's agreed to Supplier of materials or equipment
proposed to be incorporated in the work, or of materials or equipment
submitted for approval prior to Contractor's purchase thereof for incorporation
in the Work. The cost of all observations, tests, and approvals in addition to
the above which are required by the Contract Documents shall be paid by City
of Fayetteville (unless otherwise specified).
C. All observations, tests, or reviews other than those required by Laws or
Regulations of any public body having jurisdiction shall be performed by ,
organizations agreed to by City of Fayetteville and Contractor (or by Engineer
if so specified).
d. If any Work (including the work of others) that is to be observed or tested is ,
covered without written concurrence of Engineer, it must, if requested by
Engineer, be uncovered for observation. Such uncovering shall be at
Contractor's expense unless Contractor has given Engineer timely notice of ,
Contractors intention to cover such work and Engineer has not acted with
reasonable promptness in response to such notice.
e. Neither observations by Engineer nor observations, tests, or reviews by others ,
shall relieve Contractor from his obligations to perform the work in accordance
with the Contract Documents. ,
4. Uncovering work
a. If any work is covered contrary to the written request of Engineer, it must, if ,
requested by Engineer, be uncovered for Engineers observation and replaced
at Contractor's expense. ,
b. If Engineer considers it necessary or advisable that covered work be observed
by Engineer or tested by others, Contractor, at Engineers request, shall
uncover, expose or otherwise make available for observation or testing as '
Engineer may require, that portion of the work in question, furnishing all
necessary labor, material and equipment. If it is found that such work is
defective, Contractor shall bear all the expenses of such uncovering, exposure,
observation, testing and reconstruction, (including but not limited to fees and
charges of engineers, architects, attorneys and other professionals), and City of
Fayetteville shall be entitled to an appropriated decrease in the Contract Price, '
and, if the parties are unable to agree as to the amount thereof, may make a
claim therefor as provided in paragraph L. If, however, such work is not found
to be defective, Contractor shall be allowed an increase in the Contract Price or ,
an extension of the Contract Time, or both, directly attributable to such
uncovering, exposure, observation, testing and reconstruction; and, if the
parties are unable to agree as to the amount or extent thereof, Contractor may ,
make a claim therefor as provided in paragraphs L and M.
General Conditions 48 ,
City of Fayetteville
Sanitary Sewer Improvements ,
5. City of Fayetteville May Stop the Work
If the work is defective, or Contractor fails to supply sufficient skilled workmen or
I suitable materials or equipment, or fails to furnish or perform the Work in such a
way that the completed Work will conform to the Contract Documents, City of
Fayetteville may order Contractor to stop the work, or any portion thereof, until the
' cause for such order has been eliminated; however, this right of City of Fayetteville
to stop the work shall not give rise to any duty on the part of the City of Fayetteville
to exercise this right for the benefit of Contractor or any other party.
' 6. Correction or Removal of Defective Work
' a. If required by Engineer, Contractor shall promptly, as directed, either correct
all defective Work, whether or not fabricated, installed or completed, or, if the
Work has been rejected by Engineer, remove it from the site and replace it with
suitable Work. Contractor shall bear all direct, indirect and consequential costs
' of such correction or removal (including but not limited to fees and charges of
engineers, architects, attorneys, and other professionals) made necessary
thereby.
b. If the Contractor fails to remove defective work within ten days after receipt of
written notice, the rejected material or work may be removed by the City of
Fayetteville and the cost of such removal shall be taken out of the money that
may be due or may become due the Contractor on account of or by virtue of
this Contract. No such rejected material shall again be offered for use by the
Contractor under this Contract.
7. One Year Correction Period
' If within one year after the date of Substantial Completion or such longer period of
time as may be prescribed by Laws or Regulations by the terms of any applicable
special guarantee required by the Contract Documents or by any specific provision
' of the Contract Documents, any work is found to be defective, Contractor shall
promptly, without cost to City of Fayetteville and in accordance with City of
Fayetteville's written instructions, either correct such defective work, or, if it has
been rejected by City of Fayetteville, remove it from the site and replace it with
nondefective work. If Contractor does not promptly comply with the terms of such
instructions, or in an emergency where delay would cause serious risk of loss or
1 damage, City of Fayetteville may have the defective work corrected or the rejected
work removed and replaced, and all direct and indirect costs of such removal and
replacement (including but not limited to fees and charges of engineers, architects,
attorneys and other professionals) will be paid by Contractor. In special
circumstances where a particular item of equipment is placed in continuous service
before Substantial Completion of all the Work, the correction period for that item
may start to run from an earlier date if so provided in the Specifications or by
Written Amendment.
' 49 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
Acceptance of Defective Work
If, instead of requiring correction or removal and replacement of defective work,
City of Fayetteville (and, prior to Engineer's recommendation of final payment, also
Engineer) prefers to accept it, City of Fayetteville may do so. Contractor shall bear
all direct, indirect and consequential costs attributable to City ofFayetteville's
evaluation of and determination to accept such defective Work (such costs to be
reviewed by Engineer as to reasonableness and to include but not be limited to fees
and charges of engineers, architects, attorneys and other professionals). If any such
acceptance occurs prior to Engineer's recommendation of final payment, a Change
Order will be issued incorporating the necessary revisions in the Contract Documents
with respect to the Work; and City of Fayetteville shall be entitled to an appropriate
decrease in the Contract Price, and, if the parties are unable to agree as to the amount
thereof, City of Fayetteville may make a claim therefor as provided in paragraph L.
If the acceptance occurs after such recommendation, an appropriate amount will be
paid by Contractor to City of Fayetteville.
City of Fayetteville May Correct Defective Work
If Contractor fails within a reasonable time after written notice of Engineer to
proceed to correct defective work or to remove and replace rejected work as required
by Engineer or if Contractor fails to perform the work in accordance with the
Contract Documents or if Contractor fails to comply with any other provision of the
Contract Documents, City of Fayetteville may, after seven days' written notice to
Contractor, correct and remedy any such deficiency. In exercising his right under
this paragraph City of Fayetteville shall proceed expeditiously. To the extent
necessary to complete corrective and remedial action, City of Fayetteville may
exclude Contractor from all or part of the site, take possession of all or part of the
work, and suspend Contractor's services related thereto, take possession of
Contractors tools, appliances, construction equipment and machinery at the site and
incorporate in the work all materials and equipment stored at the site or for which
City of Fayetteville has paid Contractor but which are stored elsewhere. Contractor
shall allow City of Fayetteville, City of Fayetteville's representatives, agents and
employees such access to the site as may be necessary to enable City of Fayetteville
to exercise his rights under this paragraph. All direct, indirect and consequential
costs of City of Fayetteville in exercising such rights and remedies will be charged
against Contractor in an amount reviewed by Engineer, and a Change Order will be
issued incorporating the necessary revisions in the Contract Documents with respect
to the Work; and City of Fayetteville shall be entitled to an appropriate decrease in
the Contract Price, and if the parties are unable to agree as to the amount thereof,
City of Fayetteville may make a claim therefor as provided in paragraph L. Such
direct, indirect and consequential costs will include but not be limited to fees and
charges of engineers, architects, attorneys and other professionals, all court and
arbitration costs and all costs of repair and replacement of work of others destroyed
or damaged by correction, removal or replacement of Contractor's defective Work.
Contractor shall not be allowed an extension of the Contract Time because of any
delay in performance of the work attributable to the exercise by City of Fayetteville
of City of Fayetteville's rights hereunder.
General Conditions 50
City of Fayetteville
Sanitary Sewer Improvements
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' O. Payments to Contractor and Completion
1. Schedules
' The schedule of values established as provided in paragraph C.7 will serve as the
basis for progress payments and will be incorporated into a form of Application for
' Payment. Progress payments on account of Unit Price Work will be based on the
number of units completed.
' 2. Application for Progress Payments
a. The contractor shall, on the 25th day of each calendar month, together with a
representative of rhe Engineer, make an estimate of the value of the work
performed as of the 15th day of the month in accordance with this Contract
since the last preceding estimate was made.
The Contractor shall then prepare and submit the estimate to the Engineer on
the periodical estimate for partial payment forms, copies of which are bound
with these Contract Documents. The number of copies to be submitted will be
' determined by the Engineer after construction has starred.
The City of Fayetteville will endeavor to make monthly construction payments
within 30 days of receipt of the invoice after approval of the consulting
engineer (architect).
' b. Upon presentation of certified copies of purchase bills and freight bills, the
City of Fayetteville will permit inclusion in such monthly estimates payment
for materials that will eventually be incorporated in the project, providing that
' such material is suitably stored on the site at the time of submission of the
estimate for payment. At the time the next following monthly estimate is
submitted, certified copies of receipted purchase and freight bills for the stored
materials included in the monthly payment estimate submitted two months
' previously shall be submitted. If the Contractor fails to submit proof of
payment with the monthly payment estimate, those items of stored materials
for which no proof of payment has been submitted will be deleted from the
current payment estimate. Such materials when so paid for by the City of
Fayetteville will become the property of the City of Fayetteville and, in case of
default on the part of the Contractor, the City of Fayetteville may use or cause
to be used by others these materials in construction of the project. However,
the Contractor shall be responsible for safe guarding such materials against
loss or damage of any nature whatsoever, and in case of any loss or damage the
Contractor shall replace such lost or damaged materials at no cost to the City
of Fayetteville.
' (1) Except as provided in paragraph O.2.b, the first application for payment
shall be of the value of the work done and of materials proposed and
suitable for permanent incorporation in the work, delivered, and
' 51 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
suitably and safely stored at the site of the work since the Contractor
shall have begun the performance of this Contract; and every
subsequent estimate, except the final estimate, shall be of value of the
work done and materials delivered and suitably stored at the site of the
work since the last preceding estimate was made.
C. No application for partial payment shall be made when, in the judgment of the
Engineer, the total value of the Work done and materials incorporated into the
Work under this Contract since the last preceding estimate amount is less than
$10,000 unless authorized by Engineer.
d. Applications for payment shall be signed by the Engineer and approved by the
City of Fayetteville, and after such approval, the City of Fayetteville, subject to
the foregoing provisions, will pay or cause to be paid an amount equal to the
estimated value of the work performed less a retained amount in accordance
with the following schedule:
(1) Ten (10) percent until construction is 50 percent complete.
(2) Five (5) percent after construction is 50 percent complete, provided that
the Contractor is making adequate progress and there is no specific
cause for greater withholding.
(3) When the project is substantially complete (operational or beneficial
use as determined by the Engineer) the retained amount will be reduced
to two (2) percent of the value of work which is substantially complete,
or two hundred (200) percent of the value of each item as determined
by the Engineer to complete said item or items of work, whichever is
greater.
e. Contractor shall furnish with each application for payment a Contractor's
sworn affidavit listing all parties to receive payments on that request.
If required by the regulatory agencies, the Contractor and his subcontractor
shall prepare weekly sworn affidavits with respect to the payment of wages in
accordance with the provisions as set forth in the "Anti -Kickback" Act, and
submit affidavits with the progress payment requests.
3. Unit Price Items
a. Unit price items listed in the Bid form and in the Agreement form may be of
two types, "unit price construction items", and "unit price work items ordered
by the Engineer during construction". For all unit price items quantities as set
forth are the best estimates which can be made during design, since actual
quantities cannot be determined until construction is underway.
General Conditions 52
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Sanitary Sewer Improvements
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' b. The Contractor shall study carefully the Specifications to determine the extent
and scope of the work included under lump sum items in the Contract. It may
be that work under some unit price items is in addition to similar work to be
1 performed under lump sum items and paid for thereunder.
C. Unit Price Construction Items
Unit price construction items will be used to pay for work not included under a
lump sum item but required by the Contract.
' d. Unit Price Work Items Order by the Engineer During Construction
' These unit price items will be used to pay for designated work, not shown on
the Contract Drawings, when ordered by the Engineer in writing during
construction.
4. Reporting and Invoicing Cost -of -Work
All cost -of -work items shall be reported daily and signed by the Contractor and the
' Engineer, which daily reports shall thereafter be considered the true record of cost-
of- work done. Completely detailed invoices covering the cost -of -work shall be
submitted for payment not later than 15 days after the completion of the work. The
charges for work performed by the Contractor, by a Subcontractor, and by an
employee of a Subcontractor shall be reported separately. Substantiating invoices
from suppliers, vendors and Subcontractors shall be included with the Contractor's
invoices. The Contractor shall permit examination of accounts, bills, and vouchers
relating to the cost -of -work when requested by the Engineer.
' 5. Partial Waiver of Liens
Partial waiver of liens shall accompany each payment request to cover the full
amount of the previous payment request. The Contractor shall procure from each
and every Subcontractor and suppliers of material or labor a partial waiver of lien to
release the City of Fayetteville of any claim to a mechanics lien, which they or any
of them may have under the mechanics lien laws of the State in which the project is
located. Any payments made by the City of Fayetteville without requiring strict
compliance to the terms of this paragraph shall not be construed as a waiver by the
City of Fayetteville of the right to insist upon strict compliance with the terms of this
' approach as a condition of later payments.
6. Contractor's Warranty of Title
' Contractor warrants and guarantees that title to all work, materials and equipment
covered by any Application for Payment, whether incorporated in the project or not,
will pass to City of Fayetteville no later than the time of payment free and clear of all
Liens.
53 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
Review of Progress Payment Requests
a. Engineer will, within fifteen (15) days after receipt of each payment request,
either indicate in writing a recommendation of payment and present the request
to City of Fayetteville, or return the payment request to Contractor indicating
in writing Engineer's reasons for refusing to recommend payment. In the latter
case, Contractor may make the necessary corrections and resubmit the request.
Thirty (30) days after presentation of the Application for Payment with
Engineers recommendation, the amount recommended will (subject to the
provisions of paragraph O.7.e) become due and when due will be paid by City
of Fayetteville to Contractor.
b. Engineer's recommendation of any payment requested in a payment request
will constitute a representation by Engineer to City of Fayetteville, based on
Engineer's on-site observations of the work in progress as an experienced and
qualified design professional and on Engineer's review of the payment request
and the accompanying data and schedules that the Work has progressed to the
point indicated; that, to the best of the Engineer's knowledge, information and
belief, the quality of the work is in accordance with the Contract Documents
(subject to an evaluation of the Work as a functioning whole prior to or upon
substantial completion, to the results of any subsequent tests called for in the
Contract Documents to a final determination of quantities and classifications
for Unit Price Work under paragraph J.8 and to any other qualifications stated
in the recommendation); and that Contractor is entitled to payment of the
amount recommended. However, by recommending any such payment,
Engineer will not thereby be deemed to have represented that exhaustive or
continuous on-site observations have been made to check the quality or the
quantity of the work, or that the means, methods, techniques, sequences, and
procedures of construction have been reviewed or that any examination has
been made to ascertain how or for what purpose Contractor has used the
moneys paid or to be paid to Contractor on account of the Contract Price, or
that title to any work, materials or equipment has passed to City of Fayetteville
free and clear of any Liens.
C. Engineer's recommendation of final payment will constitute an additional
representation by Engineer to City of Fayetteville that the conditions precedent
to Contractors being entitled to final payment as set forth in paragraph O.8.a
have been fulfilled.
d. Engineer may refuse to recommend the whole or any part of any payment if, in
Engineer's opinion, it would be incorrect to make such representations to City
of Fayetteville. Engineer may also refuse to recommend any such payment, or,
because of subsequently discovered evidence or the results of subsequent
observations or tests, nullify any such payment previously recommended; to
such extent as may be necessary to Engineer's opinion to protect City of
Fayetteville from loss because:
General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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(1) The Work
is
defective, or completed
work has been damaged requiring
correction
or
replacement.
enumerated
(2) The Contract Price has been reduced by Written Amendment or
Change Order.
(3) City of Fayetteville has been required to correct defective Work or
complete the Work in accordance with paragraph N.6.b.
(4)
Engineer's actual
knowledge of
the
occurrence
of any of the events
enumerated
in paragraphs P.2.a.(])
through P.2.a.(9)
inclusive.
e. City of Fayetteville may refuse to make payment of the full amount
recommended by Engineer because claims have been made against City of
Fayetteville on account of Contractor's performance or furnishing of the Work
or Liens have been filed in connection with the Work or there are other items
entitling City of Fayetteville to a set-off against the amount recommended, but
City of Fayetteville must give Contractor immediate written notice (with a
copy to Engineer) stating the reasons for such action.
Substantial Completion
a. When Contractor considers the entire work ready for its intended use and all
final restoration and testing is complete, Contractor shall notify City of
Fayetteville and Engineer in writing the entire Work is Substantially Complete
and request that Engineer issue a Statement of Substantial Completion. Within
a reasonable time thereafter, City of Fayetteville, Contractor and Engineer
shall make an observation of the Work to determine the status of completion.
If Engineer does not consider the work Substantially Complete, Engineer will
notify Contractor in writing, giving his reasons therefore. If Engineer
considers the work substantially complete, Engineer will prepare and deliver to
City of Fayetteville a tentative Statement of Substantial Completion which
shall fix the date of Substantial Completion. There shall be attached to the
certificate a tentative list of items to be completed or corrected before final
payment. This list shall be called a punch list. City of Fayetteville shall have
fourteen (14) days after receipt of the tentative certificate during which he may
make written objection to Engineer as to any provisions of the certificate or
attached list. If, after considering such objections, Engineer concludes that the
Work is not Substantially Complete, Engineer will within fourteen days after
submission of the tentative certificate to City of Fayetteville notify Contractor
in writing, stating his reasons therefore. If, after consideration of City of
Fayetteville's objections, Engineer considers the Work Substantially Complete,
Engineer will within said fourteen (14) days execute and deliver to City of
Fayetteville and Contractor a definitive Statement of Substantial Completion
(with a revised tentative list of items to be completed or corrected) reflecting
such changes from the tentative certificate as Engineer believes justified after
consideration of any objections from City of Fayetteville. At the time of
55 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
delivery of the tentative Statement of Substantial Completion Engineer will
deliver to City of Fayetteville and Contractor a written recommendation as to
division of responsibilities pending final payment between City of Fayetteville
and Contractor with respect to security, operation, safety, maintenance, heat,
utilities and insurance and warranties. Unless City of Fayetteville and
Contractor agree otherwise in writing and so inform Engineer prior to
Engineer's issuing the definitive Statement of Substantial Completion,
Engineer's aforesaid recommendation will be binding on City of Fayetteville
and Contractor until final payment.
b. City of Fayetteville shall have the right to exclude Contractor from the work
after the date of Substantial Completion, but City of Fayetteville shall allow
Contractor reasonable access to complete or correct items on the punch list.
9. Partial Utilization
a. Use by City of Fayetteville of any finished part of the Work, which has
specifically been identified in the Contract Documents, or which City of
Fayetteville, Engineer and Contractor agree constitutes a separately
functioning and useable part of the Work that can be used by City of
Fayetteville without significant interference with Contractor's performance of
the remainder of the Work, may be accomplished prior Substantial Completion
of all the Work subject to the following:
(1) City of Fayetteville at any time may request Contractor in writing to
permit City of Fayetteville to use any part of the work which City of
Fayetteville believes to be ready for its intended use and substantially
complete. If Contractor agrees, Contractor will certify to City of
Fayetteville and Engineer that said part of the Work is substantially
complete and request Engineer to issue a Statement of Substantial
Completion for that part of the Work. Contractor at any time may
notify City of Fayetteville and Engineer in writing that Contractor
considers any such part of the Work ready for its intended use and
substantially complete and request Engineer to issue a Statement of
Substantial Completion for that part of the Work. Within a reasonable
time after either such request, City of Fayetteville and Contractor shall
observe that part of the Work to determine its status of completion. If
Engineer does not consider that part of the Work to be substantially
complete, Engineer will notify City of Fayetteville and Contractor in
writing giving the reasons therefore. If Engineer considers that part of
the Work to be substantially complete, the provisions of paragraph 0.8
will apply with respect to Statement of Substantial Completion of that
part of the Work and the division of responsibility in respect thereof
and access thereto.
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(2) City of Fayetteville may at any time request Contractor in writing to '
permit City of Fayetteville to take over operation of any such part of
General Conditions 56
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Sanitary Sewer Improvements
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the Work although it is not substantially complete. A copy of such
request will be sent to Engineer and within a reasonable time thereafter
City of Fayetteville, Contractor, and Engineer shall observe that part of
the Work to determine its status of completion and will prepare a list of
the items remaining to be completed or corrected thereon before final
payment. If Contractor does not object in writing to City of
Fayetteville and Engineer that such part of the Work is not ready for
separate operation by City of Fayetteville, Engineer will finalize the list
of items to completed or corrected and will deliver such list to City of
Fayetteville and Contractor together with a written recommendation as
to the division of responsibilities pending final payment between City
of Fayetteville and Contractor with respect to security, operation,
safety, maintenance, utilities, insurance, warranties and guarantees for
that part of the Work which will become binding upon City of
Fayetteville and Contractor at the time when City of Fayetteville takes
over such operation (unless they shall have otherwise agreed in writing
and so informed Engineer). During such operation and prior to
Substantial Completion of such part of the Work, City of Fayetteville
shall allow Contractor reasonable access to complete or correct items
on said list and to complete other related Work.
(3) No occupancy or separate operation of part of the Work will be
' accomplished prior to compliance with the requirements of paragraph
F.7 in respect of property insurance.
' 10. Final Observation
Upon written notice from Contractor that Work or an agreed portion thereof is
complete, Engineer will make a final observation with City of Fayetteville and
Contractor and will notify Contractor in writing of all particulars in which this
observation reveals that the work is incomplete or defective. Contractor shall
immediately take such measures as are necessary to remedy such deficiencies.
11. Final Application For Payment
' After Contractor has completed all such corrections and delivered all maintenance
and operating instructions, schedules, guarantees, Bonds, certificates of inspection,
marked -up record documents as provided in paragraph G.1 I and other documents -
all as required by the Contract Documents, and after Engineer has indicated that the
Work is acceptable, subject to the provisions of paragraph 0.16 Contractor may
make application for final payment request following the procedure for progress
' payment requests. The final payment requests shall be accompanied by all
documentation called for in the Contract Documents, together with complete and
legally effective releases or waivers (satisfactory to City of Fayetteville) of all Liens
arising out of or filed in connection with the Work. In lieu thereof and as approved
by City of Fayetteville, Contractor may fumish receipts or releases in full; an
affidavit of Contractor that the releases and receipts include all labor, services,
57 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
I
material and equipment for which a Lien could be filed, and that all payrolls, ,
material and equipment bills, and other indebtedness connected with the work for
which City of Fayetteville or his property might in any way be responsible, have
been paid or otherwise satisfied; and consent of the Surety, if any, to final payment. '
If any Subcontractor, and/or Supplier fails to furnish a release or receipt in full,
Contractor may furnish a Bond or other collateral satisfactory to City of Fayetteville
to indemnify City of Fayetteville against any Lien. ,
12. Final Payment and Acceptance
If, on the basis of Engineer's observation of the Work during construction and ,
final observation, and Engineer's review of the final payment request and
accompanying documentation - all as required by the Contract Documents,
Engineer has been shown that the work has been completed and Contractor's '
other obligations under the Contract Documents have been fulfilled, Engineer
will, within ten (10) days after receipt of final payment request, indicate in
writing Engineer's recommendation of payment and present the request to City '
of Fayetteville for payment. Thereupon Engineer will give written notice to
City of Fayetteville and Contractor that the Work is acceptable subject to the
provisions of paragraph 0.14. Otherwise, Engineer will return the payment '
request to Contractor, indicating in writing the reasons for refusing to
recommend final payment, in which case Contractor shall make the necessary
corrections and resubmit the payment request. Thirty (30) days after '
presentation to City of Fayetteville of the Application and accompanying
documentation, in appropriate form and substance, and with Engineer's
recommendation and notice of acceptability, the amount recommended by ,
Engineer will become due and will be paid by City of Fayetteville to
Contractor.
b. If, through no fault of Contractor, final completion of the Work is significantly ,
delayed thereof and if Engineer so confirms, City of Fayetteville shall, upon
receipt of Contractor's final payment request and recommendation of Engineer,
and without terminating the Agreement, make payment of the balance due for '
that portion of the Work fully completed and accepted. If the remaining
balance to be held by City of Fayetteville for Work not fully completed or
corrected is less than the retainage stipulated in the Agreement, and if Bonds '
have been fumished as required in paragraph F.1, the written consent of the
Surety to the payment of the balance due for that portion of the Work fully
completed and accepted shall be submitted by Contractor to Engineer with the '
request for such payment. Such payment shall be made under the terms and
conditions governing final payment, except that it shall not constitute a waiver
of claims. '
13. Contractor's Continuing Obligation
Contractors obligation to perform and complete the Work in accordance with the '
Contract Documents shall be absolute. Neither recommendation of any progress or
General Conditions 58 '
City of Fayetteville
Sanitary Sewer Improvements ,
' final payment by Engineer, nor the issuance of a certificate of substantial
completion, nor any payment of City of Fayetteville to Contractor under the Contract
Documents, nor any use or occupancy of the Work or any part thereof by City of
' Fayetteville, nor any act of acceptance by City of Fayetteville nor any failure to do
so, nor the issuance of a notice of acceptability by Engineer pursuant to paragraph
0. 12. nor any correction of defective work by City of Fayetteville shall constitute an
' acceptance of Work not in accordance with the Contract Documents or a release of
Contractor's obligation to perform the Work in accordance with the Contract
Documents (except as provided in paragraph 0.14).
14. Waiver of Claims
The making and acceptance of final payment shall constitute:
a. A waiver of all claims by City of Fayetteville against Contractor, except claims
' arising from unsettled Liens, from defective Work appearing after final
observation pursuant to paragraph 0.10 or from failure to comply with the
Contract Documents or the terms of any special guarantees specified therein;
however, it will not constitute a waiver by City of Fayetteville of any rights in
respect of Contractors continuing obligations under the Contract Documents.
b. A waiver of all claims by Contractor against City of Fayetteville other than
' those previously made in writing and still unsettled.
P. Suspension of Work and Termination
' 1. City of Fayetteville May Suspend Work
a. City of Fayetteville may, at any time and without cause, suspend the work or
any portion thereof for a period of not more than ninety (90) days by notice in
writing to Contractor and Engineer which shall fix the date on which work
shall be resumed. Contractor shall resume the work on. the date so fixed.
Contractor may be allowed an increase in the Contract Price or an extension of
the Contract Time, or both, directly attributable to any suspension if he makes
a claim therefor as provided in paragraphs L and M.
' b. City of Fayetteville may suspend work upon occurrence of any one or more of
' the following events:
(1) If Contractor fails to supply a qualified superintendent, sufficient
skilled workmen, subcontractors, or suitable materials or equipment.
(2) If Contractor repeatedly fails to make prompt payments to
subcontractors or for labor, materials, or equipment.
(3) If Contractor disregards Laws and Regulations, of any public body
having jurisdiction.
59 General Conditions
City of Fayetteville
Sanitary Sewer Improvements
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(4) If Contractor otherwise violates in any substantial way any provisions
of the Contract Documents the City of Fayetteville shall have authority
to suspend the Work wholly or in part, for such period of time as he '
may deem necessary, because of conditions unfavorable for the
prosecution of the Work, or to conditions which in his opinion warrant
such action, or for such time as is necessary by reason of failure on the ,
part of the Contractor to carry out orders given, or to perform any or all
provisions of the Contract. No additional compensation will be paid
the Contractor because of any costs caused by such suspension, except '
when the suspension is ordered for reasons not resulting from any act
or omission on the part of the Contractor.
C. if it becomes necessary to suspend work for an indefinite period of time, the '
Contractor shall store all materials in such manner that they will not obstruct or
impede the traveling public unnecessarily or become damaged in any way, take ,
every precaution to prevent damage or deterioration of the Work performed,
provide suitable drainage of the roadway, and erect temporary structures where
necessary. The Contractor shall not suspend work without written authority ,
from the City of Fayetteville.
2. City of Fayetteville May Terminate
a. Upon the occurrence of any one or more of the following events: '
(1) If Contractor commences a voluntary case under any chapter of the ,
Bankruptcy Code (Title 1 I. United States Code), as now or hereafter in
effect, or if Contractor takes any equivalent or similar action by filing a
petition or otherwise under any other federal or state law in effect at '
such time relating to the bankruptcy or insolvency;
(2) If a petition is filed against Contractor under any chapter of the '
Bankruptcy Code as now or hereafter in effect at the time of filing, or if
a petition is filed seeking any such equivalent or similar relief against
Contractor under any other federal or state law in effect at the time '
relating to bankruptcy or insolvency;
(3) If Contractor makes a general assignment for the benefit of creditors; '
(4) If a trustee, receiver, custodian or agent of Contractor is appointed
under applicable law or under contract, whose appointment or authority '
to take charge of property of Contractor is for the purpose of enforcing
a Lien against such property or for the purpose of general
administration of such property for the benefit of Contractors creditors; '
General Conditions 60 '
City of Fayetteville
Sanitary Sewer Improvements ,
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1 (5) If Contractor admits in writing an inability to pay its debts generally as
they become due;
1 (6) If Contractor persistently fails to perform the Work in accordance with
the Contract Documents (including, but not limited to, failure to supply
sufficient skilled workers or suitable materials or equipment or failure
1 to adhere to the progress schedule established under paragraph C.7 as
revised from time to time);
1 (7) If Contractor disregards Laws or Regulations of any public body
having jurisdiction;
1 (8) If Contractor disregards the authority of Engineer; or
(9) If Contractor otherwise violated in any substantial way any provisions
1 of the Contract Documents.
b. City of Fayetteville may after giving Contractor (and the surety, if there be
1 one) fourteen (14) days' written notice and to the extent permitted by Laws and
Regulations, terminate the services of Contractor, exclude Contractor from the
site and take possession of the work and of all Contractor's tools, appliances,
construction equipment and machinery at the site and use the same to the full
' extent they could be used by Contractor (without liability to Contractor for
trespass or conversion), incorporate in the work all materials and equipment
stored at the site or for which City of Fayetteville has paid Contractor but
1 which are stored elsewhere, and finish the work as City of Fayetteville may
deem expedient. In such case, Contractor shall not be entitled to receive any
further payment until the work is finished. If the unpaid balance of the
1 Contract Price exceeds the direct, indirect and consequential costs of
completing the Work, (including, but not limited to, fees and charges of
engineers, architects, attorneys and other professionals and court and
1 arbitration costs) such excess will be paid to Contractor. If such costs exceed
such unpaid balance, Contractor shall pay the difference to City of Fayetteville.
Such costs incurred by City of Fayetteville will be reviewed by Engineer and
1 incorporated in a Change Order, but when exercising any rights or remedies
under this paragraph City of Fayetteville shall not be required to obtain the
lowest figure for the work performed.
1 C. Where Contractor's services have been so terminated by City of Fayetteville,
the termination shall not affect any rights or remedies of City of Fayetteville
1 against Contractor then existing or which may thereafter accrue. Any retention
or payment of moneys due Contractor by City of Fayetteville will not release
Contractor from liability.
1 d. Upon fourteen (14) days' written notice to Contractor and Engineer, City of
Fayetteville may, without cause and without prejudice to any other right or
1 61 General Conditions
City of Fayetteville
1 Sanitary Sewer Improvements
remedy, elect to abandon the work and terminate the Agreement. In such case, '
Contractor shall be paid for all Work executed and any expense sustained plus
reasonable termination expenses, which will include, but not be limited to,
direct, indirect and consequential costs (including, but not limited to, fees and ,
charges of engineers, architects, attorneys and other professionals and court
and arbitration costs).
3. Contractor May Stop Work or Terminate '
If, through no act or fault of Contractor, the work is suspended for a period of more '
than ninety (90) days by City of Fayetteville or under an order of court or other
public authority, or Engineer fails to act on any payment request within thirty (30)
days after it is submitted, or City of Fayetteville fails for thirty (30) days to pay '
Contractor any sum finally determined to be due, then Contractor may, upon
fourteen days' written notice to City of Fayetteville and Engineer, terminate the
Agreement and recover from City of Fayetteville payment for all work executed and ,
any expense sustained plus reasonable termination expenses. In addition and in lieu
of terminating the Agreement, if Engineer has failed to act on an Application for
Payment or City of Fayetteville has failed to make any payment as aforesaid, ,
Contractor may upon fourteen (14) days' notice to City of Fayetteville and Engineer
stop the work until payment of all amounts then due. The provisions of this
paragraph shall not relieve Contractor of his obligations under paragraph G.15 to
carry on the Work in accordance with the progress schedule and without delay ,
during disputes and disagreements with City of Fayetteville.
Q. This Section Deleted. ,
R. Liquidated Damages or Actual Damages for Delay
1. General '
Time is of the essence of this Contract, liquidated damages or actual damages for
delay will be assessed against the Contractor for failure to complete the work within '
the time(s) specified in these Contract Documents.
2. Liquidated Damages ,
Should the Contractor fail to complete the work, or any part thereof, in the time
stipulated in the Contract or within such extra time as may have been allowed for '
unavoidable delays by extensions granted as provided in Paragraph M, the
Contractor shall reimburse the City of Fayetteville for the additional expense and
damage for each calendar day, Sundays and legal holidays included, that the '
Contract remains uncompleted after the Contract completion date. It is agreed that
the amount of such additional expense and damage incurred by reason of failure to
General Conditions 62 '
City of Fayetteville
Sanitary Sewer Improvements '
complete the work is the per -diem rate stipulated in the Bid. The said amounts are
hereby agreed upon as liquidated damages for the loss to the City of Fayetteville on
account of expense due to the employment of Engineers, inspectors, construction
' reviewers, and other employees after the expiration of the time of completion, and if
applicable, expenses incurred by the City of Fayetteville as a result of the impact of
the Contractor on other contractors under this project or other contracts, and on
' account of the value of the operation of the works dependent thereon. It is expressly
understood and agreed that this amount is not to be considered in the nature of a
penalty, but as liquidated damages, which have accrued against the Contractor. The
' City of Fayetteville shall have the right to deduct such damages from any amount
due, or that may become due the Contractor, or the amount of such damages shall be
due and collectible from the Contractor or his Surety.
' 3. Actual Damages for Delay
' Failure to meet the Contract Completion Date(s) by the Contractor will subject the
Contractor to liability for all damages suffered by the City of Fayetteville. Damages
that might accrue to the City of Fayetteville include, but are not limited to, the
additional costs for project inspection by others, construction review by RJN Group,
' Inc. the City of Fayetteville's project administration and overhead, the Engineer's
project administration and overhead, loss of revenue from the completed facility,
delay or impact damages from other Contractors on this Contract or other
Contractors on other Contracts resulting from the delay, rental costs incurred by the
City of Fayetteville as a result of delay in completion of this Contract, value and use
loss arising from this delay, and all legal costs associated with administration of this
' General Condition or with any litigation arising out of this General Condition. The
City of Fayetteville may, without prejudice to any other remedies that may be
available, withhold from any monies due, or which may become due the Contractor,
' all damages sustained or which may be sustained in accordance with this paragraph
R.3. The rights and remedies of the City of Fayetteville provided in this paragraph
R.3 are in addition to any other remedies provided by law or under this Contract.
4. Liquidate Damages will be assessed in accordance with Paragraph R.5 for each
calendar day beyond the dates stipulated below:
' a. For each calendar day beyond the Contractual Date of Substantial Completion
until the date when Substantial Completion is achieved.
' b. For each calendar day beyond the Contractual Date of Final Completion or 30
calendar days after the actual date of Substantial Completion, whichever is
' later, until the date when Final Completion is achieved.
t63 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
5. Liquidate damages will be assessed as follows:
Final Amount of Contract
Less than $1,000,000
1,000,000 and less than 3,000,000
3,000,000 and less than 5,000,000
5,000,000 and less than 10,000,000
10,000,000 and over
S. Excess Engineering Costs
1. General
Liquidated Damages
Per Day
$ 750
1,500
3,000
4,000
5,000
Excess engineering
costs shall be applicable
only
during
the Contract Time provided
in the Agreement.
Overtime
The City of Fayetteville shall charge to Contractor for all engineering and
construction observation expenses incurred by City of Fayetteville in
connection with any overtime work. For any such overtime during the regular
specified Contract Time beyond the regular eight hour day and for any time
worked on Saturday, Sunday, or holidays, the charges for such personnel will
be as provided in the Schedule of Charges below.
b. These charges for excess engineering will be deducted from the Contractor's
monthly payment request.
C. Schedule of Charges to be as follows for all engineering and construction
observation expenses incurred by the City of Fayetteville in connection with
any overtime work.
Personnel Hourly Rate
Project Manager $ 105.00
Resident Engineer 75.00
Resident Project Representative 60.00
d. The Contractor shall not work over a 10 -hour day without written permission
from the City of Fayetteville.
e. The Engineer shall determine when observation of construction activities
beyond the regular eight-hour day is required.
General Conditions 64
City of Fayetteville
Sanitary Sewer Improvements
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' T. Miscellaneous
1. Giving Notice
Whenever any provision of the Contract Documents requires the giving of written
notice it shall be deemed to have been validly given if delivered in person to the
' individual or to a member of the firm or to an officer of the corporation for whom it
is intended, or if delivered at or sent by registered or certified mail, postage prepaid,
to the last business address known to the giver of the notice.
2. Computation of Time
a. When any period of time is referred to in the Contract Documents by days, it
will be computed to exclude the first and include the last day of such period. If
the last day of any such period falls on a Saturday or Sunday or on a day made
' a legal holiday by the law of the applicable jurisdiction, such day shall be
omitted from the computation.
b. A calendar day of twenty-four (24) hours measured from midnight to the next
midnight shall constitute a day.
