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Reso 91-074 - Approve the Handicapped playground project agrmnt between Enterprise School Dist, Shasta Co Office of Education, COR, and Redding Redevelopment Agency
RESOLUTION NO. 741 A RESOLUTION OF THE CITY OF REDDING APPROVING THE HANDICAPPED PLAYGROUND PROJECT AGREEMENT BETWEEN THE ENTERPRISE SCHOOL DISTRICT, THE SHASTA COUNTY OFFICE OF EDUCATION, THE CITY OF REDDING, AND THE REDDING REDEVELOPMENT AGENCY, AND AUTHORIZING THE MAYOR TO SIGN SAID AGREEMENT WHEREAS, On October 17, 1989, the City Council set aside $12,500 in Community Development Block Grant Funds for the acquisition of a play I structure for the Handicapped Playground Project at Monte Vista School; and WHEREAS, on January 16, 1990, the City Council transferred $12,500 from Park Development funds to the Redding Redevelopment Agency for construction of a handicapped playground facility; and WHEREAS, the Shasta County Office of Education, the Enterprise Elementary School District, and the Redding West Rotary have also contributed to this project; and WHEREAS, it would be in the best interests of the residents of the City of Redding to approve this Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as follows: 1. The Handicapped Playground Project Agreement providing $12,500 in Community Development Block Grant funds for the play structure is hereby approved. 2. The Mayor is hereby authorized and directed to sign all necessary documents on behalf of the City and the City Clerk is hereby authorized and directed to attest the signature of the Mayor. 3. A true copy of the Agreement referred to herein is attached hereto and made a part hereof. I HEREBY CERTIFY that the foregoing resolution was introduced and read at a regular meeting of the City Council on the 19th day of February 1991, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: Arness, Dahl , Fulton, Moss & Buffum NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None QX"' 'Z- z�U NANCY BU71 ayor ATTEST: 1 )IJ ;jHrA. NIC OLS, City Clerk FORM APPROVED: RA DALL A. HAYS, Ci y A orney HANDICAP PLAYGROUND PROJECT AGREEMENT THIS AGREEMENT is made by and between Enterprise School District, hereafter "Enterprise", the Shasta County Office of Education, hereafter "County Office", the City of Redding, hereafter "City", and Redding ' Redevelopment Agency, hereafter "Agency". The effective date of this Agreement shall be January 16, 1990. WHEREAS, the City is authorized to operate and maintain public playgrounds and park and recreation facilities, and by virtue of such authority does operate and maintain such playgrounds and park and recreation facilities; and WHEREAS, said playgrounds and park and recreation facilities are not now sufficient to provide for the needs of an expanding community; and WHEREAS, Enterprise owns and operates within the City various schools and school sites, along with buildings and other facilities thereon, which may be used for additional playground and recreation facilities; and WHEREAS, the County Office currently operates programs within school buildings and grounds owned by Enterprise which may be used for additional 1 playground and recreation facilities; and i i WHEREAS, Chapter 10 of Division 1 of the Education Code of the State of California, commencing with Section 10900, authorizes cities and public school districts to cooperate with one another for the purpose of authorizing, i � promoting, and conducting programs of community recreation which will contribute to the attainment of general recreational and educational i objectives for children and adults of this State; and 1 WHEREAS, the Agency has budgeted funds to construct a walkway from Monte Vista School to Rother School across school property. WHEREAS, Section 10902 of the Education Code specifically authorizes 1 public entities to cooperate with one another for the purpose of acquiring, constructing, improving, maintaining, and operating recreation centers within the territorial limits of the entities; and i WHEREAS, Enterprise, the County Office, the Agency, and the City desire to enter into an agreement pursuant to the aforesaid provisions of the Education Code of the State of California, providing for the joint acquisition, construction, improvement, maintenance and operation of a playground facility and walkway to be located on property owned by Enterprise 1 between the Rother and Monte Vista Schools; NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL ACTS, PROMISES AND FORBEARANCES OF EACH OTHER, the parties hereto agree as follows: 1. The Project The parties hereto agree to cooperate as hereafter set forth to provide funding . for improvements to be made on the Rother School site located within Enterprise for their mutual enjoyment and benefit. Said improvements shall consist of the purchase and installation of an outdoor play structure to be placed on Enterprise property between the Rother and Monte Vista Schools, and i a concrete walkway. Said project is otherwise known as the "Handicap Playground Project", hereafter "Project". 2. Funding For The Project i A. The parties hereto agree that funding for the Project shall be allocated as follows: (1) The Project is estimated to cost approximately Eighty Thousand Dollars ($80,000.00); (2) The City shall pay the amount of Twelve Thousand Five Hundred Ij Dollars ($12,500.00) toward the Project from Community Development 1 Block (CDBG) funds. This amount may be used for the purchase of equipment only and may not be used for labor costs. (3) The County Office shall pay the amount of Ten Thousand Dollars ($10,000.00) toward the Project. t 2 i l (4) Enterprise shall pay the amount of Fifteen Thousand Dollars ($15,000.00) toward the Project. (5) Rotary International has made a contribution in the amount of Ten Thousand Dollars ($10,000.00) to City for the specific purpose of funding this Project. (6) The City agrees to pay an amount necessary to complete the funding for the Project from Park Development Funds, but in no event shall this amount exceed Fifteen Thousand Dollars ($15,000.00). ' i (7) The Agency agrees to contribute Twenty-Five Thousand Dollars ($25,000.00) toward the project for the sole purpose of constructing a walkway. B. The aforementioned amount, excluding that of the Agency, shall be deposited in a separate account maintained by Enterprise no later than thirty (30) days after execution of this Agreement, with exception of 1 funds as required pursuant to Subparagraph A (6) of this paragraph. i Funds required pursuant to Subparagraph A (6) of this paragraph shall be deposited in said account only as necessary to complete payment for the project upon request by Enterprise. The Agency shall design and bid the construction of the walkway and non-play structure improvements paid for I by the City through a separate bid. C. In the event the amounts required by Subparagraphs A (2) through A (5) of this paragraph are not needed for the purchase and installation of the Project as set forth herein, the excess amounts shall be rebated to the contributing entities in proportion to their contribution to the total Project. D. In the event bids for the Project exceed the total funds provided for the Project, this Agreement shall be terminated unless modified in writing by the parties hereto. E. It is agreed and understood that CDBG monies for the Project shall i be used exclusively for the purchase of playground equipment and not for installation. 3 1 3. Completion of the Project Enterprise or the Agency, as the case may be, shall be responsible for the completion of the Project including obtaining all necessary approvals and meeting all legal requirements, such as State Architect approval if necessary, j meeting all bidding requirements, and compliance with the California { Environmental Quality Act. 4. Design of Project The City shall provide Enterprise with a design and specifications for both the play structure and walkway, subject to Enterprise's approval and the approval of any necessary state agency. 5. Installation of Equipment and Facilities The City shall be responsible for the installation of the Project. Installation shall occur no later than thirty (30) days from the receipt of the equipment by Enterprise. 1 6. Ownership of the Equipment and Facilities After installation of the equipment, including walkway and lighting, on Enterprise property, Enterprise shall be the owner of said equipment and facilities. 7. Operation and Maintenance •' The responsibility for the operation and maintenance of the Project shall be as follows: A. Enterprise shall make available the Project as hereinabove described for use by the City and County Office at such times and in ' such a manner as not to interfere with the normal school use of the a playground area. B. Enterprise shall, at its costs and expense, maintain the Project except that the City shall be responsible for the annual safety check of the Project and for the necessary wood treatment of the equipment. C. Enterprise shall maintain the walkway and night-lighting and shall 1 4 • 0 make such walkway available to the public during school hours and hours of use of the play structure, in order to allow passage by children getting to schools or the play structure. I 1 8. Supervision City's activity will be unsupervised. The County Office and Enterprise shall each provide supervisorial leadership for any activities occurring on or about i j the Project at any time such entities use the Project. 9. Cost of Repairing and Replacing Property The City, the County Office, and Enterprise shall each be responsible respectively for the cost of repairing or replacing any Enterprise property damaged in connection with the City's, the County Office's, or Enterprise's use of said property under this Agreement. Normal wear and tear of any of the property by the City, the County Office, or Enterprise shall not be included within the provisions hereof relating to repair or replacement. The Agency, once the walkway project is completed, shall not have any further obligation toward the Project. 10. Insurance The City, the County Office, and Enterprise shall carry public liability insurance to jointly protect the City, the County Office, the Agency, and Enterprise and their officers, agents, servants, and employees against claims to person and/or property, including accidental death arising from the City's, the County Office's, Enterprise's, or the Agency's participation in a community or school recreation program hereunder. The form of such insurance shall be satisfactory to the City, the County Office, and Enterprise, and may include self-insurance at levels acceptable to all parties. 11. Mutual Indemnification A. The City agrees to hold harmless, defend and indemnify Enterprise, the Agency, and the County Office against all actions, claims or demands for injury, death, loss or damages regardless of fault or cause by anyone whomsoever (except where such injury, death, loss or damage was solely due to the negligent acts or omission of Enterprise, the Agency, 5 and the County Office, its agents, servants or employees), whenever such injury, death, loss or damages is a consequence of or arises out of or is incidental to, the use or maintenance of the school premises by the City or any other person or parties pursuant to authorization by the City. B. The County Office agrees to hold harmless, defend and indemnify Enterprise, the Agency and the City against all actions, claims or demands for injury, death, loss or damages, regardless of fault or cause by anyone whomsoever (except where such injury, death, loss or damage was solely due to the negligent acts or omission of Enterprise, the Agency, and the City, its agents, servants or employees), whenever such injury, death, loss or damages is a consequence of or arises out of or is incidental to, the use or maintenance of the school premises by the County Office or any other person or parties pursuant to authorization by the County Office. C. Enterprise agrees to hold harmless, defend and indemnify the City, the Agency and the County Office against all actions, claims _ or demands for injury, death, loss or damages regardless of fault or cause by anyone whomsoever (except where such injury, death, loss or damage was solely due to the negligent acts or omission of the City, the Agency, and the County Office, its agents, servants or employees), whenever such injury, death, loss or damages is a consequence of or arises out of or is incidental to, the use or maintenance of the school premises by Enterprise or any other person or parties pursuant to authorization by Enterprise. 12. Terms of this Agreement This Agreement shall be in effect from January 16, 1990 until December 31, 2005. 13. Modification Agreement This Agreement may be modified at any time by the parties hereto by reducing such modification to writing signed by the parties hereto. 