3. General
a. Should City of Fayetteville or Contractor suffer injury or damage to his person
or property because of any error, omission or act of the other party of any of
the other party's employees or agents or others for whose acts the other party is
legally liable, claim will be made in writing to the other party within a
reasonable time of the first observance of such injury or damage. The
' provisions of this paragraph T.3.a shall not be construed as a substitute for or a
waiver of the provisions of any applicable statute of limitations or repose.
b. The duties and obligations imposed by these General Conditions and the rights
and remedies available hereunder to the parties hereto, and, in particular but
without limitation, the warranties, guarantees and obligations imposed upon
Contractor by paragraph G.1 6.a, N.1, N.7, N.9, 0.6, P.2.a and all of the rights
' and remedies available to City of Fayetteville and Engineer thereunder, shall
be in addition to, and shall not be construed in any way as a limitation of, any
rights and remedies available to any or all of them which are otherwise
' imposed or available to any or all of them by Laws or Regulations, by special
warranty or guarantee or by other provisions of the Contract Documents, and
the provisions of this paragraph shall be as effective as if repeated specifically
' in the Contract Documents in connection with each particular duty, obligation,
right and remedy to which they apply. All representations, warranties and
guarantees made in the Contract Documents shall survive final payment and
termination or completion of this Agreement.
END OF THIS SECTION
65 General Conditions
City of Fayetteville
' Sanitary Sewer Improvements
1
A. General
B.
SUPPLEMENTARY CONDITIONS
These Supplementary Conditions amend or supplement the General Conditions of the
Contract and other provisions of the Contract Documents as indicated below. Provisions
which are not so amended or supplemented remain in full force and effect.
Paragraph E.1: Availability of lands
Add the following sentence to the end of paragraph E.1:
Contractor shall confine all construction activities within the easements indicated on the
plans.
Paragraph F.1: Performance and Other Bonds
Add the following new paragraphs as part of paragraph F.1:
e. Bonds meeting the requirements of Arkansas Highway and Transportation
Department are required for all work performed within their rights-of-way.
Paragraph F: Bonds and Insurance
Add the following paragraph to Paragraph F:
7. Insurance Rating
All insurance contracts must maintain a Best's Rating of A: Class VI or better.
Paragraph N.7.: Correction Period
Modify the heading and first sentence of Paragraph N.7. as follows:
Two Year Correction Period
If within two years after the date of Substantial Completion or such longer period of time as may be
prescribed by Laws or Regulations by the terms of any applicable special guarantee required by the
Contract Documents or by any specific provision of the Contract Documents, any work is found to be
defective, Contractor shall promptly, without cost to Owner and in accordance with Owner's written
instructions, either correct such defective work, or, if it has been rejected by Owner, remove it from
the site and replace it with nondefective work.
Supplementary Conditions
City of Fayetteville
CIA Sanitary Sewer Improvements
F. Paragraph 0.8: Substantial Completion
Add the following new paragraph as part of paragraph 0.8:
0.8.c. Substantial completion is defined as all excavation, material, labor, bedding, backfill, coating,
grouting, final restoration, and testing required to complete the work as defined in the Contract
documents. Individual job numbers will be considered for substantial completion.
G. Paragraph A.17: Engineer
Delete paragraph A.17 and substitute the following new paragraph:
17. Engineer - The firm of R IN Group Inc., Consulting Engineers, Dallas, Texas and Fayetteville,
Arkansas, acting through their authorized representatives.
H. Paragraph E.2.a.
Delete paragraph E.2.a and substitute the following new paragraph:
a. No reports of explorations and tests of subsurface conditions at the site are available.
Delete paragraph 0.9 of the General Conditions.
I. Paragraph 0.2.d
Delete paragraph 0.2.d. and substitute the following new paragraph:
d. Applications for payment shall be signed by the Engineer and approved by the Owner, and
after such approval, the Owner, subject to the foregoing provisions, will pay or cause to be
paid an amount equal to the estimated value of the work performed less a retained amount of
ten (10) percent until Final Acceptance by the Owner.
K. Tort Imrnunity
The City of Fayetteville has Tort Immunity under Arkansas Law. Nothing in these contract documents
shall be construed or interpreted as the City waiving that Tort Immunity.
L. USEPA Supplemental Conditions
The Supplemental Conditions for Federally Assisted Water/Wastewater hdiastructure under the
FY 2004 Federal Appropriations Act are included and made part of this document.
END OF SUPPLEMENTARY CONDITIONS
Supplementary Conditions
City of Fayetteville
Sanitary Sewer Improvements CI -2
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
1 REGION 6
1 Supplemental conditions
1 for
Federally Assisted Water/Wastewater Infrastructures
under the
1 FY 2004 FEDERAL APPROPRIATIONS ACT (P.L. 108-199)
AS AMENDED
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REPRODUCTION OF THIS GUIDANCE
i SHOULD BE ON COLORED PAPER,
PREFERABLY PINK.
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RULES AND REGULATIONS
29 CFR PART 3'- CONTRACTORS AND SUBCONTRACTORS ON PUBLIC BUILDING
OR PUBLIC WORK FINANCED IN WHOLE OR IN PART BY LOANS OR
GRANTS FROM THE UNITED STATES
§13 Weekly statement with respect to
paymento f wages.
(a) As used in this section, the term eiiiployce shall
nol apply to persons in classifications higher than that
of laborer or mechanic and thosewho are the
immediate supervisors of such employees.
(b) Foch contracter or subcontractor engaged in the
construction, prosecution, completion, orrepair of
any public building of public work, or budding or
work financed in whole or in part by loans or grants
from tht'United States; shall furnish each week a
statement with respect to the wages paid each of its
employees engaged oh work covered by this part 3
and part 5 of this.cbaptet during the preceding weekly
payroll period. 'this statement shall be executed by
the contractor or subetintrxtor or by an authorized
officer or employee of the contractor or subcontractor
who supervises the. payment of wages, and shall be
on form WH 348; `'Statement of Compliance", or on
an identical form on the back of WH 347, "Payroll
(For Contractors Optional Use)' or onanti forth with
identical wording. Sample copiesof WE 347 and
WH 348 may be obtained fromthe Government
contracting or sponsoring agency, and copies of these
forms may be purchased at the GovernmeatNnting
Office.
(c) The requirements of this section shall not apply
to any contract of $2,boo or less.
(d) Upon a written finding by the head of a Fed"
agency, the Secretary. of Labor may provide
reasonable limitations, variations, tolerances, and
exemptions from the requirements of this section
subject to such conditions as the Secretary of labor
may specify. [29 FR 97, Jam 4, 1964, as amended at
33 FR 10186, July 17; 1968; 47 FR 23679, May 28,
19821
§ 3.4 Submission of weekly"statements and
the preservation and inspection of weekly
payroll records.
(a) Each weekly statement required under 0 3.3
shall be delivered by the contractor or subcontractor,
within seven days after the regular payment date of
the payroll period, to a representative of a Federalor
State agency in charge at the site of the building or
work, or, if there is no representative of a Federal or
State agency at the site of the building or work, the
statement shall be mailed by the contractor or -
subcontractor, within such time, to a Federal or State
agency contracting for or financing the building or
work. After such examination and check as may be
made, such statement, or a copy thereof, shall be kept
available, or shall be transmitted together with a
report of any violation, in accordance with applicable
Procedures prescribed by the United States
Department of labor.
(b) Each contractor or subcontractor shall preserve
his weekly payroll records for a period of three years
from date of completion of the contract The payroll
-
records shall set out accurately and completely die
name and address of each laborer and mechanic, his
correct classification, rate of pay, daily and weekly
number of hours worked, deductions made, and actual
wages paid. Such payroll records shall be made
available at all times for inspection by the contracting
officer or his authorized representative, and by,
authorized representatives of the Department of
Labor. (Reporting and recordkeeping requirements in
paragraph (b) have been approved by the Office of
Management and Budget under control number
1215-0017) (29 FR 97, Jan. 4, 1964, as amended at
47 FR 145, Jam 5, 19821
29 CFR PART 5 - LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS
COVERING FEDERALLY FINANCED AND ASSISTED CONSTRUCTION (ALSO
LABOR STANDARDS PROVISIONS APPLICABLE TO NONCONSTRUCTION
CONTRACTS SUBJECT TO.THE CONTRACT WORK HOURS.AND SAFETY
STANDARDS AC1)
§ 5.5 Contract provisions and related matters.
(a) The Agency head shall cause or require the
contracting officer to insert in full in any contract in
excess of $2,000 which is entered into for the actual
construction, alteration and/or repair, including painting
and decorating, of a public building or public work or
building or. work financed in whole or in part from
Federal fords or in accordarei wiih guarantees of a
Federal agency or financedfrom funds obtained by.
pledge of any contract of a Federal agency to make a
loan, grantor annual contribution (except where a
different meaning is expressly indicated), and which is
subject to the, laborstandards provisions of any of the
acts listed in §5.1, the following clauses (or any
modifications thereof to meet the particularneeds of the
agency, Provided,11at such modifications are first
approved by the Department of Labor): .
(1) Minimum wagu..(i) All laborers and mechanics
employed,or working upon the site of the work (or
under the United States. Housing Act of 1937 or under
the Housing Act of 1949 in the constnxtion or.
development of the project), will be paid
unconditionally and not less often than once a week
and without subsequent deduction or rebate on any
account (except such.payroll deductions as are
permitted by regulations issued by the Secretary of
Labor under the Copeland Act (29 CFR part 3)), the
full amount of wages and bona fide fringe benefits (or
cash equivalents thercof) .due at. time of payment
computed at rates not less than those contained in the
wage determination of the Secretary of Labor which is
attached hereto and made a part hereof, regardless of
any contractual relationship which may.be alleged to.
exist between the contractor and such laborers and.
mechanics.
Contributions made or costs reasonably anticipated for
bona fide fringe benefits under section 1(bX2) of the
Davis -Bacon Act on behalf of laborers or mechanics
are considered wages paid to such laborers or
mechanics, subject to the provisions of paragraph
(aXlXiv) of this section; also; regular contributions
made or costs incurred for more than a weekly period
(but not less often than quarterly) under plans, funds, or
programswhich cover diiparticular weekly period. are
deemed to be constructively made or incurred during
such weekly period. Such laborers and mechanics shall
be paid the appropriate wage rate and fringe benefits on
the wage determination for the classificatioa of work
actually performed, without regard to skill, except as
provided in §55(a)(4). Laborers oemechanics
performing work in more than one classification may
be compensated at ([Page 11011 the.rate specified for
each classification for the time actuoy.worked therein:
Provided, That the employees payroll records
accurately set,forth the time spent in each classification
in which work is performed. The wage determination
(including any additional classification and. wage rates
conformed under. paragraph (aXlXii) of this seetron)
and the Davis -Sawn poster (WH -1321) shall beposted
at all times by Cie contractor and its subcontractors at.
the site of the work in a prominent aid -accessible place
where it can be easily seen by the workers- .
(u"XA) The contracting officer shall require that any,
class of laborers or mechanics, including;helpers, which
is Dot listed in the wage determination and which is to.
be employed under the contract shall be classified in.
conformance with the wage dcietu+isation, The
contracting officer shall approve an additional
classification and wage rate and fringe benefits
therefore only when the following criteria have been
mel:
(1) Except with respect to helpers asdefined in 29
CFR 5.2(nX4), the work to be performed by the
classification requested is not performed by a
classification in the wage determination; and
(2) The classification is utilized in the area by the
construction industry, and
(3) The proposed wage rate. ialiiding any bona fide
fringe benefits, bears a reasonable relationship to. the
wage rates contained in the wage determination; and
(4) With respect to helpers as defined in 29 CFR
5.2(nX4), such a classification prevails in the area in
which the work is performed.
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(B) If the contractor and the laborers and mechanics
to be employed in the classification (if known), or their
representatives, and the contracting officer agree on the
classification and wage rate (including the amount
designated for fringe benefits where appropriate), a
report of the action taken shall be sent by the
contracting officer to the Administrator of the Wage
and Hour Division, Employment Standards
Administration, U.S. Department of Labor,
Washington, DC 20210. The Administrator, or an
authorized representative, will approve, modify, or
disapprove every additional classification action within
30 days of receipt and so advise the contracting officer
or will notify the contracting officer within the 30Lday
periodthatadditional time is necessary.
(C) In the event the contractor, the laborers or
mechanics to be employed in the classification or their
"representatives, and the contracting"officer do not agree
on the- proposed classification and wage rate (including
the amount designated for fringe benefits, where -
appropriate), the contracting officer shall refer the
questions, including the views of all interested parties
and the recommendation of the contracting officer; to
the Administrator for deteiminatiofiAbe Administrator,
or an authorized representative, will issue a
determination within 30 days of receipt and so advise
the contracting officer m will notify the contracting
officer within the 30 -day period that additional time is
necessary.
(D) The wage rate (including fringe benefits where
appropriate) determined pursuant to paragraphs
(axl)(ii) (B) or (C) of this section; shall be paid to all
workers performing work in the classification under
this contract from the first day on which work is
performed in the classification:
(iii) Whenever the minimum wage rate prescribed in
the contract for a class of laborers or mechanics
includes a fringe benefit which is notexpressed as an
hourly rate, the contractor shall either pay the benefit as
stated in the wage determination or shall pay another
bona fide fringe benefit or an hourly cash equivalent
thereof.
`(iv) If the contractor does rot make payments to a
trustee or other third persoe,'the contractor may
consider as part of the wages of any laborer or
mechanic the amount of any costs reasonably
anticipated in providing bona fide fringe benefits order
a plan or program, Provided, That the Secretary of
Labor has found, upon the written request of the
contractor, that the applicable standards of the
Davis -Bacon Act have been met. The Secretary of
Labor may require the contractor to set aside in a
separate account assets for the meeting of obligations
under the plan or program.
(v)(A) The contracting officer shall require that any
class of laborers or mechanics which is not listed in the
wage determination and which is to be employed under
the contract shall be classified in conformance with the
wage determination. The contracting officer shall
approve an additional classification and wage rate and
hinge benefits therefor only when the following criteria
have been mel:
(1) The work to be performed by the classification
requested is not performed by a classification in the
wage dclernmimtion- and
(2) The classification is utilized in the area by the
construction industry; and -
(3) The proposed wage rate, including any bona fide
fringe benefits, bears a reasonable relationship to the
wage rates contained in the wage determination.
(B) If the contractor and the laborers and mcchamcs
to be employed in the classification (if known), or their
representatives, and the contracting officer agree on the
classification and wage rate (including the amount
designated for fringe benefits where -appropnate) a
report of the action taken shall be sent by the
contracting officer to the Administratorof the Wage
and Hour Division, Employment Standards
Administration, Washington, DC 20210. The
Administrator, or an authorized representative; will
approve, modify, or disapprove every additional
classification action within 30 days of receipt and'so
advise the contracting officer or will notify the
contracting officer within the 30 -day period that
additional tinx is necessary.
(C) In the event the contractor, the laborers or.
mechanics to be employed in the classification or their
representatives, and the contracting officer do not agree
on the proposed classification and wage rate (including
the amount designated for fringe beeefits, where .
appropriate), the contracting officer shall refer the
questions, including the views of all interested parties
and the recommendation of the contracting officer, -to .
the Administrator for determwathom The Administrator,
or an authorized representative, will issue a
determination with 30 days of receipt and so advise the
contracting officer or will notify the contracting officer
within the 30 -day period that additional time is
necessary. -
(D) The wage rate (including fringe benefits where
appropriate) determined pursuant to para�
(axlxv) (B) or (C) of this section, shall be.paidto all
workers performing work in the classification under
this contract from the first day on which work is
performed in the classification
(2) Withholding. The (write in name of Federal
Agency or the loan or grant recipient) shall upon its
own action or upon written request of an audrorizcd
representative of the Department of Labor withhold or
cause to be withheld from the contractor under this
contract or any other Federal contract with the same
prime contractor, or any other federally- assisted
contract subject to Davis -Bacon prevailing wage
requirements, which is held by the same prime
contractor, so much of the accrued payments or
advances as may be considered necessary to pay
laborers and mechanics, including apprentices,: trainees,
and helpers, employed by the contractor or any
subcontractor the full amount of wages.required by the
contract. In theevent of failure to'pay any laborer or
mechanic, including any. apprentice; trainee, or helper,
employed or working on the site of the.work (or under
the United States Housing Act of 1937 or under the
Housing Act of 1949 in the construction or
development of the project), all.or part of the wages
required by the contract, the (Agency) may, after
written notice to the contractor, sponsor, applicant, or
owner, take such action as maybe necessary to cause
the suspension of any further payment, advance, or
guarantee of funds until such violations have ceased.
(3) Payr?!4 and basic records (i) Payrolls and basic
records relating thereto shall be maintained by the
contractor during the course of the work and_pteselved
for a period *of three years thereafter for all laborers and
mechanicsworking at the site of the. work (or under the
United States Housing Act of 1937, or under the -
Housing.Act of 1949, intheconstruction or. -
developmenrof,The project). Such records shall contain
the name, address, and social security number of each
such worker, hisor: her correct classification, hourly
rates of wages paid (including rates of contributions or
costs anticipated for bona fide fringe benefits or cash
equivalents thereof,of rhe types described in section
l(bX2).(B) of the Davis -Bacon Act), daily and weekly
number of hours.worked, deductions made and actual
wages paid. Whenever the Secretary of Labor has .
found under 29 CFR 5-5(aXl)(iv) that thewages of any
laborer or.mechanic includegbe.amount of my;eosts
reasonably anticipated in providing benefits under a
plan or program described in section 1(bX2XB) of the
Davis -Bacon Act, the contractor shall maintain records
which show, that the commitment to provide such
benefits is enforceable, that the Plan or program is
financially responsible, and.that the plan or program
has been communicated in writing to the laborers or
mechanics affected, and records which show rhe costs
anticipated or the actual cost incurred in providing such
benefits. Contractors employing apprentices or trainees
under approved programs shall maintain written
evidence of the registration of apprenticeship programs
and certification of trainee programs, the registration of
the apprentices and trainees, and the ratios and wage
rates prescribed in the applicable programs.
(iiXA) The contractor shall submit weekly for each
week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate
Federal agency) if the agency is a parry to the contract,
but if the agency is not such a party, the contractor will
.submit the payrolls to the applicant, sponsor, or owner,
as the case may be, for transmission to the (write in
name of agency). The payrolls submitted shall set out
accurately and completely all of the information
required to be maintained under §53(aX3Xi) of
Regulations, 29 CFR part5_-9his information may be
submitted in any form desired. Optional Form WH -347
is available for this purpose and may be purchased from
the Superintendent of Documents (Federal Stock
Number 029-005-000,14-1), U.S. Government Printing
Office, Washington, DC 20402. The prime contractor is
responsible for the submission of copies of payrolls. y
all subcontractors.
(B) Each payroll submitted shall be accompanied by
a 'Statement of Compliance,' signed by the contractor
or subcontractor of his or her agent who pays or .
supervises the payment of the persons employed under
the contract and shall certify the following:
(1) That the payroll for the payroll period contains
the information required to be maintained under
§5.5(aX3)C) of Regulations, 29 CFR part 5 and that
such information is correct and complete;
(2) That each laborer or meth nin (including each
helper, apprentice, and trainee) employed on the.
contract during the payrolfperiod has been paid the fun
weekly wages earned, without rebate, either directly or
indirectly, and that no deductions have been made
either directly or indirectly from the full wages earned,
other than permissible deductions as set forth in
Regulations, 29 CFR part 3;
(3) That each laborer or. mechanic has been paid not
less than the applicable wage rates and fringe benefits
or cash equivalents for the classification of work
performed, as specified inthe applicable wage
determination incorporated into the comracL
(C) The weekly submission of a properly executed
certification set forth on the reverse side of Optional
Form WW347 shall satisfy the requirement.for
submission of the "Statement of Compliance required
by paragraph (aX3XiiXB) of this section
(D) The falsification of any of the above -
certificatioes may subject the contractor or
subcontractor to civil or criminal prosecution under
section.1001. of title_ 18 and section 731.of tide 31 of the
United States Code.
(iii) The contractor or subcontractor shall make the
records required under paragraph (aX3Xi) of this
section available for inspection, copying, or
transcription by authorized representatives of the (write
the name of the agency) or the Department of Labor,
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and shall permit such representatives to interview
employees during working hours on the job. If the
contractor or subcontractor fails to submit the required
records or to make them available, the Federal agency
may, after written notice to the contractor, sponsor,
applicant, or owner, take such action as may be
necessary to cause the suspension of any further
payment, advance, or guarantee of funds. Furthermore,
failure to submit the required records upon request or to
make such records available may be grounds for
debarment action pursuant to 29 CFR 5.12.
(4) Apprentices and trainees—(i) Apprentices.
Apprentices will be permitted to work at less than the
predetermined rate for the work they performed when
they are employed pursuant to and individually
registered in'a bona fide apprenticeship program
registered with the U:S. Department of labor,
Employment and Training Administration, Bureau of
Apprenticeship and Training, or with aState
Apprenticeship Agency recognized by the Bureau, or if
a person is employed in his or her first 90 days of
probationary employment as an apprentice in such an
apprenticeship program, who is not individually
registered in the program, but who has been certified by
the Bureau of Apprenticeship and Training or a State
Apprenticeship Agency (where appropriate) to be
eligible for probationary employment is an apprentice.
The allowable ratio of apprentices to journeymen on the
job site in any craft classification shall not be greater
than the ratio permitted to the contractor as to the entire
work force under the registered programi Any worker
listed on a payroll at an apprentice wage rate, who is
not registered or otherwise employed as stated above,
shall be paid not less than the applicable wage rate on
the wage determination for the classification of work
actually performed. In addition, any apprentice
performing work on the job site in excess of the ratio
penr&1ed under the registered program shall be paid
not less than the applicable wage rate on the wage
determination for the work actually performed. Where a
contractor is performing construction on a project in a
locality other than that in which its program is
registered, the ratios and wage rates (expressed in
Percentages of the journeyman's hourly rate)specified
in the contractor's or subcontractors registered program
shall be observed. Every apprentice must be paid at not
less than the rate specified in the registered program for
the apprentice's level of progress, expressed as a
percentage of the journeymen hourly rate specified in
the applicable wage determination. Apprentices shall be
paid fringe benefits in accordance with the provisions
of the apprenticeship program. If the apprenticeship
program does not specify fringe benefits, apprentices
must be paid the fullamountof fringe benefits listed on
the wage determination for the applicable classification,
If the Administrator determines that a different practice
prevails for the applicable apprentice classification,
fringes shall be paid in accordance with that
determination. In the event the Bureau of
Apprenticeship and Training, or a State Apprenticeship
Agency recognized by the Bureau, withdraws approval
of an apprenticeship program, the contractor will no
longer be permitted to utilize apprentices at less than
the applicable predetermined rate for the work
performed until an acceptable program is approved.
(ii) Trainees Except as provided in 29 CFR S. 16.
trainees will not be permitted to work at less than the
predetermined rate for the work performed unless they
are employed pursuant to and individually registered in
a program which has rccejved-prior approval,
evidenced by formal certification by the U.S.
Department of labor, Employment and Training
Administration. The ratio of trainees to journeymen on
the job site shall not be greater than permitted under the
plan approved by the Employment and Training
Administration. Every trainee must be paid at not less
than the rate specified in the approved program for ilio
trainee's level of progress, expressed as a percentage of
the journeyman hourly rate specified in the applicable
wage determination. Trainees shall be paid fringe
benefits in accordance with the provisions of the trainee
Program H the trainee program does not mention fringe
benefits, trainees shall be paid the full amount of fringe
benefits listed on the wage determination unless the
Administrator of the Wage and Hour Division
determines that there is an apprenticeship program
associated with the corresponding journeyman wage
rate on the wage determination which provides for less
than full fringe benefits for apprentices. Any employee
listed on the payroll at a trainee rate who is not
registered and participating in a training plan approved
by the Employment and Training Administration shall
be paid not less than the applicable wage rate on the
wage determination for the classification of work
actually performed. In addition, any trainee perfoinring
work on the job site in excess of the ratio permitted.
under the registered program shall be paid not less than
the applicable wage rate on the wage determination for
the work actually performed. In the event the
Employment and Training Administration withdraws
approval of a training program. rhe contractor will no
longer be permitted toutifize trainees at less than the
applicable predetermined rate for the work performed
until an acceptable program is approved.
(iii) Equal employment opportunity. The utilization
of apprentices, trainees and journeymen under this part
shall be in conformity with the equal employment
opportunity requirements of Executive Order 11216, as
amended, and 29 CFR part 30.
(5) Compliance with Copeland Act requirements.
The contractor shall comply with the requirements of
29 CFR par 3, which are incorporated by reference in
this contract
(6) Subcontracts. The contractor or subcontractor
shall insert in any subcontracts the clauses contained. in
29 CFR 5.5(axl) through (10) and such other clauses
as the (write in the name of the Federal agency) may by
appropriate instructions require, and also a clause
requiring the subcontractors to include these clauses in
any lower tier subcontracts. The prime contractor shall
be responsible for the compliance by any subcontractor
or lower tier subcontractor with. all the contract clauses
in 29 CFR 55.
(7) C.ontracr termination. debarment. A breach of
the contract clauses in 29 CFR 5-5 may be grounds for
termination of the contract, and for debarment as a
contractor and a subcontractor as provided in 29 CFR
5.12.
(8) Compliance with Dava-Bacon and Related Act
requirements. All rulings and interpretations of the
Davis -Bacon and Relited Acts contained in29CFR
parts 1, 3, and 5 are herein incorporated by reference in
this contract.
(9) Disputes concerning Labor.standards. Disputes
arising out of.the labor standards provisions of this
contract shall not be subject to the general disputes
clause. of this contract Such disputes shall be resolved
in accordance with the. procedures of the Department of
Labor set -forth in 29 CFR parts 5, 6, and 7. Disputes
within the.tneaning of this clause include disputes
between the contractor (or any, of its subcontractors)
and the contracting agency, the U.S. Department of
Labor, or the employees or their representatives.
. (10) Cerrtficationof eligibility.. (i) By entering into
this contract, the. contractor certifies that neither it (nor
he or she) nor any person or firm who has an interestin
the contractoes.firm is a person or.firm ineligible to be-
awarded
eawarded Government contractsby virtue of section 3(a)
of the Davis -Bacon Act or29 CFR 5.12(axl ).. (ins) No
part of this contract shall be subcontracted to any
person or firm ineligible for award of a Government
contract by virtue of section 3(a) of the Davis -Bacon
Act or 29. CFR S.12(axl). (ui) The penalty for
making false statements is prescribed in the U.S-
Criminal Code, 18 U.S.C. 1001.
(b) Contract Work Noun and Safety Standards Act
The Agency Head shall causeor require the contracting
officer to insert the following clauses set forth in
paragraphs (b)(l). (2). (3). and (4) of this section in full
in any contract in an amount in excess of $100,000 and
subject to the overtime provisions of the Contract Work
Hours and Safety Standards Act Tbese clauses shall be
inserted in addition to the clauses required by Sec.
55(a) or 4.6 of part 4 of this. title. As used in this
paragraph, the terrors laborers and mechanics include
watchmen and guards.
(1) Overtime requirements. No contractor or
subcontractor contracting for any part of the contract
work which may require or involve the employment of
laborers or mechanics shall require or permit any such
laborer or mechanic in any workweek in which he or
she is employed on such work towork in excess of
forty hours in such workweek unless such laborer or
mechanic receives compensation at a rate not less than
one and one-half times the basic rate of pay for all
hours worked in excess of forty hours in such
workweek.
(2) Violation; liability for unpaid wages; liquidated
damages. In the event of any violation of the clause set
forth in paragraph (b)( 1) of this section the contractor
and any subcontractor responsible therefor shall be
liable for the unpaid wages Itraddition, such contractor
and subcontractor shall be liable to the United States
(in the case of work done under contract for the District
of Columbia or a territory,to such District or to such
territory), for liquidated damages. Such liquidated
damages shall be computed with respect to each
individual laborer or mechanic, including watchmen
and guards, employed in violation of the clause set
forth in paragraph (b)(l) of this section, in the sum of
$10 for each calendar day on which such individual
was required or permitted to work in excess of the
standard workweek of forty hours without payment of
the overtime wages required by the clause set forth in
paragraph (bx1) of this section.
. (3) Withholding for unpaid wages and liquidated
damages. The (write in the name of the Federal agency
or the loan or grant recipient) shall upon its own action
or upon written request of an authorized representative
of the Department of Labor withhold or cause to be
withheld, from any moneys payable on account of work
performed by the contractor or subcontractor under my
such contract or any other Federal contract with the
same prime contractor, or any other federally -assisted
contract subject to the Contract Work Homs and Safety
Standards Act, which is held by the same prime
contractor, such sums as may be determined to be
necessary to satisfy any liabilities of such contractor. or
subcontractor for unpaid wages and liquidated damages
as provided in the clause set forth in paragraph (b)(2)
of this section.
(4) Subcontracts. The contractor or subcontractor
shall insert in any subcontracts the clauses set forth in
paragraph (b)(l) through (4) of this section and also a
clause requiring the subcontractors to include these
clauses in any lower tier subcontracts. The prime
contractor shall be responsible for compliance by any
subcontractor or lower tier subcontractor with the
clauses set forth in paragraphs (bxl) through (4) of this
section.
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(c) In addition to the clauses contained in paragraph
(b), in any contract subject only to the Contract Work ,
Hours and Safety Standards Act and not to any of the
other statutes cited in §5.1, the Agency Head shall
cause or require the contracting officer to insert a
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clause requiring that the contractor or subcontractor
shall maintain payrolls and basic payroll records during
the course of the work and shall preserve them for a
period of three years from the completion of the
contract for all laborers and mechanics, including
guards and watchmen, working on the contract. Such
records shall contain the name and address of each such
employee, social security number, correct
classifications, hourly rales of wages paid, daily and
weekly number of hours worked, deductions made, and
actual wages paid. Further, the Agency Head shall
cause or require. the contracting officer, to insert in any
such contract a clause providing that the records to be
maintained under this paragraph shall be made
available by the contractor or subcontractor for
inspection, copying, or transcription by authorized
representatives of the (write the name of agenry) and
the Department of Labor, and the contractor or
subcontractor will permit such representatives to
interview employees during_wori ing hours on the job.
§ 5.6 Enforcement.
(a)(l) it shall be the responsibility of the Federal .
agency to ascertain whether the clauses requited by §
5.5 have been inserted in the contracts subject to the
labor standards provisions of the Acts contained in §
5A. Agencies which do not directly enter into such
contracts shall promulgate the necessary regulations or
procedures to require the recipient of the Federal
assistance to insert in its contracts the provisions of §
5.5. No payment, advance, grant, loan, or guarantee of
funds shall be approved by the Federal agency unless
the agency insures that the clauses required by § 55
and the appropriate wage determination of the
Secretary of Labor are contained in such contracts.
Furthermore, no payment, advance, grant, loan, or
guarantee of funds shall be approved by the Federal
agency after the beginning of construction unless there
is oo''Ble with the agency a certification by the
contractor that the contractor and its subcontractors
have complied with the provisions of § 5t, or unless
there is on file with the agency a certification by the
contractor that there is a substantial dispute with respect
to the required provisions.
§ 5.8 Liquidated damages under the Contract
Work Hours and Safety Standards Act
(a) The Contract Work Hours and Safety Standards
Act requires that laborers or mechanics shall be paid
wages at a rate not less than one and one-half times the
basic rate of pay for all hours worked in excess of forty
hours in any workweek In the event of violation of this
Provision, the contractor and any subcontractor shall be
liable for the unpaid wages and in addition for
liquidated damages. computed with respect to each
laborer or mechanic employed in violation of the Act in
the amount of $10 for each calendar day in the
workweek on which such individual was required or
permitted to work in excess of forty hours without
payment of required overtime wages. Any contractor of
subcontractor aggrieved by the withholding of
liquidated damages shall have the right to appeal to the
head of the agency of the United States (or the territory
of District of Columbia, as appropriate) for which the
contract work was performed or for which financial
assistance was provided.
(b) Findings and recommendations of the Agency
Head The Agency Heo as the authority to review the
administrative determination of liquidated damages and
to issue a final order affirming the determination. It is
not necessary to seek the conaareace of the
Administrator but the Administrator shall be advised of
the action taken. Whenever the Agency Head finds that
a sum of liquidated damages administratively
determined to be due is incorrect m that the contractor
or subcontractor violated inadvertently the provisions
of the Act notwithstanding the exercise of due care
upon the pan of the contractor or subcontractor
involved, and the amount of the liquidated damages
computed for the contract is in excess of $500, the
Agency Head rosy make recommendations to the
Secretary that an appropriate adjustment. in liquidated
damages be nude or tha the contractor or
subcontractor be relieved of liability for such liquidated
damages. Such findings with respect to liquidated
damages shall include findings with respect to any
wage underpaytncats for which the liquidated damages
are determined.
(c) The recommendations of the Agency Head for
adjustment or relief from liquidated damages under
paragraph (a) of this section shall be reviewed by the
Administrator m an authorized representative who shag
issue an order concurring in the recommendations,
partially concurring in the recommendations, or
rejecting the recommendations. and the reasons
therefor. The order shall be the final decision of the
Department of Labor, unless a petition for review is
filed pursuant to pan 7 of this title, and the
Administrative Review Board in its discretion reviews
such decision and order, or, with respect to contracts
subject to the Service Contract Act, unless petition for
review it filed pursuant to pan 8 of this title, and the
Administrative Review Board in its discretion reviews
such decision and order.
(d) Whcmvu the Agency Head finds that a sum of
liquidated damages administratively determined to be
due under section 104(a) of the Contract Work Hours
and Safety Standards Am for a contract is $500 or less
and the Agency Head fads that the sum of liquidated
damages is incorrect or that the contractor or
subcontractor violated inadvertently the provisions of
the Contract Work Hours and Safety Standards Act
notwithstanding the exercise of due care upon the part
of the contractor or subcontractor involved, an
appropriate adjustment may be made in such liquidated
damages or the contactor or subcontractor may be
relieved of liability for such liquidated damages
with submitting recommendations to this effect or a
report to the Department of Labor. lltis delegation of
authority is made under section 105 of the Contract
Work.Hours and Safety Standards Act and has been
found to be necessary and proper in the public interest
to prevent undue hardship and to avoid scrious
impairment of the conduct of Government business.
[46 FR 19541, Apr. 29v 1993v as amende3 at 51 M
12265, Apr. 9,1996; 51 FR 13496, Apr. 21,19861
[[page: 11911
§ 5.9 SuspenAonof funds.
In the event of failure or refusal of the contractor or
any subcontractor to comply with the labor standards
clausescontained in §53 and the applicable statutes
listed in'5.1, the Federal agency; upon its own action
or upon written request of an authorized representative
of the Department. of Labor, shall take such action as
may be necessary to cause the suspension of the
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payment, advance or guarantee of funds until such time ,
as the violations are discontinued or until sufficicnt
funds are withheld to compensate employees for the
wages to which they are entitled and to cover any
liquidated damages which may be due. ,
§ 5.10 Restitution, criminal action.
(a) In cases other than those forwarded to the ,
Attorney General of the United States under paragraph
(b), of this section, where violations of the labor
standards clauses contained -in § 53 and the applicable '
statutes listed in § 5.1 result iu underpayment of wages
to employees, the Federal agency or an authorized
representative of the -Department ofLabor shall request
that restitution be made to such employees or on their
behalf to plans, funds; or programs for any type of bona
fide fringe benefits within the meaning of section.
(b) In taus where the Agencyllead or the
Administrator finds substantial evidence that such '
violations are willful and in violation of a criminal
statute, the matter shall be forwarded to the Attorney
General of the United States for prosecution if the facts
warrant. In all such taus the Administrator shall be '
informed simultaneously of the action taken
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' 29 CFR PART 6 -RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS
ENFORCING LABOR STANDARDS IN FEDERAL AND FEDERALLY ASSISTED
CONSTRUCTION CONTRACTS.AND FEDERAL SERVICE CONTRACTS
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Subpart A --General
§ 6.1 Applicability of rules.
This part provides the rules of practice for
administrative proceedings under the Service Contract
Act; the Davis -Bacon Act and related statutes listed in
Sec. 5.1 of part 5 of this title which require payment of
wages determined in accordance with the Davis -Bacon
Act, the Contract Work Hours and Safety Standards
Act, and the Copeland ACL See parts 4 and 5 of this
tide.
§ 6.2:Defnitions.
:{a) Administrator means the Administrator of the
Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, or
authorized representative. (b) Associate Solicitor
means the Associate Solicitor for Fav labor Standards,
Office of the Solicitor,A.S. Department of labor,
Washington, .DC20210. -
(c) ChiefAdminisrrative Jaw Judge means the Chief
Administrative Law Judge, U.S. Department of labor,
800 K Street, KW., Suite 40o,:Washington DC
20001-8002.
(d) Respondent means the contractor, subcontractor,
person alleged to he responsible under the contract or
subcontract, and/or any firm, corporation, partnership,
or association in which such person or firm is alleged. to
have a substantial interest (or interest; if the proceeding
is under the Davis -Bacon Act) against whom the _
proceedingsare brought- (49 FR 10627, Mar. 21, 1984,
as amended at 56 FR 54708, Oct 22, 19911
§ 63 Service; copies of documents and
pleadings.
(a) Manner of service. Service upon any party shall
be made by the party filing the pleading or document by
delivering a copy or mailing a copy to the last known
address: When a party is [(Page 1341) represented by
an attorney, the service should be upon the attorney.
(b) Proof of service. A certificate of the person
serving the pleading or other document by personal
deliveryor by mailing, setting forth the manner of said
service shall be proof of the service. Where service is
made by mail,service shall be complete upon mailing.
However, documents are not deemed filed until
received by the Chief Clerk at the Office of
Administrative Law Judges and where documents are
filed by snail 5 days shall be added to the prescribed
period.
(c) Service upon Department, number of copies of
pleading or other documents. An original and three
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copies of all pleadings and other documents shall be.
filed with the Department of Labor: The original and
one copy with the Administrative Law.ludge before
whom the case is pending, one copy with the attorney
representing the Department during the hearing, and one
copy with the Associate Solicitor.
§ 6A Subpoenas (ServiceContractAct).
All applications under the Service Contract Act for
subpoenas ad testificandum and subpoenas duces tecum
shall be made in writing to the Administrative Law
Judge. Application for subpoenas duces tecwn sbali.
specify as exactly as possible the documents to be.
Ixoduced-
§ 6.5 Production of documents and witnesses..
The parties, who shall be deemed to be the Department
of Labor and the respondent(s), my serve on any other
parry a request to produce documents or witnesses in the
control of the party served, setting forth with .
particularity the documents or witnesses requested. The
parry served shall have 15 days to respond or object
thereto unless a shorter or longer time is ordered by the
Administrative Law Judge. The parties shall produce
documents and witnesses to which no privilege attaches
which are in the control of the party, if so ordered by the
Administrative Law Judgeupon motion therefor by a
party. If a privilege is claimed, it must be specifically
claimed in writing prior to the hearing or orally at the
hearing or deposition, including the reasons therefor. In
no event shall a statement taken in confidence by the, .
Department of Labor or other Federal agency be ordered
to be produced prior to the date of testimony at trial of
the person whose statement is at issue unless the consent
of such person has been obtained.
§ 6.6 Administrative Law Judge.
(a) Equal Accts to Justice Ace Proceedings under
this part are not subject to the provisions of the Equal
Access to Justice Act (Pub. L. 96-481). In any hearing
conducted pursuant to the provisions of this part 6,
Administrative Law Judges shall have no power or
authority to award attorney fees and/or other litigation
expenses pursuant to the provisions of the Equal Access
to Justice AcL
(b) Contumacious conduct. failure'or refusal of a
witness to appear or answer. Contumacious conduct at
any hearing before an Administrative Law Judge shall
be ground for exclusion from the hearing., In taus
arising under the Service Contract Act, the failure or
refusal of a witness to appear at any hearing or at a
deposition when so ordered by the Administrative Law
Judge, or to answer any question which has been ruled
to be proper, shall be ground for the action provided in
section 5 of the Act of June 30, 1936 (41 U.S.C. 39)_
and, in the discretion of the Administrative law Judge,
for striking out all or part of the testimony which may
have been given by such witness.
§ 6.7 Appearances.
(a) Representation. The parties may appear in
person, by counsel, or otherwise.
(b) Failure to appear. In the event that a party
appears at the hearing and oo party appears for the
opposing side; the presiding Administrative Law Judge
is authorized, if such party fails to show good cause for
such failure to appear, to dismiss the case or to find the
facts as alleged in the complaintand to enter a default
judgment containing such findings, conclusions and
order as are appropriate. Only where a petition for
review of such default judgment tiles alleged
procedural irregularities in the proceeding below and
not the merits of the case shall a non -appearing party
be permitted to file such a petition for review. Failure to
appear at a hearing shall not be deemed to be a waiver
of the right to be served with a copy of the
Administrative Law Judge's decision.
§ 6.8 Transmission of record.
If a'petition for review of the Administrative Law
Judges decision is filed with the Administrative Review
Board; the Chief Administrative Law Judge shall
promptly transmit the record of the proceeding. H a
petition for review is not filed within the time
prescribed in this pan, the Chief Administrative Law
Judge shall so advise the Administrator.
Subpart B—Enforcement Proceedings Under
the Service Contract Act (and Under the
Contract Work Hours and Safety Standards
Ad fop Contracts Subject to the Service
Contract Act)
§ 6.15 Complaints.
(a) Enforcement proceedings under the Service
Contract Actand under the Contract Work Hours and
Safety Standards Act for contracts subject to the. Service
Contract Act, may be instituted by the Associate
Solicitor for. Fair Labor Standards or a Regional
Solicitor by issuing a complaint and causing the
complaint to be served upon Ibe. respondent
(b) The complaint shall contain a clear and concise
factual statement of the grounds for relief and the relief
requested. .
(c) The Administrative Law Judge shall notify the
parties of the time and place for a hearing.
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§ 6.16 Answers.
(a) Within 30 days after the service of the complaint
the respondent shall file an answer with the Chief
Administrative Law Judge. The answer shall be signed
by the respondent or his/her attorney.
(b) The answer shall (1) contain a statement of the
facts which constitute the grounds of defense, and shall
specifically admit, explain, or deny each of the
allegations of the complaint unless the respondent is
without knowledge, in which case the answer shall so
state; or (2) stale that the respondent admits all of the
allegations of the complaint. The answer may contain a
waiver of heating. Failure 20 file an answer to or plead
specifically to any allegation of the complaint shall
constitute an admission of such allegation.
(c) Failure to file an answer shall constitute grounds
for waiver of hearing and entry of.a default judgment
unless respondent shows good cause Parsuch faihue to
file. In preparing the decision of default judgrnent.the'
Administrative Law Judge shall adopt as findings of fact
the material facts alleged in the complaint and. shall
order the appropriate relief and/or sanctions.
§ 6.17 Amendments to pleadings:
At any time prior to the close of the hearing record,
the complaint or answer may be amended with the
permission of the Administrative Law Judge and on
such terms as he/she may approve: When issues not
raised by the pleadings are reasonably within the scope
of the original complaint and are tried by express or
implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings, and
such.amendoents may be made as necessary to make
them conform to the evidence. Such amendments shall
be allowed when justice and the presentation of the
merits are served thereby, providedthereis no prejudice
to the objecting party's presentation on the merits. A
continuance in the hearing may be granted or the record
left open to enable the new allegations to be addressed
The presiding Administrative law Judge may, upon
reasonable notice and upon such terms as are just;
permit supplemental pleadings setting forth transactions,
occurrences or events which have happened since the
data of the pleadings and which are relevant to any of
the issues involved. ..
§ 6.18 Consent finding's and order.
(a) At any time prior to the receipt of evidence or, at
the discretion of the Administrative Law Judge, prior to
the issuance of the decision of de Administrative Law
Judge, the parties may enter into consent findings and an
order disposing of the processings in whole or in part
(b) Any agreement containing consent findings and an
order disposing of a proceeding in whole or in part shall
also provide:
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(1) That the order shall have the same force and
effect as an order made after full hearing;
(2) That the entire record on which any order may be
based shall consist solely of the complaint and the
agreement;
(3) A waiver of any further procedural steps before
the Administrative Law Judge and Administrative
Review Board regarding those matters which are the
subject of the agreement; and
(4) A waiver of any right to challenge or contest the
validity of the findings and order entered into in
accordance with the agreement.
(c) Within 30 days after receipt of an agreement
containing consent findings and an order disposing of
the disputed matter in whole, the Administrative Law
Judge shall, if satisfied with its form and substance,
accept such agreement by issuing a decision based upon
the agreed findings and order. If such agreement
disposes of only a part of the disputed matter, a hearing
shall'be conducted on the matters remaining in dispute.
§ 6.19 Decision of the Administrative law
Judge.
(a) Proposed fundings of fact, conclusions, and order.
Within 20 days of filing of the transcript of the
testimony or such additional time as the Administrative
Law Judge may allow each party may file with the
Administrative Law Judge proposed findings of fact,
conclusion of law, and order, together with a supporting
brief expressing the reasons for such proposals. Such
proposals and brief shall be served on all parties, and
shall refer to all portions of the record and to a0
authorities relied upon in support of each proposal.
(b) Decision of the Administrative law Judge. (1)
Within a reasonable time after the time allowed for the
filing of proposed findings of fact, conclusions of law,
and order, or within 30 days after receipt of an
agreement containing consent findings and order
disposing of the disputed matter in whole, the
Administrative Law Judge shall make his/her decision.
H any aggrieved party desires review of the decision, a
petition for review thereof shall be filed as provided in
Sec. b.20 of this tide, and such decision and order shall
be inoperative unless and until the Administrative
Review Board issues an order affirming the decision.
The decision of the Administrative Law Judge shall
include findings of fact and conclusions of law, with
reasons and bases tberefor,upon each material issue of
fact, law, or discretion presented on the record. The
decision of the Administrative Law Judge shall be
based upon a consideration of the whole record,
including any admissions made under §§ 6.16, 6.17 and
6.18 of this title. It shall be supported by reliable and
probative evidence. Such decision shall be in
accordance with the regulations and rulings contained
in parts 4 and 5 and other pertinent pans of this title.
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(2) If the respondent is found to have violated the.
Service Contract Act. the Administrative Law Judge
shall include in his/her decision an order as to whether
the respondent is to be relieved from the ineligible list as
provided in section 5(a) of the Act, and, if relief is
ordered, findings of the unusual circumstance, within the
meaning of section 5(a) of the Act, which are the basis
therefor. If respondcut is found to have violated the
provisions of the Contract Work Hours and Safety
Standards Act, the Administrative Law Judge shall issue
an order as to whether the respondent is to be subject to
the ineligible list as provided in §5.12(a)(1) of part 4 of
this title, including findings regarding the existence of
aggravated or willful violations. If wages and/or fringe
benefits are found due under the Service Contract Act
and/or the Contract Work SafetyStandards Act and are
unpaid, no relief from the ineligible lisrshall be ordered
except on condition that such wages and/or fringe
benefits are paid.
(3) The Administrative law Judge shall make no
findings regarding liquidated damages under the
Contract Work Hours and Safety Standards Act
§ 6.20 Petition for review.
Within 40 days after the date of the decision of the
Administrative law Judge (or such additional time as is
granted by the Administrative Review Board), any party
aggrieved thereby who desires review thereof shall file a
petition for review of the decision with supporting
reasons. Such party shall transmit the petition in writing
to the Administrative Review Board pursuant to 29 CFR
pan 8, with a copy thereof to the Chief Administrative
Law Judge. The petition shag refer to the specific
findings of fact, conclusions of law, or order at issue. A
petition concerning the decision on the ineligibility list
shall also state the unusual circumstances or lack thereof
under the Service Contract Act, and/or the aggravated or
willful violations of the Contract Work Hours and Safety
Standards Act or lack thereof, as appropriate.
§6.21 Ineligible list.
(a) Upon the final decision of the Administrative Law
Judge or Administrative Review Board, as appropriate,
the Administrator shall within 90 days forward to the
Comptroller Creo" the name of any respondent found
in violation of the Service Contract Act, including the
name of any firm, corporation, partnership. or .
association in which the respondent has, a substantial
interest, unless such decision orders relief from the
ineligible list because of unusual circumstances.
(b) Upon the final decision of the Administrative Law
Judge or the Administrative Review Board, as
appropriate, the Administrator promptly shall forward to
the Comptroller General the name of any respondent
found to be in aggravated or willful violation of the
Contract Work Homs and Safety Standards Act, and the
name of any fmn, corporation, partnership; or
association in which the respondent has a substantial
interest.
Subpart.C—Enforcement Proceedings Under
the Davis -Bacon Act and Related Prevailing
Wage Statutes, the Copeland Act, and the
Contract Work Hours and Safety Standards
Act (Excep( Under Contracts Subject to the
Service Contract Act)
§ 630 Referral to Chief Administrative Law
Judge.
(a) Upon timely receipt of a request for a hearing _
under §5.1 l -(where the Administrator has determined
that relevant facts are in dispute) or §5.12 of part 5 of
this tide, the Administrator shall refer the case to the
Chief Adminisiritive Law Judge by Order of Reference,
to which shall be attached a copy of the notification
letter to the respondent from the Administrator and
response thereto, for designation of an Administrative
Law Judge to conduct such hearings as may be
necessary to decide the disputed matters. A copy of the
Order of Reference and attachments.tbereto shall be _
served upon the respondenL
(b) The notification letter from the Administ ator and
response thereto s)iall be given the effect of a complaint
and answer, respectively, for purposes of the
administrative proceedings. The notification letter and
response .shall bel accordance with the provisions of
.
0.11 or§5.12(6x1) of pari 5 o this tide, as
appropriate.
§ 631 Amendments to pleadings.
At any time piiorto the closing of the hearing
record; the complaint (notification letter) or answer
(response) may. be amended with the permission of the
Administrative Law.Judge and upon such terms as .
he/she may approve, For proceedings pursuant to §5.11
of pan 5 of this title, such an amendment may include a
statement that debarment action is warranted under
§5.12(axl) of part 5 of this title or under section 3(a) of
the Davis -Bacon ACL Such amendments shall be
allowed when justice. and the presentation of the merits
are served thereby, provided there is. no prejudice to the
objecting party's presentation on the merits. When
issues not raised by the pleadings arc reasonably within
the scope of the original complaint and are tried by
express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
pleadings, and such amendments may. be made as
necessary to make them conform to the evidence. The
presiding Administrative Law Judge may, upon -
reasonable notice and upon such terns as are just,
pemut supplemental pleadings setting forth
transactions, occurrences or events which have
happened since the date of the pleadings and which are
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relevant to any of the issues involved. A continuance in
the hearing may be granted or the record left open to
enable the new allegations to be addressed.
§ 632 Consent findings and order.
(a) At any time prior to the receipt of evidence or, at
the discretion of the Administrative Law Judge, prior to
the issuance of the decision of the Administrative Law
Judge, the parties may enter into consent findings andan
order disposing of the proceeding in whole or in pari
(b) Any agreement containing consent findings and an
order disposing of a proceeding in whole or in part shall
also provide:
(1) That.the order shall have the same force and effect
as an order made after full hearing;
(2) That the entire record on which any order may be
based shall consist solely of the complaint and the .
agreement;
(3) 7Lat any order concerning debarment under the.
Davis -Bacon Act (but not under any of the.other statutes
listed in §5.1 of part 5 of this title) shall constitute a
recommendation to the Comptroller General;
(4) A waiver of any further procedural steps before -
the Administrative Law Judge and the Administrative
Review Board regarding those matters which are the
subject of the agreement; and
(5) A waiver of my right to challenge or.contest the
validity of the findings and order entered into in
accordance with the agmcmenL _
(c) Within 30 days after receipt of an agreement
containing consent findings and an order disposing of
the disputed matter in whole, the Administrative Law
Judge shall, if satisfied with its form and substance,
accept such agreement by issuing a. decision based upon
the agreed findings and order. If such agreement
disposes of only a part of the disputed matter, a hearing
shall be conducted on the matters remaining in dispute,
§ 633 Decision of the Administrative Late
Judge.
(a) Proposed findings of fact, conclusions, and order.
Within 20 days of filing of the transcript of the
testimony or such additional time as the Administrative
Law Judge may allow, each party may file with the
Admidnuative Law Judge proposed findings of fact,
conclusions of law, and order, together with a
supporting brief expressing the reasons for such
proposals. such proposals and brief shall be served on
all parties, and shall refer to all portions of the record
and to all authorities relied upon in support of tach
proposal.
(b) Decision of the Administrative Law Judge. (1)
Within a reasonable time after the time allowed for
filing of proposed findings of fact, conclusions of law,
and order, or within 30 days of receipt of an agreement
containing consent findings and order disposing of the
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disputed matter in whole, the Administrative Law Judge
shall make his/ her decision. If any aggrieved party
desires review of the decision, a petition for review
thereof shall be filed as provided in §6.34 of this tide;
and such decision and order shall be inoperative unless
and until the Administrative Review Board either
declines to review the decision or issues an order
affirming the decision The decision of the
Administrative law Judge shall include findings of fact
and conclusions of law, with reasons and bases therefor,
upon each material issue of fact, law, or discretion
presented on the record. Such decision shall be in
accordance with the regulations and rulings contained
in parr 5 and other pertinent parts of this tide. The
decision of the Administrative Law Judge shall be
based upon a consideration of the whole record,
including any admissions made in the respondent's
answer (response) and §6.32 of this title. It shall be
supported by reliable and probative evidence.
(2) If the respondent is found to have violated the
labor standards provisions of any of the statutes listed in
§5.1 of pari 5 of this title other than the Davis -Bacon
Act, and if debarment action was requested pursuant to
the complaint (notification letter) or any amendment
thereto; the Administrative Law Judge shall issue an
order as to whether the respondent is to be subject to the
ineligible list as provided in §5.12(a)(1) of this tide,
including any findings of aggravated or willful
violations. If the respondent is found to have violated
the Davis -Bacon Act, and if debarment action was
requested, the Administrative Law Judge shall issue as
a part of the order a recommendation as to whether
respondent should be subject to the ineligible list
pursuant to section 3(a) of the Aa, including any.
findings regarding respondent's disregard of obligations
to employees and subcontractors. if wages are found
due and are unpaid, no relief from the ineligible list
shall be ordered or recommended except on condition
thatsuch wages are paid.
(3) The Administrative Law Judge shall make no
findings regarding liquidated damages under the
Contract Work Hours and Safety Standards Act
§ 6.34 Petition for review.
Within 40.days after the date of the decision of the
Administrative Lawjudge (or such additional time as is
granted by the Administrative Review Board). any party
aggrieved thereby who desires review thereof shall file
a petition for review of the decision with supposing
reasons. Such party shall transmit the petition in writing
to the Administrative Review Board, pursuant to pas 7
of this title, with a copy thereof to the Chief
Administrative Law judge. The petition shall refer to
The specific findings of fact, conclusions of law, or
order at issue. A petition concerning the decision on
debarment shall also state the aggravated or willful
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violations and/or disregard of obligations to employees
and subcontractors, or lack thereof, as appropriate.
§ 635 Ineligible lists.
Upon the foul decision of the Administrative law.
Judge or Administrative Review Board, as appropriate,
regarding violations of any statute listed in §5.1 of part 5
of this title other than the Davis- Bacon Act, the
Administrator promptly shall toward to the Comptroller
General the name of any respondent found to have
committed aggravated or willful violations of the labor
standards provisions of such statute, and the name of
any firm, corporation, partnership, or association in
which such respondent has a substantial interest Upon
the final decision of the Administrative Law Judge or
Administrative Review Board, as appropriate, regarding
violations of the Davis -Bacon Act, the Administrator
promptly shall forward to the Comptroller General any
recommendation regarding debarment action against a
responden4 and the name of any firm, corporation,
partnership, or association in which such respondent has
m interest
Subpart D -Substantial Interest Proceedings
§ 6.40 Scope.
This subpart supplements the procedures contained
in §4.12 of part 4 and §5.12(d) of part 5 of this tide,
and states the rules of practice applicable to hearings to
determine whether persons of finis whose names appear
on the ineligible list pursuant to section 5(a) of the .
Service Contract Act or §5.12(ax 1) of part 5 of this title
have a. substantial interest in any firm, corporation,
partnership, or association other than those listed on the
iftligible list; and/or to determine whether persons or
firms whose names appear on the ineligible list pursuant
to section 3(a) of the Davis -Bacon Act have an interest
in any firm, corporation, partnership, or association
other than those listed on the ineligible list.
4 6.41 Referral to Chief Administrative law
Judge.
(a) Upon timely receipt of a request for a hearing
under §4.12 of part 4 or §5.12 of part 5 of this tide,
where the Administrator has determined that relevant
fats are in dispute, or on his/her owns motion, the
Administrator shall refer the case to the Chief
Administrative law Judge by Order of Reference, to
which shall be attached a copy of any findings of the
Administrator and response thereto, for designation of
an Administrative Law Judge to conduct such bearings
as may be necessary to decide the disputed matters. A
copy of the Order of Reference and attachments thereto
shall be served upon the person or firm requesting the
hearing, if any and upon the respondents.
. (b) The findings of the Administrator and response
thereto shall be given the effect of a complaint and
answer, respectively, for purposes of the administrative
Proceedings.
§ 6.42 Amendments to pleadings.
At any time prior to the closing of the bearing
record, the complaint (Administrators findings) or
answer (response) may be amended with the permission
of the Administrative law Judge and upon such terms
as be/she may approve. Such amendments shall be
allowed when justice and the presentation of the merits
are served thereby, provided there is no prejudice to the
objecting party's presentation on the merits. When
issues not raised by the pleadings are reasonably within
the scope of the original complaint and are tried by
express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the
pieadings, and such amendments may be made as
necessary to make them conform to the evidence. The
presiding Administrative Law Judge may, upon such
terms as are just, permit supplemental pleadings setting
forth transactions, occurreoees c r events which have
happened a since the data of the pleadings. and which
are relevant to any of the issues involved. A
continuance in the hearing may be granted or the record
left open to enable the new allegations to be addressed.
§ 6.43 Consent Ridings and order.
(a) At any time prior to the receipt of evidence or, at
the discretion of the Administrative Law Judge; prior to
the issuance of the decision of the Administrative Law
Judge, the parties may enter into consent findings and
an order disposing of the proceeding in whole or in part.
(b) Any agreement containing consent findings and
an order disposing of a proceeding in whole or in part
shall provide:
(1) That the order shall have the same force and
effect as an order made after full hearing:
(2) That the entire record on which any order may be
based shall consist solely of the complaint and the
agreement;
(3) A waiver of any further procedural steps before
the Administrative Law Judge and the Administrative
Review Board, as appropriate, regarding those matters
whiclrare the subject of the agreement; and
(4) A waiver of any right to challenge or contest the
validity of the findings and order entered into in
accordance with the agreement.
(c) Within 30 days after receipt of an agreement
containing consent findings and an order disposing of
the disputed matter in whole, the Administrative Law
Judge shall accept such agreement by issuing a decision
based upon the agreed findings and order. If a such
agreement disposes of only a part of the disputed
matter, a hearing shall be conducted on the matters
remaining in dispute.
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§ 6.44 Decision of the Administrative Law
Judge.
(a) Proposed findings of fact, conclusions, and order.
Within 30 days of filing of the transcript of the
testimony, each party may file with the Administrative
Law Judge proposed findings of fact, conclusions of
law, and order, together with a supporting brief
expressing the reasons for -such proposals. Such
proposals and brief shall be served on all parties, and
shall refer to all portions of the record and to all
authorities relied upon in support of each proposal.
(b) Decision of the Administrative Law Judge. Within
60 days after the time allowed fot filing of proposed
fiodirigs of fact, conclusions of law, and order, or within
30 days after receipt of an agreement containing consent
findings and order disposing of the disputed manor in
whole, the Administrative Law Judge shall make his/ her
decision. If any aggrieved party desires review of the
decision a petition for review thereof shall be filed as
provided in §6.45 of this title, and such decision and
order shill be inoperative unless and until the
Administrative Review Board issues an order affirming
the decision. The decision of the Administrative Law
Judge shall include findings of fact and conclusions of
law, with reasons and bases therefor, upon each material
issue of fact, law, or discretion presented on the record.
Such decision shall be in accordance with the
regulations and rulings contained in parts 4and 5 and
other pertinent parts of this title. The decision of the
Administrative Law Judge shall be based upon a
consideration of the whole record, including any
admissions made in the respondents' answer (response)
and §6.43 of this title.
§ 6.45 Petition for review.
Within 30 days after the date of the decision of the
Administrative Law Judge, any party aggrieved thereby
who desires review thereof shall file a petition for
review of the decision with supporting reasons. Such
party shall transmit the petition in writing to the
Administrative Review Board pursuant to 29 CFR part 8
if the proceeding was under the Service Contract Act, or
to the Administrative Review Board pursuant to 29 CFR
pail 7 if the proceeding was miler §5.12(ax I) of part 5
of this title or under section 3(a) of the Davis -Bacon
Act, with a copy thereof to the Chief Administrative
Law Judge. The petition for review shall refer to the
specific findings of fact, conclusions of law, or order at
issue.
§ 6.46 IrnGgible list
Upon the final decision of the Administrative law
Judge. Administrative Review Board, as appropriate, the
Administrator promptly shall forward to the Comptroller
General the names of any firm, corporation, partnership,
or association in which a person or firm debarred
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pursuant to section 5(a) of the Service Contract Act or
§5.12(a) of pan 5 of this title has a substantial interest;
and/or the name of any firm, corporation, partnership,
or association in which a person or firm debarred
pursuant to section 3(a) of the Davis -Bacon Act has an
interest
Subpart Fr -Substantial Variance and Aim's
Length Proceedings
§ 6.50 Scope.
. This subpart supplements the procedures contained
in §§4.10 and 4.11 of part 4, of this title and states the
rules of practice applicable to hearings under section
4(c) of the Act to determine whether the collectively
bargained wages and/or fringe benefits otherwise
required to be paid under that section and sections.
2(axl) and (2) of the Act,me substantially at variance
withillose which prevail for services of a character
similar in the locality, and/or to determine whether the
wages and/or fringe benefits provided in the collective
bargaining agreement were reached as a result of
arm's-length negotiations.
§ 651 Referral to, Chief Administrative Law
Judge.
(a) Referral pursuant to §¢.10 or §4.11 of part 4 of
this title will be by an Order of Reference from the
Administrator to the Chief Administrative Law Judge,
to which will be attached the material submitted by the
applicant or any other material the. Administrator
considers relevant and, for proceedings pursuant to
§4.11 of this title, a copy of any findings of the ,
Administrator. A copy of the Order of Reference and all
attachments will be sent by mail to the following
parties: The agency whose contract is involved, the
parties to the collective bargaining agreement, any
contractor or subcontractor performing on the contract,
any contractor or subcontractor (mown to be desirous of
bidding thereon or performing services thereunder who
is known or believed to be interested in the
determination of the issue, any unions or other
authorized representatives of service employees
employed or who may be expected to be employed by
such contractor or subcontractor on the contract work,
and any other affected parties known to be interested in
the determination of the issue. The Order of Reference
will have attached a certificate of service naming all
interested parties who have been served.
(b) Accompanying the Order of Reference and
attachments will be a notice advising that any interested
party, including the applicant, who intends to
participate in the proceeding shall submit a written
response to the Chief Administrative law Judge within
20 days of the date on which the certificate of service
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indicates the Order of Reference was mailed. The notice
will state that such a response shall include:
(1) A statement of the interested party's case;
(2) A list of witnesses the interested party will
present, a summary of the testimony each is expected to
give, and copies of all exhibits proposed to be proffered;
(3) A list of persons who have knowledge of the facts
for whom the interested party requests that subpoenas be
issued and a brief statement of the purpose of their
testimony; and
(4) A certificate of service in accordance with §6.3 of
this title on all interested parties, including the
Administrator.
§ 6.52 Appointment of Administrative Law
Judge and notification of preheating conference
and hearing dale.
Upon receipt from the Administrator of an Order of
Reference, notice to the parties, attachments and
certificate of service, the Chief Administrative Law
Judge shall appoint an Administrative Law. Judge to hear
the case. The Administrative Law Judge shall promptly
notify all interested parties of the time and place of a
preheating conference and of the hearing which shall be
held immediately upon the completion of preheating
conference. The date of the piehcaring conference and
hearing shall be not more than 60 days from the date on
which the certificate of service indicates the Order of
Reference was mailed. Sec. 6.53 Rehearing
conference.
(a) At the preheating conference the Administrative
Law Judge shall attempt to determine the exact areas of
agreement and disagreement raised by the
Administrator's Order of Reference and replies thereto,
so that the evidence and arguments presented at the
hearing will be relevant, complete, and as brief and
concise as possible.
(b) Any interested party desiring to file proposed
findings of fact and conclusions of law shall submit
them to the Administrative taw Judge at the preheating
conference. _
(c) If the parties agree that no bearing is necessary to
supplement the written evidence and the views and
arguments that have been presented, the Administrative
Law Judge shall forthwith render his/her final decision.
The Administrative Law Judge with the agreement of
the parties may permit submission of additional written
evidence or argument, such as data accompanied by
affidavits arresting to its validity or depositions, within
ten days of commencement of the prehearing
conference.
§ 6.54 Hearing.
(a) Except as provided in §6.53(c) of this title, the
hearing shall commence immediately upon the close of
the preheating conference. All matters remaining in
controversy, including the presentation of additional
evidence, shall be considered at the hearing. There shall
be a minimum of formality in the proceeding consistent
with orderly procedure,
(b) To expedite the proceeding the Administrative
Law Judge shall, after consultation with the parties, set
reasonable guidelines and limitations for the
presentations to be made at the hearing. The
Administrative Law Judge may limit cross-examination
and may question witnesses.
(c) Under no circumstances shall source data
obtained by the Bureau of Labor Statistics, U.S.
Department of Labor, or the names of establishments
contacted by the Bureau be submitted into evidence or
otherwise disclosed. Where the Bureau has conducted a
survey, the published summary of the data may be
submitted into evidence:
(d) Affidavits or depositions may be admitted at the
discretion of the Administrative Law Judge. The
Administrative Law Judge may also require that unduly
repetitious testimony be submitted as affidavits. Such
affidavits shall be submitted within three days of the
conclusions of the hearing
(e) Council for the Administrator shall participate in
the proceeding to the degree he/she deems appropriate.
(f)An expedited transcript shall be made of the hearing
and of the prehearing conference.
§ 6.55 Closing' of record.
The Administrative Law Judge shall close the record
promptly and not later than 10 days after the date of
commencement of the prehcaring conference.
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Post -hearing briefs may be permitted. but the filing of
briefs shall not delay issuance of the decision of the
Administrative Law Judge pursuant to §6S6 of this title
§ 6.56 Decision of the Administrative Law Judge.
Within 15 days of receipt of the transcript, -the
Administrative Law Judge shall render his/her decision
containing findings of fact and conclusions of law. The
decision of the Administrative Law Judge shall be based
upon consideration oldie whole record, and shallbe in
accordance with the regulations and rulings contained in
part 4 and other pertinent carts of this title. If any party
desires review of the dccistonrapetition for review
thereof shall be filed as provided in §6S7 of this title,
and such decision and order shall be inoperative unless
and until the Administrative Review Board issues an
order affirming the decision. if a petition has not been
filed within 10 days of issuance of the Administrative
Law Judges decision, the Administrator shall promptly
issue any wage determination" which may be required as
a result of the decision.
§ 6.57 Petition for review,
Within 10 days after the date of the decision of the
Administrative Law Judge, any interested party wbo
participated in the proceedings before the Administrative
Law Judge and desires review of the decision shall file a
petition for review by the Administrative Review Board
pursuant to 29 CFR part 8. The petition shall refer to the
specific fundings of fact, conclusions of law, or order
excepted to and the specific pages of transcript relevant
to the petition for review.
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41 CFR 60 - OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS, EQUAL
EMPLOYMENT OPPORTUNITY, DEPARTMENT OF LABOR'
COMPLIANCE RESPONSIBILITY FOR EQUAL EMPLOYMENT OPPORTUNITY
PART 60-1 OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
§,60-1A Equal opportunity clause.
(b) Federally assisted construction contracts. (1)
Except as otherwise provided, each administering
agency shall require the inclusion of the following
language as a condition of any grant; contract. loan,
insurance, or guarantee involving federally assisted
construction which is not exempt fiom the requrements
of the equal opportunity clause:
The applicant hereby agrees that it will incorporate or
cause to be incorporated into any contract for
construction work, or modification thereof,: as defined in
the. regulations of the Secretary, of labor at 41 CFR
Chapter 60, which is paid for in whole or in part with
funds bbWned from the Federal Government or
borrowed on'llie credit of the Federal Government
ptcsuant to a grant, contract, loan insurance, or
guarantee, or undertaken pursuant to any Federal
program involving such grant, contract, loan, insurance,
or guarantee, the following equal opportunity clause:
During the performance of this contract, the contractor
agrees as follows:
(1) The contractor will not discriminate against any,
employee or applicant for employment because of race,
color, religion, sex, or national origin. The contractor
will take affirmative action to ensue that applicants am
employed, and that employees ate treated during
employment without regard to their race, color, religion,
sex, or national origin. such action shall include, but not
be limited to the following. Employment, upgrading,
demotion, or transfer, recruitment or recruitment
advertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training,
including apprenticeship. The contractor agrees to post
in conspicuous places, available to employees and
applicants for employment, notices to be provided
setting forth the provisions of this nondiscrimination
clause.
(2) The contractor will, in all solicitations or
advertisements for employees placed by or on behalf of
the contractor, state that all qualified applicants will
receive considerations for employment without regard
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to race, color, religion, sex, or national origin.
(3) The contractor will send to each labor union or
representative of workers with which he has a collective
bargaining agreement or other contract or
understanding, a notice to be provided advising the said
labor union or workers' tepresentatives of the
contractor's commitments under this section, and shall
Post copies of the notice in conspicuous places available
to employees and applicants for employment
(4) The contractor will comply with all provisions.of
Executive Order 11246 of September 24, 1965, and of
the rules, regulations, and relevant orders of the
Secretary of tabor.
(5) The contractor will furnish all information and
reports required by Executive Order 11246 of
September 24, 1965, and by rules, regulations, and
orders of the Secretary of Labor, or pursuant thereto,
and will permit access to his books, records, and
accounts by the administering agency and the Secretary
of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
(6) In the event of the contractor's noncompliance with
the nondiscrimination clauses of this contract or with
any of the said rules, regulations, or orders, this contract
may be canceled, terminated, or suspended in whole or
in part and the contractor may be declared ineligible for
further Government contracts or federally assisted
construction contracts in accordance with procedures
authorized in Executive Order 11246 of September 24,
1965, and such other sanctions may be imposed and
remedies invoked as provided in Exeeutive.Otder 11246
of September 24, 1965, or by rule, regulation, of order .
of the Secretary of Labor, or as otherwise provided by
law.
(7) The contractor will include the portion of the
sentence immediately preceding paragraph (I) and the
provisions of paragraphs (1) through (7) in every
subcontract or purchase order unless exempted by rules,
regulations, or orders of the Secretary of Labor issued
pursuant to section 204 of Executive Order 11246 of
September 24, 1965, so that such provisions will be
binding upon each subcontractor or vendor. The
contractor will take such action with respect to any
subcontract or purchase order as the administering
agency may direct as a means of enforcing such
provisions, including sanctions for noncompliance:
Provided, however, That in the event a contractor
becomes involved in, or is threatened with, litigation
with a subcontractor or vendor as a result of such
direction by the administering agency the contractor
may request the United States to enter into such
litigation to protect the interests of the United States.
The applicant further agrees that it will be bound by the
above equal opportunity clause with respect to its own
employment practices when it participates in federally
assisted construction work: Provided, That if the
applicant so participating is a State or local government,
the above equal opportunity clause is not applicable to
MY agency, instrumentality or subdivision of such
government which does not participate in work on or
under the contract.
The applicant agrees that it will assist and cooperate
actively with the administering agency and the Secretary
of Labor in obtaining the compliance of contractors and
subcontractors. with the equal opportunity clause and the
. roles, regulations, and relevant orders of the Secretary
of Labor, that it will furnish the administering agency
and the Secretary of Labor such information as they
may require for the supervision of such compliance, and
that it will otherwise assist the administering agency in
the discharge of the agency's prinoary responsibility. for
seaming compliance. The applicant further agrees that
it will refrain from entering into any contract or contract
modification subject to Executive Order 11246 of
September 24, 1965, with a contractor,debared Eton, or
who has not demonstrated eligibility for, Government
contracts and federally assisted construction contracts
pursuant to the Executive order and will carry out such
sanctions and penalties for violation of the equal
opportunity clause as may be 'unposed upon contractors
and subcontractors by the administering agency or the
Secretary of Labor pursuant to Pan D, Subpar D of the
Executive order. In addition, the applicant agrees that if
it fails or refuses to.comply with these undertakings, the
administering agency may take any or all of the
following actions: Cancel,' terminate, or suspend in
whole or in par this grant (contract, loan, insurance,
guarantee); refrain from extending any further
assistance to the applicant under the program with
respect to which the failure or refund occurred until
satisfactory assurance of future compliance has been
received from such applicant; end refer the case to the
Department of Justice for appropriate legal proceedings.
(c) Subcontracts. Each nonexempt prime contractor or
subcontractor shall include the equal opportunity clause
in each of its nonexempt subcontracts.
(d) Incorporation by reference. The equal opportunity
clause may be incorporated by reference in all
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Government contracts and subcontracts, including
Government bills of lading, transportation requests,
contracts for deposit of Government funds, and
contracts for issuing and paying U.S. savings bonds and
notes, and such other contracts and subcontracts as the
Director may designate.
(e) Incorporation by operation of the order. By
operation of the order, the equal opportunity clause shall
be considered to be a pan of every contract and
subcontract required by the order and the regulations in
this part to include such a clause whether or not it is
physically incorporated in such contracts and whether or
not the contract between the agency and the contractor
is written.
(0 Adaptation of language. Such necessary changes in
language may be made in the equal opportunity clause
as shall be appropriate to identify properly the parties
and their undertakings.
§ 60-1.7 Reports and other required
information
(a) Requirements for prime contractors and
subcontractors.