6 14. Conditions of Agreement Relating to CDBG Assistance A. No member of or Delegate to the Congress of the United States and no Resident Commissioner shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. B. No member, officer or employee of the City of Redding or its designees or agents, no members of the governing body of the City of Redding, and no other public official of the City of Redding who exercises any functions or responsibilities with respect to the program during his tenure or for one year thereafter shall have any interest, direct or indirect, in any contract or subcontract or the proceeds thereof, for work to be performed in connection with the program assisted under this Agreement. C. The assistance provided under this Agreement shall not be used in i the payment of any bonus or commission for the purpose of obtaining HUD a i approval of the application for such assistance, or HUD approval of applications for additional assistance, or any other approval or concurrence of HUD required under this Agreement, Title I of the Housing and Community Development Act of 1974 or HUD regulations with respect thereto; provided, however, that reasonable fees or bona fide technical, consultant, managerial or other such services other than actual solicitation are not hereby prohibited if otherwise eligible as program costs. D. Enterprise shall not discriminate against any person on the grounds of race, color, national origin, age, sex or religion, or against an otherwise qualified handicapped individual. E. Enterprise shall make all Monte Vista park facilities available to all City's residents during non-school hours. F. If the facilities improved using City's funds cease to be used for the purposes identified in this Agreement, the monetary value pursuant to the depreciation schedule attached hereto as Exhibit "A" shall be 1 7 1 paid by Enterprise to City. The value to be paid to City shall be the value identified in Exhibit "A", assigned to the year in which the effective date of change from approved use occurs. G. Enterprise shall meet all requirements of 24 CFR, Part 85.36 Procurement in the acquisition of the playground equipment. These requirements are identified in Exhibit "B". I H. Enterprise shall insure that the supplier selected is not on the 1 General Services Administration list of the parties excluded from i procurement programs listing. I. Enterprise shall insure that small, minority-owned and women-owned businesses have been given an opportunity to bid on this project. IN WITNESS WHEREOF, the parties hereto have executed this Agreement. d ATTEST: CITY OF REDDING BY ETHEL NICHOLS, City Clerk NANCY BUFFUM, Mayor i ATTEST: REDDING REDEVELOPMENT AGENCY BY PHILLIP A. PERRY, SecretAry C / FIN, firman Redding Redevelopment Ag ncy APPROVED AS TO FORM: COUNTY OFFICE OF EDUCATION ? BY ALL A. HAYS, ity Attorney ENTERPRISE SCH00 DISTRICT J BY I 8 i i EXHIBIT "A" DEPRECIATION SCHEDULE YEAR PERCENTAGE VALUE 1990 100% $12,500 1991 93% $11,625 1992 87% $10,875 1993 80% $10,000 1994 73% $ 9,125 1995 67% $ 8,375 1996 60% $ 7,500 7 1997 53% $ 6,625 1998 47% $ 5,875 { 1999 40% $ 5,000 2000 33% $ 4,125 2001 27% $ 3,375 2002 20% $ 2,500 2003 13% $ 1,625 2004 7% $ 875 j2005 0% $ 0 i f i a a i I i { EXHIBIT "B" DEPARTMENT OF HOUSING & URBAN DEVELOPMENT J ' 24 CFR PART 85 "Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments" This "common rule" is applicable to the Community Development Block Grant Entitlement Program to the extent specified in 24 CFR Part 570 at Section I 570.502(a). , 1 i i i i i i i Federal ,Register / S1, No. 48 / Friday, IvSatrri.:l. 1988 Aules 'and Regulations 8 Y PART 85—ADMINISTRATIVE REOUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE,LOCAL AND FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENTS Subpart A—Ge+►eral 85.1 Purpose and scope of this part. 852 Scope of subpart 85.3 Definitions. 85.4 Applicability. 85.5 Effect on other Issuances. 85.8 Additions and Exceptions. Subpart B—•?r"ward Requdromsnts 85.10 Forms for applying for giants. 1 85.11 State plans. 85.12 Special grant or subgrant conditions f for"high-risk"grantees. Subpavt C--•Pos1-Award RegWmffwnts Flumocial Administration 8520 Standards for financial management systems. 8521 Payment requirements. 8522 Allowable costs. 8523 Period of availability of funds. 8514 Matching or cost sharing. 8525 Program income. 8526 Non-Federal audits. jChanges,Property.and Subawards 85.30 Changes under discretionary(project) awards. 85.31 Real property. 85.32 Equipment. 85.33 Supplies. 85.34 Copyrights. 85.35 Subawards to debarred and i suspended parties. 85.38 Procurement. 85.37 Subgrants. Reports Records Retention.and Enforcement 85.40 Monitoring and reporting program performance. 85.41 Financial reporting. 85.42 Retention and access requirements for records. 85.43 FnforcemenL 83.44 Termination for convenience. Subpart D—Atter-eie-C.ard Roq+kvnrerits 8550 CloseouL 8531 later disallowances and adjustments 8552 Collection of amounts due. Subpart E—EnMMff onts IReaerved) Authority:Section 7(d).Department of Housing and Urban Development Act.42 U.S.C.3535(d). Dated:February IM 196L Cart D.Covit2. i Acting Secretory. 11114000 coot 4216-3tems i i i Vol.V gBgg Federal R©7gister f ol. 53. No. 48 / Friday. Match 'Al.11, 1.. and Regulations outlay of money contributed to the assistance.such as a fellowship or ottier grantee or subgrantee by other public lump sum award. which the grantee is Subpart A--General agencies and institutions, and private not required to account for. t Pte"end scope Of ti-A Part organizations and individuals.When "Grantee"means the government to This part establishes uniform authorized by Federal legislation. which a grant is awarded and which is administrative rules for Federal grants Federal funds received from other accountable for the use of the funds assistance agreements may be provided.The grantee is the entire legal and cooperative agreements and considered as grantee or subgrantee subawards to State,local and Indian entity even if only a particular i tribal governments. cash contributions. component of the entity is designated in g -Contract"means (except as used in the grant award document. ' 4 852 Scope of subpart the definitions for"grant"and kcount %. "in this section and except " cal government"means a coun . rant 1 This subpart contains general rules g p municipality.city, town. township. local pertaining to this part and procedures where qualified by"Federal")a public authority(including env public for control of exceptions from this part procurement contract under a grant or and Indian housing agency under the subgrant.and means a procurement United States Housing Act of 1937) § U3 Definitions, subcontract under a contract. school district.special district.intrastate As used in this part: "Cost sharingor matching"means the district.council of governments "Accrued expenditures"mean the value of the third party in-kind (whether or not incorporated as a charges incurred by the grantee durv:tg a contributions and the portion of the nonprofit corporation under state la A). given period requiring the provision of costs of a federally assisted project or any other regional or interstate funds for: (1)Goods and other tangible program not borne by the Federal government entity, or an a or property received: (2)services Government. g �' y agency performed by emplovees.contractors. "Cost-type contract"means a convect instrumentality of a local government. aubgrantees. subcontractors,and other or subcontract under a grant in which "Obligations"means the amounts of payees; and (3)other amounts becoming the contractor or subcontractor is paid orders placed.contracts and subgrants owed under programs for which no on the basis of the costs it incurs,with awarded,goods and services received. i current services or performance is or without a fee. and similar transactions during a given required. such as annumes,insurance "Equipment"means tangible, period that will require payment by the claims,and other benefit payments. nonexpendable.personal property grantee during the same or a future "Accrued income"means the sum of: having a useful life of more than one period. (1)Earnings during a given period from year and an acquisition cost of$&000 or "OMB"means the United States services performed by the grantee and more per unit A grantee may use its Office of Management and Budget. ! goods and other tangible property own definition of equipment provided "Outlays"(expenditures)mean delivered to purchasers,and (2)amounts that such definition would at least charges made to the project or program. becoming owed to the grantee for which include all equipment defined above. They may be reported on a cash or no current services or performance is "Expenditure report"means:(1)For accrual basis.For reports prepared on a required by the grantee. nonconstruction grants,the SF-2&A cash basis.outlays are the sum of actual "Acquisition cost"of an item of "Financial Status Report"(or other cash disbursement for direct charges for purchased equipment means the net equivalent report):(2)for construction goods and services.the amount of invoice unit price of the property grants.the SF-271 "Outlay Report and indirect expense incurred. the value of including the cost of modifications. Request for Reimbursement'(or other in-kind contributions applied.and the attachments.accessories.or auxiliary equivalent report). amount of cash advances and payments apparatus necessary to make the "Federally recognized Indian tribal made to contractors and subgrantees.. property usable for the purpose for government"means the governing body For reports prepared on an accrued which it was acquired.Other charges or a governmental agency of any Indian expenditure basis,outlays are the sum such as the cost of installation. tribe.band,nation,or other or.saaized of actual cash disbursements.the transportation.taxes.duty or protective group or community(including anyamount of indirect expense incurred.the in-transit insurance.shall be included or Native 5illage as defined in section 3 of value of inkind contributions applied. excluded from the unit acquisition cost the Alaska Native Claims Settlement and the new increase(or decrease)in in accordance with the grantee's regular Act.E5 S:at 8W)certified by the the amounts owed by the grantee for accounting prac•rces. Secretary cf the Interior as eligible for goods and other property received.for "AdmirustraLive"requirements mean the special programs and services services performed by employees, those matters common to grants in provided by him t..ough the Bureau of contractors,aubgrantees. general.such as financial ma.aagement. Indian Affaim subcontractors.and other piyees.and kinds and frequency of reports.and "Goverment"means a State or local other amounts becoming owed under retention of records.These are government or a federally recognized programs for which no current services distinguished from"programmatic" Indian tribal government or performance are required.such as requirements,which concern matter "Grant"means sn award of financlal annuities.insurance claims.and other that can be treated only on a program. assistance.including cooperative benefit payments. by-program or grant-by-grant basis.such agreements.in the form of money.our as kinds of activities uhs.can be property in lieu of money.by the Federal fern to a system a completion method" supported by grants under a particular Government to an eligible grantee.The refer to a system tinder which program, term does not include technical payments are made for construction "Awarding agency'means(1)with assistance which provides services work according to the percentage of respect to a grant the Federal agency. instead of money,or other assistance in completion of the work.rather than to and(2)with respect to a subgrant.the the form of revenue sbanng.loans.loan the grantee's cost incurred. party that awarded the subgrant guarantees.interest subsidies. "Prior approval"means "Cash contributions"means the insurance.or direct appropriations. documentation evidencing consent prior grantee's cash outlay.including the Also,the tum does not include to incurring specific cost 1 Federal Register / 53, No. 48 / Friday, March 11, 1988 03 and Regulations 8089 "Real property"means land,including as of the expiration of a grant:(3) Health Service for the Homeless Block land improvements, structures and Refusal to extend a grant or award Grant). C appurtenances thereto,excluding additional funds,to make a competing (3)Entitlement grants to carry out the movable machinery and equipment. or noncompeting continuation,renewal, following programs of the Social "Share",when referring to the extension,or supplemental award;or(4) Security Act: awarding agency's portion of real voiding of a grant upon determination (i)Aid to Needy Families with property,equipment or supplies,means that the award was obtained Dependent Children(Title IV-A of the the same percentage as the awarding fraudulently,or was otherwise illegal or Act,not including the Work Incentive agency's portion of the acquiring party's invalid from inception. Program(WIN) authorized by section i total costs under the grant to which the 'Terns of a grant or subgrant"mean 402(a)19(C);HHS grants for WIN are acquisition costs under the grant to all requirements of the grant or subject to this part): which the acquisition coat of the subgranL whether in statute. (ii)Child Support Enforcement and i property was charged.Only costs are to regulations,or the award document. Establishment of Paternity(Title fV-D of be counted—not the value of third-party Third party in-kind contributions" the Act); i in-kind contributions. mean property or services which benefit (iii)Foster Care and Adoption -State"means any of the several a federally assisted project or program Assistance(Title IV-E of the Act): States of the United States,the District and which are contributed by non- (iv)Aid to the Aged. Blind.and of Columbia, the Commonwealth of Federal third parties without charge to Disabled (Titles I.X.XIV,and XVI- Puerto Rico. any territory or possession the grantee,or a cost-type contractor AABD of the Act):and of the United States,or any agency or under the grant agreement. (v)Medical Assistance (Medicaid) instrumentality of a State exclusive of •Unliquidated obligations"for reports (Title XIX of the Act) not includi,,.