(i) Each prime contractor and subcontractor shall file
annually, on or before the 31st -day of March, complete
and accmate reports on Standard Form 100 (EEO.1),,
promulgated jointly by the Office of Federal Contract
Compliance Programs, the Equal Employment
Opportunity Commission and Plans for Progress or such
form as may hereafter be promulgated in its place if
such prime contractor or subcontractor (1) is not exempt
from the provisions of these. regulations in accordance
with § 60-1 S; (u) has 50 or more employees; (iii) is a
prime contractor or first tier subcontractor; and (rv) has
a contract, subcontract or purchase order amounting to
$50,000 or more or serves as a depository of
Govemmeot funds in any amount, or is a financial
institution which is an issuing and paying agent for U.S.
savings. bonds and savings notes: Provided, Thal any
subcontractor below the first tier which performs
construction work at the site of construction shall be
required to file such a report if it meets requirements of
paragraphs (aXl) M Ct), and (iv) of this section:
(2) Each person required by § 60-1.7(aXl) to submit
reports shall file such a report with the contracting or
administering agency within 30 days after the award to
him of a contract m subcontract, unless such person has
submitted such a report within 12 mouths preceding the
date of the award. Subsequent reports shall be submitted
annually in accordance with
§ 60-1.7(aXl), or at such other intervals. as the Director
may require. The Director may extend the time for filing
any report
(3) The Director or the applicant, nn their own
motions, may "ire a contractor to keep employment
or other records and to furnish, in the form requested,
within reasonable limits, such information as the
Director or the applicant dams necessary for the
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administration of the order.
(4) Failure to file timely, complete and accurate reports
as required constitutes noncompliance with the prime
contractor's or subcontractors obligations under the
equal opportunity clause and is ground for the
imposition by the Director, an applicant, prime
contractor or subcontractor, of any sanctions as
authorized by the order and the regulations in this part.
(b) Requirements for bidders or prospective
contractors -(1) Certification of compliance with Part
60-2: Affirmative Action Programs. Each agency shall
require each bidder or prospective prime contractor and
proposed subcontractor, where appropriate, to state in
the bid or in writing at the outset of negotiations for the
contract: (f) Whether it has developed and has on file at
each establishment affirmative action programs pursuant
to Part 60-2 of this chapter; (u) whether it has
participated in any previous contract or subcontract
subject to the equal opportunity clause; (iii) whether it
has filed with the Joint Reporting Comntittee, the
Director or the Equal Employment Opportunity
Commission all reports due under the applicable filing
requirements.
(2) Additional information -.A bidder or prospective
prime contractor or proposed subcontractor shall be
required to submit such information as the Director
requests prior to the award of the contract or
subcontract. When a determination has been made to
award the contract or,subcontraci to a specific
contractor, such contractor shall be required, prior to
award, or after the award, or both, to furnish such other
information as thcapplicanl or the Director requests.
(c) Use of reports. Reports filed pursuant to this section
shall be used only in connection with the administration
of the order, the Civil Rights Act of 1964, or in
furtherance of the purposes of the order and said Act.
§ 60-1.8 Segregated facilities.
(a) General. In order to comply with his obligations
under the equal opportunity clause, a prime contractor
or subcontractor must insure that facilities provided for
employes are provided in such a manner that
segregation on the basis of race, color, religion, or
national origin cannot result He may neither require
such segregated use.by written or oral policies nor
tolerate such use by employee custom. His obligation
extends further to insuring that his employees are not
assigned to perform their services at any location, under
his control, where the facilities are segregated. This
obligation extends to all contracts containing the equal
opportunity clause regardless of the amount of the
contract The term'facilities"as used in this section
means waiting rooms, work areas, tutaurants and other
eating areas, time clocks, restrooms, washrooms, locker
rooms, and other storage or dressing areas, parking lots,
drinking fountains, recreation or cntcnamment areas,
transportation, and housing facilities provided for
employees.
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(b) Certification by prime contractors and
subcontractors. Prior to the award or any nonexempt
Government contract of subcontract or federally assisted
construction contract or subcontract, each agency or
applicant shall require the prospective prime contractor
and each prime contractor and subcontractor shall
require each subcontractor to submit a certification, in
the form approved by the Director, that the prospective
prime contractor or subcontractor does not and will not
maintain any facilities he provides for his employees in
a segregated manner, or permit his employees to
perform their services at any location, under his control,
where segregated facilities. are maintained; and that he
will obtain a similar certification in the form approved
by the Director, prior to the award of any nonexempt
subcontract.
143 FR 49240, Oct 20, 1979.43 FR 51400, Nm. 3. 1976]
§ 604.2 Solicitations.
(a) All Federal contracting officers and all applicants
shall include the notice set forth in paragraph (d) of this
section and the Standard Federal Equal Employment
Opportunity Construction Contract Specifications set
forth in § 604.3 of this part in all solicitations for offers
and bids on all Federal and federally assisted
construction contracts or subcontracts to be performed
in geographical areas designated by the Director
pursuant to § 60-4.6 of the part Administering agencies
shall require the inclusion of the notice set forth in
paragraph (d) of this section and the specifications set
forth in § 60-4.3 of this pan as a condition of any grant,
contract, subcontract, loan, insurance or guarantee
involving federally assisted construction covered by this
Pan 60-4.
(b) All mtrconstmction contractors covered by
Executive Order 11246 and the implementing
regulations shall include the notice in paragraph (d) of
this section in all construction agreements which are
necessary in whole or in part to the perfomtance.of.the
covered oonconstruction contracL
(c) Contracting officers, applicants and
nonconstruction contractors shall given written notice to
the Director within 10 working days of award of a
contract subject to these provisions. The notification
shall include the name, address and telephone number
of the contractor, employer identification number, dollar
amount of the contract, estimated starting and
completion dates of the contract; the contract number,
and geographical area in which the contract is to be
performed.
(d) The following notice shall be included in, and shall
be a part of, all solicitations for offers and bids on all
Federal and federally assisted construction contracts or
subcontracts in excess of S 10,000 to be performed in
geographical areas designated by the Director pursuant
to § 60-4.6 of this pan (see 41 CFR 60-4.2(a)):
NOTICE OF REQUIREMENT' FOR AFFIRMATIVE
ACTION TO ENSURE EQUAL EMPLOYMENT
OPPORTUNrIY (EXECUTIVE ORDER 11246)
1. The Offerors or Bidder's attention is called to the
'Equal Opportunity Clause and the'Standard Federal
Equal Employment Specifications* w forth herein.
2. The goals and timetables for minority and female
participation, expressed in percentage terms for the
Contractor's aggregate worldorce in each trade on all
construction work in the covered area, are as follows:
Time- Goals for minority Goals for female
Tables participation for participation in
each trade each. trade
Insert goals for Insert goals for
each year. .each year.
These goals are applicable to all the Contractoe-s
constriction work (whether or not it is Federal or
federally assisted) performed in the covered area If the
contractor performs construction work in a geographical
area located outside of the covered area, it shall apply
-the goals established for such geographical area where
the work is actually peiforrned:'With regard to this
second, area, the contractor also is subject to the goals
for both its federally involved and nonfederally involved
construction. - .: .
The Contractor's compliance with the Executive Order
and the regulations in 41 CFR Part 60-4 shall be based
on its implementation of the Equal Opportunity Clause,
specific affirmative action obligations required by the
specifications set forth in 41 CFR 6043(a), and its
efforts to meet the goals. The hours of minority and
female employment and training must be substantially
uniform throughout the length of the contract, and in
each trade, and the contractor shall make a good faith
effort to employ minorities and women evenly on each
of its projects. The transfer of minority or female
employees or trainees from Contractor to Contractor or
from project to project for the sole purpose of meeting
the Contractor's goals shall be a violation of the
contract; the Executive Order and the regulations in 41
CFR Part 60-4. Compliance with the goals will be
Treasured against the total work hours performed.
3. The Contractor shall provide written notification to
the Director of the Office of Federal Contract
Compliance Programs within 10 working days of award
of any construction subcontract in excess of 510,000 at
any tier for construction work -and" the contract
resulting from this solicitation. The notification shall list
the name, address and telephone number of the
subcontractor, employer identification number of the
subcontractor; estimated dollar amount of the
subcontract; estimated starting and completion dates of
the subcontract; and the geographical area in which the
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subcontract is to be performed.
4. As used in this Notice, and in the contract resulting
from this solicitation, the 'covered area' is (insert
description of the geographical areas where the contract
is to be performed giving the state, county and city, if
any).
143 FR 49254, C r 20.1978; 43 FR 51401, Nm. 3. 1978, as amended
W 45 FR 659r7. Co. 3.19901
§ 6043 Equal opportunity clauses.
(a) The equal opportunity clausepublishedat 41 CFR
60-1.4(a) of this chapter issequired to be included in,
and is part of, all nonexempt Federal contracts and
subcontracts, including construction contracts and
subcontracts. The equal opportunity clause published at
41 CFR 60-1.4(b) is requited to be included in; and is a
pari of, all nonexempt federally assisted construction
contracts and subcontracts. In addition to the clauses
described above, all Federal contracting officers, all
applicants and all noieonstruction contractors, as
applicable, shall include the specifications set forth in
this section in all Federal and federally assisted
construction contracts in excess of $10,000 to be
performed in geographical areas designated by the
director pursuant to § 6G4.6 of this part and in
consmrction subcontracts in excess of $10.000
necessary in whole or in part to the performance of
nonconsbuction Federal contracts and subcontracts
covered under the Executive order.
STANDARD FEDERAL EQUAL EMPLOYMENT
OPPORTUNITY CONSTRUCTION CONTRACT
SPECIFICATIONS (EXECUTIVE ORDER 11246)
1. As used in these specifications:
a. 'Covered area' means the geographical area described
in the solicitation from which this contract resulted;
b'. 'Director' means Director, Office of Federal Contract
Compliance Programs, United States Departmenfof
Labor, or any person to whom the Director delegates
authority,
c. 'Employer identification number' means the Federal
Social Security number used on the Employer's -
Quarterly Federal Tax Retnru, U.S. Treasury
Department Form 941.
d. 'Minority* includes:
(i) Black (all persons having origins in any of the Black
African racial groups not of Hispanic origin);
(ii) Hispanic (all persons of Mexican, Poetto Rican,
Cuban, Central or South American or other Spanish
Culture or origin, regardless of race);
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' (iii) Asian and Pacific Islander (all persons having
origins in any of the original peoples of the Far East,
' Southeast Asia, the Indian Subcontinent, or the Pacific
Islands): and
(iv) American Indian or Alaskan Native (all persons
' having origins in any of the original peoples of North
America and maintaining identifiable tribal affiliations
through membership and participation or community
identification).
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2. Whenever the Contractor, or any Subcontractor at any
tier, subcontracts a portion of the work involving any
construction trade, it shall physically inc)ode in each
subcontract in excess of $10,000 the provisions of these
specifications and the Notice which contains the
applicable goals for minority and female participation
and which is set forth in the solicitations from which
this contract resulted:
3. I( the Contractor is participating (pursuant to 41 CFR
_60.45) in a Hometown Plan approved by the U.S.
Department of Labor in the covered area either
individually or through an association, its affirmative
action obligations on all work in the Plan area
(including goals and timetables) shall be in accordance
with that Plan for those trades which have unions
participating in the Plan: Conhactors must be able to
demonstrate their participation in and compliance with
the provisionsofany such Hometown Plan. Each
Contractor or Subcontractor -participating in an
approved Plan is individually required to comply with
is obligations under the EEO clause, and to make a
good faith effort to achieve each goal undei the Plan in
each trade in which it has employees. The overall good
faith performance by other Contractors or
Subcontractors toward a goal in an approved Plan does
not excuse any covered Contractor's or Subcontractors
failure to take good faith efforts to achieve the Plan
goals and timetables.
4. The Contractor shall implement the specific
affirmative action standards provided in paragraphs 7 a
through p of these specifications. The goals set forth in
the solicitation from which this contract resulted are
expressed as percentages of the total boors of -
employment and training of minority and female
utilization the Contractor should reasonably be able to
achieve in each construction trade in which it has
employees in the covered area Covered Construction
contractors pulcrung construction work in
geographical areas where they do not have a Federal or
federally assisted construction contract shall apply the
minority and female goals established for the
geographical area where the work is being performed.
Goals are published periodically in the Federal Register
in notice foam and such notices may be obtained from
any Office of federal Contract Compliance Programs
office or from Federal procurement contracting officers.
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The Contractor is expected to make substantially
uniform progress in meeting its goals in each craft
during the period specified.
5. Neither the provisions of any collective bargaining
agreement, nor the failure by a union with whom the
Contractor has a collective bargaining agreement, to
refer either minorities or women shall excuse the
Contractor's obligations under these specifications,
Executive Order 11246, or the regulations promulgated
pursuant thereto.
6. In order for the nonworking training hours of
apprentices and trainees to he counted in meeting the
goals, such apprentices and traioecs most be employed
by the Contractor during the training period, and the
Contractor must have made a commitment to employ
the apprentices and trainees at the completion of their
training, subject to the availability of employment
opportunities. Trainees must be trained pursuant to.
training programs approved by the U.S. Department of
Labor.
7. The Contractor shall take specific affrmativc actions
to ensure equal employment opportunity. The evaluation
of the Contractors compliance with these specifications
shall be based upon its effortio achieve maximum
results from its actions. The Contractor shall document
these efforts fully, and shall implement affirmative
action steps at least as extensive as the following:
a Ensure and maintain a waking environment free of
harassment, intimidation, and coercion at all sites, and
in all facilities at which the Contractor's employees aro
assigned to wort The Contractor, where possible, will
assign two or rare women to each construction project.,
The Contractor shall specifically ensure that all
foremen, superintendents, and other on-site supervisory
personnel are aware of and carry out the Contractor s
obligation to maintain such a working environment,
with specific attention to minority or female individuals
working at such sites or in such facilities.
b. Establish and maintain a current list of minonTy and
female recruitment sources, provide written notification
to minority and female recruitment sources and to
community organizations when the Contractor or its
unions have employment opportunities available, and
maintain a record of the organizations'responses.
c. Maintain a current file of the names, addresses and
telephone numbers of each minority. and female
off -the -street applicant and minority or female referral
from a union, a recruitment source or community
organization and of what action was taken with respect
to each such individual. If such individual was sent to
the union hiring hall for referral and was not referred
back to the Contractor by the union or, if referred, not
employed by the Contractor, this shall be documented in
the file with the reason therefor, along with whatever
additional actions the Contractor may have taken.
d. Provide immediate written notification to the Director
when the union or unions with which the Contractor has
a collective bargaining agreement has riot referred to the
Contractor a minority person or woman sent by the
Contractor, or when the Contractor has other
information that the union referral process has impeded
the Contractors efforts to meet its obligations.
e. Develop on-lbe-job training opportunities andlor
participate in training programs for the area which
expressly include minorities and women, including
upgrading programsand apprenticeship and trainee
programs relevant to the Contractors employment
needs, especially those program funded or approved by
the Department of Labor. The Contractor shall provide
notice of these programs to the sources compiled under
7b above.
f. Disseminate the Contractors IFA policy by providing
notice of the policy to unions and training programs end
requesting their cooperation in assisting the,Contractor
in meeting its EEO obligations; by including it in any
policy,manual and collective bargaining agreement; by
publicizing rt in the company newspaper, annual report,
etc.; by.specific review of the policy with all
management personnel and with all minority.and female
employees at least once a year, and by posting the
company EEO policy on bulletin boards accessible to all
employees at each location where coostmction work is
performed.
g. Review, at least annually, the company+; EFA policy
and affirmative action obligations under these
specifications with all employees having. MY.
responsibility for hiring, assignment, layoff. termination
or other employment decisions including specific
review:of these.items with onsite supervisory personnel
such as Superintendents, General Foremen, etc., prior to
the initiation of construction work at any job site. A
written record shall be made and maintained identifying
the time and place of these meetings, persons attending,
subject matter discussed, and disposition of the subject
matter.
h. Disseminate the Contractor's EEO policy externally
by including it in any advertising in the news media,
specifically including minority and female news media,
and providing written notification to. and.discussing the
Contractor's EEO policy with. other.Contractors and
Subcontractors with whom the Contractor does or
anticipates doing business.
i. Direct its recruitment efforts, both oral and written, to
minority, female and community organizations, to
schools with minority and female students and to
minority and female recruitment and training
23
organizations serving the Contractor's recruitment arca
and employment needs. Not later than one month prior
to the date for the acceptance of applications for
apprenticeship or other training by any recruitment
source, the Contractor shall send written notification to
organizations such as the above, describing the
openings, screening procedures, and tests to be used in
the selection process.
j. Encourage present minority and female employees to
recruit other minority persons and women and, where
reasonable; provide after school, summer and vacation
employment to minority and female youth both on the
site and in other areas of a Contractors work force.
k. Validate all tests and other selection requirements
where there is an obligation to do so under 41 CFR Part
60.3.
1. Conduct, at least annually, an inventory and
evaluation at least of all minority and femalepersonoel
for promotional opportunities and encourage these
employees to seek or to prepare for, through appropriate
training, etc., such opportunities.
m Ensure that seniority practices, job classifications,
work assignments and other personnel practices, do not
have a discriminatory effect by continually monitoring
all personnel and employment related activities to.
ensure that the EEO policy and the Contractors
obligations under these specifications are being carrion
out_
n. Ensure that all facilities and company activities are
nonsegregated except that separate or single -tun toilet
and necessary changing facilities shall be provided to
assure privacy between the sexes.
o. Document and maintain a record of all solicitations of
offers for subcontracts from minority and female
construction contractors and suppliers, including.
circulation of solicitations to minority and female
contractor associations and other business associations.
p. Conduct a review, at least annually. of all supeivitors _
adherence to and performance under the Contractors
EEO policies and affirmative action obligations.
8. Contractors are encouraged to participate in voluntary
associations which assist in fulfilling one or more. of
their affirmative action obligations (7a through p). The
efforts of a contractor association, joint
contractor -union, contractor -community. or other
similar group.of which the contractor is a member and
participant, may be asserted as fulfilling any one or
more of its obligations under 7a through p of these
Specifications provided that the contractor actively
participates in the group, makes every effort to ass=
that the group has a positive impact on the employment
of minorities and women in the industry, ensures that
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the concrete befits of the program are reflected in the
Contractor's minority and female workforce
participation, makes a good faith effort to meet its
individual goals and timetables, and can provide access
to documentation which demonstrates the effectiveness
of actions taken on behalf of the Contractor. The
obligation to comply, however, is the Contractors and
failure of such a group to fulfill an obligation shall not
be a defense for the Contractor's noncompliance.
9. A single goal for minorities and a separate single goal
for women have been established. The Contractor,
however, is required to provide equal employment
opportunity and to take affirmative action for all
minority groups, both male and female, and all women,
both minority and non -minority. -Consequently, the
Contractor may be in violation of the Executive Order if
a particular group is employed in a substantially
disparate manner (foe example, even though the
Contractor has achieved its goats for women generally,
the Contractor may be in violation of the Executive
Order if a specific minority group of women is
underutilized).
10. The Contractor shall not use the goals and
' timetables or affirmative action standards to
disciiminate against any person because of race, color,
religion, sex, or national origin.
' 11. The Contractor shall not enter into any Subcontract
with any person or firm debarred from Government
contracts pursuant to Executive Order 11246.
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12. The Contractor shall carry out such sanctions and
penalties for violation of these specifications and of the
Equal Opportunity Clause, including suspension,
termination and cancellation of existing subcontracts as
may be imposed or ordered pursuant to Executive Order
11246, as amended, and its implementing regulations,
by the Office of Federal Contract Compliance
Programs. Any Contractor who fails to carry out such
swictiont and penalties shall be in violation of these
specifications. and Executive Order 11246, as amended.
13. The Contractor, in fulfilling its obligations under
these specifications, shall implement speck
affirmative action steps, at least as extensive as those
24
standards prescribed in paragraph 7 of these
specifications, so as to achieve maximum results from
its efforts to ensure equal employment opportunity. if
the Contractor fails to comply with the requirements of
the Executive Order, the implementing regulations, or
these specifications, the Director shall proceed in
accordance with 41 CFR 604.8.
14. The Contractor shall designate a responsible official
to monitor all employment related activity to ensure that
the company EEO policy is being carried out, to submit
reports relating to the provisions hereof as may be
required by the Government and to keep records.
Records shaft at least illcludt for each employee the
name, address, telephone numbers, construction trade,
union affiliation if any, employee identification number
when assigned, social security number, race; sex, status.
(e.g.. mechanic, apprentice trainee, helper, or laborer),
dates of changes in'status, hours worked per week in the
indicated trade, rate of pay, and locations at which the
work was performed. Records shall be maintained,in an
easily understandable and retrievable form; however, to
the degree that existing records satisfy this,requirement,
contractors shall not be required to maintain separate
records.
15. Nothing herein provided shall be construed as a
limitation upon the application of other laws which
establish different standards of compliance or upon the
application of requirements for the hiring of local or
other area residents (e.g., those under the Public Works
Employment Act of 1977 and the Community
Development Block Grant Program).
(b) The notice set forth in 41 CFR 60-0.2 and the
specifications set forth in 41 CFR 60-43 replace the
New Form for Federal Equal Employment Opportunity
Bid Conditions for Federal and Federally Assisted
Construction published at 41 FR 32482 and commonly
known w the Model Federal EEO Bid Conditions, and
the New Form shall not be used after the regulations in
41 CFR Part 60-4 become effective.
(43 FR 49254, Oct 20.1978;43 FR 51401, Nov. 3, 1978, w
uamded X 45 FR 65970. Oct 3, 19801
40 CFR PART 7 - NONDISCRIMINATION IN PROGRAMS RECEIVING FEDERAL
ASSISTANCE FROM THE ENVIRONMENTAL PROTECTION AGENCY
Subpart A—General
This pan implemcots: Title VI of the Civil Rights Act
of 1964, as ameoded; section 504 of the Rehabilitation
Sec
Act of 1973, as amended; and section 13 of the Federal
7.10
Purpose of this pan.
Water Pollution Control Act Amendments of 1972,
7.15
Applicability.
Public Iaw 92-500, (collectively, the Acts).
7.20
Responsible agency officers.
7.25
Definitions.
§7.15 Applicability.
Subpart B= -Discrimination Prohibited on the
Basis of Race, Color, National Origin or Sex
7.30 General probibitioo.'
7.35 Specific prohibitions.
Subpart C—Discrivination Prohibited on the
Basis of Handicap
7.45 General prohibition.
750 Specific prohibitions against discrimination:
755 Separate or different programs.
7.60 Prohibitions and requirements relating to
employmen0
7.65 Accessibility.
7:70 New construction
7.75 Traasitionplan.
Subpart D—Requfrernents for Applicants and
Recipients
7.80 Applicants.
7.85 Recipients.
790 Grievance procedures. .
7.95 Notice of nondiscrimination.
7.100 Intimidation and retaliation prohibited.
Subpart E—Agency Compliance Procedures
7.105 General policy.
7.110 Preaward compliance.
7.115 Postaward compliance.
7.120 Ccmiplaint investigations.
7.125 Coordination with other agencies.
7.130 Actions available to EPA to obtain compliance.
7.135 Procedure for regaining eligibility.
Authority. 42 U.S.C. 20004 to 2000d-4; 29 U.S.C. 794; 33
U.S.C. 1251 nt.
Sources 49 FR 1659, lam 12, 1984, unless otherwise noted.
Subpart A—General
§ 7.10 Purpose of this part.
This part applies to all applicants for, and recipients of,
EPA assistance in the operation of programs or activities.
receiving such assistance beginning February 13, 1984.
New construction (§7.70) for whichdesignwas initiated
prior to February 13, 1984, shall comply with the
accessibility requirements in the Department of Health,
Education and Welfare (now the Department of Health
and Human Services) nondiscrimination regulation, 45
CFR 84.23, issued lune 3, 1977, or with equivalent
standards that ensure the facility is readily accessible to
and usable by handicapped persons. Such assistance
includes but is not limited to that which is listed in the
Catalogue of Federal Domestic Assistance under the
66.000 series. It supersedes the provisions of former 40
CFR parts 7 and 12.
§7.20 Responsible agency officers.
(a) The EPA Office of Civil Rights (OCR) is.
responsible for developing and administering EPA's
compliance programs under the Acts.
(b) EPA's Project Officers will, to the extent possible,_
be available to explain to each recipient its obligations
under this pan and to provide recipients with technical
assistance or guidance upon request.
§.7.25 Definitions.
As used in this pan:
Administrator means the Administrator of EPA. It
includes any other agency official authorized to act OR
his or her behalf, unless explicity stated otherwise.
Alcohol abuse means any misuse of alcohol which
demonstrably interferes with a person's health,
interpersonal relations or worlang ability.
Applicants means any entity that files an application or
unsolicited proposal or otherwise requests EPA
assistance (see definition for EPA assistance)L
Assistant Attorney General is the head of the Civil
Rights Division, U.S. Department of Justice.
Award Official means the EPA official with the
authority to approve and execute assistance agreements
and to take other assistance related actions authorized by
this pan and by other EPA regulations or delegation of
authority.
Thug abuse means:
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(a) The use of any drug or substance listed by the
Department of Justice in 21 CFR 1308.11, under
authority of the Controlled Substances Act, 21 U.S.C.
801, as a controlled substance unavailable for
prescription because:
(1) The drug or substance has a high potential for
abuse,
(2) The drug or other substance has no currently
accepted medical use in treatment in the United States, or
(3) Isere is a lack of accepted safety for use of the
drug a other substance under medical supervision.
Now Examples of dings under paragraph (aXl) of this section
include cumin opiates and opiate derivatives (eg., heroin) and
hallucinogenic substances (e.g., marijuana, mescaline, peyote)
and depressants (e.g., methaqualone). Examples of (ax2)
include opium. coca leaves, methadone, amphetamines and
banbitwates.
(b) The misuse of any drug or substance listed by the
Department of Justice in 21 CFR 1308.12-1308.15 under
authority of the Controlled Substances Act as a
controlled substance available for prescription.
EPA meant the United States Environmental Protection
Agency.
EPA assistance means any grant or cooperative
agreement, loan, contract (other than a procurement
contract or a contract of insurance or guaranty), or any
other arrangement by which EPA provides or otherwise
makes available assistance in the form of:
(I) Funds;
(2) Services of personnel; or
(3) Real or personal property or any interest in or use
of such property, including:
(i) Transfers or leases of such property for less than
far market value or for reduced consideration; and
(ii) Proceeds from a subsequent transfer or lease of
such property if EPA's share of its fair market value is
nes returned to EPA.
Facility means all, or myfimi'of, or any interests in
structures, egwpmen4 roads; walks, parking lots, or oilier
real or personal property.
Handicapped person:
(a)Handicapped person meant any person who (1)
has a physical of mental impairment which substantially
limits one or more major life activities, (2) has a record
of such an impairment, or (3) is regarded as having such
an impairment. For purposes of employment, the term
handicapped person does not include any person who is
an alcobofic or drug abuser whose cement use of alcohol
or drugs prevents such individual from performing the
duties of the job in question or whose employment, by
reason of such current drug m alcohol abuse, would
constitute a direct threat to property or the safety of
others.
(b) As used in this paragraph, the phrase:
(])Physical or mental 1pafrment meant (i) any
physiological disorder or conditioa, cosmetic
disfigurement, or anatomical loss affecting one or more
of the following body systems: Neurological;
musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular, reproductive;
digestive; genito-urinary; hemic and lymphatic; skin; and
endocrine; and (ii) any mental or psychological disorder,
such as mental retardation, organic brain syndrome,
emotional or mental illness, and specific learning
disabilities.
(2) Major life activities meant functions such as
caring for one's self, performing manual tasks, walking,
seeing, hearing, speaking, bteatlting, learning, and
working.
(3) Has a record of such an impairment means has a
history of. or has been misclassified as having, a trental
or physical impairment that substantially limits one or
more major life activities.
(4) Is regarded as having an impairment means:
(i) Has a physical or mental impairment that does not
substantially limit major life activities but that is treated
by a recipient as constituting such a limitation;
(ii) Has a physical or trental impairment that
substantially limits major fife activities only as a result of.
the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined above but is
treated by a recipient as having such an impairment.
Office of Card Rights or OCR meant the Director of the
Office of Civil Rights, EPA Headquarters or his/her
designated representative.
Project OJfncer means the Cr'A otrnenal designated in
the assistance agyeemenl (as defined in EPA assistance)
as EPA's program contact with the recipient; project
Officers are responsible for monitoring the project
Qualified handicapped person means:
(a) With respect to employment: A handicapped
person who, with reasonable accommodation, can
perform the essential functions of the job in question.
(b) With respect to services: A handicapped person
who meets the essential eligibility requirements for the
receipt of such services.
Racial clarsijrcadonr:'
' Additional subcategories based on national origin or
primary lmguge spoken may be used where appropriate on
tither a national or a regional basis. Subparagraphs (a) through
(e) are in conformity with Directive 15 of the Office of Federal
Statistical Policy and Standards, whose function is now in the
Office of frformation and Regulatory Affain, Office of
Management and Budget. Should that office, or any successor
office, change or otherwise avend the categories listed in
Directive 15, the ategorics in this paragraph span be
interpnmed to conform with any such changes or amendments.
(a) American Indian or Alaskan native. A person
having origins in any of the original peoples of North -
America, and who maintains cultural identification
through tribal affiliation or community recognition.
(b) Asian or Pacific Islander. A person having origins.
in any of the original peoples of the Far East, Southeast
Asia, the Indian subcontinent, or the Pacific Islands. This
area includes, for example, China, Japan, Korea, the
Philippine Islands, and Samoa
(c) Black and nor of Hispanic origin- A person
26
having origins in any of the black racial groups of Africa
(d) Hirpanic. A person of Mexican, Puerto Rican,
Cuban, Central or South American or other Spanish
culture or origin, regardless or race.
(e) White,.nor of HiTiutie origin. A person having
origins in any of the original peoples of Europe, North
.Africa, m the Middle East
Recipient means, for the purposes of this regulation,
any State or its political subdivision, any instrumentality
of a State or its political subdivision, any public or
private agency, institution, organization, or other entity,
or any person to which Federal financial assistance is
extended directly of through another recipient, including
any successor, assignee, or transferee of a recipient, but
excluding the ultimate beneficiary of the assistance.
Section 13 refers to section 13 of the Federal Water
Pollution Control Act Amendments of 1972.
United States includes the States of the United States,
the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, American Samoa, Guam, Wake
Island, the Canal Zone, and all other territories and
possessions of the United States; the term State includes
any one of the foregoing.
Subpart B—Discrimination Prohibited on the
Basis of Race, Color, National Origin or Sex
§ 730 General prohibition.
No person shallbe excluded from participation in, be
denied the benefits of, or be subjected to discrimination
under any program or activity receiving EPA assistance
on the basis of race, color, national origin, or on the basis
of sex in any program or activity receiving EPA
assistance under the Federal Water Pollution Control Act.
as amended, including the Environmental financing Act
of 1972.
§ 735 Specific prohibitions.
(a) As to any program or activity receiving EPA
assistance: a recipient shall not directly or through
contractual, licensing, or other arrangements on the basis
of race, color, national origin or, if applicable, sex:
(1) Deny a person my service, aid or other benefit of
the program;
(2) Provide a person any service, aid or other benefit
that is different, or is provided differently from that
provided to others under the program;
(3) Restrict a person in my way in the enjoyment of
my advantage or privilege enjoyed by others receiving
any service, aid, or benefit provided by the program;
(4) Subject a person to segregation in any Iran= or
separate treatment in any way related to receiving
services or benefits under the program;
(5) Deny a person or any group of persons the
opportunity to participateps members of any planning or
advisory body which is an integral part of the program,
such as a local sanitation board or sewer authority;
(6) Discriminate in employment on the basis of sex in
my program subject to section 13, or on the basis of race,
color, or national origin in any program whose purpose is
to create employment; or, by means of employment
discrimination, deny intended beneficiaries the benefits
of the EPA assistance program, or subject the
beneficiaries to prohibited discrimination.
(7) In administering a program or activity receiving
Federal financial assistance in which the recipient has
previously discriminated. on the basis of race, color, sex,
or national origin, the recipient shall take affirmative
action to provide remedies to those who have been
injured by the d rni^ation.
(b) A recipient shall not use criteria or methods of
administering its program which have the effort of
subjecting individuals to discrimination because of their
race, color, national origin, or sex; or have the effect of
defeating or substantially impairing accomplishment of
the objectives of the program with respect to individuals
of a particular race, color, national origin, or sex. .
(c) A recipient shall oot choose mite or location of a
facility that has the purpose or effect of excluding .
individuals from, denying them the benefits of,, or .
subjecting them to discrimination under any program to.
which this part applies on the grounds of race, color, of
national origin or sex; or with the puipose or effect sof
defeating or substantially impairing the accomplishment
of the objectives of this subpart .
(d) The specific prohibitions of discrimination
enumerated above do not limit the general prohibition of
§7.30.
Subpart C—Discrimination Prohibited on the.
Basis of Handicap
§ 7.45 General prohibition.
No qualified handicapped person shall solely on the
basis of handicap be excluded from participation in; be.
denied the benefits of, or otherwise be subjected to.
discrimination under any program or activity receiving
EPA assistance. .
§ 750 Speofic prohibitions against discrimination.—
(a) A r cipicn4 in providing �y:aid.,beuefit or
service under my program or activity receiving EPA
assistance shall not, onthe basis of handicap, directly Cir
throuih contractual, licensing, or other.amngeme6t . .
(1) Deny a qualified handicapped person any service,
aid or other benefit of a federally assisted program; '
(2) Provide different or separate aids, benefits. or .
services to handicapped persons or to.any.ctass of
handicapped persons than is provided to others ®less the
action is necessary to provide qualified handicapped
persons with aids, benefits, or services th* are as _
effective as those provided to others;
(3) Aid or perpetuate discrimination against a
qualified handicapped person by providing significant
assistance to an entity that discriminates on the basis of
handicap in providing aids, benefits, or services to
beneficiaries of the recipient's program;
(4) Deny a qualified handicapped person da
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opportunity to participate as a member of planning or
advisory boards; or
(5) Limit a qualified handicapped person in any other
way in the enjoyment of any right, privilege, advantage,
or opportunity enjoyed by others receiving an aid, benefit
or service from the program.
(b) A recipient may not, in determining the site or
location of a facility, make selections: (1) That have the
'effect of excluding handicapped persons from, denying
them the benefits of, or otherwise subjecting them to
discrimination under any program or activity that
receives or benefits from EPA assistance or (2) that have
the purpose or effect of defeating or substantially
impairing the accomplishment of the objectives of the,
program of activity receiving EPA assistance with
respect to handicapped persons.
(c) A recipient shall not use criteria or methods of
administering any program or activity receiving EPA
assistance which have the effect of subjecting individuals
to discrimination because of their handicap, or have the
effect of defeating or substantially impairing
accomplishment of the objectives of such program or
activity with respect to handicapped persons.
(d) Recipients shall take appropriate steps to ensure
that communications with their applicants, employees,
and beneficiaries are available to persons with impaired
vision and hearing.
(e) The exclusion of non -handicapped persons or
specified classes of handicapped persons from programs
limited by Federal statute or Executive Order to
handicapped persons or a different class of handicapped
persons is not prohibited by this subpart
5 7.55 Separate or different progrims.
Recipients shall not deny a qualified handicapped
person an opportunity equal to that afforded others to
participate in or benefit from the aid, benefit, or service
in the program receiving EPA assistance. Recipients shall"
administer programs in the most integrated setting
appropriate to the needs of qualified handicapped
persons.
17.60 Prohibitions and requirements relating to
employment.
(a) No qualified handicapped person shall, on the
basis of handicap, be subjected to discrimination in
employment under any program or activity that receives
or benefits from Federal assistance.
(b) A recipient shall make all decisions concerning
employmenttmder any program or activity to which this
part applies in a manner which ensures that
discrimination on the basis of handicap does not occur,
and shall not limit, segregate, or classify applicants or
employees in any way that adversely affects their
opportunities or status because of handicap.
(c) The prohibition against discrimination in
employment applies to the following activities:
(1) Recruitment, advertising, and the processing of
applications for employment;
(2) Hiring, upgrading, promotion, award of tenure,
demotion, transfer, layoff, termination, right of term
from layoff, and rehiring;
(3) Rates of pay or any other form of compensation
and changes in compensation;
(4) Job assignments, job ciassifications, organizational
structures, position descriptions, lines of progression,
and seniority lists; .
(5) (.caves of absence, sick leave, or any other leave;
(6) Fringe benefits available by virtue of employment,
whether or not administered by the recipient;
(7) Selection and financial support for training,
including apprenticeship; professional meetings,
conferences, and oder related activities, and selection'
for leaves of absence to pursue training;
(8) Employer sponsored activities, including social or
recreational programs; or
(9) Any other term, condition, or privilege of
employment
(d) A recipient shall not participate in a contractual or.
other relationship that has the effect of subjecting
qualified handicapped applicants or employees to
discrimination prohibited by this subpart the
relationships referred to in this paragraph include
relationships with employment and referral agencies,
with labor unions, with organizations, providing or
administering fringe benefits to employees of the
recipient and with organizations providing training and
apprenticeship program.
(e) A recipient shall make reasonable accommodation
to the known physical or mental limitations of an
otherwise qualified handicapped applicant or employee
unless the recipient can demonstrate that the
accommodation would impose an undue hardship on the
operation of its program
(f) A recipient shall not use employment tests or
criteria that discriminate against handicapped persons
and shall ensure that employment tests are adapted for
use by persons who have handicaps that impair sensory,
manual, or speaking skills.
(g) A recipient shall not conduct a preemployment
medical examination m make a preemployment inquiry
as to whether an applicant is a handicapped person oras
to the nature or severity of a handicap except as
permitted by the Department of Justice in 28 CFR
42.513.
§7.65 Accessibility.
(a) General. A recipient shall operate each program
or activity receiving ITA assistance so that such _
program or activity, when viewed in its entirety, is
readily accessible to and usable by handigapped persons.
This paragraph does not:
(1) Necessarily require a recipient to make each of its
existing facilities or every part of an existing facility
accessible to and usable by handicapped persons,
(2) Require a recipient to take any action that the
recipient can demonstrate would result in a fundamental
alteration in the nature of its program or activity or in
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undue financial and administrative burdens. If an action
would result in such an alternation or such financial and
administrative burdens, the recipient shall be required to
take any other action that would not result in such an
alteration or financial and administrative burdens but
would nevertheless ensure that handicapped persons
receive the benefits and services of the program or
activity receiving EPA assistance.
(b) Medwilt of making existing programs accessible.
A recipient may comply with the accessibility
requirements of this section by making structural
changes, redesigning equipment, reassigning services to
accessible buildings, assigning aides to bencficiaries, or
any other means that make its program or activity
accessible to handicapped persons. In cnoosing among
alternatives, a recipient must give priority to methods that
offer program benefits to handicapped persons in the
most integrated setting appropriate.
(c) Deadlines. (1) Except where structural changes in
facilities are necessary. recipients must adhere to the
provisions of this section within 60 days after the
effective date of this Part-
(2)
ari(2) Recipients having an existing facility which does
require alterations in order to make a program or activity
accessible must prepare a transition plan in accordance.
with § 7.75 within six months from the effective date of
this part. The recipient, must complete the changes as.
soon as possible, but not later there three years from date
of award.
(d) Notice of accessibility. The recipient must make
sure that interested persons, including those with
impaired_ vision or hearing, can find out about the
existence and location of the assisted program smites,
activities, and facilities that are accessible to and usable
by handicapped persons.
(e) Structural _and financial feasibility. This section
does not require structural alterations to existing facilities
if making such alterations would not be structurally or
financially feasible. An alteration is not structurally
feasible when it has little likelihood of being
accomplished without removing or altering a
load-bearing structural member. Financial feasibility
shall take into account the degree to which the alteration
work is to be assisted by EPA assistance, the cost
limitations of the program under which such assistance is
provided, and the relative cost of accomplishing such
alterations in manners consistent and inconsistent with
accessibility.
§ 7.70 New construction.
(a) General. New facilities shall be designed and
constructed to be readily accessible to and usable by
handicapped persons. Alterations to existing facilities
shall, to the maximum extent feasible, be designed and
constructed to be readily accessible to and usable by
handicapped persons.
(b) Conformance with Uniform FederalAccessibffily
Standards. (1) Effective as of January 18. 1991, design,
construction, or alteration of buildings in conformance
with sections 38 of the Uniform Federal Accessibility
Standards (USAF) (appendix A to 41 CFR subpart
101-19.6) shall be deemed to comply with the
requirements of this section with respect to those
buildings. Departures from particular technical and
"scoping requirements of WAS by.the use of other
methods are permitted where substantially equivalent or
greater access to and usability of the building is
provided.
(2) For purposes of this section, section 4.1.6(lxg) of
UFAS shall be interpreted to exemptfrom the
requirements of WAS only mechanical rooms and other
spaces that, because of their intended use, will not
require accessibility to the public or beneficiaries or
result in the employment or resrdercctherein. of persons
with physical handicaps.
(3) This section does not require recipients to make
building alterations that have little likelihood of being
accomplished without removing or altering a
load-bearing structural member.
149 FR 1659, Jan. 12, 1984, as amended at 55 FR 52138,
52142, Dec. 19, 1990)
§ 7.75 Transition plan.
If structural changes to facilities are necessary to
make the program accessible tohandicapped persons, a
recipient must prepare a transition plan.
(a) Requirements. The transition plan must set forth
the steps needed to compluiie the structural changes
required and must be developed with the assistance of
interested persons, including hatirPped persons or
organizations representing handicapped persons. At a
minimum, the transition plan must
(1) Identify the physical obstacles in the recipient's'
facilities that limit handicapped persons' access to is
program or activity,
(2) Describe in detail what the recipient will do to
make the facilities accessible,
(3) Specify the schedule for the steps needed to
achieve full program accessibility, and include a
year -by -year timetable if the process will take more than
one year,
(4) Indicate the person responsible for carrying out the
Plan.
(b)Availability. Recipients shall make available a
copy of the transition plan to. the OCR upon request and
to the public for inspection at either the site of the project
or at the recipient's main office.
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Subpart D—Requirements for Applicants and '
Redpients
§ 7.80 Applicants.
(a) Assurances—(1) General. Applicants for EPA
assistance shall submit an assurance with their
applications stating that, with respect to their programs
ov activities that receive EPA assistance, they will
comply with the requirements of this par. Applicants
must also submit any other information that the.00R.
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determines is necessary for preaward review. The
applicant's acceptance of EPA assistance is an acceptance
of the obligation of this assurance and this pan.
(2) Duration of assurance—(i) Real property. When
EPA awards assistance in the form of real property, or
assistance to acquire real property, or structures on the
property, the assurance will obligate the recipient, or
transferee, during the period the real property or
structures are used for the purpose for which EPA
assistance is extended, or for another purpose in which
similar services or benefits are provided. The transfer
instrument shall contain a covenant running with the
land which assures nondiscrimination Where applicable,
the covenant shall also retain a right of reverter which
will permit EPA to recover the property if the covenant is
ever broken
(ii) Personal property. When EPA provides assistance
in the form of personal property, the assurance will
obligate the recipient for so long as it continues to own or
possess the property.
(iii) Other forms of assistance. In all other cases, the
assurance will obligate the recipient for as long as EPA
assistance is extended.
(b) wastewater treatment project. EPA Form 4700-4
shall also be submitted with applications for assistance
under Title II of the Federal Water Pollution Control Act
(c) Compliance information. Each applicant for EPA
assistance shall submit regarding the program or activity
that would receive EPA assistance:
(1) Notice of any lawsuit pending against the applicant
alleging discrimination on the basis of race, color, sex,
handicap, or national origin;
(2) A brief description of any applications pending to
other Federal agencies for assistance, and of Federal
assistance being provided at the time of the application;
and
(3) A statement describing any civil rights compliance
reviews regarding the applicant conducted during the
two-year period before the application, and information
concerning the agency or organization performing the
reviews.
(Approved by the Office of Management and Budget under
control number 2000.0006)
§ 7.85 Recipients.
(a) Compliance information. Each recipient shall
collect, maintain, and on request of the OCR, provide the
following information to show compliance with this pan:
(1) A brief description of any lawsuits pending against
the recipient that allege discrimination which this pan
prohibits;
(2) Raciallethnic, national origin, sex and handicap
data, or EPA Form 47004 information submitted with its
application;
(3) A log of discrimination complaints which identifies
the complaint, the date it was filed, the date the
recipient's investigation was completed, the disposition,
and the date of disposition; and
(4) Reports of any compliance reviews conducted by
any other agencies.
(b)Additional compliance information. If necessary,
the OCR may require recipients to submit data and
information specific to certain programs to deterrnine
compliance where there is reason to believe that
discrimination may exist in a program or activity
receiving EPA assistance or to investigate a complaint
alleging discrimination in a program or activity receiving
EPA assistance. Requests shall be limited to data and
information which is relevant to determining compliance
and shall be accompanied by a written statement
summarizing the complaint or setting forth the basis for
the belief that discrimination may exist.
(c) Self-rvaluadon. Each recipient must conduct a
self-evaluation of its administrative policies and
practices, to consider whetherauch policies and practices
may involve handicap discrumnation prohibited by this
pan. When conducting the self-evaluation, the recipient
shall consult with interested and involved persons
including handicapped persons or organizations
representing handicapped persons. The evaluation shall
be completed within 18 months after the effective date of
this part
(d) Preparing compliance information: In preparing
compliance information, a recipient must:
(1) [Reserved)
(2) Use the racial classifications set forth in § 7.25 in
determining categories of race, color or national origin.
(e) Maintaining compliance information. Recipients
must keep records for paragraphs (a) and (b) of this -
section for three (3) years after completing the project.
When any complaint or other action for alleged failure to
comply with this part is brought before the three-year
period ends, the recipient shall keep records until the
complaint is resolved.
(I) Accessibility to compliance information. A
recipient shall:
(1) Give the OCR access daring normal business
hours to its books, records, amounts and other sources of
information, including its facilities, as may be pertinent
to ascertain compliance with this pan;
(2) Make compliance information available to the
public upon request; and
(3) Assist in obtaining other required information that
is in the possession of other agencies, institutions, or
persons not under the recipient's control. If such parry
refuses to release that information, the recipient shall
inform the OCR and explain its efforts to obtain the
information.
(g) Coordination of compliance effortU the recipient
employs fifteen (15) or more employees; it shall
designate at least one person to coordinate its efforts to
comply with its obligations under this pan.
(Approved by the Office of Management and Budget under
control number 2000.0006) -
§ 790 Grievance procedures
(a) Requirements. Fach recipient shall adopt
grievance procedures that assure the prompt and fair
resolution of complaints which allege violation of this
pan.
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(b) Erception. Recipients with fewer than fifteen (15)
full-time employees need not comply with this section
unless the OCR finds a violation of this part or
determines that creating a grievance procedure will not
significantly impair the recipient's ability to provide
benefits or services.
§ 7.95 Notice of nondiscrimination.
(a) Requirements. A recipient shall provide initial and
continuing notice that it does not discriminate on the
basis of race, color, national origin, or handicap in a
program or activity receiving EPA assistance or, in
programs covered by section 13, on the basis of sex.
Methods of notice must accommodate those with
unpaired vision or bearing. At a minunue4 this notice.
must be posted in a prominent place in the recipient's
offices or facilities. Methods of notice may also include
publishing in newspapers and magazines, and placing
notices in recipient's internal publications or on
recipient's printed letterhead. Where appropriate, such
notice must be in a language or languages other than
English. The notice must identify the responsible
employee designated in accordance with § 7.85.
(b) Deadline. Recipients of assistance must provide
initial notice by thirty (30) calendar days after award and
continuing notice for the duration of EPA assistance.
§ 7.100. Intimidation and retaliation prohibited.
No applicant, recipient, nor other person shall
intimidate, threaten, coerce, or discriminate against any
individual or group, either.
(a) For the purpose of interfering with any right or
privilege guaranteed by the Acts or this part or
(b) Because the individual has filed a complaint or has
testified, assisted or participated in any way in an
investigation, proceeding or hearing under this part or
has opposed any practice made unlawfid by this
regulation. -
Subpart E -Agency Compliance Procedum
§ 7.105 General policy.
EPA's Administrator, Director of the Office of Civil
.Rights. Project Officers and other responsible officials
shall seek the cooperation.of applicants and recipients in
securing compliance with this part, and are available to
provide help.
§ 7.110 Preaward comptisaim
(a) Renew of compliance information. Within EPA's
application processing period, the OCR will determine
whether the applicant is in compliance with this part and
informs One Award Official. This determination will be
based on the submissions required by § 7.80 and any
other information EPA receives during this time
(including complaints) or has on file about the applicant.
When the OCR cannot make a determination on the basis
of this information, additional information will be
requested from the applicant, local government officials,
or interested persons or organizations, including
handicapped persons or organizations representing such
persons. The OCR may also conduct an on- site review
only when it has reason to believe discrimination may be
occurring in a program or activity which is the subject
of the application.
(b) Voluntary compliance. If the review indicates
noncompliance, an applicant may agree in writing to lake
the steps the OCR recommends to come into compliance
with this part The OCR must approve the written
agreement before any award is made.
(c) Refusal to comply. If the applicant refuses to enter
into such an agreement, the OCR shall follow the
procedure established by paragraph (b) of § 7.130.
§ 7.115 Postaward compliance.
(a) Periodic review. 77rc OCR may periodically
conduct compliance reviews of any recipient's programs
or activities receiving EPA assistance, including the
request of data and information, and may conduct on-site
reviews when it has reason to believe that discrimination
may be occurring in such programs or activities.
(b) Notice of renew. After selecting a recipient for
review or initiating a complaint investigation in
accordance with § 7.120, the OCR will inform the
recipient of,
(1) The name of and schedule for review, or
investigation; and
(2) Its opportunity, before the determination in
paragraph (d) of this section is made, to make a written
submission responding to, rebutting, or denying the
allegations raised in the review or complainL
(c) Postreriew, notice. (1) Within 180 calendar day>
from the start of the compliance review or complaint
investigation, the OCR will notify the recipient in
writing by certified mail, return receipt requested, of '
(i) Preliminary findings;
(ii) Recommendations, if any, for achieving voluntary
compliance; and
(iii) R«ipienfs right to engage in voluntary
compliance negotiations where appropriate.
(2) The OCR will notify the Award Official and the
Assistant Attorney General for Civil Rights of the
preliminary findings of tioncompliance.
(d) Format determination of noncompliance. After
receiving the notice of the preliminary finding of
noncompliance in paragraph (c) of this section; die:
recipient troy.
(1) Agree to the OCR's recommendations, or
(2) Submit a written response sufficient to
demonstrate that the preliminary findings are incorrect,
or that compliance may be achieved through steps other
than those recommended by OCR
If the recipient does not take one of these actions
within fifty (50) calendar days after receiving this
preliminary notice, the OCR shall, within fourteen (14)
calendar days, send a formal written determination of
noncompliance to the recipient and copies to the Award
Official and Assistant Attorney General.
(e) Voluntary compliance time limits. The recipient
will have ten (10) calendar days from receipt of the
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formal determination of noncompliance in which to come
into voluntary compliance. If the recipient fails to meet
this deadline, the OCR must start proceedings under
paragraph (b) o(§ 7.130.
(I) Form of Polumary compliance agreements. All
agreements to come into voluntary compliance must:
(1) Be in writing;
(2) Set forth the specific steps the recipient has agreed
to take, and
(3) Be signed by the Director, OCR a his/her designee
and an official with authority to legally bind the recipient
§ 7.120 Complaint investigations.
The OCR shall promptly investigate all complaints
filed under this section unless the complainant and the
party complained against agree to a delay pending
settlement negotiations.
(a) Who may file a complaint A person who believes
that he or she or a specific class of persons has been
discriminated against in violation of this part may file a
complaint The complaint may be filed by an authorized
representative. A complaint alleging employment
discrii i tion must identify at least one individual
aggrieved'by such discrimination. Complaints solely
alleging employment discrimination against an individual
on the basis of race, color; national origin, sex or religion
shall be processed under the procedures for complaints of
employment discrimination fled against recipients of
Federal assistance (see 28 CFR part 42, subpart H and 29
CFR pari 1691). Complainants are encouraged but not
required to make use of any grievance procedure
established under § 7.90 before filing a complaint Filing
a complaint through a grievance procedure does not
extend the 180 day calendar requirement of paragraph
. (bX2 of this section.
(b) )Mere, when and how to file complaint The
complainant may file a complaint at any EPA office. The
complaint may be referred to the region in which the
alleged discriminatory acts occurred.
(1) The complaint must be in writing and it must
describe the alleged discriminatory acts which violate
this.part.
(2) The complaint must be filed within 18O calendar
days of the alleged diwi+miaatory acts, unless the OCR
waives the time limit for good wase. The filing of a
grievance with the recipient does not satisfy the
requirement that complaints must be filed within 180
days of the alleged discriminatory acts
(c) Notif catiom The OCR will notify the complainant
and the recipient of the agency's receipt of the complaint
within five (5) calendar days.
(d)'Complaint procesrmg procedwes After
acknowledging receipt of a complaint, the OCR will
immediately initiate complaint processing procedures.
(1) Preliminary investigation. (i) Within twenty (20)
calendar days of acknowledgment of the complaint, the
OCR will review the complaint for acceptance, rejection,
or referral to the appropriate Federal agency.
(ii) if the complaint is accepted, the OCR will notify
the complainant and the Award Official. The OCR will
also notify the applicant m recipient complained against
of the allegations and give the applicant or recipient
opportunity to make a written submission responding to,
rebutting, or denying the allegations raised in the
complaint
(iii) The party complained against may send the OCR
a response to the notice of complaint within thirty (30)
calendar days of receiving it -
(2)
t(2) Informal resolution. (i) OCR shall attempt to
resolve complaints informally whenever possible. When
a complaint cannot be resolved informally, OCR shall
follow the procedures established by paragraphs (c)
through (c) of § 7.115.
(ii) [Reserved]
(e) Confidentiality. EPA agrees to. keep the
complainant's identity confidential except to the extent
necessary to carry out the purposes of this part, including
the conduct of any investigation, hearing, or judicial
proceeding arising thereunder. Ordinarily in complaints
of employment discrimination, the name of the
complainant will be given to the recipient with the notice
of complaint-
(f)
omplaint(f) [Reserved]
(g) Dirmirsal o f eomplaint If OCR's investigation
reveals no violation of this part, the Director, OCR, will
dismiss the complaint and notify the complainant and
recipient
§ 7.125 Coordination with other agencies
If, in the conduct of a compliance review or an
investigation, it becomes evident that another agency has
jurisdiction over the subject matter, OCR will cooperate
with that agency during the continuation of the review of
investigation. EPA will:
(a) Coordinate its efforts with the other agency, and
(b) Ensure that one of the agencies is designated the
lead agency for this purpose. When an agency oder than
EPA serves as the lead agency, any action taken,
requirement imposed, or determination made by the lead
agency, other than a final determination to terminate
funds, shall have the same effect as though such action
had been taken by EPA.
§ 7.130 Actions available to EPA to obtain
compliance.
(a) General. If compliance with this part cannot be
assured by informal means, EPA may terminate Or refuse
to award or to continue assistance. EPA may also use
any other means authorized by law to get compliance,
including a referral of the matter to the Department of
Justice.
(b) Procedure to denjo, annul, suspend or terminate
EPA assistance— (1) OCR fording. If OCR determines -
that an applicant or recipient is not in compliance with
this part, and if compliance cannot be achieved
voluntarily, OCR shall make a finding of
noncompliance. The OCR will notify the applicant or
recipient (by registered mail, return receipt requested) of
the finding, the action proposed to be taken, and the
Opportunity for an evidentiary hearing.
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(2) Hearing. (i) Within 30 days of receipt of the above
notice, the applicant or recipient shall file a written
answer, under oath or affirmation, and may request a
hearing.
(ii) The answer and request for a hearing shall be sent
by registered mail, return receipt requested, to the Chief
Administrative law Judge (ALT) (A-110), United States
Environmental Protection Agency,. 1200 Pennsylvania
Ave., NW., Washington, DC 20460. Upon receipt of a
request for a hearing, the ALJwillseed the applicant of
recipient. a copy of the ALPS procedures- If the recipient
does not request a hearing, it shall be deemed to have
waived its right to a hearing, and the OCR finding shall
be deemed to be the Alps determination.
(3) Final derision and disposition. (0-7fhe applicant or
recipient may, within 30 days of receipt of the ALPS
determination, file with the Administrator its exceptions
to that determination. When such exceptions am filed, the
Administrator may, within 45 days after the ALTs
determination, serve to the applicant or recipient, a notice
that he/she will review the determination. In the absence
of either exceptions or notice of review, the ALIS
determination shall constitute the Administrator's final
decision.
(u) If the Administrator reviews the ALPS.
determination, an parties shall be given reasonable
opportunity to file written statements. A copy of the
Administrators decision will be sent to the applicant or
recipient.
(iii) If the Administrators decision is to deny an
application, or annul, suspend or terminate EPA
assistance, that decision becomes effective thirty (30)
days from the date on which the Administrator submits a
full written report of the circumstances and grounds for,
such action to the Committees of the House and Senate
having legislative jurisdiction ova the program or
activity involved. The decision of the Administrator shall
not be subject to further administrative appeal under
EPA's General Regulation for Assistance Programs (40
CFR part 30, subpart L)-
(4) Scope of decision. The denial, annulment,
termination or suspension shall be limited to the
particular applicant or recipient who was found to have
discriminated, and shall be limited in its effect to the
particular program or the part of it in which the
discrimination was found.
4 7.135 Procedure for regaini
urng eligibility. -.
(a) Requirements. An applicant or recipient whose
assistance has been denied, annulled, terminated, or
suspended under this part regains eligibility as soon as it:
(1) Provides reasonableassurance that it is complying
• and will comply with this part in the future, and..
(2) Satisfies the terms and conditions for regaining
eligibility that are specified in the denial, annulment,
termination or suspension order.
(b) Procedure. The applicant or recipient must submit
a written request to restore eligibility to the OCR -
declaring that it has mel the requirements set forth in
paragraph (a) of this section. Upon determining that.
these
requirements have been met, the OCR must notify the.
Award Official, and the applicant or recipient that.
eligibility has been restored. .
(c) Rights on denial of restoration of eligibility. If the
OCR denies a request to restore eligibility, the applicant_
or recipient may file a written request for a hearing
• before the EPA Chief Administrative Law Judge in
accordance with paragraph (c) 4 7.130, listing the
reasons it believes the OCR was in error.
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40 CFR PART 31 -UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS
Audwriry^ 33 U.S.0 1251 a seq.; 42 U.S.0 7401 a seq.; 42 US.C. 6901 a seq.; 42 U.S.C. 30W a seq.; 7 U.S.C. 136 a seq.; 15 U.S.0 2601 a seq.;
42 U.S.C. 9601 a seq.; 20 U.S.C. 4011 a seq.; 33 U.S.0 1401 a seq. swum; 53 FR 8075 and SM. Mar. 11, 1988, unless alerwise Doted
Subpart A -General
¢ 31.1 Purpose and scope of this pati.
This pan establishes uniform administrative rules for
Federal grants and cooperative agreements and
subawards to State, local and Indian tribal governments.
§ 31.2 Scope of subpart.
This subpart contains general rules pertaining to this
part and procedures for control of exceptions from this
par
§.31.3 Definitions.
As used in this part:
Accrued expenditures mean the charges incurred by
the grantee during a given period requiring the provision
of foods 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 Do current services or performance is
required by the grantee.
Acquisition cost of an item of purchased equipment
means the net invoice rosin 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,
trarisp6rtation, taxes, duty or protectibe in -transit
instaaoce, shall be included or excluded from the unit
acquisition cost in accordance with the grantee's regular
accounting practices.
Administrative requirements mean those matters
common to grants in general; such as financial
management, kinds and frequency of reports, and
retention of records. These :are distinguished from
programmatic requirements, which concern mum that
can be treated only on a progtatin-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,
34
the party that awarded the subgrant.
. Cash contributions means the grantee's cash outlay,
including the outlay of money contributed to the grantee
or subg intee 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 g uitce or subgrantee cash contributions.
Contract means (exceptas 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 cuss
of a federally assisted project or program not borne by
the Federal Government.
Cost -type contract meant 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 is own definition of equipment provided that
such definition would at least include all equipment
defined above.
Expenditure report means: (I) For nonconstruction
gams, the SF -269 "Financial Status Report' (or other
equivalent report); (2) for construction grans, the
SF -271 'Outlay Report and Request for
Reimbuisemcnt' (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 hum through the Bureau of Indian Affairs.
Government means a State or local government or a
federally recognized Indian tribal governmitnt
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 whichprovidesservices
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 graotce is not requited
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.
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 of 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 U.S. Office of Management and
BudgeL
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 cath 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.". accrued expenditure basis,
outlays arc the sura actual cath disbtvscments, the
amount of indirect expense incurred, the value of in
kind 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 grantees cost incurred.
Prior approval means documentation evidencing
content prior to incurring specific coat.
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 agencys 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 properly 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 tae United
States, the District of Columbia, the Commonwealth of
Puerto Rico, any territory or possession of the United
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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 prwnded 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 a 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-
Suspeasion.means depending on the context, either (1)
temporary withdrawal of the authority to obligate.grant
funds pending corrective action by the grantee or
subgrantee or a decision to terminate the grana, or (2) an
action taken by a suspending official in accordanm with
agency regulations, implementing E.O. 12549_ to
immediately exclude a person from participating in
grant transactions for a period, pe.Ming.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 unobligalcd balance as of the
expiration of a grant; .
(3) Rcft W to extend a grant or award additional fund-%
to make a competing tee 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 docunment .
Third party in-kind contributioirs mean property or
services which benefit a federally assisted Project of.
program and which are contributed by non -Federal third
parties without charge to the grantee, or a cost -type
contractor under the grant agreemern.
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 accnied expenditure basis, they represeat the
amount of obligations incurred by the grantee for which
an outlay has not been recorded.
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Uno66gated 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
die cumulative obligations from the cumulative funds
authorized.
§ 31.4 Applicability.
(a) Cenerai Subparts A -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
o[5 31.6, 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 -loco= 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
Tidcs I -ID 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 Pari C of Title V,
Mental Health Service for the Homeless Block Grant).
(3) Entitlement grants to carry out the following
programs f 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);
IMS 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(ax6XB).
(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
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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-I (a), and 242'through 244 (portions of
the Impact Aid program), except for 20 U.S.C.
238(d)(2Xc) 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. 64l(a))..
(b) Entitlement pmgrams. Entitlement programs. .
enumerated above in § 31.4(a) (3) through (8) are
subjectto subpart E. -
§ 31.5 Effect on other issuances.
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 § 31.6.
§ 31.6 Additions and exceptions
(a) For classes of grants and grantees subject to Us,
part, Federal agencies may Trot 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. -
(c) Exceptions on a case-by-case basis and for
subgrantces may be authorized by the affected Federal
agencies.
(1) In the Environmental Protection Agency, the
Director, Grants Administration Division, is authorized
to grant the exceptions.
(d) The EPA Director is also authorized to approve
exceptions, on a class or an individual case basis, to
EPA program -specific assistance regulations other than
those which implement statutory and executive order
requirements. - I ..
153 Fit 8068 and &187, Mar. It. 1988, and amended at 53 FR W75,
Mar. 11. 1988)
Subpart B -Pre -Award Requirements
§ 31.10 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 ody 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 avoidmore
detailed or burdensome application requirements for
subgrants.
(b) Authorized forms and inshrdions for.
govemmenhd organiudious. (1) In applying for grants,
applicants shall only rue 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 o f preapplieadons 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 gran!. Other supplementary
instructions may be issued only with the, approval of
OMB to the extent required ruder the Paperwork
Reduction Act of 1980. For any standard form, except
the SF -424 faceshect, Federal agencies may shade out
or instruct the applicant to disregard any lire item that is
not needed.
(4) When a grantee applies for additional funding
(such as a continuation or supplemental award) or
amends a previously submitted application, only the
affected Pages need be submitted. Previously submitted
pageswith information that is still current need not be
resubmitted.
§31.11 State plans.
(a) Scope. 77e 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 m 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 gram funding. For this
assurance and other assurances required in the plan, the
State may:
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(1) Cite by number the statutory or regulatory
provisions requiring the assuranrss and affirm that it
gives the assurances required by those provisions,
(2) Repeat the assurance language in the statutes a
regulations, or
(3) Develop its own language to the extent permitted
by law.
(d) Amendmcnfs. A State will amend a plan wherever
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.
$ 31.12 Special grant or subgrant conditions for
"bigh-risk" grantees.
(a) A grantee or subgrantee may be considered 'high
risk' if an awarding agency determines that a grantee or
subgrantee: -
(1) Has a history of unsatisfactory performance, or
(2) Is not financially stable, or' .
(3) Has a management system which does not meet the
mansgemenl standards set forth in this pan, 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 torhe next phase
until receipt of evidence of acceptable performance
within a given funding period; -
(3) Requiring additional, more detailed financial
reports;
(4) Additional project monitoring;
(5) Requiring the grantee or subgrantee to obtain
technical or management assistance; or
(6) Establishing additional prior approvals_
(c) If an awarding agency decides to impose such
conditions, the awarding official will notify the grantee
or subgrantee as early as possible, in writing, of -
(1)
f(1) The nature of the special coalitions/restrictions:
(2) The reason(s) for imrposing 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
eonditionshesmictions imposed.
§ 31.13 Principal environmental statutory
provisions applicable to EPA assistance
awards.
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Grantees shall comply with all applicable Federal laws
including:
(a) Section 306 of the Clean Air Act, (42 U.S.C. 7606).
(b) Section 508 of the Federal Water Pollution Control
Act, as amended, (33 U.S.C. 1368).
(c) Section 1424(c) of the Safe (kinking Water Act,
(42 U.S.C. 300h -3(c))-
153 FR 8075. Mar. 11, 19881
Subpart C -Post -Award Requirements
Financial Administration
§ 31.20 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 subgrantecs 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, unmbligated
balances, assets, liabilities, outlays or expenditures, and
income.
(3) Internal control Effective control and
accountabilitymust be maintained for all grant and
subgrant cash, real and personal property, and other
assets. Grantees and subgrantees mutt 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 Firancial 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 agrcement If unit cost data are required,
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estimates based on available documentation will be
accepted whenever possible.
(5) Allowable cost Applicable OMB cost principles,
agency program regulations, and the terns 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 canceled
checks, paid bills, payrolls, time and attendance records,
contract and subgrant award documents, etc.
.(7) Cash management Procedures for minimizing the
time elapsing between the transfer of funds from the
U.S. Treasury and disbursement by grantees and
subgrantees must be followed whenever advance
payment procedures are used. Grantees must establish
reasonable prooedmes 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 arc 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
Ube financial management system of any. applicant for
financial assistance as part of a preaward review or at
any time subsequent 4o award.
131.21 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) Baste 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 regulation.4 at
31 CFR pan 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) Reimbmrement. Reimbursement shall be the
preferred method when the requirements in paragraph
(c) of this section are not met. Grantees and subgramem
may also be paid by reimburmincnt.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 of 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
bassi on the grantee's or subgantee'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
subgranteds actual cash disbursements.
(f) Effect of program income, refunds, and audit
recoveries on paytaenL (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 subgrantoes 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 § 31.43(c).
(3) A Federal agency shall not make payment to ,
grantees for amounts that =.withheld by grantors or
subgrantees from payment to contractors to assure
satisfactory completion of work Payments shag be
made by the Federal agency when the grantees or
subgrantces 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 Fedcal-State
39
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 er
seq.) and the Indian Self -Determination Act (23 U.S.C.
450), grantees and subgranices 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.
§31.22 Allowable costs.
.(a) limitation on we of fundr. Grant funds may be
used only for.
(I) Tic allowable costs of the grantees, subgrantees
and cost -type contractors, including allowable costs in
the form of payments to feed -price contractors; and
(2) Reasooabte fees or profit to cost -type contractors
but not any fee or profit (or other intteinent above
allowable costs) to rhe grantee or subgrantee:
(b) Applicable cost principles. For each kind of
organization, there is a set of Federal principles foe,
determining allowable costs: Allowable costs will be
determined in accordance with the cost principles
applicable to the organization incurring the costs. Ilia
following chart lists the lands of Organizations and the
applicable cost principles.
For the costs of a-
Use the principles; in -
State, local or Indian tribal
OMB Circular A-87.
government. '
Private nonprofit orgaruzatior
OBM Circular A-122.
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..........
OMB Circular A-21.
For-profit organization other
48 CFR part 31.
than a hospital and an or-
Contract Cost principles
ganization named in OMB,
and Procedures, or
Circular A-122 as not sub-
uniform cost account-
ject to that circular
ing standards that
comply with cost
principles acceptable
to die Federal agency.
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§ 31.73 Period of availability of funds. ,
(a) GenevaL 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 mnobligated 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
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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.
§31.24 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) QuaGficetions 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 eared by a
grantee or subgrantee from a contract awarded under
another Federal gran -
(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 mor
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 nay other
award of Federal funds.
(4) Costs financed by program income. Costs financed
by program income, as defined in § 31.25, shall not
count towards satisfying a cost sharing m matching
requirement unless they are expressly pemutted in the
terms of the assistance agreement- (This use of general
program income is described in § 31.25(g).)
(5) Serrieer or property financed by income earned
by contractor.,- Contractors under a grant may cam
income from the activities carried out under the contras
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 most be verifiable from the
records of grantees and subgramce 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 metlwds that the organization
uses to support the allocability of regular personnel
costs.
(7) Special sr^nr^ni• for third parry 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 allowablecosts.
(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 marching credit for such contributions
shall be given only if -the grantee, subgrantee, or
contractor has established, along with its regular indirect
cost rate, a special rate for allocating to individual
Projects or programs the value of the contributions.
(iii) A third party in-kind contribution to a fixed-price
contract may count towards satisfying a cost sharing or.
matching requirement only if it results in:
(A) An increase in the services or property provided
under the contract (without additional cost to the grantee
or subgrantee) or
(B) A cost savings to the grantee or subgrantee.
(iv) The values placed on third party in-kind
contributions for cost sharing or matchingpurposeswill
conform to the rales 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.
(c) Valaarion of donated serriees-(I) Volunteer
serriem 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 fee fringe benefits may be included in the
valuation .
(2) Employees of other organirahons. When an
employer other than a grantee, subgrantee, or cost -type
contractor furnishes bee of chasge.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 fripge benefits and
overhead costs. If the services are in a different tine of
work, paragraph (cel) of this section applies.
(d) Valuation of !bird 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 parry 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 OF 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.th
. if assisting in e acquisition of
property. isnot the propose of the grant or subgrant,
paragraphs..(ex2) m 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 rata or the
donated land may be counted as cost sharing or
matching. In the case of a subgrant, the terms of the
grant. agreement may rcquim that the approval be
obtained from the Foderal.agency as well as the grantee.
In all cans, 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
(eR2)(1) of this sectim 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.partyio-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 §31.22, in rhe 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
props tis market value at the time it was donated.
(f) Valuation of grantee or subgrantee donated real
property for eoasAvctionl"qufsition. If a grantee or
subgrantee donates real property for a construction or
facilities acquisition project, the current market vale of
that property may be counted as costsharing 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 (I) 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 vale be set by an
41
independent appraiser, and that the value or rate be
certified by the grantee. This requirement will also be
imposed by the grantee on subgrantees.
§ 31.25 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 acquiredwith 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 mchide 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 aresuh of the grant agreement
during the grant period. 'During the giantperiod". the
me
tibetween the effective date of the award and the
ending date of the award reflected in de final financial
report.
(c) Cost ofgenera ing 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 reveaues 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. a•
program income. (See § 3134..) .
(f) property. Proceeds from the sale of real property or
equipment will be handled in accordance with the-
requirements
herequirements of % 3131 and 3132.
(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 giant agreement specify
another alternative (or a combination of the alternatives).
In specifying alternatives, the Federal agency may
distinguish between income earners by the grantee and.
income earned. by subiramees 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
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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 commined to the
project
(2) Addition. When authorized, program income may
be added to the funds committed to the grant agreement
by the Federal agency and the grantee. The program
income shall be used for the purposes and under the
conditions of the grant agreement.
(3) Cost sharing or matching. When authorized,
program income may be used to meet the cost sharing or
matching requirement of the grant agreement The
amount of the Federal grant award remains the same.
(h) Income after the award period There are no
Federal requirements governing the disposition of
program income gamed 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.
§ 31.26 Non -Federal audit
(a) Basic rale. Grantees and'subgrantees are
responsible for obtaining audits in accordance with the
Single Audit Act of 1984(31 U.S.C. 7501-7) and
Federal agency implementing regulations. The audits
shall be made by an independent auditor in accordance
with generally accepted government auditing standards
covering.financial and compliance audits.
(b) Subgrantees. State or local governments, as those
terms me defined for purposes of the Single Audit Act,
that receive Federal financial assistance and provide
. $25,000 or more of it in a fiscal year to a subgrantee
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
Requirements for Grants and Other Agreements with
Institutions of Higher Education, Hospitals and Other
Nonprofit Organizations' have met the audit
requirement: 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
42
within six months after receipt of the audit report in
instance of noncompliance with Federal laws and
regulations;
(4) Consider whether subgrantee audits necessitate
adjustment of the grantee's own records; and
(5) Require each subgrantee to permit independent
auditors to have access to the records and financial
statements.
(c)Auditor selection. In arranging for audit services, §
31.36 shall be followed.
Changes, Property, and Subawards
§ 3130 Changes.
(a) GeneraL Grantees and subgrantees are permitted to
rebudget within the approved direct cost budget to meet
unanticipated requirements and may makelimited
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 § 31.22) 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) Nonconsbuction 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
noncomtruction 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
S 1 00,000.
(iii) Transfer of funds allotted for training allowances
(i.e., from direct payments to trainees to other expense
categories).
(2) Consbrction projects. Grantees and mbgrantees
shall obtain prior written approval for my budget
revision which would result in the decd for additional
funds.
(3) Combined construction and nonconsbuction
profecLs. When a grant or subgranf jtrovides 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 n onconstruction 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 envision requiring prior approval).
(2) Need to extend the period of availability of funds.
(3) Changes in key persons in taus 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 authorised 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 § 31.36 but does not apply to the
procurement of equipment, supplies, and general
support services.
(e)Additional prior approval regmirementr. The
awarding agency may hot 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 is 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 § 31.22) 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 teras and Conditions
of the Federal grant to the grantee. H the revision;
requested by the subgrantee would result in a change to
the grantees approved project which requires Federal
prior approval, the grantee will obtain the Federal
agency's approval before approving the subgrantee's
request
§ 3131 Real property.
(a) T irle. Subject to the obligations and conditions set
forth in this section,tide 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 thatpurposes,
and die grantee or subgrantee shall not dispose of or
encumber its tide 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
43
one of the following alternatives:
(1)Rrtenfion of tide. 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) Sao 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 saleafter
deduction of any actual and reasonable selling and
fixing -up expenses. If the grant is still active, die net
proceeds from sale may be offset against the. original
cost of the property. When:a 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 designatcNapproved by the
awarding agency. The grantee or subgrantee shall be
paid.an amount calculated by applying the grantee or
subgrantees percentage of participation in the purchase
of the real property to the current fair market value of
the property.