- �he local governments.The term does not on a cash basis mean the State Medicaid Fraud Control n include any public and Indian housing prepared �„; agency under United States Housing Act amount of obligations incurred by the authorized by section la^'' of 1937. grantee that has not been paid.For (4)Entitlement grants under tne, "Subgrant"means an award of reports prepared on an accrued following programs of The National I financial assistance in the form of expenditure basis.they represent the School Lunch Act: money,or property in lieu of money, amount of obligations incurred by the (i)School Lunch(section 4 of the Act), made under a grant by a grantee to an grantee for which an outlay has not (ii)Commodity Assistance(section 8 eligible subgrantee.The term includes been recorded. of the Act), financial assistance when provided by "Unobligated balance"means the (iii) Special Meal Assistance(section contractual legal agreement,but does portion of the funds authorized by the 11 of the Act), nut include procurement purchases,nor Federal agency that has not been (iv)Summer Food Service for Children does it include any form of assistance obligated by the grantee and is (section 13 of the Act),and which is excluded from the definition of determined by deducting the cumulative (v)Child Care Food Program (section "grant"in this partobligations from the cumulative funds 17 of the Act). "Subgrantee"means the government authorized. (5)Entitlement grants under the or other legal entity to which a subgrant 85 following programs of The Child 1 4—4 ApplicabGtty. Nutrition Act of 1968: is awarded and which is accountable to a General.Subparts A-D of this art r Special Mille section 3 of the Act the grantee for the use of the funds ( ) p p ( ) P ( )' provided. apply to all grants and subgrants to and "Supplies"means all tangible governments,except where inconsistent (ii)School Breakfast(section 4 of the personal property other than with Federal statutes or with regulations Act). ..equipment"as defined in this part. authorized in accordance with the (6)Entitlement grants for State "Suspension"means depending on the exception provision of IM-6,or. Administrative expenses under The context,either(1)temporary withdrawal (1)Grants and subgrants to State and Food Stamp Act of 1977(section 16 of ` of the authority to obligate grant funds local institutions of higher education or the Act). 4 pending corrective action by the grantee State and local hospitals. (7)A grant for an experimental,pilot. or subgrantee or a decision to terminate (2)The block grants authorized by the or demonstration project that is also the grant.or(2)an action taken by a Omnibus Budget Reconciliation Act of supported by a grant listed in paragraph suspending official in accordance with 1981(Community Services;Preventive (a)(3)of this section; agency regulations implementing E.O. Health and Health Services:Alcohol. (8)Grant funds awarded under IZ549 to immediately exclude a person Drug Abuse.and Mental Health subsection 412(e)of the Immigration and from participating in grant transactions Services:Maternal and Child Health Nationality Act(8 U.S.C.1522(e))and for a period.pending completion of an Services:Social Services:Low-income subsection S01(s)of the Refugee investigation and such legal or Home Energy Assistance:States' Education Assistance Act of 19M(Pub. debarment proceedings as may ensue. Program of Community Development L.98-422,94 Stat 1809),for cash "Termination-means permanent Block Grants for Small Cities;and assistance,medical assistance,and withdrawal of the authority to obligate Elementary and Secondary Education supplemental security income benefits previously-awarded grant funds before other than programa administered by the to refugees and entrants and the that authority would otherwise expire.It Secretary of Education under Title V. administrative costs of providing the also means the voluntary relinquishment Subtitle D.Chapter 2.Section 583—the assistance and benefits; of that authority by the grantee or Secretary's discretionary grant program) (9)Grants to local education agencies subgrantee.'Termination"does not and Titles 1411 of the job Training under 20 U.S.C.236 through 241-1(a). include:(1)Withdrawal of funds Partnership Act of 1982 and tinder the and 242 through 244(portions of the awarded on the basis of the grantee's Public Health Services Act(Section Impact Aid program),except for 20 underestimate of L%e unobligated 1921).Alcohol and Drug Abuse U.S.C.238(d)(2)(c)and 240(f) balance in a prior period.(2) Treatment and Rehabilitation Block (Entitlement Increase for Handicapped i 7 Withdrawal of the unobligated balance Grant and Part C of Title V.Mental Children):and I 8090 Federal Register / -Jo* No. 48 / Fridav, March 11, 1988 / Rlfland rtegul ,i urs (10) Payments under the Veterans to plan,budget. and evaluate the work (1)Has a history of unsatisfactory I Administration's State Home Per Diem under a grant.Other supplementary performance.or / Program (38 U.S.C.841(a)). instructions may be issued only with the (2) Is not financially stable.or (\ (b)Entitlement programs.Entidement approval of OMB to the extent required (3) Has a management syktem which pro rams enumerated above in under the Paperwork Reduction Act of does not meet the management 4 4(a)(3HN are subject to Subpart 1980.For any standard form except the standards set forth in this part.or E. SF-424 facesheeL Federal agencies may (4)Has not conformed to terns and I$-5-5 Effect on other tssuances. shade out or instruct the applicant to conditions of previous awards,or All other rants administration disregard any line item that is not (5)Is otherwise not responsible:and if ,All other of codifiedprogram needed. the awarding agency determines that an P (4) When s grantee applies for award will be made,special conditions regulations,program manuals, additional fund such as e handbooks and other nonregulatory ( and/or restrictions shall correspond to materials which are inconsistent with continuation vi supplemental submitted award)or the high risk condition and shall be this part are superseded,except to the amends a previously submitted included in the award. application.only the affected pages extent they are required by statute,or need be submitted. Previous! submitted (b)Special conditions or rest ictio s Previously sumay include: authorized in accordance with the pages with information that is still i exception provision in 185 6 current need not be resubmitted. 11) Payment on a reimbursement basis: 1-8-5-6 Additions and exceptions f i.ti State plwm (2) Withholding authority to proceed (a)For classes of grants and grantees (a)Scope.The statutes for some to the next phase until receipt of subject to this part.Federal agencies programs require States to submit plans evidence of acceptable performance may not impose additional before receiving grants.Under within a given funding period administrative requirements except in regulations implementing Executive (3) Requiring additional.more detailed codified regulations published in the Order 12372."Intergovernmental Review financial reports: j Federal Register. of Federal Programs."States are (4) Additional project monitoring: (b)Exceptions for classes of grants or allowed to simplify,consolidate and (5) Requiring the grante or subgrantee grantees may be authorized only by substitute plans.This section contains to obtain technical or management OMB' additional provisions for plans that are assistance:or (c)Exceptions on a case-by-case basis subject to regulations implementing the (6)Establishing additional prior . and for subgrantees may be authorized Executive Order. approvals. by the affected Federal agencies i (b)Requirements. A State need meet (c)if an awarding agency derides to Subpart B—Pre-Award Requirements only Federal administrative or impose such conditions, the awarding 13-L10 Forms for apptyinq for grants. Programmatic requirements for a plan, official will notify the grantee or that are in statutes or codified subgrantee as early as possible.in (a)Scope. (1)This section prescribes regulations. writing. of: forms and instructions to be used by (c)Assurances.In each plan the State (1)The nature of the special governmental organizations(except will include an assurance that the State conditions/restrictions: hospitals and institutions of higher shall comply with all applicable Federal (2)The reason(s) for imposing them: education operated by a government)in statutes and regulations in effect with (3)The corrective actions which rust applying for grants.This section is not respect to the periods for which it be taken before they will be removed applicable,however,to formula grant receives grant funding.For this and the time allowed for completing the i programs which do not require assurance and other assurances applicants to apply for funds on a required in the plan,the State may: corrective actions and project basis. q P y' (4)The method of requesting (2)This section applies only to (1)Cite by number the statutory or reconsideration of the conditions/ applications)Ths sti Federal agencies t for regulatory provisions requiring the restrictions imposed. g assurances and affirm that it gives the grants.and is not required to be applied assurances required by those provisions. Subpart C—Post•Award Requlrerrter, by grantees in dealing with applicants (2)Repeat the assurance language in for subgrants.However,grantees are the statutes or regulations.or Financial Administration encouraged to avoid more detailed or (3)Develop its own language to the g burdensome application requirements extent permitted b law. r�2o Standards for nnancial y P n for subgrantt iaruQement systema. (d)Amendments.A State will amend (a)A State must expand and account orbovernmental ogcnizetr'ona )Ins and a Alar,whenever necessary t t reflect:(i) for grant funds in accordance with State f 8 � ( New or revised Federal statutes or applying for grants,applicants shall only regulations or(2)a material change in laws and procedures for expending and use standard application forms or those any State law,organization,policy,or accounting for its own funds.Fiscal prescribed by the granting agency with State agency operation.The State will control and accounting procedures of the approval of OMB under the obtain approval for the amendment and the State,as well as its subgrantees and Paperwork Reduction Act of 1980. its effective date but need submit for cost-type contractors,must be sufficient (2)Applicants are not required toapproval only the amended portions of to— submit more than the original and twothe plan. (1)Permit preparation of reports copies of preapplieations or required by this part and the statutes applications. 