§ 31.32 Equipment.
(a) Tide. 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) Stater. 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 subgrantecs will follow paragraphs (c)
through (e) of this section..
(c) Use. (1) Equipment shall be used by the graittee 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 equiprnent may be usedin other activities.
currently or previously. supported by a Yederal agency.
(2) The grantee or subgrantee shall also make
equipment available for use on other projects or.
programs currently or previously supportedby the
Federal Government, providing such use will not
interfere with the work on:tbe projects or Program for
which it was originally acquired. Fust preference for
other use shall be given to other programs or projocts
supported by the awarding agency. User fees should be
considered if appropriate.
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(3) Notwithstanding the cncouragement in § 3125(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 pan with
grant funds, until disposition takes place will, as a
minimum, meet the following requirements:
(1) Property records must be maintained that include a
description of the property, a serial number or other
identification number, the source of property, who holds
title,. the acquisition date, and cost of the property;
percentage of Federal participation in the cost of the
property, the location, use and condition of the property,
and any ultimate disposition data including the date of
disposal and sale price of the property.
(2) A physical inventory of the property must be taken
and the results reconciled with the property records at
least once every two years.
(3) A control system must be developed to ensure
adequate safeguards to prevent loss, damage, or theft of
the property. Any loss, da nage, 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 replacemeat
equipment acquiredtradera 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 vane 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 vane 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.
(I) Federal equipment. In the event a grantee or
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subgrantee is provided federally -owned equipment:
(I)Tide will remain vested in the Federal Govemment
(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 irmtsfer fife. The Federal awarding
agency may reserve the right to transfer title to the
Federal Government or a third pan named by the
awarding agency when such a thud party is otherwise
eligible under existing statutes. Such transfers shall be
subject to the following standards: (1) The property
shall be identified in the -9- rantor 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 31.32(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.
§ 31.33 Supplies.
(a) Mir. Title to supplies acquired undera 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-programts or projecm the grantee or
subgrantee shall compensate the awarding agency for its
share.
§ 3134 Copyrights.
The Federal awarding agency reserves a royalty -free,
nonexclusive, and irrevocable license to reproduice,
publish or otherwise use, and to authorize others to use,
for Federal Government purposes:'
(a) The copyright in any work developed under a grant,
subg ant, or contract under a grant or subgrant; and
(b) Any rights of copyright to which a grantee,
subgrantee or a contractor purchases ownership with
giant support. .
§ 3135 Subawards to debaried.and suspended
parties.
Grantees and subgraatem must not make any award or
permit any award (subgrant or contract) at any tier to
any parry 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.'
§ 3136 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 Slate will ensure that every
purchase order or other contract includes my 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
subgrantee 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 employx, officer or
agent of the grantee or subgrantee shall participate in
selection, or in the award or administration ofa 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 either
solicit nor accept gratuities, favors or anything of
monetary value from contractors, potential contractors,
or parties to Sub agomincr s. Grantee and subgrantees
may set minimum rules where the financial interest is
not substantial or the gift is an unsolicited item of
nominal intrinsic value. To the extent permitted by State
or local law or regulations, such standards or conduct
will provide .for penalties, sanctions, or outer
disciplinary actions for violations of such standards by
the grantees 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, of potential
conflicts of interest.
(4) Grantee and subgrantee procedures will provide for
a review of proposed procurements to avoid purchase of
unnecessary or duplicative items. Consideration should
be given to consolidating or breaking our procurements
45
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 incontractsfor construction
projects of sufficient size to offer reasonable
opportunities for cost reductions: Value eng.meeting 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 subgrantee 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
nemssaray 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 ailing price that the
contractor exceeds at its own risk.
(11) Grantees and subgraotees alone will be _
responsible. in accordance with good administrative
practice and sound business judgment, for ilia settlement
of all contractualand 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
them 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
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protests by the Federal agency will be limited to:
(i) Violations of Federal law or regulations and the
standards of this section (violations of Stale 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 protea
Protests received by theFederalagency other than those
specified above will be referred to the grantee or
subgrantee.
(c) Compe6dom (1) All procurement transactions will
be conducted in a manner providing full and open
competition consistent with the standards of § 3136.
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,
(ir) Requiring unnecessary experienmand excessive
bonding,
(tai) Noncompetitive pricing practices between Tums or
between affiliated companies,
(iv) Noncompetitive awards oto 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 I I-
(vii) Any arbitrary action iri 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 preference in the evaluation of bids or
proposals, except in those case where applicable
Federal statues 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) Grantee will have written selection procedure 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 astatement 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
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means to define the performance or other salient
requirements of a procurement- The specific features of
the named brand which must be met by offerors shall be
clearly stated; and
(ii) Identify all requirements which the offerors must
fulfill and all other factors to be used in evaluating bids
or proposals.
(4) Grantees and subgrantees will ensure that all
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
subgrantee will not preclude potential bidders from
qualifying during the solicitation period.
NOTE: THE EPA -ASSISTED WATER AND
WASTEWATER MMASTRUCTURFS
PROJECTS AUTHORTLED UNDER THE P. L
107-73 AND AS AMENDED 4ARE: NOT SUBJECT
TO TIIE FOLLOWING SECTION (5) gBoy
AmerieanO REQUIREMENTS.
(5) Construction grants awarded under Title I of the
Clean Water Act are subject to the following'Buy
American' requimmens in paragraphs (ex5)(I)_(iit) of
this section. Section 215 of the Clean Water Act requires
that contractors give preference to the use of domestic
material in the constriction of EPA-fimded treatment
works.
(t) Contractors must use domestic construction
materials in preference to nondomestic material if it is
priced no more than 6perccnt higher than the bider
offered price of the nondomestic material, including all
toss of delivery to the construction site and any
applicable duty, whether or not assessed. The grantee
will normally base the computations on prices and costs
in effect on the date of opening bids or proposals.
(ii) The award official may waive the Buy American
provision based on factors the award official considers
relevant, including:
(A) Such use is not in the public interest;
(B) The cost is unreasonable;
(C) The Agency's available resources are not sufficient
to implement the provision, subject to the Deputy
Administrators concurrence;
(D) The article, materials or supplies of the class or
kind to be used or the articles, materials or supplies from
which they are manufactured are not mired, produced or
manufactured in the United State in sufficient and
reasonably available commercial quantities or
satisfactory quality for the particular project; or
(E) Application of this provision is contrary to
multilateral government procurement agreements,
subject to the Deputy Administrators concurrence.
(iii) All bidding documents, subagreemens, and, if
appropriate, requests for proposals must contain the
following 'Buy American provision: In accordance
with section 215 of the Clean Water Act (33 U.S.C.
1251 ct seq.) and implementing EPA regulations, the
contractor agrees that preference will be given to
domestic construction materials by the contractor,
subcontractors, materialmen and suppliers in the
performance of this subagreement.
(d) Methods of pracwement to be jallowed (1)
Procurement by smoU pwrhase procedwez Small
purchase procedures are those relatively simple and
informal procurement methods for securing services,
supplies, or other property Thal do no( cost more,lham
the simplified acquisition threshold fixed at 41 U.S.C.
403(11) (currently set at $100,000). If small purchase
procedures are used. price m rate quotations shall be
obtained Erma an adequate number of qualified sources.
(2) Procurement by sealed bids (formal advertising).
Bids are publicly solicited and a firmfixed-price
contrail (hmip 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 m ethod is the
preferred method for procuring construction, i(the
conditions in 31.36(dx2)(1).apply.
(i) In order for scaled 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 thebasis of price.
(ii) if sealed bids are used, (he 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 far opening the bids;
(B) The invimtion.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 a1 the time and
place prescribed in the invitation for bids;
(D) A firm fixed-price contract award will be trade in
writing to the lowest responsive and responsible bidder.
Where specified in bidding documents,
factors such as discounts, transportation cost, and life-
cycle
ifecycle costs shall be considered in determining which bid
is lowest. Payment discounts will only be used to
detrmtirx the tow bid when prior experience indicates
that such discounts are usually taken advantage of; and
(E) Any ur all bids Wray. be rejected if there is a sound
documented reason.
(3) Procurement by competitive propowls. 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:
47
(i) Requests for proposals will be publicized and
identify all evaluation factors and thea 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 sub&rantees may use competitive
proposal procedures for quariffrcabont-based
procurement of architectmal/engincering (A/E)
professional services whereby competitors'
qualifications are evaluated and the most gna6E'ied
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 ME professional services. It cannot be
used to purchase other types of services.though A/E
Tums are a potential source to perform the proposed
effort-
(4)
ffort(4) Proenement by noncompetitive proposal; is
procurement through solicitation of a. proposal from only
one source, or aft" solicitation of a number of sources,
competition is determined inadequate.
(i) Procurement by noncompetitive proposal; 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 Bort .
data, the projections of the data, and the evaluation of,
the specific elements of costs and profits, is required.
(iii) Grantees and subgra ttees may be required to
submit the proposed procurement to the awarding
agency for pre -award review in accordance with
paragraph (p) of this section.
(e) Contracting with small and minority firms, women's
business enterprise and labor surplus area firer.. (1)
The grantee and subgrantee will take all necessary
affirmative steps to assure shat vunon fens, women's
business enterprises, and labor
surplus area funis 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
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women's business enterprises are solicited whenever
they are potential sources;
(iii) Dividing total requirements; when economically
feasible, into smaller tasks or quantities to permit
maximum participation by small and minority business,
and women's business enterprises;
(iv) Fstablishing delivery schedules, where the
requirement perr its, 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 Ic4 to take the affirmative steps listed in
paragraphs (e)(2) (1) through (v) of this section.
(f) Contract cost 'and price. (1) Grantees and
subgeantecs must perform a cost or price analysis in
connection with every procurement action including
contract modificatiore. 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 home by the
contractor, the contractors 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 baud 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 § 31.22). 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
M
subgrantecs 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.
(2) Grantees and subgrantees must on request make
available for awarding agency pre -award review
procurement documents, sue- as requests for proposals
or invitations for bids, independent cost estimates, etc.
when:
(i) A grantee's or subgrantees 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 competitiou or only one bid or offer is received
in response to a solicitation; or
(iii) The procurement, which is expected to exceed the
simplified acquisition threshold, specifies a'brand
name' product; or
(iv) The proposed award is more than the simplified
acquisition threshold and is to be awarded to other than
the apparent low bidder under a sealed bid procurement;
or
(v) A proposed contract modification changes the
scope of a contract or increases the contract amount by
more than the simplified acquisition threshold.
(3) A grantee or subgrantee will be exempt from the
preaward review in paragraph (gx2) 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
continuous high -dollar funding, and third-parly.cantracts
are awarded on a regular basis.
(ii) A grantee or subgrantee may self=cutify 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 spscific procedures,
regulations, standards, etc.; as being in compliance with
these requirements and have its system available for
review.
(h) Bonding requirement. 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 instrrment .
accompanying a bid as assurance Ihat 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
hood" is one executed in connection with a contract to
secure fulfillment of all the coutractoes obligations
under such contract -
(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 =ure
payment as required by law of dl 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 most contain provisions in paragraph (1) of
.this section. Federal agencies are permitted to require
changes, remedies, changed conditions, access and
records retention, suspension of work, and other clauses
_approved by11u 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, entitledFqual 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 coutracts awarded in excess.of $10,000 by
grantees and their contractors or subgrantees)
(4) Compliance with the Copeland •Anti -Kickback"
Act (I8 U.S.C. 874)as supplemented in Department of
Labor regulations (29 CFR Pan 3). (All contracts and
subgrants for construction or iepair) .
NOTE: THE EPA-ASSLST,ED WATER AND
WASTEWATER INFRASTRUCTURES
PROJECTS AUTHORIZED UNDER THE P. L.
107-73 AND AS AMENDED ARE NOT SUBJECT
TO, THE FOLLOWING SECTION (5) MME
DAVIS-BACON ACTU REQUIREMENTS
(5) Compliance with the Davis -Bacon Act (40 U.S.C.
276a to 276a-7) as supplemented by Department of
112
Labor regulations (29 CFR Pan 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 Aa (40
U.S.C. 327-330) as supplemented by.Departrnent of
Labor regulations (29 CFR Pan 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, papas, 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 cox years
after grantees or subgrantees make final payments and
all other pending matters are closed..
(12) Compliance with all applicably 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 pan 15). (Contracts, subcontracts, and subgrantsof
amounts in excess of $1001000)
(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).
0) Payment to conultantt. (1) EPA will limit its
participation in the salary rate (excluding overtread) pad
to individual consultants retained by grantees or by a .
grantees contractors or subcontractors to. the maximum
daily rate for a GS -18. (Grantees may, however, pay
consultants more than this amount). This. limitation
applies to consultation services of designated.individuals
with specialized skills who are paid it a daily or hourly
rate. This rate does not include transportation and
subsistence costs for travel performed; grantees will pay
these in accordance with their normal travel
reimbursement practices. (Pub. L. 99-591).
(2) Subagreements with firms for services which aro
awarded using the procurement requirements in this pan
are not affected by this limitation.
(k) Use of the same architect or engineer during
conduction. (1) If the grmice is satisfied with the
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qualifications and performance of the architect or
engineer who provided any or all of the facilities
planning or design services for a waste -water treatment
works project and wishes to retain that firm or
individual during construction of the project, it may do
so without further public notice and evaluation of
qualifications, provided:
(i) The grantee received a facilities planning (Step 1)
or design grant (Step 2), and selected the architect or
engin cer in accordance with EPA's procurement
regulations in effect when EPA awarded the grant; or
(ii)'Tbe award official approves noncompetitive
procurement under § 31.36(d)(4) for reasons other than
simply using the same individual or fmmlhat provided
facilities planning or design services for the project; or
(iii) The grantee attests that:
(A) The initial request for proposals clearly slated the
possibility that the firm or individual selected could be
awarded a subagreement for services during
construction; and
-(B) The firm or individual was selected for facilities
planning or design services in accordance with
procedures specified in this section.
(C) No employee, officer or agent of the grantee, any
member of their immediate families, or thew partners
have financial or other interest in the firm selected for
award; and
(D) Now of the grantee's officers, employees or
-agents solicitedoraccepted gratuities, favors or
anything of monetary value from contractors or other
parties to subagreements:
(2) However; if the grantee uses the procedures in .
paragraph (kxl) of this section to retain an architect or
engineer, any Step 3 subagreements between the
architect or engineer and the grantee most meet all of
the other procurement provisions in § 3136.
153 FR 8068 and 8087, Mu. 11, 1988, and mended a 53 FR 8075,
Mar. 11, 1988)
§.31.37 Subgrants.
(a) Sores. 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 §
31.42 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.
So
(b) AM other grantees. All other grantees shall follow
the provisions of this part which arc 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. Granims shall:
(1) Ensure that every subgrant includes a provision for
compliance with this par;
(2) Ensure that every subgrant includes any clauses
required by Federal statute and executive orders and
their implementing regulations; and
(3) Ensure that subgram= are aware of requirements
imposed upon them by Federal statutes and regulations.
(c) Erceprionr. By their own terms, certain provisions
of this part do not apply to tlic award and administration
of subgrants:
(1) Section 31.10;
(2) Section 31.11;
(3) The letter -of -credit procedures specified in
Treasury Regulations at 31 CFR part 205, cited in §.
31.21; and -
(4) Section 3150.
Reports, Records, Retention, and Enforcement
§ 31.40 Monitoring and reporting program
performance.
(a) Monitoring by grantees. Grantees are responsible
for managing the day -today operations of grant and
subgrant supported activities. Grantees most mooitar
grant and subgrant supported activities to assure
compliance with applicable Federal requirements and
that performance goals are being achieved. Grantee
monitoring most cover each program, function or.
activity.
(b) Noncom&mtion 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 foal Financia( Status
Report
(1) Grantees shall submit annual performance reports
unless the awarding agency requiresquarterly or
semi-annual reports. However,perfornnance 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 Phe finallmformaice report
will be due 90 days after the expiration or termination of
grant support If a jtutified 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 Dot 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.
(e) Consbuction performance reports. For the most
part, on-site technical inspections and certified -
perccntag"f-completion data are reliedon 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 Dever more frequently than
quarterly.
(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 "too
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 my assistance
needed to resolve the situation.
(2) Favorable developments which enable meeting
time schedulesandobjectives 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. .
(J) Waivers, extensions. (1) Federal agencies may
waive y p
wperformance 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 Hate for any performance report from a
subgrantee if the grantee will still be able to meet its
performance repotting obligations to the Federal
agency.
§ 31.41 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.
51
(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 form prescribed in this
section in dealing with their subgrantees. However;
grantees shall not impose more burdensome
requirements on subgrantees.
13) Grantees shall follow all applicable standard and
supplemental Federal agency instructions approved by
OMB to the extend 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 or4nshW the grantee to
disregard any lire item that the Federal agency finds
unnecessary for its recision making purposes.
(4) Grantees will not be required to submit more than
the original and two copies of form required under this
Pam
(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 ajuttified request from a -
grantee.
(b) Financial Status Report -(1) Form. Grantees will
use Standard Form 269 or 269A, Financial ,Slants
Report, to report the status of funds for all
nonconstruction grants and for construction grants when
required in accordance with S 31.41(cMiii).
(2) Accounting basis. Each grantee will report program
outlays and program income Data 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 morn 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'qualtcAY
or semiannual basis, they will be. due 30 days After the
reporting period. When required on an annual basis, they
will be due 90 days after the grant year. Final reports
will be due 90 days after the expiration or termination of
grant support.
(c) Federal Cath Transactions Report-(1)Form. (i)
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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
(i) 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 bands of their .
subgramees or contractors and to provide short narrative
explanations of actions taken by the grantee to reduce
the excess balances.
(4) Frequency and due dare. Grantees most submit the
report no later than 15 working days followingthe end
of each quarter. However, where an advance either by
letter of credit m 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 rtimbi rsemens-(I)
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 oonconstraction grants will also be submitted on
Standard Form 270. (For reimbursement requests under
construction grants, see paragraph (eel) of this section.)
(3) The frequency for submitting payment requests is
treated in § 31.41(b)(3).. -
(e) Outlay "port and request jor reimbursement jor
construction programs_ (1) Grants that support
construction activities paid by reimbursement method.
(i)Requests for reimbursement under coastruction
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
foru4 specified in § 31.41(d), instead of this form
(ii) The frequency for submitting reimbursement
requests is is treated in § 31.41(b)(3).
(2) Grants that support construction activities paid by
52
letter of credir, electronic fund$ 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 Reimbur mens for Construction
Programs. The Federal agency will provide any
necessary special instruction. However, frequency and
due date shall be governed by § 31.41(6) (3) and (4).
(ii) When a concoction giant is paid by Treasury
check advances based on periodic requests from the
grantee, the advances will be requested on the form
specified in § 31.41(d).
(iii) The Federal agency -may substitute the Financial
Status Report specified in § 31.4 I (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
131.4 1 (bX2).
§31A2 Retention and access requirements for
records.
(a)Apprrcability. (1) This section applies to all -
financial and programmatic records, supporting
documents; statistical records, and other records of
grantees or subgrantces which are:
(i) Required to be maintained by the terms of this part,
program regulations or the grant agreement, or
(u) Otherwise reasonably considered as pertinent to
program regulations in 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 §31.36(f)(Ip).
(b) Length of retention period. (1) Except as otherMse
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 i4 or until the end of the
regular 3 -yeas period, whichever is later.
(3) To avoid duplicate record keeping, awarding
agencies may make special arrangements with grantees
and subgrantces to retain any records which are
continuously needed for joint use- The awarding agency
will request transfer of nzards to its custody when it
determines that the records possess long-term retention
value. When the records are transferred to or maintained
by the Federal agency, the 3 -year retention requirement
is not applicable to the grantee or subgrantee.
(c) Starting date ofretention periad-(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 expendituse'reporL 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 tlhe direction of the awarding agency.
(3) RaordsJor income transactions after grant or
subgrani 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 stare from the
end of the grantee's fiscal yeas 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 visage charge back rates or composite fringe
benefit rates).
(i) )f submfned 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, den the 3 -year retention
period for its supporting records starts from rhe date of
such submission.
(u) If not submimed for negoriation. If the proposal,
plan, or other computation is not required to be
submitted to the Federal Government (or (o.th c grantee)
for negotiation purposes, then the 3 -year retention
period for tyre proposal plan, or computation and its
supporting records starts from end of the fiscal year (or
other accounting period) covered by the proposal, plan,
Of oder computation..
(d) Substitution of microfilm. Copies made by
microfilming, photocopying, or similar methods may be
substituted for the original records.
(e) Access to records -(l) Records of grantees and
subgrantees. The awarding agency and the Comptroller
General of the United States, or any of their authorized
representatives, SWI 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 rights of access
in this section must not be limited to the required
retention period but shall last as long as the records are
retained.
53
(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, Stale, Of local law,
grantees and subgrantees are not required to permit
public access to their records.
§ 31.43 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:
(l) 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 subgranteds program,
(i) EPA can also wholly or partly annul the current
award for the grantees or subgrantee's.program.
(ii) [Reserved]
(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 bearing, 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 subgramta resulting from obligations incurred
by the grantee or subgrantee during a suspension or atter
termination of an award are not allowable unless the
awarding agency expressly authorizes them in the notice
Of syspensioo or termination or subsequently. Othet-
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 unwed 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. ase
noincareellable, and,
(2) The costs would be allowable if the award were cwt
suspended lir expired normally at the end of rhe funrding
period in which the termination takes effect
(d) Relationship to Debarment and Srtspen*len-T�
enforcement remedies identified in this section•
including suspension and termination, do not preclude
grantee or subgrantee from being subject to'Debatrrkrd
and Suspension' under E.O. 12549 (see § 3135)-
153 Fit 6066 Md SM. Mu. 11, 196& and �ded at 53 Fit W7&
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Mar. 11, 1988)
§ 31.44 Termination for convenience.
Except as provided in § 31.43 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'mayy terminate the award in its entirety under
either § 31.43'or paragraph (a) of this section.
§ 31.45 Quality assurance.
If the grantee's project involves.environmentally
related measurements or data generation, the grantee
shall develop and.implement quality assurance practices
consisting of policies, procedures, specifications,
standards, and documentation sufficient to produce data
of quality adequate to meet project objectives and to
immunize loss of data due to out -of -control conditions or
malfunctions.
153 Flt 8074 Mar. 11. 1988)
Subpart D -Atter -The -Grant Requirements
§ 31.50 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
ha$ been completed.
(b) Reporxt. 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 de grant Upon request by the grantee,
Federal agencies may extend this time frame. These
may include but are not limited to:
(1) Final perfo»rlance 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 -170) (if applicable).
(4) Invention disclosure (if applicable) -
(5) Federally -owned property report.-
In
eport.In accordance with § 31:32(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
54
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 a4ustmenlr. (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 unobligatcd (unencumbered) cash
advanced that is no( authorized to be retained for use on
other grants.
§ 3151 Later disallowances and adjustments
Ile 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 dire as
a result of later refunds, corrections, or other
transactions;
(c) Records retention as required in § 31.42
(d) Property management requirements in §§ 31.31 and
31.32; and
(e) Audit requirements in § 31.26.
§ 3152Collection 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 tense 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, theFederatagency will charge intemst on
an overdue debt in accordance with the Federal Claims
Collection Standards (4 CFR Ch. 11). the date Gom
which interest is computed is not extended by litigation
or the filing of any form of appeal.
Subpart E -Entitlement [Reserved]
Subpart F -Disputes
§ 31.70 Disputes
(a) Disagreements should be resolved at the lowest
level possible.
(b) If an agreement cannot be reached, the EPA
disputes decision official will provide a written final
decision. The EPA disputes decision official is the
individual designated by the award official to resolve
disputes concerning assistance agreements.
(c) The disputes decision official's decision will
constitute final agency action unless a request for
review is filed by registered mail, return receipt
requested, within 30 calendar days of the date of the
decision..
(1) For final decisions issued by an EPA disputes
decision official at Headquarters, the request for review
shall be filed with the Assistant Administrator
responsible for the assistance program
(2) For final decisions issued by a Regional disputes
decision official, the request for review shall be filed
with the Regional Administrator. if the Regional
Administrator issued the final decision, the request for
reconsideration shall be filed with the Regional
Administrator.
(d) The request shall incluoe:
(1) A copy of the EPA disputes decision official's final
decision;
(2) A statement of the amount in dispute;
(3) A description of the issues involved; and
(4) A concise statement of the objections to (he final
decision.
(e) The disputant(s) may be represented by counsel and
may submit documentary evidence and briefs for
inclusion in a written record.
(f) Disputants are entitled to an informal conference
with EPA officials .
(g) Disputants are entitled to a wrirten'decision from
the appropriate Regional a Assistant Administrator.
(h) A decision by Oe Assistant Administrator to
confirm the final decisionof a Headquarters disputes
decision official will constitute the final Agency action.
(i) A decision by the Regional Administrator to
confirm the Regional disputes decision official's
decision will constitute the final Agency action.
However, a petition for discretionary review by the
Assistant Administrator responsible for the assistance
program may be filed within 30 calendar days of the
Regional Adminisoiator s decision. The petition shall be
sent to flee Assistant Administrator by registered mail,
return receipt requested, and shall include:
(l) A copy of the Regional Administrators decision;
and
(2) A concise statement of the objections to the
decision.
0) If the Assistant Administrator decides not to review
the Regional Administrator's decision, the Assistant
Administrator will advise the disputant(s) in writing that
the Regional Administrators decision remains the final
Agency action.
(k) If the Assistant Administrator docides to review the
Regional Administrator's decision, the review will
generally be limited to the written record on which the
Regional Administrators decision was based. The
Assistant Administrator may allow the disputant(s) to
55
submit briefs in support of the petition for review and
may provide an opportunity for an informal conference
in order to clarify technical or legal issues. After
reviewing the Regional Administrator's decision, the
Assistant Administrator will issue a written decision
which will then become the final Agency action.
(1) Reviews may not be requested of:
(1) Decisions on requests for exceptions under § 31.6;
(2) Bid protest decisions under § 31.36(bX12);
(3) National Environmental Policy Act decisions under
Part 6;
(4) Advanced wastewater treatment decisions of the
Administrator; and
(5) Policy decisions of the EPA Audit Resolution
Board.
153 FR 8076. Mr. 11, 19881
Appendix A to Part 31- Audits of States,
Local Governments, and Non -Profit
Organizations
EXECUTIVE OFFICE OF THE PRESIDENT
Office of Management and Budget
Circular No. A-133
Revised June 24, 1997
To the Heads of Executive Departments and
Establishments.
Subject: Audits of States, Local Governments, and Non -
Profit Organizations
1. Purpose. This Circular is issued pursuant to the
Single Audit Act of 19842 P.L. 98-502, and the Singe
Audit Act Amendments of 1996, P.L. 104-156. It sets.
forth standards for obtaining consistency and ungpitity
among Federal agencies for the audit of States, local
governments, and non-profit organizations expending
Federal awards.
2. Authority. Circular A-133 is issued under Ibb
authority of sections 503, 1111, and 7501 of seq. of title
31, United States Code, and Executive Orders 8248 and
11541.
3. Rescission and Supersession. This Circular rescinds
Circular A-128, "Audits of State and Local
Governments," issued April 129 1986; and supersedes
the prior Circular A-133, "Audits of Institutions of
Higher Education and Other Non -Profit Institutions,"
issued April 22, 1996. For effective dales, see paragraph
10.
4. Policy. Except as provided herein, the standards set
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forth in this Circular shall be applied by all Federal
agencies. If any statute specifically prescribes policies
or specific requirements that differ from the standards
provided herein, the provisions of the subsequent statute
shall govern.
Federal agencies shall apply the provisions of the
sections of this Circular to non -Federal entities, whether
they are recipients expending Federal awards received
directly from Federal awarding agencies, or are
subrecipients expending Federal awards received from a
pass-through entity (a recipient or another subrecipient).
This Circular does not apply to non -U.S. based entities
expending Federal awards received either directly as a
recipient or indirectly as a subrecipient.
5. Definitions. The definitions of key terms used in this
Circular are contained in §_.105 in the Attachment to
this Circular.
6. Required Action_ The specific requirements and
responsibilities of Federal agencies wind non -Federal
entities are set forth in the Attachment to this Circular.
Fakralagencies making awards to non -Federal entities,
either direcdy or indirectly, shall adopt the language in
the Circular in codified regulations as provided, in,:
Section 10 (below), unless different provisions are.
required by Federal statute or are approved by the
Office of Management and Budget (OMB).
7. OMB Responsibilities. OMB will review Fedgal
agency regulations and implementation of this Circular,
and will provide interpretations of policy requirements
and assistance to ensure uniform, effective and efficient
implementation.
8. Information Contact. Further information
concerning Circular A-133 may be obtained by.
contacting the Financial Standards and Reporting
Branch, Office of Federal Financial Management;
Off ce of Management and Budget,. Washington, DC
20503, telephone (202) 395-3993.
9. Review (late. This Circular will have a policy review
three years from the date of issuance.
10. Effective Dates. The standards set forth in §_.400
of the Attachment to this Circular, which apply directly
to Federal agencies, shall be effective July l., 1996, and
shall apply to audits of fiscal years beginning after lune
30; 1996, except as otherwise specified in §.400(a).
Thi standards set forth in thisGircular that Federal
agencies shall apply to non -Federal entities shall be
adopted by Federal agencies in codified regulations not
later than 60 days after publication of this final revision
in the Federal Register, so that they will apply to audits
of fiscal years beginning after June 30, 1996, with the
exception that §—.305(b) of the Attachment applies to
ZVI
audits of fiscal years beginning' after June 30, 1998. The
requirements of Circular A-128, although the Circular is
rescinded, and the 1990 version of Circular -A-133
remain in effect for audits of fiscal years beginning on
or before June 30, 1996.
/S/
Franklin D. Raines
Director
I: tTrT Tm". o
PART_ --AUDITS OF STATES, LOCAL
GOVERNMENTS, AND NON-PROFIT
ORGANIZATIONS,
Subpart A—General
See.
_.100 Purpose.
_.105 Definitions.
Subpart B—Audits
_ 200 Audit requirements.
_.205 Basis for determining Federal awards expended.
_.210 Subrecipient and vendor determinations.
_.215 Relation to other audit requirements.
_.220 Frequency of audits.
_225 Sanctions.
_.230 Audit costs.
_.235 Program -specific audits.
Subpart C—Auditees
_300 Auditee responsibilities.
.305 Auditor selection
_.310 Financial statements.
_.315 Audit findings follow-up
_.320 Report submission
Subpart D --Federal . Agencies and Pass -Through Entities .
_.400 Responsibilities.
405 Management decision.
Subpart E—Auditors
_.500 Scope of audit.
.505 Audit reporting.
_310 Audit findings.
_315. Audit wonting papers.. .
_320 Major program determination
_325 Criteria for Federal program risk.
_330 Criteria for a low-risk audita.
Subpart A—General
§_.100 Purpose.
This part sets forth standards for obtaining consistency
and uniformity among Federal agencies for the audit of
non -Federal entities expending Federal awards.
§_.105 Definitions
Auditce nears any non -Federal entity that expends
Federal awards which must be audited under this part
Auditor means an auditor, that is a public accountant or
a Federal. State of local government audit organization,
whichmees the general standards specified in generally
accepted government auditing standards (GAGAS). The
term auditor does not include internal auditors of non-
profit organizations.
Audit finding means deficiencies which the auditor is
required by §_.510(a) to repots in the schedule of
findings and questioned costs.
CFDA number means the number assigned to a Federal
program in the Catalog of Federal Domestic
Assistance (CFDA).
Cluster of progtaw means a grouping of closely
related programs that share common compliance
requirements. The types of chuters of ptogIDms are
research and developmeut(R&D), student financial aid
(SFA), and other clusters. 'Other clusters' are as
defined by. the Office of Management and Budget
(OMB) in the compliance supplement or as designated
by a State for Federal awards the State provides to its
subreciptents that meet the definition of a cluster of
programs. When designating an mother cluster: a State
shall identify the Federal awards included in the cluster
and advise the subrecipients of compliance requirements
applicable to the cluster, consistent with §_ 400WI)
and §_ 4Wd)(2), respectively. A cluster of programs
shall be considered as one program for determining
major programs: as described in §_520, and, with the
exception of R&D as described in §_.200(c), whether
a programa-specific audit may be elected:
Cogo'vwt agency for audit means the Federal agency
designated to carry out the responsibilities described in
§_.400(x).
Compliance supplerneral refers to the Circular A•133
Compliameq Supplement, included as Appendix B to
Circular A-133, or such documents as OMB or its
designee may issue to replace it. Thu document is
available from the Government Printing Office,
Superintendent of Documents, Washington, DC 20402-
9325.
Corrective action means action taken by the auditee
that:
(1) Corrects identified deficiencies;
(2) Produces recommended improvements; or
57
(3) Demonstrates that audit findings are either invalid or
do not warrant audita action.
Federal agency has the same meaning as the term
agency in Section 551(1) of title 5, United States Code.
Federal award means Federal financial assisumce and
Federal cost-reimbtirsement contracts that non -Federal
entities receive directly from Federal awarding agencies
or indirectly from pass-through entities. It does not
include proememcni eootracts, under grants or contracts,
used to buy goods or services from vendors. Any audits
of such vendors shall be covered by the terms and
conditions of the counact.-Contracts to operate Federal
Government owned, contracloe.operated facilities
(GOCOs) aro excluded from the requirements of this
part.
Federalawarding agency means the Federal agency
that provides an award directly to the recipient-
Federal
ecipientFederal financial assistance means assistance that ram -
Federal entities receive or administer in the forst of
grants, loans, ban guarantees, property (including
donated surplus property), cooperative agreeuenti,
interest subsidies, insurance, food commodities, diiul
appropriations, and other assistance, but does trot
include amounts received as reimbursement for services
rendered to individuals as described in §_.205(L) and
(1) All Federal awaids to a non -Federal entity assigned a
single number in the MA.
(2) When no CFDA number is assigned, all Federal
awards from the same agency made for the same
purpose should be combined and considered one
Program .
(3) Notwithstanding paragraphs (1) and (2) of this
definition, a cluster ofprograms. Tie types of c1daiis of
programs are: .
(i) Research and development ('R&D):
(ii) Student financial aid (SFA); and
(Iii) "Other clusters," as &srn'bed in the definition of
cluster of pro¢rams in this section. _
GAGAS mesas generally accepted government auditing
standards issued by the Comptroller General of the
United States, which are applicable To financial audits.
Generally accepted accounting principles has the
meaning specified in generally accepted auditing
standards issued by the American Institute of Certified
Public Accountants (AICPA). .
Indian tribe means any Indian tribe. band, nation. or
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' other organized group or community, including any
Alaskan Native village or regional or village corporation
(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
thew status as Indians.
' Internal control means a process, effected by an
entity's management and other personnel, designed to
provide reasonable assurance regarding the achievement
Lof objectives in the following categories:
(1) Effectivenness and efficiency of operations;
(2) Reliability of financial reporting; and
(3) Compliance with applicable laws and regulations.
Internal control pertaining.to. the compliance
requirements for Federal programs (Internal control
over Federal programs) means a process—effected by an
entity's management and other personnel—designed to
' provide reasonable assurance regarding the achievement
of the following objectives for Federal programs:
(1) Transactions are properly recorded and accountea
for to:
(i).Permit the preparation of reliable financial statements
' and Federal reports; -
(ii) Maintain' accountability over assets; and
I (iii) Demonstrate compliance with laws, regulations,
and other compliance requirements;
(2) Transactions are executed in, compliance with:
(i) Laws, regulations; and the provisions of contracts or
grant agreements that could have a direct and material
effect on a Federal program; and
1 (ii) Any other laws and regulations that are identified in
the compliance supplement; and
' (3) Funds. property, and other assets are safeguarded
against loss from unauthorized use or disposition.
Loan means a Federal loan or loan guarantee received
' or. administered by a non -Federal entity.
Local government means ally unit of local government
within a State, including a county, 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.
Major program means a Federal program determined
by the auditor to be.a major program in accordance with
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§_.520 or a program identified as a major program by
a Federal agency or pass-through entity in accordance
with §_.215(c).
Management decision means the evaluation by the
Federal awarding agency or pass-through eatity of the
audit findings and corrective action plan and the
issuance of a written decision as to what corrective
action is necessary.
Non -Federal eutity means a State, local government, or
non-profit organization.
Non-profit organiratiou urians:
(1) any corporation, trust, association, cooperative, or
other organization that: .
(i) Is operated primarily for scientific, educational,
serylco, charitable; or similar purposes in the public
interest;
(ti) Is not organized primarily for profit; and
(iii) Uses its net proceeds to maintain, improve, or
expand its operations; and
(2) The term non-profit organization includes -norm
profit institutions of higher education and hospitals.
OMB means the Executive Office of the President,
Office of Management and Budgel.
Oversight agency for audit means the. Federal
awarding agency that provides the predominant amount
of direct funding to a recipient not assigned a cognizant
agency for audit. When there is no direct funding, the
Federal agency with the predominant indirect finding
shall assume the oversight responsibilities. The duties of
the oversight agency for audit are described in
§_.400(b)
Pass-through entity means a non -Federal entity. that
provides a Federal award to a subrecipient to carry out a
Federal program.
Prognram-specific audit means an audit.of one Federal
program as provided for in §_.200(c) and §_.235.
Questioned cost means a cost that is questioned by the
auditor because of an audit finding: - - -
(1) Which resulted from a violation or possible violation
of a provision of a law, regulation,.eonti ac4 grant,
cooperative agreement, or other agreement or document
governing the use of Federal funds, including funds used
to match Federal funds;
(2) Where the costs, at the time of the audit, are not
supported by adequate documentation; or -
(3) Where the costs incurred appear unreasonable and
do not reflect the actions a prudent person would take in
the circumstances.
Recipient means a non -Federal entity that expends
Federal awards received directly from a Federal
awarding agency to carry out a Federal program.
Research and development (R&D) mean all research
activities, both basic and applied, and all development
activities that are performed by a non -Federal entity.
Research is defined as a systematic study directed
toward fuller scientific knowledge or understanding of
the subject studied. The term research also includes
activities involving the training of individuals in
research techniques where such activities utilize the
same facilities as other research and development
activities and where such activities are not included in
the instruction function. Dev lopment is the systematic
use of knowledge and understanding gained from
research directed toward the production of useful
materials, devices, systems..or methods, including
design and development of prototypes and processes.
Single audit means an audit which includes both the
entity's financial staterneots and the Federal awards as
described in
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 Tenritory of the Pacific Islands, any
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insirt entality thereof, any multi -State, regional, or -
interstate entity which has governmental functions, and
any Indian tribe as defined in this section.
Student Firnncin Aid (SFA) includes those programs
of general student assistance, such as those authorized
by Title IV of the Higher Education Act of 1965, as
amended, (20 U.S.C- 1070 et seq.) which is
administered by the U.S: Department of Education, and
similar programs provided by other Federal agencies- It
does not include programs which provide fellowships or
similar Federal awards to students on a competitive
basis, or for specified studies or research.
Subrecipienl means a non -Federal entity that expends
Federal awards received from a pass-through entity to
carry out a Federal program, but does not include an
individual that is a beneficiary of such a program. A
subrecipient may also be a recipient of other Federal
awards directly from a Federal awarding agency.
Guidance on distinguishing between a siibrecipient and
a vendor is provided in §_210.
Types of compliance requirements refers to the types
of compliance requirements listed in the compliance
supplement Examples include: activities allowed or
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unallowed; allowable costs/cost principles; cash
management; eligibility; snatching, level of effort,
earmarking; and, reporting.
Vendor means a dealer, distributor, merchant, or other
seller providing goods or services that are required for
the conduct of a Federal program. These goods or
services may be for an organi7a60n's own use or for the
use of beneficiaries of the Federal program. Additional
guidance on distinguishing between a subrecipient and a
vendor is provided in 6_210.
Subpart B—Audits
§_-200 Audit requirements
(a) Audit required. Non -Federal entities that expend
$300,000 or more in a year in Federal awards shall have
a single or program -specific audit conducted for that
year in accordance with the provisions of this part
GuidanceondcterminiogTcdeal awards -expended is
provided in §_.205:
(b)Single audit Non -Federal entities that expend
$300,000 or more in a year in Federal awards shall have
a single audit conducted in accordance with §_S00
except when they elect to have a program -specific audit
conducted in accordance with paragraph (e) of this
section.
(c) Program -specific audit election. When an additee
expends Federal awards under only one Federal program
(excluding R&D) and the Federal program's laws,
regulations, or grant agroementsdo'not require a
financial statement audit of the auditee, the audita may
elect to have a program -specific audit conducted in
accordance with §_135. A ping ram -specific audit
may not be elected for R&D unless all of the Federal
awards expended were received from the same Federal
agency, or the same Federal agency and the same pass-
through entity; and that Federal agency, or pars -through
entity in the case of a submcipient, approves in advance
a program -specific audit
(d) Exemption when Federal awards expended are
less than 5.300,000. Non -Federal entities that expand
less than $3110,000 a year in Federal awards are exempt
fromPederal audit requirements for that year, except as
noted in §_115(a), but records must be available for
review or audit by appropriate officials of the Federal:
agency, passthrough entity, and General. Accounting
Office (GAO).
(e) Federally Funded Research and.Developmeot
Centers (FFRDC). Management of an audit= that
owns or operates a FFRDC may elect to treat the
FFRDC as a separate entiy for purposes of this part
§..205 Basis for determining Federal awards
expended
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(a) Determining Federal awards expended. The
determination of when an award is expended should be
based on when the activity related to the award occas.
Generally, the activity pertains to events that require the
non -Federal entity to comply with laws, regulations, and
the provisions of contracts or grant agreements, such as:
expendituurelexpense transactions associated with grants,
cost -reimbursement contracts, cooperative agreements,
and direct appropriations; the disbursement of foods
passed through to subrecipients; the use of loan
Proceeds under loan and loan guarantee programs- the
receipt of property; the receipt of surplus property; the
receipt or use of program income; the distribution or
consumption of food commodities; the.djsbursement of
amounts entitling the non -Federal entity to an interest -
subsidy; and, the period when insurance is in force.
(b) Loan and loan guarantees (loans). Since the
Federal Government is at risk for loans until the debt is
repaid, the following guidelines shall be used to
calculate the value of Federal awards expended under
loan programs, except as noted in paragraphs (e) and (d)
of this section:
(1) Value of new loans made or received during the
fiscal year; plus
(2) Balance of loans from previous years for which the
Federal Government imposes continuing compliance
requirements; plus
(3) Any interest subsidy, cash, or administrative cost
allowance received.
(c) Loan and loan guarantees (loans) at institutions
of higher education. When loans are made to students
of an institution of higher education but the institution
does not make the loans, then only the value of loans
made during the year shall be considered. Federal
awards expended in that year. The balance of loans for
previous years isnot included as Federal awards
expended because the lender accounts for the prior
.balances.
(d) Prior loan and ban guarantees (loans). Loans, the
Proceeds of which were received and expended in prior_
years, are not considered Federal awards expended
under this part when the laws, regulations, and the
provisions of contracts or grant agreements pertaining to
such loans impose no continuing compliance
requirements other than to repay the loans.
(e) F. dowment funds. The cumulative balance of
Federal awards for endowment funds which are
federally restricted are considered awards expended in
each year in which the funds are still restricted.
' (f) Free rent Free rent received by itself is not
considered a Federal award expended under this part
However, free rent received as part of an award to carry
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our a Federal program shall be included in determining
Federal awards expended and subject to audit under this
part.
(g) Valuing non-cash assistance. Federal non-cash
assistance, such as free rent, food stamps, food
commodities, donated property, or donated surplus
property, shall be valued at fair market value at the time
Of receipt or the assessed value provided by the Federal
agency.
(h) Medicare. Medicare payments to a non -Federal
entity for providing patient care services to Medicare
eligible individuals are not considered Federal awards
expended under this part
(i) Medicaid. Medicaid payments to a subrecipient for
Providing patient care services to Medicaid eligible
individuals are not considered Federal awards expended
under this part unless a State requires the funds, to be
treated -as Federal awards expended because
reimbursement is on a cost-rcimburserrent-basis.
(i) Certain loans provided by the National Credit
Union Administration. For purposes of this part, loans
made from the National Credit Union Share Insurance
Fund and the Central Liquidity Facility that are funded
by contributions from insured institutions are not
considered Federal awards expended.
3t_.210 Subrecipient and vendor determinations.
(a) General. An auditee may be a recipient, a
subrecipient and a vendor. Federal awards expended as
a recipient or a subrecipient would be subject to audit
under this part The payments received for goods or
services provided as a vendor would not be considered
Federal awards. The guidance in paragraphs (b) and (c)
of this section should be considered in determining
whether payments constitute a Federal award or a
payment for goods and services.
(b) Federal award. Characteristics indicative of a
Federal award received by a subrecipienl are when the
organization:
(1) Determines who is eligible to receive what Federal
financial assistance;
(2) Has its perforrrance measured against whether the
Objectives of the Federal program are mei;
(3) Has responsibility for programmatic decisio
making;
(4) Has responsibility for adherence to applicable
Federal program compliance requirements; and
(5) Uses the Federal funds to carry out a program of the
organization as compared to providing goods or services
for a program of the pass-through entity.
(c) Payment for goods and services. Characteristics
indicative of a payment for goods and services received
by a vendor are when the organization:
(l) provides the goods and services within normal
business operations;
(2) Provides similar goods or services to may different
purchasers;
(3) Operates in a competitive environment;
(4) Provides goods or services that are ancillary to the
operation of the Federal program; and
(5) Is not subject to compliance requirements of the
Federal program_
(d) Use of judgment in malting determination. There
may be unusual circumstances or exceptions to the
listed characteristics. In malting the determination of
whether a subrecipient or vendor relationship exists, the
substance of the relationship is more important than the
form of the agreement- It is not expected that all of the
characteristics will be present and judgment should be
used in determining whether an entity is a subrecipient
or vendor. '
(e) For-profit subredpient. Since this part does not -
apply to for-profit subrecipients, the pass-througb entity
is responsible for establishing requirements, as
necessary, to ensure compliance by for-profit
subrecipients. The contract with the for-profit
subrccipient should describe applicable compliance
requirements and the for-profit subrecipient's
compliance responsibility, Methods to ensure
compliance for Federal awards made to for-profit
subrecipients may include preaward audits, monitoring
during the contract, and post -award audits.
(1) Compliance responsibility for vendors. In most
cases, the auditee's compliance responsibility for
vendors is only to ensure that the procurement, receipt,
and payment for goods and services comply with laws,
regulations, and the provisions of contracts or grant
agreements. Program compliance requirements normally
do not pass through to vendors. However, the audit= is
responsible for ensuring compliance for vendor
transactions which are structured such that the vendor is
responsible for program compliance or the vendor's
records must be reviewed to determine program .
compliance. Also, when these .vendor transactions relate
to a major program, the scope of the audit shall include
determining whether these transactions are in
compliance with laws, regulations, and the provisions of
contracts or grant agreements.
§_215 Relation to other audit requirements.
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(a) Audit under this part in lieu of other audits. An
audit made in accordance with this part shall be in lieu
of any financial audit required under individual Federal
awards. To the extent this audit meets a Federal agency's
needs, it shall rely upon and use such audits. The
provisions of this part neither limit the authority of
Federal agencies, including their Inspectors General, or
GAO to conduct or arrange for additional audits (e.g.,
financial audits, perforvtance audits, evaluations,
inspections, or reviews) nor authorize any auditee to
constrain Federal agencies from carrying out additional
audits. Any additional audits shall be planned and
performed in such a way as to build upon work
performed by other auditors.
(b) Federal agency to pay for additional audits. A
Federal agency that conducts or contracts for additional
audits shall, consistent with other applicable laws and
regulations, arrange. for funding the full cost of such
additional audits.
(c) Request for a program to be audited as a major
program A Federal agency may request an auditee to
have a particular Federal program audited as a major
program in lieu of the Federal agency conducting or
arranging for the additional audits. To allow for
planning, such requests should be made at least 180 days
prior to the end of the fscal year to be audited_ The
auditee, after consultation with its auditor, should
promptly respond to such request by informing the
Federal agency whether the program would otherwise be
audited as a major program using the risk-based audit
approach described in ¢_520 and, if not, the
estimated incremental cost The Federal agency shall
then promptly confirm to the auditee.whodu it wants.
the program audited as a major program. If the program
is to be audited as a major program based upon this..
Federal agency request, and the Federalagencyagrees to
pay the full incremental costs, then the auditee shall
have the program audited as a major program. A pass
through entity may use the provisions of this paragraph
for a subrecipient
§_220 Frequency of audits.
Except for the provisions for biennial audits provided in
paragraphs (a) and (b) of this section, audits required by
this part shall be performed annually. Any biennial audit
shall cover both years within the biennial period.
(a) A state or local government that is required by
constitution or statute, in effect on January 1, 1997t to
undergo.its auditsJess frequently than annually, is
permitted to undergo its audits pursuant to this part
biennially. This requirement must still be in effect for
the biennial period under audit.
(b) Any non-profit organization that had biennial audits
for all biennial periods ending between July 1, 1992, and
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January 1, 1995, is permitted to undergo its audits
pursuant to this part biennially.
§_.225 Sanctions.
No audit costs maybe charged to Federal awards when
audits required by this part have not been made or have
been nude but not in accordance with this part. In taus
of continued inability or unwillingness to have an audit
conducted in accordance with this part, Federal agencies
and pus-through_entitics shall take appropriate action
using sanctions such as:
(a) Withholding a percentage of Federal awards until the
audit is completed satisfactorily;
(b) Withholding or disallowing overhead costs;
(c) Suspending Federal awards.until the audit is
conducted; or
(d) Terminating the Federal award.
1_.230 Audit costs.
(a) Allowable costs. Unless prohibited by law, the cost
of audits made in accordance with the provisions of this
part are allowable charges to Federal awards. The
charges may be considered a direct cost or an allocated
indirect cost, as determined in accordance with the
provisions of applicable OMB cost principles circulars,
the Federal Acquisition Regulation (FAR) (48 CFR
parts 30 and 311 or other applicable cost principles or
regulations.
(b) Unallowable costs. A non -Federal entity shall not
charge.the following to a Federal award:
(1) The cost of any audit under the Single Audit Act
Amendments of 1996 (31 U.S.C: 7501 et seq.) not
conducted in accordance with this part.
(2) The cost of atiditing a nonTederal entity which has
Federal awards expended of less than $300.000 per year
and is thereby exempted under §_.200(d) from having
an audit conducted under this part. However, this does
not prohibit a pass-through entity from charging Federal
awards for the cost of limited scope audits to monitor its
subrecipients in accordance with 6_.400(d)(3),
provided the subreclpient does not have a single audit -
For purposes of this part, limited scop eaudits only
include agreed-upon procedures engagements conducted
in accordance with either the A1CPA's generally
accepted auditing standards of attestation standards; that
are paid for and arranged by a pass-through entity and
address only one or more of the following types of
compliance requirements: activities allowed or
unallowed; allowable costs/tpst principles; eligibility;
matching, level of effort, earmaAdog; and, reporting.
Prograurspecific audits.
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(a) Prograr specific audit guide available. In many
cases, a program-spccific audit guide will be available to
provide specific guidance to the auditor with respect to
internal control, compliance requirements, suggested
audit procedures, and audit reporting requirements. The
auditor should contact the Office of Inspector General of
the Federal agency to determine whether such a guide is
available. When a current program -specific audit guide
is available, the auditor shall follow GAGAS and the
guide when performing a program -specific audit.
(b) Program-specilic audit guide not available. (1)
When a program -specific audit guide is not available,
the auditee and auditor shall have basically the same
responsibilities for the Federal program as they would
have for an audit of a major program in a single audit.
(2) The auditee shall prepare the financial statement(s)
for the Federal program that includes, at a minimum, a -
schedule of expenditures of Federal awards for the
program and notes that describe the significant
accounting policies used in preparing the schedule, a
summary schedule of prior audit findings consistent with
the requirements of §_315(b), and a corrective action
plan consistent with the requirements of §_315(c).
(3) The auditor shall.
(i) Perform an audit of die financial statemeot(s) for the
Federal program in accordance with GAGAS
(ii) Obtain an understanding of internal control and
Perform tests of internal control over the Federal
program consistent with the requirements of §_SOo(c)
for a major program;
(iii) Perform procedures to determine whether the
auditce has complied with laws, regulations, and the
provisions of contracts or grant agreements that could
have a direct and material effect on the Federal program
consistent with the requirements of §_S00(d) fQy. a
major program; and
(iv) Follow up on prior audit findings, perform
procedures to assess the reasonableness of the summary
schedule of prior audit findings prepared by the audita,
and report, as a current year audit fording, when the
auditor concludes that the summary schedule of prior
audit findings materially misrepresents the status of any
prior audit finding in accordance with the requirements
of §_.500(e).
(4) The auditors report(s) may be in the form of either
combined or separate reports and may be organized.
differently from the manner presented in this section.
The auditors report(s) shall state that the audit was
conducted in accordance with this part and include the
following:
(i) An opinion (or disclaimer of opinion) as to whether
the financial statements) of the Federal program is
presented fairly in all material respects in conformity
with the stated accounting policies;
(ii) A report on internal control related to the Federal
program, which shall describe the scope of testing of
internal control and the results of the tests;
(iii) A report on compliance which includes an opinion
(or disclaimer of opinion) as to whether the auditee
complied with laws, regulations, and the provisions of
contracts or grant agreements which could have a direct
and material effect on the Federal program; and
(iv) A schedule of fundings and questiontA costs for the
Federal program that includes a summary of the
auditor's results relative to the Federal program in a
formal consistent with §_S05(dxl) and findings and
questioned costs consistent with the requirements of
§_.505(d)(3).
(c) Report sabmictiion for program -specific audits.
(1) The audit shall be completed -and the reporting
required by paragraph (e)(t) or (c)(3) of this section
submitted within the earlier of 30 days after receipt of
the auditor's report(s), or nine months after the end of
the audit period, unless a longer period is agreed to in
advance by the Federal agency that provided the
funding or a different period is specified in a program -
specific audit guide. (However, for fiscal years
beginning on or before June 30, 1998, the audit shall be
completed and the required reporting. shall be submitted
within the earlier of 30 days after -receipt of the auditor's
report(s), or 13 months after the end of the audit period,
unless a different period is specified in a prograu -
. specific audit guide.) Unless restricted by law or
regulation, the audited shall make report copies
available for public inspection -
(2) When a prograntspecifrc:audit guide is available,
the auditee shall submit to the Federal clearinghouse
designated by OMB the data collection form prepared in
accordance with §_320(6). as applicable to a
program -specific audit, and the reporting required by
the program -specific audit guide to be, retained as an
archival copy. Also, the auditee shall submit to the
Federal awarding agency or pass-through entity the
reporting required by time program -specific audit guide.
(3) When a program -specific audit guide is not
available, the reporting package for a program -specific
audit shall consist of the financial statement(s) of the
Federal program, a summary schedule of prior audit
findings, and a corrective action plan as described in
paragraph (b)(2) of this section, and the auditai s
reports) described in paragraph (6x4) of this section-
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ectionIle data collection form prepared in accordance with
§_320(6), as applicable to a program -specific audit,
and one copy of this reporting package shall be
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submitted to the Federal clearinghouse designated by
OMB to be retained as an archival copy. Also, when the
schedule of findings and questioned costs disclosed
audit findings or the sur unary scheduleof prior audit
findings reported the status of any audit findings, the
audit= shall submit one copy of the reporting package
to the Federal clearinghouse on behalf of the Federal
awarding agency, or directly to the pass-through entity
in the case of a subrecipient. Instead of submitting the
reporting package to the pass-through entity, when a
subrecipicot is not required to submit a reporting
package to the pass-through entity, the subrecipient shall
provide written notification to the pass-through entity,
consistent with the requirements of 0_320(e)(2). A
subrecipient may submit a copy of the reporting package
to the pass-through entity to comply with this
notification requirement.
(d) Other sections of this part tiny apply. Program -
specific audits are subject to §_.100 through
§_.215(b), §_.220 through 11_2311,
through §_305, §_315. §_320(1) through
§_320(1), §_400 through §—.405, §:_.510
through §-515, and other referenced provisions of
this pan unless contrary to the provisions of this.section,
a program -specific audit guide, m program laws and
regulations.
Subpart C-Auditees
§_300 Auditee responsibilities. .
The auditee shall;
(a) Identify, in its accounts, all Federal awards received
and expended and the Federal program under which
they were received. Federal program and award
identificationshallinclude, as applicable, the CFDA title
and number, award number and year, name of the
Federal agency, and name of the pass-through entity.
(b) Maintain internal control over Federal programs that
provides reasonable assurance that the auditee is
managing Federal awards in compliance with laws,
regulations, and the provisions of contracts or grant
agreements that could have a material effect on each of
its Federal programs.
(c) Comply with laws, regulations, and the provisions of
contracts or gran( agreements related to each of its
Federal programs.
(d) Prepare appropriate financial statements; including
the schedule of expeuditues of Federal awards in
accordance with §_310.
(e) Ensure that the audits required by this part are
properly performed and submitted when due. When
extensions to the report submission due date requited by
§_320(2) are granted by the cognizant or oversight
agency for audit, promptly ratify the Federal
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clearinghouse designated by OMB and each pass-
through entity providing Federal awards of the
extension.
(f) Follow up and take corrective action on audit
findings, including preparation of a summary schedule-
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cheduleof prior audit findings and a corrective action plan in
accordance with §_315(b) and §_.315(c),
respectively.
§_305 Auditor selection.
(a) Auditor procurement In procuring audit services,
auditees shall follow the procurement standards
prescribed by the Grants Management Common Role
(hereinafter referred to as the "A-102 Common Rule")
published March 11, 1988 and amended April 19,1995
I insert appropriate CFR citation), Circular A-110,
"Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education,
Hospitals and Other Non -Profit Organizations," or the
FAR (48 CFR part 42), as applicable (OMB Circulars
are available from the Office of Administration,
Publications Office, room 2200, New Executive Office
Building; Washington, DC 20503). Wherever possible,
auditees shall make positive efforts to utilize small
businesses, minority-owned firms, and women's
business enterprises, in procuring audit services as
stated in the A-102 Common Rule, OMB Circular A-
110, or the FAR (48 CFR part42), as applicable. In
requesting proposals for audit services, the objectives
and scope of the audit should be made clear. Factors to
be considered in evaluating each proposal for audit
services include the responsiveness to the request for
proposal, relevant experience, availability of staff with
professional qualifications and technical abilities, the
results -of external quality control reviews, and price.
(b). Restriction on auditor preparing indirect cost
proposals. An auditor who prepares the indirect cost
proposal or cost allocation plan may not also be selected
to perform the audit required by this part when the
indirect costs recovered by the auditee during the prior
year exceeded $I million. This restriction applies to the
base year used in the preparation of the indirect cost
proposal or cost allocation plan and any subsequent
years in which the resulting indirect cost agreement or
cost allocation plan is used to recover costs. To
minimize any disruption in existing contracts for audit
services, this paragraph applies to audits of fiscal years
beginning after June 30, 1998.
(c) Use of Federal auditors. Federal auditors may
perforin all or part of the work' required under this part if
they comply fully with the requirements of this part
§_.310 Financial statements.
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(a) Financial statements. The auditee shall prepare
financial statements that reflect its financial position,
results of operations or changes in net assets, and, where
appropriate, cash Bows for the fiscal year audited. The
financial statements shall be for the same organizational
unit and fiscal year that is chosen to meet the
requirements of this part However, organization -wide
financial statements may also include departments.
agencies, and other organizational units that have
separate audits in accordance with 9_S00(a) and
prepare separate financial statements.
(b) Schedule of expenditures of Federal awards. The
auditee shall also prepama schedule of expenditures of
Federal awards for the perioa covered by the auditee's
financial statements. While not required, the auditee
may choose to provide information requested by Federal
awarding agencies and pass-through entities to make the
schedule easier to use. For example, when ayedcral .
program has multiple award years, the auditee may -list
the amount of Federal awards expended for each award
year separately. At a minimmn, the schedule shall:
(1) list individual Federal programs by Federal agency.
For Federal programs included in a cluster of programs,
list individual Federal programs within a cluster of
Programs. For R&D, total Federal awards expended .
shall be shown either by individual award or by Federal
agency and major subdivision within the Federal
agency. For example, the National lustitutes of Health is
a major subdivision in the Department of Health and
Human Services.
(2) For Federal awards received as a subrecipient, the
name of the pass-through entity and identifying number
assigned by the pass-through entity shall be included.
(3) Provide total Federal awards expended for each
individual Federal program and the CFDA number or
other identifying number when the CFDA information is
not available.
(4) Include notes that describe the significant accounting
policies used in preparing the schedule.
(5) To the extent practical, pass-through entities should
identify in the schedule the total amount provided to
subrecipients from each Federal program
(6) Include, in tither the schedule ora [rote to the
schedule, the value of the Federal awards expended in
the form of noncash assistance, the amount of insurance
in effect during the year, and loans *6r loan guarantees
outstanding at year end. While not required, it is
preferable to present this information in the schedule.
§_315 Audit. findings follow-up.
(a) General. The auditee is responsible for follow-up
and corrective action on all audit findings. As part of
this responsibility, the auditee shall prepare a summary
schedule of prior audit findings. The auditee shall also
prepare a corrective action plan for current year audit
findings. The summary schedule of prior audit findings
and the corrective action plan shall include the reference
numbers die auditor assigns to audit findings under
§_510(c). Since the summary schedule may include
audit findings from multiple years, it shall include the
fiscal year in which the finding initially occurred-
(b)
ccurred
(b) Summary schedule of prior audit findings. The
summary schedule of prior audit findings shall report
the status of all audit findings included in the prior
audit's schedule of findings and questioned costs
relative to Federal awards. The summary schedule shall
also include audit findings reported in the prior audit's
summary schedule of prior audit fundings except audit
findings listed as corrected in accordance with
patagrsph (b)(l) of this section, or no longer valid or
not warranting further action in accordance: with
paragraph (b)(4) of this section.
(1) When audit findings were fully corrected, the
summary schedule need only list the audit findings and
state that corrective action was taken.
(2) When audit findings were not corrected or were only
partially cortatm, the summary schedule shall describe
the planned corrective action as well as any partial
corrective action taken.
(3) When corrective action taken is significantly
different from corrective action previously reported in a
corrective action plan or in the Federal agency's or pass-
through entity's management decision, the summary
schedule shall provide an explanation.
(4) When the auditee believes the audit findings are no
longer valid or do not warrant further action, the reasons
for this position shall be described in the summary
schedule. A valid reason for considering an audit
furling as not wartanting further action is that all of the
following have occurred:
(i) Two years have passed since the audit report in
vNeb the finding occurred was submitted to the Federal
clearinghouse;
(ii) The Federal agency or pass-through entity is not
currently following up with the audilee on the audit
finding; and
(iii) A management decision was not isx" dA
(c) Corrective action plan. At the completion of the
audit, the auditee shall prepare a corrective action plan
to address each audit finding included in the current
year auditor's reports. The corrective action plan shall
provide the name(s) of the contact person(s) responsible
for corrective action, the corrective action planned, and
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the anticipated completion data if the auditee does not
agree with the audit findings or believes corrective
action is not required, then the corrective action plan
shall include an explanation and specific reasons.
§_.320 Report submission
(a) General 'Ihe audit shallbe completed and the data
collection form described in paragraph (b) of this section
and reporting package described in paragraph (e) of this
section shall be submitted within the earlier of 30 days
after receipt of the auditor's report(s), or nine months
after the end of the audit period, unless -a longer period
is agreed to in advance by: the cognizant or oversight
agency for audit (However; to fiscal years beginning
on or before June 30, 1999, the audit shall be completed
and the data collection form and reporting package shall
be submitted within the earlier of 30 days after receipt of
the auditors reporgs), or, 13 months afle r the end of the
audit period.) Unless restricted by law or regulationthe
auditee shall make copies available for public
inspection.
(b) Data Collection. (1) The auditee shall submit a data
collection form which states whether the audit was
completed in accordance with this part and provides,
information about the.auditee, its Federal programs, and
the results of the audit The form shall be approved by
OMB, available from the Federal clearinghouse
designated by OMB, and include dam elements similar
to those presented in this paragraph. A senior level
representative of the auditee (e.g., State controller,
director of finance; chief executive_ officer, or chief
financial officer) shall sign a statement to. be included as
part of the form certifying that the auditee complied
with the requirements of this part, the form was prepared
in accordance with this part (and the instructions
accompanying the form), and the information included
in the form, in its entirety, are accurate and complete.
(2) The data collection form shall include the following
data elements:
(i) The type of reportthe auditor issued on the financial
statements of the auditee (i.e., unqualified opinion,
qualified opinion, adverse opinmion. at disctairner of
opinion).
(ii) Whore applicable, a statement that reportable .
conditions in internal control were disclosed by the audit
of the financial statements and whether any such
conditions were material weaknesses.
(iii) A statement as to whether the audit disclosed any
noncompliance which is material to the financial
statements of the auditce.
(iv) Where applicable, a statement that reportable
conditions in internal control over major programs were
disclosed by the audit and whether any such conditions
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were material
(v) The type of report the auditor issued on compliance
for major programs (i.e., unqualified opinion, qualified
opinion, adverse opinion, or disclaimer of opinion).
(vi) A list of the Federal awarumg agencies which will
receive a copy of the reporting package pursuant to
§_320(d)(2) of OMB Circular A-133.
(vii) Ayes or no statement as to whether the auditee
qualified as a low-risk audit" under 4_530 of OMB
Circular A-133.
(viii)The dollar threshold used to distinguish between
Type A and Type.B programs as defined in §_S20(b)
of.OMB Circular A4 33.
(ix) The Catalog of Federal Domestic Assistance
(CFDA)'number for each Federal program, as
applicable.
(x) The name of each Federal program and
identification of each major program Individual
programs:within a cluster of piogtams should be listed
in the same level of detail as they are listed in the
schedule of expenditures of Federal awards.
(xi) The amount of expenditures in the schedule of
expenditures of Federal awards associated with each
Federal program.
(xii) For each Federal program, a yes or no statement as
to whether thereareaudit findings in each of the
following types of compliance requirements and the
total amount of any questioned costs:
(A) Activities allowed or unallowed.
(B) Allowable eoststcost principles.
(C) Cash management-
(D)
anagement(D) Davis -Bacon Act
(E) Eligibility.
(F) Equipment and real property u anagernenL
(G) Matching, level of.effort, earuurking.
(I) Period of availability of Federal funds.
(1) Procurement and suspension and debarment
(1) Program income.
(In Real property acquisition and relocation assistance.
(L) Reporting.
(M) Subrecipient monitoring.
Cof
(N) Special tests and provisions
(xiii) Auditee Name, Employer Identification
Number(s), Name and Title of Certifying Official,
Telephone Number, Signature, and Date.
(xiv) Auditor Name, Name and Title of Contact Person,
Auditor Address, Auditor Telephone Number; Signature,
and Date.
(xv) Whether the auditee has either a cognizant or
oversight agency for audit
(xvi) The name of the cognizant or oversight agency for
audit determined in accordmeo with §_.400(a) and
¢_.400(b), respectively.
(3) Using the information included in the reporting
package described in paragraph (e) of this section, the
auditor shall complete the applicable sections of the. -
form The auditor shall sign -a statement to be included
as part of the data collection form that indicates, at a
minimum, the source of the information included in the
form, the auditor's responsibility for the information,
that the form is not a substitute for the reporting package
described in paragrapli (c) of this section, and that the
content of the form is limited to the data elements
prescribed by OMB.
(c) Reporting package. The reporting package shall
include the:
(1) Financial statements and schedule of expenditures of
Federal awards discussed in ¢_310(a) and
§_310(6), respectively;
(2) Summary schedule of prior audit findings discussed
in §_315(b);
(3) Auditor's report(s).discussed in,§_S05; and
(4) Corrective action plan discussed in §_315(e):
(d) Submission to ckariogtiouse. All auditees shall
submit to the Federal clearinghouse designated. by. OMB
the data collection form described in paragraph tb) of
this section and one copy of the reporting package
described in paragraph (e) of this section for
(1) The Federal clearinghouse to retain as an archival
copy; and
(2) Each Federal awarding agency when the schedule of
findings and questioned costs disclosed audit findings
relating to Federal awards that the Federal awarding
agency provided directly or Bre summary scWule of
prior audit findings reported the status of any audit
findings relating to Federal awards that the Federal
awarding agency provided directly.
(e) Additional submission by subrecipients. (1) In
addition to the requirements discussed in paragraph (d)
of this section, auditees that are also subrecipients shall
submit to each pass-through entity one copy of the
reporting package described in paragraph (e) of this
section for each pass-through entity when the schedule
of findings and questioned costs disclosed audit findings
relating to Federal awards that the pass-through entity
provided or the summary schedule of prior audit
findings reported the status of any audit findings
relating to Federal awards that the pass-through entity
provided.
(2) Instead of.submitting the reporting package to a
pass-through entity, when a subrecipienfis not required
to submit a reporting package to a pass-through entity
pursuant to paragraph (e)(1) of this section, the
subrecipient shall provide written notification to the
pass-through entity that: an audit of the subrecipient was
conducted in accordance with this part (including the
period covered by the audit and the name, amount, and
CFDA number of the Federal award(s) provided by the
pass-through entity); the schedule of fundings and
questional costs disclosed no audit findings relating to
the. Federal.award(s) that the pass-through entity
provided; and, the summary schedule of prior audit
findings did not report on the status of any audit
findings relating to the Federal award(s) that the pass-
through entity provided. A subrecipient may submit a
copy of the reporting package described in paragraph (c)
of this sectior:to a.pass-through entity to comply with
this notification requirement.
(I) Requests for report copies. In response to requests
by a Federal agency or pass-through entity, auditees
shall submit the appropriate copies of the reporting
package described in paragraph (c) of this section and, if
requested, a copy of any management letters issued by
the auditor.
(g) Report retention requirements. Auditees shall
keep one copy of the data collection form described in
paragraph (b) of this section and one copy of the
reporting package described in paragraph (e) of this
section on file for three years from the date of
submission to the Federal clearinghouse designated by
OMB. Pass-through entitics*shall keep subrecipients'
submissions on file for three years from date of receipt.
(h) Clearinghouse responsibilities. The Federal
clearinghouse designated by OMB shall distribute the
reporting packages received in accordance with
paragraph (d)(2) of this section and §..235(c)(3) to
applicable Federal awarding agencies, maintain a data
base of completed audits, provide appropriate
information to Federal agencies, and follow up with
known auditees which have not submitted the required
data collection forms and reporting packages.
(i) Clearinghouse address. The address of the Federal
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clearingbouse currently designated by OMB is Federal
Audit clearinghouse, Bureau of the Census, 12011.
10th Street, Jeffersonville, IN 47132.
0) Electronic filing. Nothing in this part shall preclude
electronic submissions to the Federal clearinghouse in
such manner as may be approved by OMB. With OMB
approval, the Federal clearinghouse may pilot test
methods of electronic submissions.
Subpart D—Federal Agenries and Pass -Through
Entities
§_.400 Responsibilities.
(a) Cognizant agency for audit responsibilities.
Recipients expending more than $25 million a year in
Federal awards shall have a cognizant agency for audit.
Tire designated cognizant agency for audit shall be the
Federal awarding agency that provides the predominant
amount of direct funding to a recipient unless OMB
makes a specific cognizant agency for audit assignment
To provide for continuity of cognizance, the
determination of the predominant amount of direct
funding shall be based upon direct Federal awards
expended in therecipient's fiscal years ending in 1995,
2000, 2005, and every fifth year thereafter. For exampk,
audit cognizance for periods ending in 1997 through
2000 will be determined based on Federal awards
expended in 1995. (However, for States and local
governments that expend more than $25 million a year
in Federal awards and have previously assigned
cognizant agencies for audit, the requirements of this
paragraph are not effective until fiscal years beginning
after low 30, 2000.) Notwithstanding the manner in.
which audit cognizance is determined, a Federal
awarding agency with cognizance for an auditee may
reassign cognizance to anotherFederal awarding, agency
which provides substantial direct funding and agrees to
be the cognizant agency for audit. Within 30 days after
any reassignment, both the old and the new cognizant
agency for audit shall notify the auditee, and, if known,
the auditor of the reassignment. The cognizant agency
for audit shall:
(1) Provide technical audit advice and liaison to auditees
and auditors.
(2) Consider auditee requests for extensions to the report
submission due date required by §_320(n). The
cognizant agency for audit may grant extensions for
good cause.
(3) Obtain or conduct quality controJ reviews of selected
audits made by non -Federal auditors, 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
direct reporting by the auditee or its auditor of
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irregularities or illegal acts, as required by GAGAS or
laws and regulations.
(5) Advise the auditor and, where appropriate, the
audita of any deficiencies found in the audits when the
deficiencies require corrective action by the auditor.
When advised of deficiencies, the auditee shall work
with the auditor to take corrective action. If corrective
action is not taken, the cognizant agency for audit shall
notify the auditor, the auditee, and applicable Federal
awarding agencies and pass-through entities of the facts
and make recommendations for follow-up action. Major
inadequacies or repetitive substandard performance by
auditors shall be referred to appropriate State licensing
agencies and professional bodies for disciplinary action.
(6) Coordinate, to the extent practical, audits or reviews
grade by or for Federal agencies that are in addition to
the audits made pursuant to itis part, so that the
additional audits or reviews build upon audits performed
in accordance with this part.
(7) Coordinate a management decision for audit findings
that affect the Federal programs of more than one
agency.
(8) Coordinate the audit work and reporting
responsibilities among auditors to achieve the most
cost-effective audit.
(9) For biennial audits permitted under §_520,
consider auditee requests to qualify as a low-risk auditee
under §_530(a).
(b) Oversight agency for audit responsibilities. An
auditee which does not have a designated cognizant
agency for audit will be under the general oversight of
the Federal agency determined in accordance with
§_.105. The oversight agency for audit:
(1) Shall provide technical advice to auditees and.
auditors as requested.
(2) May assume all or some of the responsibilities
normally performed by a cognizant agency for audit.
(c) Federal awarding agency responsibilities. The
Federal awarding agency shall perform the following for
the Federal awards it makes:
(1) Identify Federal awards made by informing each
rccipicnt of the CFDA title and number, award name
and number, award year; and if the award is for R&D.
When some of this information is not available, the
Federal agency shall provide information necessary to
clearly describe the Federal award.
(2) Advise recipients of requirements imposed on them
by Federal laws, regulations, and the provisions of
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contracts or grant agreements.