4 IL12 Spectat grant or suibrint authorizing the gram and (3)Applicants must follow all conditions for•WW"'ish"grantoea (2)Permit the tracing of funds to a applicable instructions that beat OMB (a)A grantee or subgrantee may be level of expenditures adequate to clearance numbers.Federal agencies considered"high risk-if an awatdir4 establish that such funds have not been may specify and describe the programs. agency determines that a grsates or used in violation of the restrictions and functions.or activities that will be used subgranter. prohibitions of applicable statutes. Ile Federal Register / 53, No. 48 / Friday. March I1, iga8 Oes and Regulatiuns 8091 (b)The financial management systems disbursements. Grant -es must monitor disbursements. The working capi'al l of other grantees and subgrantees must cash drawdowns by their subgrantees to advance method of payment shall not be meet the following standards: assure that they conform substantially used by grantees or subgrantees if the (1)Financial reporting. Accurate, to the same standards of liming and reason for using such method is the current,and complete disclosure of the amount as apply to advances to the unwillingness or inability of the grantee financial results of financially assisted grantees. to provide timely advances to the activities must be made in accordance (c) An awarding agency may review subgrantee to meet the subgrantees with the financial reporting the adequacy of the financial actual cash disbursements. requirements of the grant or subgrant. management system of any applicant for (f)Effect of progrom income. refunds. (2)Accounting records.Grantees and ftnancial assistance as part of a and audit recoveries on payment. (1) subgrantees must maintain records preaward review or at any time Grantees and subgrantees shall disburse which adequately identify the source subsequent to award. repayments to and interest earned on a and application of funds provided for �1 psyment revolving fund before requesting financially-assisted activities.These additional cash payments for the same 1 records must contain information (a)Scope.This section prescribes the activity. 1 pertaining to grant or subgrant awards basic standard and the methods under (2)Except as provided in paragraph and authorizations,obligations. which a Federal agency will make (0(1)of this section.grantees and ( unobligated balances.assets,liabilities. payments to grantees,and grantees will subgrantees shall disburse program ' outlays or expenditures,and income. make payments to subgrantees and income, rebates, refunds, contract (3)Internal contml. Effective control contractors. settlements,audit recoveries and I and accountability must be maintained (b)Basic standard. Methods and interest earned on such funds before ' for all grant and subgrant cash.real and procedures for payment shall minimize requesting additional cash payments. personalproperty,and other assets. the time elapsing between the transfer p (g) Withholding poymer.:s. (t) Unless b of funds and disbursement y the Grantees and subgrantees must otherwise required by Federal statute. adequately safeguard all such property grantee or subgrantee. in accordance awarding agencies shall not withhold l and must assure that it is used solely for with Treasury regulations at 31 CFR Part payments for proper charges incurred by authorized purposes. 205. payments or subgrantees unless— (4)Budget control. Actual (c)Advances. Grantees and (i)The grantee or subgrantee has expenditures or outlays must be subgrantees shall be paid in advance. p failed to comply with ant award � compared with budgeted amounts for provided they maintain or demonstrate p y gr eachant b Financial the willingness and ability to maintain conditions or 8r or subgrant. information must be related to procedures to minimize the lime (ii)The grantee or subgrantee is i performance or productivity data, elapsing between the transfer of the ndebted to the United States. including the development of unit cost funds and their disbursement by the (2)Cash withheld for failure to comply information whenever appropriate or grantee or subgrantee. with grant award condition.but without specifically required in the grant or (d)Reimbursement. Reimbursement suspension of the grant.shall be subgrant agreement.If unit cost data are shall be the preferred method when the released to the grantee upon subsequent required,estimates based on available requirements in paragraph(c) of this compliance.When a grant is suspended, documentation will be accepted section are not met.Grantees and payment adjustments will be made in cordance with whenever possible. subgrantees may also be paid by acenvy shall not make (5)Allowable cost. Applicable Old reimbursement for any construction (3)A Federal agency shall cost principles.agency program grant.Except as otherwise specified in payment to grantees for amounts that regulations,and the terms of grant and regulation.Federal agencies shall not are withheld by grantees or subgrantees subgrant agreements will be followed in use the percentage of completion from payment to contractors to assure determining the reasonableness, method to pay construction grants.The satisfactory completion of work. allowability,and allocability of costs. grantee or subgrantee may use that Payments shall be made by the Federal (8)Source documentation.Accounting method to pay its construction' agency when the grantees or records must be supported by such contractor,and if It does,the awarding subgrantees actually disburse the source documentation as cancelled agency's payments to the grantee or withheld funds to the contractors or to checks,paid bills.payrolls,time and subgrantee will be based on the escrow accounts established to assure attendance records.contract and grantee's or subgrantee'p actual rate of satisfactory completion of work. subgrant award documents,eta disbursement. (h)Cash depositories.(1)Consistent (7)Cash management Procedures for (e) Working capital advances.If a with the national goal of expanding the minimizing the fame elapsing between grantee cannot meet the criteria for opportunities for minority business the transfer of hinds from the U.S. advance payments described in enterprises.grantees and subgrantees - Treasury and disbursement by grantees paragraph(c)of this section,and the are encouraged to use minority banks(a and subgrantees must be followed Federal agency has determined that bank which is owned at least 50 percent whenever advance payment procedures reimbursement to not feasible because by minority group membersjl A list of are used.Grantees must establish the grantee lacks sufficient working minority owned banks can be obtained reasonable procedures to ensure the capital.the awarding agency may from the Minority Business Development receipt of reports on subgrantees'cash provide cash or a working capital Agency.Department of Commerce, balances and cash disbursements in advance basis.Under this procedure the Washington.DC 20230. sufficient time to enable them to prepare awarding agency shall advance cash to (2)A grantee or subgrantee shall complete and accurate cash transactions the grantee to cover its estimated maintain a separate bank account only reports to the awarding agency.When disbursement needs for an initial period when required by Federal State advances are made by letter-0f-credit or generally geared to the grantee's agreement electronic transfer of funds methods,the disbursing cycle.Thereafter,the (i)Interest earned on advances. grantee must make drawdowns as close awarding agency shall reimburse the Except for interest earned on advances ,..� as possible to the time of making grantee for its actual cash of funds exempt under the _ i i 8,D92 Federal Register / VoO No. 48 / Friday, March 11, 1988 / RuOand Regulations Intergovernmental Cooperation Act(31 90 days after the end of the funding awarding the contract. No costs of U.S.C.6501 et seq.)and the Indian Self- period (or as specified in a program services or property supported by this / Determination Act (23 U.S.C.450). regulation) to coincide with the income may count toward satisfying a (\ grantees and subgrantees shall submission of the annual Financial cost sharing or matching requirement promptly,but at least quarterly,remit Status Report (SF-269).The Federal unless other provisions of the grant interest earned on advances to the agency may extend this deadline at the agreement expressly permit this kind of Federal agency.The grantee or request of the grantee. income to be used to meet the subgrantee may keep interest amounts 1 8 5 Matching or cost sr►atinprequirement. up to$100 per year for administrative —'2 . (6)Records. Costs and third party in- expenses. (a)Basic rule:Costs and contributions kind contributions counting towards acceptable.With the qualifications and satisfying a cost sharing or matching 4 B-5-22 Allowable coats. exceptions listed in paragraph(b)of this requirement must be verifiable from the (a)Limitation on use of funds.Grant section,a matching or cost sharing records of grantees and subgrantee or funds may be used only for. requirement may be satisfied by either cost-type contractors.These records (1)The allowable costs of the or both of the following: must show how the value placed on I grantees. subgrantees and cost-type (1)Allowable costs incurred by the third party in-kind contributions was contractors,including allowable costs in grantee, subgrantee or a cost-type derived.To the extent feasible, the form of payments to fixed-price contractor under the assistance volunteer services will be supported by contractors:and agreement.This includes allowable the same methods that the organization (2)Reasonable fees or profit to cost- costs bome by non-Federal grants or by uses to support the allocability of type contractors but not any fee or profit others cash donations from non-Federal regular personnel costs. (or other increment above allowable third parties. (7)Special standards for third party costs) to the grantee or subgrantee. (2)The value of third party in-kind in-kind contributions. (i)Third party in- (b)Applicable cost principles. For contributions applicable to the period to kind contributions count towards 1 each kind of organization, there is a set which the cost sharing or matching satisfying a cost sharing or matching of Federal principles for determining requirements applies. requirement only where,if the party allowable costs.Allowable costs will be (b)Qualifications and exceptions--{1) receiving the contributions were to pay determined in accordance with the cost Costs borne by other Federal grant { principles applicable to the organization ogreements. Except as provided by for them. the payments would be allowable costs. incurring the costs.The following chart Federal statute,a cost sharing or lists the kinds of organizations and the matching requirement may not be met (ii)Some third party in-kind applicable cost principles. by costs borne by another Federal grant. contributions are goods and services This prohibition does not apply to that.if the grantee.subgrantee,or income earned by a grantee or contractor receiving the contribution subgrantee from a contract awarded had to pay for them.the payments For the costs of a— use the pnncoes n— under another Federal grant. would have been an indirect costs. / (2)General revenue sharing. For the Costs sharing or matching credit for (\ State.local or lndan OMB Cacvlar A-a7. purpose of this section,general revenue such contributions shall be given only if frost government. purpose funds distributed under 31 the grantee,subgrantee,or contractor P rga natpotn OBM iaCtltar M122. g has established.along with its regular organization other then U.S.C.6702 are not considered Federal an(t)nsutuuon of grant funds: indirect cost rate,a special rate for f.grer eoueawn,(2) (3)Cost or contributions counted allocating to individual projects or howtal.a(3) towards other Federal costs-sharing programs the value of the contributions. organaauon named n til A third a to-kind contribution twB C.acuw x-122 requirements. Neither costs nor the (iii) party as not swlea to a,at values of third party in-kind to a fixed-price contract may count arcutar" contributions may count towards towards satisfying a cost sharing or Educatarat ratnuuons._ OMB t-ecLdar w-21. satisfying a cost Shari or matchict matching requirement only if it results Forgrobt orgarwt,on as CFA Part 31. y 8 ng g ofnar than a hosortal contract cost requirement of a grant agreement if they in: and an orpnizandn Pn ncV*s and have been or will be counted towards (A)An increase in the services or named in 06M Rocera+res"or urotom+ satisfying a cost sharing or matching property provided under the contract Comw A-tZ2 as na cost a0co n" requirement of another Federal grant (without additional cost to the grantee tn,ofea to that cite". standards wcandy ca .Ain cost onncriias agreement.a Federal procurement or subgrantee)or a«wotat)w to the contract.or any other award of Federal (B)A cost savings to the grantee or Feoera agency. funds. subgrantee. (4)Costs financed by program income. (iv)The values placed on'third party Costs financed by program income,as in-kind contributions for cost sharing or I 8 5 rs Pwsod to aranabulty of tunds. defined in I flS 25.shall not count matching purposes will conform to the (a)General.Where a funding period is towards satisfying a cost sharing or rules in the succeeding sections of this specified.a grantee may charge to the matching requirement unless they are part.if a third party in-kind contribution_ award only costs resulting from expressly permitted in the terms of the is a type not treated in those sections. obligations of the funding period unless assistance agreement.(This use of the value placed upon it shall be fair carryover of unobligated balances is general program income is described in and reasonable. permitted,in which case the carryover 4 BS_25(g).) . . (c) Valuation of donoted services—(1) 1 balances may be charged for costs (5)Services or property financed by Volunteer services.Unpaid services resulting from obligations of the income earned by contractors. provided to a grantee or subgrantee by subsequent funding period. Contractors under a grant may earn individuals will be valued at rates (b)Liquidation of obligations.A income from the activities carried out consistent with those ordinarily paid for grantee must liquidate all obligations trader the contract in addition to the similar work in the grantee's or Incurred under the award not later than.. amounts tamed from the party suhgrantee's organisation.if the grantee Federal Register /* 53, No. 48 / Friday, March 11. 1988 Oles and Regulations 8093 or subgrantee does not have employees land, and only depreciation or use (c)Cost of generating program performing similar work.the rates will allowances may be counted for donated income. If authorized by Federal be consistent with those ordinarily paid equipment and buildings.The regulations or the grant agreement. costs by other employers for similar work in depreciation or use allowances for this incident to the generation of program the same labor market. In either case,a property are not treated as third party income may be deducted from gross reasonable amount for fringe benefits in-kind contributions. Instead. they are income to determine program income. may be included in the valuation. treated as costs incurred by the grantee (d)Governmental revenues.Taxes, (2)Employees of other organizations. or subgrantee.They are computed and special assessments.levies. fines. and When an employer other than a grantee. allocated (usually as indirect costs)in other such revenues raised by a grantee subgrantee,or cost-type contractor accordance with the cost principles or subgrantee are not program income furnishes free of charge the services of specified in 1822.in the same way as unless the revenues are specifically an employee in the employee's normal depreciation or use allowances for identified in the grant agreement or line of work, the services will be valued purchased equipment and buildings.The Federal agency regulations as program at the employee's regular rate of pay amount of depreciation or use income. exclusive of the employee's fringe allowances for donated equipment and (e)Royalties. Income from royalties benefits and overhead costs.If the buildings is based on the property's and license fees for copyrighted services are in a different line of work. market value at the time it was donated. material. patents,and inventions paragraph(c)(1)of this section applies. (n Valuation of grantee orsubgrontee developed by a grantee or subgrantee is (d) Valuation o/third party donated donated real property forconstructiori/ program income only if the revenues are supplies and loaned equipment or space. acquisition. If a grantee or subgrantee specifically identified in the grant (1) If a third party donates supplies, the donates real property for a construction agreement or Federal agency regulations contribution will be valued at the or facilities acquisition project, the as program income.(See § --S__.34.) market value of the supplies at the time current market value of that property (f)Property. Proceeds from the sale of of donation. may be counted as cost sharing or real property or equipment will be (2) U a third party donates the use of matching. If any part of the donated handled in accordance with the equipment or space in a building but property was acquired with Federal requirements of§§JiL.31 and 85.32. retains title, the contribution will be funds, only the non-federal share of the (g) Use of program income. Program valued at the fair rental rate of the property may be counted as cost sharing income shall be deducted from outlays equipment or space. or matching. which may be both Federal and non: (e) Valuequipment. bui of third party donated (g)Appraisal of real property. In some Federal as described below. unless the equipment,buildings. and land. If s third cases underparagraphs d .(e)and agency regulations or the grant � party donates equipment,buildings,or ( ) (f)of Federal land, and title passes to a grantee or this section. it will be necessary to agreement specify another alternative subgrantee, the treatment of the donated establish the market value of land or a (or a combination of the alternatives).In property will depend upon the purpose building or the fair rental rate of land or specifying alternatives.the Federal of the grant or subgrant,as follows: of space in a building.In these cases, the agency may distinguish between income (1)Awards/or capital expenditures. If Federal agency may require the market earned by the grantee and income the purpose of the grant or subgrant is to value or fair rental value be set by an earned by subgrantees and between the assist the grantee or subgrantee in the independent appraiser,and that the sources,kinds,or amounts of income. acquisition of property,the market value value or rate be certified by the grantee. When Federal agencies authorize the of that property at the time of donation This requirement will also be imposed alternatives in paragraphs(g)(2) and(3) may be counted as cost sharing or by the grantee on subgrantees. of this section,program income in matching. ! R 5 5 Pr*gram ITIC excess of any limits stipulated shall also (2)Other awards. If assisting in the be deducted from outlays. acquisition of property is not the (a)General. Grantees are encouraged (1)Deduction.Ordinarily program purpose of the grant or subgrant. to earn income to defray program costs. income shall be deducted from total paragraphs(e)(2)(i)and(ii)of this program income includes income from allowable costs to determine the net section apply: fees for services performed from the use allowable costs.Program income shall (i)If approval is obtained from the or rental of real or personal property be used for current costs unless the I awarding agency.the market value at acquired with grant funds.from the sale Federal agency authonzes otherwise. the time of donation of the donated of commodities or items fabricated Program income which the grantee did equipment or buildings and the fair under a grant agreement.and from not anticipate at the time of the award rental rate of the donated land may be payments of pnncipal and interest on shall be used to reduce the Federal counted as colt shanng or matching.In loans made with grant funds.Except as agency and grantee contributions rather t.4e case of a subgrant.the terms of the otherwise provided in regulations of the than to increase the tunas committed to grant agreement may require that the Federal agency.program income does the project. approval be obtained from the Federal not include interest on grant funds. (2)Addition.When authorized. agency as well as the grantee.In all rebates,credits.discounts,refunds.etc. program income may be added to the cases,the approval may be given only if and interest earned on any of them. funds committed to the grant agreement a purchase of the equipment or rental of (b)Definition of program income. by the Federal agency and the grantee. the land would be approved as an program income means gross income The program income shall be used for allowable direct cost.If any part of the received by the grantee or subgrantee the purposes and under the conditions of j donated property was acquired with directly generated by a grant supported the grant agreement. Federal funds,only the non-federal activity,or earned only as a result of the (3)Cost shoring or motching.When share of the property may be counted as grant agreement during the grant period. authorized.program income may be cost-sharing or matching. "During the grant period"is the time used to meet the cost sharing or ' (ii)If approval is not obtained under between the effective date of the award matching requirement of the grant t paragraph(e)(2)(i)of this section,no and the ending date of the award agreement.The amount of the Federal amount may be counted for donated reflected in the final financial report grant award remains the same. i I a r' i �gy Fedc3ral Rester / VoJ.*Nn 48 / Fridav, March 11. ]988 / R,rie'lRftd Regt,!ations (h)Income after Lire award period (c)Avtbtar selection. in arranging for (1)Any revision of the scope or There are no Federal requirements audit services, 1 8536 sball be objectives of the project (regardless of goverru A the disposition of program followed. whether there is an associated budget income eemed after the end of the revision requiring prior approval). award period (i.e..antil the errdmg date Changes,property,and Subawards (2)Need to extend the period of of the final financial report.eee availability of funds. paragraph(a)of this section),unless the (3) Changes in key persons in cases terms of the agreement or the Federal (a)Cenerol. Grantees and subgrantees where specified in an application or a agency regulations provide otherwise. are permitted to rebudget within the grant award. In research projects. a approved direct cost budget to meet change in the project director or 18525 N*o-Federa(sudtL unanticipated requirements and may principal investigator shall always (a)Basic Rule.Grantees and make limited program changes to the require approval unless waived by the ') subgrantees are responsible for approved project.However,unless awarding agency. obtaining audits in accordance with the waived by the awarding agency,certain (4)Under nonconstruction projects. Single Audit Act of 1984 (31 U.S.C.7501— types of post-award changes in budgets contracting out,subgranting(if 7) and Federal agency implementing and projects&hall require the prior authorized by law)or otherwise regulations.The audits shall be made by written approval of the awarding obtaining the services of a third party to an independent auditor in accordance agency. perform activities which are central to with generally accepted government (b)Relation to cost principles.The the purposes of the award.This auditing standards covering financial applicable cost principles (see 18 5 -22) approval requirement is in addition to and compliance audits. contain requirements for prior approval the approval requirements of 1$5_.36 of certain types of costs.Except where but does not apply to the procurement of (b)Subgrontees. State or local � � equipment.su lies,and general governments.as those terms are defined waived.those requirements apply to anpp 8 for purposes of the Single Audit Act, grants and subgranis even if paragraphs support services. that receive Federal financial assistance (c)through(f)of this section do not. (e)Additional prior approval I provide$25.000 or more of it in a (c)Budget changes. (i) requirements.The awarding agency may tron projects. Except as not require prior approval for any fiscal year to a subgrantee shall: Nonconstruc (1)De!ermine whether State or local stated in other regulations or an award budget revision which is not described subgrantees have met the audit document.grantees or subgrentees shall in paragraph(cJ of this section. g obtain the prior approval of the (f)Requesting prior approval. (1)A requirements of the Act and whether Circular awardmg agency whenever any of the request for prior approval of any budget subgrantees covered by OMB A-110."Uniform Requirements for following changes is anticipated under a revujon will be in the same budget Grants and Other Agreements with nonconstruction award: formal the grantee used in its Institutions of Higher Education. (i)Any revision which would result in application and shall be accompanied Hospitals and Other Nonprofit the need for additional funding. by a narrative justification for the Organizations"have met the audit (ii) Unless waived by the awarding proposed revision. requirement.Commercial contractors agency, cumulative transfers among (2)A request for a prior approval (private forprofit and private and direct cost categories. or, if applicable, under the applicable Federal cost governmental organizations)providing among separately budgeted programs. principles tsee 1-.]