(3) Ensure that audits are completed and reports are
received in a timely manner and in accordance with the
requirements of this pan.
(4) Provide technical advice and counsel to auditees and
auditors as requested.
(5) Issue a management decisionon audit findings
within six months atter receipt of the audit report and
ensure that the recipient takes appropriate and timely
corrective action.
(6) Assign a person responsible for providing annual
updates of the compliance supplement to OMB.
(d) Pass-through entity responsibilities. A pass-
through entity shall perform the following for the
Federal awards it makes:
(1) Identify Federal awards made by informing each.
subrecipicut of CFDA title and number, award name'and
number, award year, if the award is R&D, and name of
Federal agency. When some of this information is not
available, the pass-through entity shall provide the best
information available to describe the Federal award.
(2) Advise subrecipients of requirements imposed on
them by Federal laws, regulations, and the provisions of
contracts or grant agreements as well as any
supplemental requirements imposed by the pass-through
entity.
(3) Monitor the activities of subre6pients as necessary
to ensure that Federal awards are used for authorized
purposes in compliance with laws, regulations, and the
provisions of contracts or grant agreements and that
performance goals are achieved.
(4) Ensure that subreciptents expending $300,000 or
more in Federal awards during the subrecipient's fiscal
year have met the audit requirements of this pan for that
fiscal year.
(5) Issue a management decision on audit findings
within six months after receipt of the subrecipient's audit
report and ensure that the subrecipient takes appropriate
and timely.corrective action.
(6) Consider whether subrecipient audits necessitate
adjustment of the pass-through entity's own records.
(7) Require each subrecipient to permit the pass-through
entity and auditors to have access to the records and
financial statements as necessary for the pass-through
entity to comply with this part
§_.405 Management derision.
(a) General. The management decision shall clearly
state whether or not the audit finding is sustained, the
reasons for the decision, and the expected audita action
to repay disallowed costs, make financial adjustments,
or take otter action. If the audita has not completed
corrective action, a timetable for follow-up should be
given. Prior to issuing the management decision, the
Federal agency or passthrough entity may request
additional information or documentation from the
audita, including a request for auditor assurance related
to the documentation, as a way of mitigating disallowed
costs. The management decision should describe any
appeal process available to the audita_
(b) Fedcral agency. As provided in §_.400(a) 7), the
cognizant agency for.audit shall be responsible for
coordinating a management decision for audit findings
that affect the piograms of more than one Federal
agency. As provided in §_A00(e)(5), a Federal
awarding agency is responsible for issuing a
management decision for findings that relate to Federal
.awards it makes to recipients. Alternate arrangements
may be made on a case-by-case basis by agreement
among the Federal agencies concerned.
(c) Pass-through entity. As provided in
§_ 400(d)(5), the pass-through entity shall be
responsible for making the management decision for
audit findings that relate to Federal awards it makes to
subrecipients.
(d) Thme requirements. The entity responsible for
making the management decision shall do so within six
months of receipt of the audit report. Corrective action
should be initialed within six months after receipt of the
audit report and proceed as rapidly as possible.
(e) Reference numbers. Management decisions shall
include the reference numbers the auditor assigned to
each audit finding in accordance with §_510(c).
Subpart E --Auditors
§_.500 Scope of audit
(a) General. The audit shall be conducted in accordance
with GALAS. The audit shall cover the entire
operations of the audita; or, at the option of the auditee,
such audit shall include a series of audits that cover
departments, agencies, and other organizational Units
which expended or otherwise administered Federal
awards during such fiscal year, provided that each such
audit shall encompass the financial statements and
schedule of expenditures of Federal awards for each
such department, agency, atd oUec organizational unit,
which shall be considered to be a iron -Federal entity.
The financial statements and schedule of expenditures
of Federal awards shall be for the same fiscal year.
(b) Mmancial statements. The auditor shall determine
whether the financial statements of the auditee are
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presented fairly in all material respects in conformity
with generally accepted accounting principles. The
auditor shall also determine whether the schedule of
expenditures of Federal awards is presented fairly in all
material respcas in relation to the auditce's financial
statements taken as a whole.
(c) Interml control. (1) In addition to the requirements
of GAGAS, the auditor shall perform procedures to
obtain an understanding of internal control over Federal
programs sufficient to plan the audit to support a low
assessed level of control risk for major programs.
(2) Except as provided in paragraph (c)(3) of this
section, the auditor shall
(i) Plan the testing of internal control over major
program to support a low assessed level of control risk
for the assertions relevant to the compliance
requirements for each major program; and
(ii) Perform testing of internal control as planned
paragraph (e)(2)(i) of this section.
(3) When internal control over some or all of the
compliance requirements for a major program are likely
to be ineffective in preventing or detecting
noncompliance, the planning and performing of testing
described in paragraph (e)(2) of this section are not
required for those compliance requirements. However,
the auditor shall report a reportable condition (including
whether any such condition is a material weakness) in
accordance with 1_510, assess the related control risk
at the maximum. and Consider whether additional
compliance tests are required because of ineffective
internal control.
(d) Compliance. (1) In addition to the requirements of
GAGAS, the auditor shall determine whether the audita
has complied with laws, regulations, and the provisions
of contracts or grant agreements that may have a direct
and material effect on each of its major programs,
(2) The principal compliance requirements applicable to
most Federal programs and the compliance requirements
of the largest Federal programs are included in the
compliance.supplement.
(3) For the compliance requirements related to Federal
programs contained in Ilse compliance supplement, as
audit of these compliance requirements Will meet the
requirements of this part. Where there have been
changes to the compliance requirements and the changes
are not reflected in Om compliance supplement, the
auditor shall determine the current compliance
requirements and modify the audit procedures
accordingly. For those Federal programs not covered in
the compliance supplement, the auditor should use the
types of compliance requirements contained in the
compliance supplement as guidance for identifying the
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' types of compliance requirements to test, and determine
the requirements governing the Federal program by
reviewing the provisions of contracts and grant
' agreements and the laws and regulations referred to in
such contracts and grant agreements:
(4) The compliance testing shall 'include tests of
' transactions and such other auditing procedures
necessary to provide the auditor sufficient evidence to
support an opinion on compliance.
' (e) Audit follow-up. The auditor shall follow-up on
prior audit findings, perform procedures to assess the
reasonableness of the summary schedule of prior audit
' findings prepared by the auditee in accordance with
§_.315(b), and report, as a current year audit finding,
when the auditor concludes that the summary schedule
of prior audit findings materially misrepreaeots the
sutbs of any prior audit finding. The auditor shall
perform audit follow-up procedures regardless of
whether a'prior audit finding relates to a major program
in the current year.
(f) Data Collection Form As required in
§_.320(b)(3), the auditor shall complete and sign
specified section's of thedati collection form`
' §_.505'Audit reporting.
The auditor's report(s) may be in the form of either'
' combined or separate reports and may be organized
differently from the manner presented in this section.
The auditors report(s) shall state that the audit was
' conducted in accordance with this part and include the
following:
(a) An opinion (or disclaimer of opinion) as to whether
the financial statements are presented fairly in all
material respects in conformity with generally accepted
accounting principles and an opinion (or disclaimer of
opinion) as to whether the schedule of expenditures of
' Federal awards is presented fairly in all material
respects in relation to the financial statements taken as a
whole.
' (b)A report on internal control related to the financial
statements and major programa. This report shall
describe the scope of testing of internal control and the
results of the tests, and, where applicable, refer to the
' separate schedule of findings and questioned costs
described in paragraph (d) of this section.
(c) A report on compliance with laws, regulations, and
the provisions of contracts m1rant agreements,
noncompliance with which could have a material effect
on the financial statements. This report shall also
' include an opinion (or disclaimer of opinion) as to
whether the auditee complied with laws, regulations,
and the provisions of contracts or grant agreements
which could have a direct and material effect on each
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major program, and, where applicable, refer to the
separate schedule of findings and questioned costs
described in paragraph (d) of this section.
(d) A schedule of findings and questioned costs which
shall include the following three components:
(1) A summary of the auditor's results which shall
include:
(i) The type of report the auditor issued on the financial
statements of the audit" (i.e., unqualified opinion,
qualified opinion, adverse opinion, or disclamcr of
opinion);
(u) Where appficable, a statement that reportable
conditions in internal control were disclosed by the audit
of the financial statements and whether any such
conditions were material weaknesses;
(iii) A statement as to whether the audit disclosed any
noncompliance which is material to the financial
statements of the auditor;
(iv) Where applicable; a statement that reportable
conditions in internal control over major programs were
disclosed by the audit and whether any such conditions
were material weaknesses;
(v) The type of report the auditor issued on compliance
for major programa (Le., unqualified opinion, qualified
oprnron, adverse opinion, or disclaimer of opinion);
(vi) A statement as to whether the audit disclosed any
audit findings which the auditor is required to report
under 11_S10(a);
(vii) An identification of major programs;
(viii)The dollar threshold used to distinguish between
Type A and.Type B programs, asdescribed in
§_S20(b); and
(ix) A statement as to whether the auditee qualified as a
low-risk auditee under §_530.
(2) Findings relating to the financial statements which.
are required to be reported in accordance with GAGAS.
(3) Findings and questioned toss for Federal awards
which shall include audit findings as defined in
§,S10(a).
(i) Audit findings (e.g.. internal control findings,
compliance findings, questioned costs, m Gaud) which
relate to the same issue should be presented as a single
audit finding. Where practical, audit findings should be
organized by Federal agency or pass-through entity.
(i) Audit findings which relate to both the financial
statements and Federal awards, as reported under
paragraphs (d)(2) and (d)(3) of this section,
respectively, should be reported in both sections of the
schedule. However, the reporting in one section of the
schedule may be in summary form with a reference to a
detailed reporting in the other section of the schedule.
§_510 Audit findings.
(a) Audit findings reported. The auditor shall report
the following as audit findings in a schedule of findings
and questioned costs:
(1) Reportable conditions in internal control over major
programs. The auditor's determination of whcdmr.a
deficiency in internal control is a reportable condition
for the purpose of reporting an audit finding is in
relation to a type of compliance requirement for a major
program or an audit objective identified in the
compliance supplement .The auditor shall identify
reportable conditions which are individually or
cumulativelymaterial weaknesses.
(2) Material noncompliance with the provisions of laws,
regulations, contracts, or grant agreements related to a
major program. The auditors determination of whether
a noncompliance. with.the provisions of laws, .
regulations, conuacts,.or grant agreements is material
for the purpose of reporting an audit finding is in
relation to a type of compliance requirement for a major
program or an audit objective identified in the
compliance supplement.
(3) Known questioned costs which are greater than
$10,o00 for a type of compliance requirement for a
major program. Known questioned costs are those
specifically identified by the auditor. In evaluating the
effect of questioned costs on the opinion on compliance,
the auditor considers the best estimate of total costs
questioned (likely questioned costs), not just the
questioned costs specifically identified (known
questioned costs). Tlie auditor shall also report known
questioned costs when likely questioned costs are
greater than $10,000 for a type of compliance
req uiremenl for a major program In reporting
questioned costs, the auditor shall include information
to provide proper perspective for judging the prevalence
and consequences of the questioned costs.
(4) Known questioned costs which are greater than
S 10,000 for a Federal program which is not audited as a
major program. Except for audit follow-up, the auditor
is ant required under this part to perform audit
procedures for such a Federal program;therefore, the
auditor will normally not find questioned costs for a
program which is not audited as a major program
However, if the auditor does become aware of
questioned costs for a Federal program which is not
audited as a major program (e.g., as part of audit follow-
up or other audit procedures) and the (mown questioned
costs are greater than $10,000, then the auditor shall
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report this as an audit finding.
(5) The circumstances concerning why the auditor's
report on compliance for major programs is other than
an unqualified opinion,unless such circumstances are
otherwise reported as audit findings in the schedule of
findings and questioned costs for Federal awards.
(6) Known fraud affecting a Federal award, unless such
fraud is otherwise reported as anaudit finding in the.
schedule of fundings and questioned costs for Federal
awards. This paragraph does not require the auditor to
mak6 an additional reporting when the: auditor confirms
that the hand was reported,outsideof the auditor's
reports under the direct teporting requirements of
GAGAS.
(7) histances where. the results, of audit follow-up
procedures disclosed that the summary schedule of prior
audit findings prepared by the auditee. in accordance
with §_315(6) materially_ mtueptesents the status of
any prior audit finding.
(b) Audit finding detail. Audit findings shall be
presented in sufficient detail for the auditce to prepare a
corrective. action plan and take corrective actionand for
Federal agencies and pass-through entities to arrive at a
management decision. The following specific
information shall be included, as applicable, in audit
findings:
(1) Federal program and specific Fedefal award.
identification including the CFDA tide and.number.
Federal award number and year, name of Federal,
agency, and name of the applicable pass-through eutity.
When information; such as the CFDA title. and number
or Federal award number, is not available,.the auditor
shall provide the best information available to describe
the Federal award.
(2) The criteria or specific requirement upon which the
audit finding is based, including statutory, regulatory, or
other citation.
(3) The condition found, including facts that support the
deficiency identified in the audit finding.
(4) Identification of questioned costs and how they were
computed.
(5) Information to provide proper perspective for
judging the prevalence and consequences of the audit
findings, such as whether the audit findings represent an
isolated instance or a systemic pr6hlM Where
appropriate, instances identified shall be related to the
universe and the number of cases examined and be
quantified in terms of dollar value.
(6) The possible asserted effect to provide sufficient
information to the audita and Federal agency, or.pass-
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through entity in the case of a subrecipienl, to permit
them to determine the cause and effect to facilitate
prompt and proper corrective action.
(7) Recommendations to prevent future occurrences of
the deficiency identified in the audit finding.
(8) Views of responsible officials of the auditee when
there is disagreement with the audit findings, to the
extent practical.
' (c) Reference numbers. Each audit finding in the
schedule of findings and questioned costs shall include a
reference number to allow for easy referencing of the
audit findings during follow-up.
' §_315 A"t working papers.
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(a) Retention of working papers. -fhe auditor shall
retain working papers and reports for a minimum of.
three years after the date of issuance of the audiloes
report(s) to the auditee, unless the auditor is noted in
writing by the cognizant agency for audit, oversight
agency for audit, or pass-through entity to extend the
retention period. When the auditor is aware that the
Federal awarding,agency, pass-through entity, or,
mditee is contesting an audit finding, the auditor shall
contact the parties contesting the audit finding for
guidance prior -to destruction of the working papers and
reports.
(b) Access to working papers. Audit working papers
shall be made available upon request to the cognizant or
oversight agency for audit or its designee, a Federal
agency providing direct or indirect funding, or GAO at
the completion of the audit, as part of a quality review,
to resolve audit findings, or to carry out oversight
responsibilities consistent with the purposes of this part
Access to working papers includes the right of Federal
agencies to obtain copies of working papers, as is
reasonable and necessary.
§_S20 Major prognm determination.
(a) General. The auditor shall use a risk-based approach
toAetermine which Federal programs are major
programs. This risk-based approach shall include
consideration of: Current and prior audit experience,
oversight by Federal agencies and pass-through entities,
and the inherent risk of the Federal program. The
process in paragraphs (b) through (i) of this section shall
be followed.
(b).Step 1. (1) The auditor shall identify the larger
Federal programs, which shall be labeled Type A
programs. Type .A programs are defined as Federal
programs with Federal awards expended during the
audit period exceeding the larger of-
(i)
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(i) $300,000 or three percent (.03) of total Federal
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awards expended in the case of an auditee for which
total Federal awards expended equal or exceed $300,000
but are less than or equal to $100 mullion.
00 $3 million or three -tenths of one percent (.003) of
total Federal awards expended in the case of an auditce
for which total Federal awards expended exceed S 100
million but are less than or equal to $10 billion.
(iii) $30 million or 15 hundredths of. one percent (.0015)
of total Federal awards expended in the case of an
auditee for which total Federal awards expended exceed'
SIO billion.
(2) Federal programs not labeled Type A under
paragraph (b)(1) of this section shall be labeled Type B
programs.
(3) The inclusion of large loan and loan guarantees
(loans) should not result in the exclusion of other
programs as Type A programs. When a Federal program
providing loans significantly affects thenumber or size
of Type A programs, the auditor shall consider this
Federal program as a Type A program and exclude its
values in determining other Type A programs.
(4) For biennial audits permitted miler §_.220, the
determination of Type A and Type B programs shall be
based Upon the Federal awards expended during the
two-year period.
(c) Step 2. (1) The auditor shall identify Type A
Programs which are low-risk For a Type A program to
be considered low-risk it shall have been audited as a
major program in at least one of the two most recent
audit periods (in the most recent audit period in the case
of a biennial audit), and, in the most recent audit period,
it shall have had no audit findings under
However, the auditor may use judgment aid coisidcr
that audit findings from questioned costs under
§_.510(a)(3) and §_S10(ax4), fraud under
§_.510(a)(6), and audit follow-up for the sumit5ary
schedule of prior audit findings under §_S10(a)(7) do
not preclude the Type A program from being lost% -risk
The auditor shall consider: the criteria in §_S25(c),
§_S25(d)(1). §_S25(d)(2). and §_525(d)(3):
the results of audit follow-up; whether any changes in
personnel OF system affecting a Type A program have
significantly increased risk; and apply professional
judgment in determining whether a-TypeA program is
low-risk
(2) Notwithstanding paragraph (e)(() of this section,.
OMB may approve i Federal awarding agency's request
that a Type A program at certain recipients may not be
considered low-risk For example, it may be necessary
for a large Type A program to be audited as major each
Year at particular recipients to allow the Federal agency
to comply with the Government Management Reform
Act of 1994 (31 U.S.C. 3515). The Federal agency shall
notify the recipient and, if known, the auditor at least
ISO days prior to the end of the fiscal year to be audited
of OMB's approval. -
(d) Step 3. (1) The auditor shall identify Type B
prograritt which are high-risk using professional
judgment and the criteria in §_525. However, should
the auditor select Option 2 under Step 4 (paragraph
(e)(2)(i)(B) of this section), the auditor is not required to
identify more high-risk Type B programs than the
number of low-risk Type A programs. Except for known
reportable conditions in internal control or compliance
problems as discussed in §_525(b)(1),
§_525(bx2), and §_525(e)(1), a single criteria in
1_525 would seldom cause a Type B program to be
considered high-risk
(2) The auditor is not expected to perform risk
assessments on relatively small Federal programs.
Thereforq thy auditor is only required to perform risk
assessments on Type B program that exceed the larger
of
(i) $100,000.or three- tenths of one percent (.003) of
total Federal awards expended when the auditee has less
than or equal to $ 100 million in total Federal awards
expended.
(ii) $300,000 or three -hundredths of one percent (.0003)
of total Federal awards expended when the auditee has
nate than $100 million in total Federal awards
expended.
(e) Step 4. At a minimum, the auditor shall audit all of
the following as major programs:
(1) All Type A programs, except the auditor may .
exclude any Type A programs identified at low-risk
under Step 2(paragraph (e)(1) of this section). '
(2) (i) High-risk Type B programs as identified under
either of the following two options:
(A) Option 1. At least one half of the Type B programs
identified as high-risk under Step 3 (paragraph (d) of
thissection), except this paragraph (e)(2)(i)(A) does not
require the auditor to audit mom. high-risk Type B
programs than the number of low-risk Type A programs
identified as low-risk under Step 2.
(B) Option 2. One high-risk Type B program for each
Type A program identified as low-risk under Step 2.
(ii) When identifying which high-risk Type B programs
to audit as major under eitha'Option 1 or 2 in paragraph
(ex2Xi (A) or (B); the auditor is encouraged to use an
approach which provides an opportunity for different
high-risk Type B programs to be audited as major over a
period of time. -
(3) Such additional programs as may be necessary to
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comply with the percentage of coverage rule discussed
in paragraph (p of this section. This paragraph (e)(3)
may require the auditor to audit more programs as major
than the number of Type A programs.
(f) Percentage of coverage rule" The auditor shall audit
as major programs Federal programs with Federal
awards expended that, in the aggregate, encompass at
least So percent of total Federalawardsexpended. if the
auditee meets the criteria in §_530 for a low -rick
auditee, the auditor need only audit as major programs
Federal programs with Federal awards expended that, in
the aggregate, encompass at least 25 percent of total
Federal awards expended.
(g) Documentation of risk The auditor shall document
in the working papers the risk analysis process used in
determining major programs.
(h) Auditor's judgment. When the major program
determination was performed and documented in -
accordance with tris part, the auditors judgment in
applying the risk-based approach to determine major
programs shall be presumed correct. Challenges by
Federal agencies and pass-through entities shall only be -
for dearly improper use of the guidance in this part
However, Federal agencies and -pass-through entities
may provide auditors guidance about the riskof a
particular Federal program and the auditor shall consider
this guidance in determining major programs in audits
not yet completed.
(i) Deviation from use of risk criteria. For fust -year
audits, the auditor may elect to determine major
programs as all Type A programs plus any Type B
programs as necessary to meet the percentage'ot
coverage role discussed in paragraph (f) of this section.
Under this option, de'auditor would not be required to
perform the procedures discussed in paragraphs (c), (d),
and (e) of this section.
(1) A fust -year audit is the first year the entity is audited "
under this pan or the first year of a change of auditors.
(2) To ensure that a frequent change of auditors -Would
not preclude audit of high -risk -Type B programs, this
election for first-year audits may not be used by an
auditee more than once in every three years.
§_525 Criteria for Federal program risk.
(a) General. The auditors determination should be
based on an overall evaluation of the risk of
noncompliance occurring which cou)dbe material to the
Federal program The auditor shall use auditor judgment
and consider criteria, such as described in Paragraphs
(b), (c), and (d) of this section, to identify risk in Federal
programs. Also, as part of the risk analysis, the auditor
may wish to discuss a particular Federal program with
audilee management and the Federal agency or pass -
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through entity.
(b) Current and prior audit experience. (1)
Weaknesses in internal control over Federal programs
would indicate higher risk Consideration should be
given to the control environment over Federal programs -
and such factors as the expectation of management's
adherence to applicable laws and regulations and the
provisions of contracts and grant agreements and the
competence and experience of personnel who
administer the Federal programs.
(i) A Fed" program administaea under multiple
internal control structures may have higher risk When
assessing risk in a large single audit, th'e auditor'shall
consider whether weaknesses are isolated in a single
operating unit (e -g., one college campus) or pervasive
throughout the entity.
(ii) When significant parts of a Federal program are
passed through to subrecipients; a weak system for
Wititoring subrecipients would indicate higher risk
(iii)'Me �extent to which computer processing is used to
administer Federal programs, as well as the complexity
of that processing,' should be considered by the auditor
in assessing risk. New and recently modified computer
systems may also indicate risk-
(2)
isk
(2) Prior audit findings would indicate higher risk;
particularly when the situations identified in the audit
findings could have a.significant impact on a Federal
program or have not been corrected.
(3) Federal programs not recently audited as major
programs may be of higher risk than.Federat programs
recently audited as major programs without audit
findings.
(c) Oversight exercised by Federal agencies and pas
through entities. (1) Oversight exercised by:Federal
agencies or pass-through entities could indicate risk For
example, recent monitoring or other reviews, performed
by an oversight entity _which disclosed no significant
problems would indicate lower risk. However,
monitoring which disclosed significant problems would
indicate higher risk
(2) Federal agencies, with the concurrence of OMB,
may identify Federal programs which are. higher risk.
OMB plans.to provide this identification. in the
compliance supplement.
(d) Inherent risk of the Feaerar program (1) The
nature of a Federal program may indicate risk
Consideration should be given to the complexity of the
program and the extent to which the Federal program
contracts for goods and services. For example, Federal
program that disburse fonds through third party
contracts or have eligibility criteria may be of highs
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risk. Federal programs primarily involving staff payroll
costs may have a high-risk for time and effort reporting,
but otherwise be at low-risk-
(2)
ow-risk
(2) The phase of a Federal program in its life cycle at the
Federal agency may indicate risk. For example, a new
Federal program with new or interim regulations may
have higher risk than an established program with time.
tested regulations. Alio, significant changes in Federal
programs, laws, regulations, or the provisions of
contracts or grant agreements may increase risk
(3) The phase of a Federal program in its life cycle at the
auditee may indicate risk. For example, during the first
and last years that an audiree participates in a Federal
program, the risk may be higher due to start-up or
closeout of program activities and staff.
(4) Type B programs with largerFederal awards
expended would be of higher risk than programs with
substantially smaller Federal awards expended.
§_.530 Criteria for a low-risk auditee.
An auditee which meets all of the following conditions
for each of the preceding two years (or, is the case of
biennial audits, preceding two audit periods) shall,
qualify as a - low- risk aurfit= and be eligible for reduced
audit coverage in accordance with §_520:
(a) Single audits were performed on an annual oasis in
accordance with the provisions of this part A non -
Federal entity that has biennial audits does not qualify as
a low-risk auditee, unless agreed to in advance by the -
cognizant or oversight agency for aWit
(b) The auditors opinions on the financial statements
and the schedule of expenditures of Federal awards were
unqualified. However, the cognizant or oversight agency
for audiVmay judge that an opinion qualification' does
not affect the management of Federal awards and
provide a waiver.
(c) There were no deficiencies in internal control which
were identified as material weaknesses under the
requirements of GAGAS. However, the cognizant or.
oversight agency for audit may judge that any identified
material weaknesses do not affect the management of
Federal awards and provide a waives.
(d) Non of the Federal programs bad audit findings
from any of the following in either of the preceding two
years (or, in the case of biennial audits, preceding two
audit periods) in which they were classified as Type A
programs: I .
(1) Internal control deficiencies which were identified as
material weaknesses;
(2) Noncompliance with the provisions of laws,
regulations, contracts, or grant agreements which have a
material effect on the Type A program: or(3) Known or
likely questioned costs that exceed five percent of the
total Federal awards expended for a Type A program
during the year.
MODEL CONTRACT CLAUSE
1. SUPERSESSION
The recipient and the contractor agree that this and other
appropriate clauses in 40 CFR 31.36(1) apply to that
work eligible for EPA assistance to be performed under
this contract and that these clauses supersede any
conflicting provisions"of this contract.
2PRIVPPY OF CONTRACT
This contract is expected to be funded in pan whm funds
from the U.S. Environmental Protection Agency._.
Neither the United States nor any of its departments,
agencies or mploycesis. or, will be, a party to this
contract or any. lower tier contract_ 'This contract is
subject to.the applicable EPA procurement regulations
in effect on the date of the assistance award for this
project
3. CHANGES
(a) The fotowiir clause applies only to contracts
for construction
(1) The recipient. may at any time, withom notice to
any surely, by,writtep order, make any change in the
workwithin,the general.scope of the contract, including
but not limited to changes: -
(i) In the specifications (including drawings and
designs);
(ii) In the time, method or• manner of performance of
the work:. -
(iii)1n the recipient -furnished facilitim equipment,
matcrials, services or site. or
(iv) Directing acceleration in the performance of the
work
(2)A change order shall also be any oil= written
order (including direction, instruction, interpretation or
detertrdnation) from the recipient which causes any
change, provided the contractor gives the recipient
written notice stating the date, circumstances and source
of the order and that the contractor regards the order as
a change order.
(3) Except as provided in this clause, no order,
statement or conduct of the recipient shall be treated as
a change under this clause or entitle the contractor to an
75
equitable adjustment.
(4) if any change under this clause causes an increase
or decrease in the contractor's cost or the time required
to perform any part of the work under this contract,
whether or not changed by any order; the recipient shall
make an equitable adjustment and modify the contract in
writing. Except for claims based on defective
specifications, no claim for any change under paragraph
(a)(2) above shall be allowed for any costs incurred
more than 20 days before the contractor gives written
notice as required in paragraph (ax2). In the case of
defective specifications for which the recipient is
responsible, the equitable adjustment shall include any
increased cast the contractor -reasonably incurred in
attempting to comply with -those oefective
specifications.
(5) If the contractor intends to assert a claim for an
equitable adjustment under this clause, the contractor
must, within 30 days other receipt of a written change
order under paragraph (a)(1) or the furnishing of a
written notice under paragraph (ax2), submit a written
statement to the recipient setting forth the general name
and monetary extent of such claim, The _recipient may
extend the 30 -day period. The, contractor may include
the statement of.claim in the notice under paragraph (2)
of this changes clause.
(6) No claim by the contractor for an equitable
adjustment shall be allowed if made after final payment
under this contract.
(b) The following clause applies only to coolncts for
services.
(1) The recipient may at any time, by written order and
without notice to the sureties, make changes within the
general scope of this contract in the services or work to
be performed. If such changes cause an increase m
decrease in the contractor's cost m time required to
perform any services under this contract, whetheror not
changed by any order, the recipient shall make an
equitable adjustment and modify thiscontract in writing.
The contractor must assert any claim for adjustment
under this clause in writing within 30 days from the date
it receives the recipient's notification of change;'(ialess
the recipient grants additional time before the date of
final payment
(2) No claim by the contractor for m equitable
adjustment shall be allowed if made after final payment
under this contract-
(3)
ontract(3) No services for which the contractor will charge an
additional compensation shall be furnished without the
written authorization of the recipient.
(c) the fo0owine claim applies ooh to contracts for
supplies
(1) The reeipiIcot may at any time, by written order and
without notice to the sureties, make changes within the
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general scope of this contract in any one or more of the
following:
(i) Drawings, designs or specifications where the
supplies to be furnished arc specifically manufactured
for. the recipient;
(ii) Method of shipment or packing; and
(iii) Place of delivery.
(2) If any changes cause an increase or decrease in the
cost or time required to perform any part of the work
under this contract, whether or not changed by such
order, the recipient shall make an equitable adjustment
in the contract price or delivery schedule, or both, and
modify the contract in writing. The contractor must
assert any claim for adjustment under this clause within
30 days from the date the contractor receives the
recipient's notification of change. If the recipient
decides that the facts justify such action, the recipient
may receive and act upon any such claim asserted at any
time before final payment under this contract. where
the cost of property made obsolete or excess as a result
of change is included in the contractor's claim for
adjustment, the recipient has the right to prescribe the
manner of disposition of such property. - Nothing in this
clause shall excuse the contractor from proceeding with
the contract as changed.
(3) No claim by thecontractor for an equitable
adjustment shall be allowed if made after final payment
under this contract.
4. DIFFERING SITE CONDITIONS
The fo0owine da¢se applies only to construction
contracts.
(a) The contractor shall promptly, and before such
conditions are disturbed, notify the recipient in writing
of
(1) Subsurface or latent physical conditions at the site
differing materially from those indicated in this
contract, or
(2) Unknown physical conditions at the site, of an
unusual nature, differing materially from those
ordinarily encountered and generally recognized as
inhering in work of the character provided for in this
conuacL
tb) The recipient shall promptly investigate the
conditions. I it finds that conditions materially differ
and will cause an increase or decrease in the contractor's
cost or the time required to perform any part of the work
under this contract,whether or not changed as a result
of such conditions, the recipient shall make an equitable
adjustment and modify the contract in writing.
(c) No claim of the contractor under this clause shall
be allowed unless the contractor has given the notice
required in paragraph (a) of this clause. However, the
recipient may extend the time prescribed in paragraph
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(d) No claim by the contractor for an equitable
adjustment shall be allowed if asserted after final
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payment under this contract.
5. SUSPENSION OF WORK
The followine clause applies only to construction
contracts.
(a) The recipient may order the contractor in writing to
suspend, delay or interrupt all or any part of the work for
such period of time as the recipient may determine to be
appropriate for the convenience of the recipient.
(b) If the performance of all or any part of the work is
suspended, delayed or interrupted for an unreasonable
Period of time by an act of.Lbe recipient in
administration of this confrad, or by the recipient's
failure to act within the time specified.in this contract
(or if no time is specified, within a reasonable time), the
recipient shall snake an adjustment for any increase in
the cost of performance of this contract (excluding
profit) necessarily caused by such unreasonable
suspension, delay or inleritiption and modify the
subagreement in writing. However, no adjustment shall
be made under this clause for any suspension, delay or
interruption to the extent (1) that performance would
have been so suspended, delayed or interrupted by any
other cause, including the fault or negligence of the,
contractor, or (2) for which an equitable adjustment is
provided for or excluded under any other provision of
this contract-
(c)
ontract(c) No claim under this clause shall be allowed (I for
any costs incurred more than 20 days before the
contractor notified the recipient in writing of the act, or
failure to act, involved (this requirement does not apply
to a claimresulting from a suspension order), and (2)
unless the amount claimed is asserted in writing as soon
as practicable after the termination of such suspension,
delay or interruption, but not later than the date of foul
payment under the contrkL
6.
The following clause applies only to contracts over
10000:
(a) This contract may be terminated in whole or in part
in writing by either party in the event of substantial
failure by the other party to fulfill its obligations under
this contract through no fault of the terminating party.
provided that no termination may be effected unless the
Jew other party is given (1) not lethan ten (10) calondar
days written notice (delivered by certified mail, return
receipt requested) of intent to terminate, and (2) an
opportunity for consultation with "the terminating party
prior to termination. "
(b) This contract may be terminated in whole or in part
in writing by the recipient for its convenience, provided
that the contractor is given (1) not less than ten (10)
calendar days' written notice (delivered by certified
mail, return receipt requested) of intent to temunate, and
(2) an opportunity for consultation with the terminating
party prior to termination.
(c) If termination for default is effected by the
recipient, an equitable adjustment in the price provided
for in this contract shall be made, but (1) no amount
shall be allowed for anticipated profit on unperformed -
services or other work, and (2) any payment due to the
contractor at the time of termination may be adjusted to
cover any additional costs to the recipient because of the
contractor's default. If termination for default is effected
by the contractor, or if termination for convenience is
effected by the recipient, the equitable adjustment shall
include a reasonable profit for services or other work
performed. The equitable adjustment for any
termination shall provide for payment to the contractor
for services rendered and expenses incurred prior to the
termination, in addition to termination settlement costs
reasonably incurred by the contractor relating to
commitments which had become firm prior to the
termination.
(d) Upon receipt of a termination action under
paragraphs (a) or (b).above, the contractor shal (1)
promptly distontione all affected.work (unless rte
notice directs -otherwise), and (2) deliver or otherwise
make. available to the. recipient 0 data, drawings,
specifications, reports, estimates, suulniaries and such
other information and materials as may have been
accumulated bythe contractor in performing this
contract. whether completed or in process.
(e) Upon termination under paragraphs (a) or (b) above,
the recipient may take over the work and may award
another party a contract to complete the work under this
contract.
(f) 1f, after termination for failure of the contractor to
fulfill contractual obligations, it is determined that the
contractor had not failed. to fulfill contractual
obligations, the termination shall be deemed to have
been for the convenience of the recipient In such events
adjustment of the subagreement price shall be made as
provided in paragraph (c) of this clause.
7. REMEDIES
This dance applies only to contracts over $25.000.
Unless otherwise provided in this contract, all claims,
counter -claims, disputes and other matters in question
between the recipient and the contractor arising out of,
or relating to, this contract or the breach of it will be
decided, if the parties mutually agree, by arbitration,
mediation, or other alternative dispute resolution
mechanism; or in a court of competent jurisdiction
within the State in which the m6piem is located.
8. PRICE REDUCTION FOR DEFECTIVE
COST OR PRICING DATA
[NOTE - The following clause applies to (1) any
contract negotiated between the recipient and its
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contractor in excess of 1100,000; (2) negotiated contract
amendments or change orders in excess of $100.O00
affecting the price of a formally advertised,
competitively awarded fixed price contracts or (3) any
lower tier contract or mrchase order in excess of
$ 100.000 under a contract other than a formally.
advertised, competitively awarded, fixed price contracts
This clause does not apply to contracts awarded on the
basis of effec ive price competition
(a) The contractor and subcontractor, where
appropriate, assure that the cost and pricing data
submitted for evaluation with respect to negotiation of
prices for negotiated contracts, lower tier contracts and
change orders is based on current, accurate and complete
data supported by their books -and records. If the
recipient or EPA determines that any price (including
profit) negotiated in connection with this contract, lower
tier contract or am adment.thereumder was increased by
any significant sums because the data provided was
incomplete, inaccurate or nor current at the time of
submission, then such price,orcost or profit shall be
reduced accordingly and the recipient shall modify the
contract in writing to reflect such action..
(b) Failure to agree on a reduction shall be subject to
the remedies clause of this contract.
[NOTE - Since the contract is subiect to reductio_n_upder
this clause by reason of defective cost or pricing data
submitted in connection with lower tier contracts, the
contractor may wish to include a clause in each lower
tier contract requiring the lower tier contractor to
appropriately iademmifv the contractor.- It is expected
that any lower tier contractor subied to such.
indemnification wffl eenerally redbiie substantially
similar indemnification for defective cost and oricine
data submitted by lower tier contractoMI
9. AUDIT: ACCESS TO RECORDS
(a) The contractor shall maintain books, records,
documents and other evidence directly pertinent to
performance on EPA funded work under this contract in
accordance with generally accepted accounting
principles and practices consistently applied, and the
applicable EPA regulations in effect on the date of
execution of this
contract The contractor shall also maintain the financial
information and data used in the preparation or support
of any cost submission required under applicable
regulations for negotiated contracts or change orders and
a copy of the cost summary submitted to the recipient
The United States Environmental Protection Agency, the
Comptroller General of the United States, the United
States Department of Labors the recipient, and (the
State] or any of their authorized representatives shall
have access to all such books, records; documents and
other evidence for the purpose of inspection, audit and
copying during normal
business hours. The contractor will provide proper
facilities for such access and inspection.
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