_.22)may be made goods and services tSate and local projects, functions.or activities which by letter. pare e mad.State and local not required to have a .whenever yexceed or are expected to exceed ten (3)A request by a subgrantee for prior governments eraudit percent of the current total approved approval will be addressed in writing to single aushould use their own budgeththe awarding agem 's the grantee.The grantee will promptly govenm din procedures to ensure that the contractor share exceeds 5100.000. review such request and shall approve has complied with laws and regulations (iii)Transfer of funds a4otted for or disapprove the request in writing.A affecting the expenditure of Federal training allowances(i.e_ from aireet grantee will not approve any budget or funds; payments to trainees to other expense project revision which is inconsistent (2J T?etezmine whether the subgrantee categories). with the purpose or terms and -+ spent Federal assistance funds provided (2)Construction projects.Grantees conditions of the Federal grant to the in accordance with applicable laws and and subgrantees shall obtain prior grantee.If the revision.requested by the regulations.This may be accomplished written approval for any budget revision subgrantee would result in a change to b reriewin an audit of the subgrantee which woald res�rlt in the need for the grantee's approved project which Y 8editonal funds, requires Federal prior approval.the made in accordance with the Act, (3)Combined cons7nrction and grantee will obtain the Fedlral agency's Circular A-110.or through other means nonconsiructFon projects.When a grant approval before approving the (e.g,program reviews)if the subgrantee or subgrant provides funding for both subgrantee'•request. hes not had such an audit, construction and nonconstruction (3)Ensure that appropriate corrective--activities.the grantee or wbgtanlee fl U-31 A"proportr. action is taken within six months after must obtaat prior written approval from (a)Tide.Subject to the obligations receipt of the audit report in instance of the awarding agency before making any and conditions set forth in this section. noncompliance with Federal laws and fund or budget transfer from title to real property acquired under a regulations; nonconsUvction to cora mcdoe or vice grant or wbgrant will vest upon . (4)Consider whether subgrantee vena, acquisition in the grantee or subgrantee audits necessitate ad;ustment of the (d)Prograarmotic changes.Crantees trespectively. grantee'a own t:ecords;and or subgrantees must obtain the prior (b)Use.Except as otherwise provided i " (S)Rewire each subgrantee to permit approval of the awarding agency by Federal statutes.real property will be 1 independent auditors to have access to whenever arty of the fallowing actions is used for the originally authorized the records and financial statements. — anticipated " purposes as long as needed for that i v.. Federal Register / Vo�. No. 48 / Friday, March 11. 1988 / R*and Regulations 13095 purposes.and the grantee or subgrantee (c) Use. (1)Equipment shall be used (4)Adequate maintenance procedures ahall not dispose of or encumber its title by the grantee or subgrantee in the must be developed to keep the property or other interests. program or project for which it was in good condition. (c)Disposition.When real property is acquired as long as needed,whether or (5)If the grantee or subgrantee is no longer needed for the originally not the project or program continues to authorized or required to sell the authorized purpose, the grantee or be supported by Federal funds.When no property,proper sales procedures must subgrantee will request disposition longer needed for the original program be established to ensure the highest instructions from the awarding agency. or project.the equipment may be used in possible return. The instructions will provide for one of other activities currently or previously (e)Disposition.When original or the following alternatives: supported by a Federal agency. replacement equipment acquired under (1)Retention of title.Retain title after (2)The grantee or subgrantee shall a grant or subgrant is no longer needed compensating the awarding agency.The also make equipment available for use for the original project or program or for 1 amount paid to the awarding agency on other projects or programs currently other activities currently or previously will be computed by applying the or previously supported by the Federal supported by a Federal agency, awarding agency's percentage of Government.providing such use will not disposition of the equipment will be participation in the cost of the original interfere with the work on the projects made as follows: purchase to the fair market value of the or program for which it was originally (1)Items of equipment with a current property.However.in those situations acquired.First preference for other use per-unit fair market value of less than where a grantee or subgrantee is shall be given to other programs or 55.000 may be retained,sold or disposing of real property acquired with projects supported by the awarding otherwise disposed of with no further grant funds and acquiring replacement agency.User fees should be considered obligation to the awarding agency. real property under the same program, if appropriate. (2)Items of equipment with a current the net proceeds from the disposition (3)Notwithstanding the per unit fair market value in excess of may be used as an offset to the coat of encouragement in §_85-.25(a) to earn S5•000 may be retained or sold and the the replacement property. program income.the grantee or awarding agency shall have a right to an (2)Sole of property. Sell the property subgrantee must not use equipment amount calculated by multiplying the and compensate the awarding agency. acquired with grant funds to provide current market value or proceeds from The amount due to the awarding agency services for a fee to compete unfairly sale by the awarding agency's share of will be calculated by applying the with private companies that provide the equipment. awarding agency's percentage of equivalent services,unless specifically (3)In cases where a grantee or participation in the cost of the original permitted or contemplated by Federal subgrantee fails to take appropriate purchase to the proceeds of the sale statute. disposition actions,the awarding agency after deduction of any actual and (4)When acquiring replacement may direct the grantee or subgrantee to reasonable selling and fixing-up equipment.the grantee or subgrantee take excess and disposition actions. expenses.If the rant is still active,the 8 (f)Federal equipment. In the event a t P 8 may use the equipment to be replaced ea � net proceeds from sale may be offset a trade-in or sell the property and use grantee or subgrantee is Provided against the original cost of the property. the proceeds to offset the cost of the federally-owned equipment: i When a grantee or subgrantee is (1)Title will remain vested in the directed to sell property,sales approval of the awarding agency. Federal Covernment. procedures shall be followed that (d)Management requirements. (2)Crantees or subgrantees will provide for competition to the extent procedures for managing equipment manage the equipment in accordance practicable and result in the highest (including replacement equipment), with Federal agency rules and possible return. procedures.and submit an annual (3) Transfer of tide.Transfer title to whether acquired in whole or in part' inventory listing. the awarding agency or to a third-party withlac grant funds.until disposition takes (3)When the equipment is no longer • place will,as a minimum,meetlhe needed.the grantee or subgrantee will designated/approved by the awarding following requirements: request die sition instructions from the agency.The grantee or subgrantee shallP (I)Property records must be Federal agency. be paid an amount calculated by 8 y ' applying the grantee or subgrantee'• maintained that include a description of (g)Right to transfer title.The Federal ercentage of participation r the the property,a serial number or other awarding agency may reserve the right p purchase of the real property to the identification number,the source of to transfer title to the Federal current fair market value of the property.who holds title,the acquisition Covetnment or s third part named by property. date,and cost of the property. the awarding agency when such a third percentage of Federal participation in party is otherwise eligible under existing f Equtprnent. the cost of the property.the location.use statutes.Such transfers shall be subject (a) Tide.Subject to the obligations and condition of the property.and any to the following standards: and conditions set forth in this secti0 n. ultimate disposition data including the (1)The property shall be identified in title to equipment acquired under a date of disposal and sale price of the --lhe grant or otherwise made known to grant or subgrant will vest upon Property the grantee in writing. acquisition in the grantee or subgrantee (2)A physical inventory of the (2)The Federal awarding agency shall respectively. property must be taken and the results issue disposition instruction within 120 (b)Stoles.A State will we,manage, , reconciled with the property records at calendar days after the end of the and dispose of equipment acquired least once every two years. Federal support of the project for which under a grant by the State in accordance (3)A control system must be it was acquired.U the Federal awarding 1 with State laws and procedures.Other developed to ensure adequate agency fails to issue disposition ' grantees and subgrantee•wfll follow safeguards to prevent loss,damage,or instructions within the 120 calendar day paragraphs(c)through(e)of this theft of the property.Any loss.damage. period the grantee shall follow .;a section. or theft shall be investigated. - 2(e)• i � . 3096 do's!.,, No. 18 / Friday. March 11, 1988 / R enc Revu;al'*0118 (3)When title to equipment is (Y)Grantees and subgrantees will new equipment and property nhenever transferred,the grantee shall be paid an maintain a contract administration each use is feasible and reduces project amount calculated by applying the system which ensures that corrtrectors costs. percentage of participation in the perform in accordance with the terms, (7)Grantees and subgrantees are purchase to the current fair market conditions,and specifications of their encouraged to use value engineenng value of the property. contracts or purchase orders. clauses in contracts for construction (3) Grantees and subgrantees will projects of sufficient size to offer 1 B-5-33 Supp11e& maintain a written code of standards of reasonable opportunities for cost (a) Title.Title to supplies acquired conduct governing the performance of reductions. Value engineering is a under a grant or subgrant will vest,upon their employees engaged in the award systematic and creative anaylsis of each acquisttion•in the grantee or subgrantee and administration of contracts.No contract item or task to ensure that its respectively. employee,officer or agent of Life grantee essential function is provided at the (b)Disposition If there Is a residual or subgrantee shall participate in overall lower cost. i inventory of unused supplies exceeding selection.or in the award or (8)Grantees and subgrantees will j 55.000 in total aggregate fair market adutinistration of a contract supported make awards only to responsible value upon termination or completion of by Federal funds if a conflict of interest, contractors possessing the ability to the award,and if the supplies are not real or apparent.would be involved. perform successfully under the terms needed for any other federally Such a conflict would arise when: and conditions of a proposed sponsored programs or projects.the (i)The employee.officer or agent, procurement.Consideration will be grantee or subgrantee shall compensate (ii)Any member of his immediate given to such matters as contractor the awarding agency for its share. family, integrity,compliance with pubbc policy. (iii) His or her partner.or record of past performance.and (iv)An organization which employs, financial and technical resources. 1 a-5L-U Copyrights_ or is about to employ,any of the above, (9)Grantees and subgrantees will The Federal awarding agency has a financial or other interest in the maintain records sufficient to detail the oy reserves a raltyee,frnonexclusive, firm selected for award.The grantee's or significant history of a procurement. and irrevocable license to reproduce, subgrantee's officers,employees or These records will include.but are not publish or otherwise use,and to agents will neither solicit nor accept necessarily limited to the following: authorize others to use,for Federal gratuities.favors or anything of rationale for the method of procurement, Government purposes: monetary value from contractors, selection of contract type.contractor (a)The copyright in any work potential contractors,or parties to selection or rejection.and the basis for developed under a grant.subgrant.or subagreements.Grantee and the contract price. contract under a grant or subgrant;and subgrantees may set minimum rules (10)Grantees and subgrantees will (b)Any rights of copyright to which a where the financial interest is not grarrtee.subgrantee or a contractor substantial or the gift is an unsolicited use time and material type contracts purchases ownership with grant support. Item of nominal intrinsic value.To the only— extent permitted by State or local law or t After a determination that no other 18-535 Subawards io debarred and regulations,such standards or conduct contract is suitable,and mapended parties. will provide for penalties.sanctions.or (ii)If the contract includes a exiling Grantees and subgrantees must not other disciplinary actions for violations price that the contractor exceeds at its make any award or permit any award of such standards by the grantee's and own risk. (subgrant or contract)at any tier to any subgrantee's officers.employees.or (11)Grantees and eubgrantee�alone party which is debarred or suspended or agents.or by contractors or their agents. will be responsible.in accordance with is otherwise excluded from or ineligible The awarding agency may in regulation good administrative practice and sound for participation in Federal assistance provide additional probibitions relative business judgment,for the settlement of programs under Executive Order 12549, to real,apparent.or potential conflicts all contractual and administrative issues "Debarment and Suspension.' of interest. arising out of procurements.These (4)Grantee and subgrantee issues include.but are not limited to 18536 Procurement procedures will provide Cor a review of source evaluation.protests.disputes. (a)States.When procuring property proposed procurements to avoid and claims.These standards do not and services ander a grant.a State will purchase of unnecessary or duplicative relieve the grantee or subgrantee of any follow the same policies and procedures items.Consideration should be given to contractual responsibilities under its I,uses for procurements from its non- consolidating or breaking out contracts.Federal agencies will not f Federal funds.The State will ensure that procurements to obtain a more substitute their judgment for that of the 1 every purchase order ar ether contract economical purchases.Where grantee or subgrantee unless the matter includes any clauses required by appropriate,an analysis will be made of is primarily a Federal concern. i Federal statutes and executive orders lease versus purchsse alternatives,and Violations of law will be referred to the 1 and their implemen"i;regulations. any other appropriate analysis to local.State.or Federal authority having Other grantees and subgrantees will determine the most economical proper turisdiction. follow paragraphs fb)thmugh(i)in We approach. (12)Grantees and subgrantees will section. (S)To foster greater economy and have protest procedures to handle and (b)Pnocuremerrt standards. (1) efficiency,grantees and subgrantees are resolve disputes relating to their Grantees and evbgrantees well use their encouraged to eerier into State and local procurements and shall in all instances own procurement procedures which intergovernmental agreements for disclose information regarding the reflect applicable State and local laws procurement or use of common goods protest to the awarding agency.A and regulations.provided that the and services. protestor must exhaust all ! procurements canfmm to applicable (e)Grantees and subgrantees are administrative remedies with the ! Federal law and the standards identified etrtx?ureged to use Federal excess and grantee and subgraolee before purvutng in this section. surplus property in Geis of purchasing a protest with the Federal agency. t a Federal Register / V053, No. 48 / Friday, March 11. 2988 / s and Regulations 8097 Reviews of protests by the Federal unduly restrict competition.The (ii) If sealed bids are used. the agency will be limited to. desenption may include a statement of following regwrements apply. (i) Violations of Federal law or the qualitative Mature of the material, (A)The invitation fur bids v%ill be regulations and the standards of this product or service to be procured,and publicly advertised and bids shill be section(violations of State or local law when necessary,shall cel forth those solicited from an adequate number of will be under the jurisdiction of State or eninimurn essential characteristics and known suppliers.providing them local authorities)and standards to which it must conform if it sufficient time prior to the date set for (ii) Violations of the grantee's or is to satisfy its intended use.Detailed opening the bids. subgrantee's protest procedures for product specifications should be (B)The invitation for bids. which will failure to review a complaint or protest avoided if at all possible.When it is include any specifications and pertinent Protests received by the Federal agency impractical or uneconomical to tamake a attachments, shall define the items or other than those specified above will be dear and accurate description of the services in order for the bidder to referred to the grantee or subgrantee. technical regwrements,a "brand name properly respond: (c) Competition.(1)All procurement or equal"description may be used as a (C)All bids will be publicly opened at transactions will be conducted in a means to define the performance or the time and place prescribed to the manner providing full and open other salient requirements of a invitation for bids: j competition consistent with the procurement.The specific features of the (D)A firm fixed-price cnntnct award standards of¢8536.Some of the named brand which must be met by will be made in writing to the lowest situations considered to be restrictive of offerors shall be clearly stated.and responsive and responsible bidder. competition include but are not limited (ii)Identify all requirements which the Where specified in bidding documents. to: offerors must fulfill and all other factors factors such as discounts.transportation (i) Placing unreasonable requirements to be used in evaluating bids or cost,and life cycle costs shall be on firms in order for them to qualify to proposals. considered in determining which bid is do business, (4)Grantees and subgrantees will lowest.Payment discounts will only be (ii)Requiting unnecessary experience ensure that all prequalified lists of used to determine the low bid when and excessive bonding, persons.firms.or products which are prior experience indicates that such (iii)Noncompetitive pricing practices used in acquiring goods and services are discounts are usually taken advantage between firms or between affiliated current and include enough qualified of;and j companies, sources to ensure maximum open and (E) Any or all bids may be rejected if (iv)Noncompetitive awards to free competition.Also,grantees and there is a-sound documented reason. consultants that are on retainer subgrantees will not prelude potential (3)Procurement by competitive contracts. bidders from qualifying during the proposals.The technique of competitive (v)Organizational conilictsof solicitation period. proposals is normally conducted with interest. (d)Methods of procurement 10 be more than one source submitting an (vi)Specifying only a "brand name" followed.(1)Procurement by smell. offer,and either a fixed-price or cost- product oshproduct instead of allowing"an equal" purchase procedures. Small purchase reimbursement type contract is product to be offered and describing the procedures are those relatively simple awarded.It is generally used when performance of other relevant and informal procurement methods for conditions are not appropriate for the requirements of the procurement.and securing services,supplies.or other use of sealed bids.if this method is (vii)Any arbitrary action in the property that do not cost swore than used the following requirements-apply- procurement pplyprocurement process. S25.Ow in the aggregate.if small (i)Requests forproposals will be (2)Grantees and subgrantees will purchase procurements are used.price publicized and identify all evaluation conduct procurements in a manner that or rate quotations will be obtained from faclon and their relative importance. prohibits the use of statutorily or an adequate number of qualified Any response to publicized requests for administratively imposed in-State or sources. proposals shall be honored to the local geographical preferences in the (2)Procurement by sealed hids evaluation of bids or proposals,except (formal advertising).Bids are pasblidy maximum extent practical: in those cases wheat applicable Federal Solicited and a G{m-used-price contract (ii)Proposals will be solicited from an statutes expressly mandate sir (laurmp sum or unit price)is aevatded to adequate number of qualified sour,=er. encourage geographic preference. the responsible bidder whose bid. Crit)Grantees and subgrantees will 1 have a method for conducing technical Nothing in this section preempts State conforming with all the material terms licensing laws.When contracting for and conditions of the invitation for bids, evaluations of the proposals received architectural and engineering(AJE) is the lowest in price.The sealed bid and for selecting awardees: services,geographic location may be a raethod is the preferred method for (iv)Awards will be made to the selection criteria provided its procuring construction,if the Waditioaa -responsible firm whose'pt 'proposal is most application leaves an appropriate in I�..38(d)(290 appy advantageous to the program,with price number of qualified firms.given the (i)In order for sealed bidding to be and other tactors considered:and nature and sine of the project.to feasible.the fdlowing condwons should (v)Grantees and subgrantees may use eampete for the contmcL be present: competitive proposal procedures for (3)Grantees will have written (A)A complete,adequate,and qua Micatinns-based procurement of - selection procedutw tow procmr+eauat realistic specification or purchase architectraalJeagineetvtg(A/E) transactions.These procedures will de0cription is available: pialessional services whereby ensure that all solicitations: (B)Two or more tespoasible bidders competitors*qualifications are (i)Incorporate a clew and accurate are willing trend able to compels evaluated and the most qualified description of the technical effectively for the busir>ess:and competitor u selected sob}ect to requirements for the amaled al.produ" (C)The prosere_asant kads ltse(f to a negotiation of Lair and reasonable or service to be procured Such Arra fixed ptice enntraot aad the. compensation.The method.where price description shall not.is competitive selection of the successful bidder can be .L not used as a selecWm tactor,can procurements.contain Leatures which made priacipally on the basis of pr"- only be used in procurement of A JE i 8N8 Federal Register / Vol'S3. No. 48 ( .':iday, March 11, 1988 / RVand Regulations professional services. 11 cannot be used (vi)Requiring the prime contractor,if generally will take place prior to the to purchase other types of services subcontracts are to be let. to take the time the specification is incorporated though A/E firms are a potential source affirmative steps listed in paragraphs into a solicitation document. However, if to perform the proposed effort. (e)(2)(i)through (v)of this section. the grantee or subgrantee desires to (4) Procurement by noncompetitive (f)Contract cost and price. (1) have the review accomplished after a proposals is procurement through Grantees and subgrantees must perform solication has been developed.the solicitation of a proposal from only one a cost or price analysis in connection awarding agency may still review the source.or after solicitation of a number with every procurement action including specifications.with such review usually of sources,competition is determined contract modifications.The method and limited to the technical aspects of the inadequate. degree of analysis is dependent on the proposed purchase. (i)Procurement by noncompetitive facts surrounding the particular (2)Grantees and subgrantees must on proposals may be used only when the procurement situation,but as a starting request make available for awarding award of a contract is infeasible under point,grantees must make independent agency pre-award review ( delete small purchase procedures.sealed bids estimates before receiving bids or procurement documents•such as or competitive proposals and one of the proposals.A cost analysis must be requests for proposals or invitations for following circumstances applies: performed when the offeror is required bids,independent cost estimates,e1c., (A)The item is available only from a to submit the elements of his estimated when: single source: cost,e.g..under professional.consulting, (i)A grantee's or subgrantee's (B)The public exigency or emergency and architectural engineering services procurement procedures or operation for the requirement will not permit a contracts.A-cost analysis will be fails to comply with the procurement delay resulting from competitive necessary when adequate price standards in this seciton:or solicitation. competition is lacking. and for sole (C)The awarding agency authorizes source procurements,including contract (ii)The procurement is expected to noncompetitive proposals:or modifications or change orders.unless exceed 525.000 and is to be awarded (D)After solicitation of a number of price resonableness can be established without competition or only one bid or sources,competition is determined on the basis of a catalog or market price offer is received in response to a inadequate. of a commercial product sold in solicitation:or (ii)Cost analysis.i.e.,verifying the substantial quantities to the general (iii)The procurement,which is proposed cost data,the projections of public or based on prices set by law or expected to exceed 525.000. specifies a the data, and the evaluation of the regulation.A price analysis will be used "brand name"product;or specific elements of costs and profit,is in all other instances to determine the (iv)The proposed award over 52.5.000 required. reasonableness of the proposed contract is to be awarded to other than the (iii)Grantees and subgrantees may be price, apparent low bidder under a sealed bid required to submit the proposed (2)Grantees and subgrantees will procurement;or procurement to the awarding agency for negotiate profit as a separate element of (v)A proposed contract modification pre-award review in accordance with the price for each contract in which changes the scope of a contract or paragraph(g)of this section. there is no price competition and in all increases the contract amount by more i (e)Con trocting with small and cases where cost analysis is performed. than$25.000. minority firms. women's business To establish a fair and reasonable profit, (3)A grantee or subgrantee will be enterprise and labor surplus area firms. consideration will be given to the exempt from the pre-award review in (1)The grantee and subgrantee will take complexity of the work to be-performed. paragraph (g)(2)of this section if the j all necessary affirmative steps to assure the risk borne by the contractor,the awarding agency determines that its 1 that minority firms.women's business contractor's investment.the amount of procurement systems comply with the enterprises.and labor surplus area firms subcontracting,the quality of its record standards of this section. are used when possible. of past performance,and industry profit (i)A grantee or subgrantee may 1 (2)Affirmative steps shall include: rates in the surrounding geographical request that its procurement system be { (i)Placing qualified small and area for similar work. reviewed by the awarding agency to i minority businesses and women's (3)Costs or prices based on estimated determine whether its system meets + business enterprises on solicitation lists: costs for contracts under grants will be these standards in order for its system (ii)Assuring that small and minority allowable only to the extent that costs to be certified.Generally.these reviews businesses.and women's business incurred or cost estimates included in shall occur where there is a continuous enterprises are solicited whenever they negotiated prices are consistent with high dollar funding,and third party are potential sources; Federal cost principles(see 4$5 contracts aro awarded on a regular (iii)Dividing total requirements,when Grantees may reference their own cost economically feasible.into smaller tasks principles that comply with the basis: or quantities to permit maximum applicable Federal cost principles. (ii)A grantee or subgrantee may self- participation by small and minority (4)The cost plus a percentage of cost certify its procurement system.Such ( business,and women's business and percentage of construction cost self-certification shall not limit the t enterprises; methods of contracting shall not be awarding agency's right to survey the (iv)Establishing delivery schedules, used: system.Under a eelf-certification where the requirement permits,which (g)Awording agency review.(1) procedure,awarding agencies may wish encourage participation by small and Grantees and subgrantees must make to rely on written assurances from the minority business,and women's available,upon request of the awarding grantee or subgrantee that it is business enterprises; agency.technical specifications on complying with these standards.A i (v)Using the services and assistance proposed procurements where the grantee or subgrantee will cite specific of the Small Business Administration, awarding agency believes such review -procedures,regulations.standards.etc.. and the Minority Business Development is needed to ensure that the item and/or as being in compliance with these t Agency of the Department of Commerce; service specified is the one being requirements and have its system and - proposed for purchase.This review available for review. 111 I - - st V�53, tvo. t . 1 Fric -y, March 71, 7988 /fles and Regulations 8099 :edei:. Register / (h) Bonding requirements. For (4)Compliance with the Copeland 18 5 37 SuGgranta. f construction or facility improvement "Anti-Kickback"Act (18 U.S.C.874)as (a)States.States shall follow state 1 ( contracts or subconstracts exceeding supplemented in Department of labor law and procedures when awarding and \\\ 5100.000. the awarding agency may regulations(29 CFR Part 3).(All administering subgranis(whether on a accept the bonding policy and contracts and subgrants for construction cost reimbursement or fixed amount requirements of the grantee or or repair) ' basis)of financial assistance to local subgrantee provided the awarding (5) Compliance with the Davis-Bacon and badian tribal governments. States agency has made a determination that Act (40 U.S.C.276a to a-7)as shall: the awarding agency's interest is supplemented by Department of labor (1)Ensure that every subgrant adequately protected.1f such a regulations 129 CFR Part 5). includes any clauses required by determination has not been made.the (Construction contracts in excess of Federal statute and executive orders minimum requirements shall be as $2,000 awarded by grantees and and their implementing regulations: follows: subgrantees when required by Federal (2)Ensure that subgrantees are aware J (1)A bidguorontee from each bidder grant program legislation) of requirements imposed upon them by 1 equivalent to five percent of the bid j price.The"bid guarantee"shall consist (6)Compliance with Sections 703 and Federal statute and regulation: of a firm commitment such as a bid 107 of the Contract Work Hours and (3)Ensure that a provision for bond. certified check,or other Safety Standards Act (40 U.S.C.327-330) compliance with Section x.42 is negotiable instrument accompanying a as supplemented by Department of placed in every cost reimbursement bid as assurance that the bidder will, Labor regulations(29 CFR Part 5). subgrant;and upon acceptance of his bid.execute (Construction contracts awarded by (4)Conform any advances of grant i such contractual documents as may be grantees and subgrantees in excess of funds to subgrantees substantially to the ' required within the time specified. 52.000,and in excess of S2,500 for other same standards of timing and amount (2)A performance bond on the port of contracts which involve the employment that apply to cash advances by Federal the contractor for 100 percent of the of mechanics or laborers) agencies. contract price. A"performance bond" is (7)Notice of awarding agency (b)All othergrantees..AlI other one executed in connection with a requirements and regulations pertaining grantees shall follow the provisions of contract to secure fulfillment of all the to reporting. this part which are applicable to contractor's obligations under such (8) Notice of awarding agency awarding agencies when awarding and co(n3)A payment bond on the part of the requirements and regulations pertainingadministerincost reimbursement orts (whether on fixed amount contractor for 100 percent o a to patent rights with respect to any f p f the discovery or invention which arises or is basis)of financial assistance to local contract price. A "payment bond"is one developed in the course of or under suchend Indian tribal governments.Grantees J executed in connection with a contract contract. shall: 1 to assure payment as required by law of (1)Ensure that every subgrant all persons supplying labor and material (9)Awarding agency requirements in the execution of the work provided and regulations pertaining to copyrights thduart; provision for compliance with for in the contract. and rights in data. P (2)Ensure that every subgrant (i)Contract provisions.A grantee's (10)Access by the grantee,the includes any clauses required by and subgrantee's contracts must contain subgrantee,the Federal grantor agency, provisions in paragraph(i)of this the Comptroller General of the United Federal statute and executive orders Section.Federal agencies are permitted States,or any of their duly authorized and their implementing regulations:and to require changes,remedies,changed representatives to any books, (3)Ensure that subgrantees are aware j conditions,access and records documents,papers,and records of the of requirements imposed upon them by retention,suspension of work,and other contractor which are directly pertinent Federal statutes and regulations. clauses approved by the Office of to that specific contract for the purpose (c)Exceptions.By their own terms. Procurement Policy. of making audit,examination,ifxcerpts. certain provisions of this part do not (1)Administrative.contractual.or and transcriptions. apply to the award and administration legal remedies in instances where (11)Retention of all required records of subgrants: contractors violate or breach contract for three years after grantees or (1)Section X5.,10; terms,and provide for such sanctions subgrantees make final payments and (2)Section RS-i l; and penalties as may be appropriate. all other pending matters are closed. (3)The letter-of-credit procedures (Contracts other than small purchases) (12)Compliance with all applicable specified in Treasury Regulations at 31 (2)Termination for cause and for standards,orders,or requirements CFR Part 20S.cited in; -A 5 21;and convenience by the grantee or g subgrantee including the manner by issued under section 308 of the Clear Air (4)Section A.50. 1 which it will be effected and the basis Act(42 US.C.1857(h)),section 508 of the Reports.Records.Retention.and for settlement(All contracts in excess Clean Water Act(33 U.S.C.1388). Enforcement of$10.000) Executive Order 11738,and (3)Compliance with Executive Order Environmental Protection Agency 140 MonMortnp ane ropavn9 11248 of September 24,1965 entitled regulations(40 CFR Part 15).(Contracts. program pertormanee. "Equal Employment Opportunity,"as subcontracts,and subgrants of amounts (a)Monitoring bygrantees.Crantees amended by Executive Order 11375 of in excess of S1o0.000) are responsible for managing the day-to- October 13.1967 and as supplemented in (13)Mandatory standards and policies day operations of grant and subgrant Department of Labor regulations(41 relating to energy efficiency which are supported activities.Grantees must CFR Part 80).(All construction contracts contained in the state energy monitor grant and subgrant supported ' awarded in excess of 510,000 by conservation plan issued in compliance activities to assure compliance with grantees and their contractors or with the Energy Policy and applicable Federal requirements and y subgrantees) Conservation Act(Pub.L.94-183). that performance goals are being i J moo Federal Register / V0 53, No. 48 / Friday. Marc'. '3. .:3 and -Regulations d achieved.Grantee monitoring must performance reporting dates which have (5) Federal agencies may provide cover each program.function or activity. significant impact upon the grant or computer outputs to grantees to expedite Jb)Nonconstruction performonoe silbgrant supported activity.In such or contribute to the accuracy of reports.The Federal agency may. if 11 cases,the grantee must inform the reporting.Federal agencies may ecce decides that performance information Federal agency as soon as the following the required information from grantees available from subsequent applications types of conditions become known: in machine usable furmat or computer contains sufficient information to meet 411 Problems•delays,or adverse printouts instead of prescribed forms. its programmatic needs.require the conditions which will materially impair (6) Federal agencies may waive any grantee to submit a performance report the ability to meet the objective of the report required by this section if not only upon expiration or termination of award.This disclosure must include a needed. grant support.Unless waived by the statement of the action taken.or (7)Federal agencies may extend the Federal agency this report will be due contemplated.and any assistance due date of any financial report upon on the same date as the final Financial needed to resolve the situation. receiving a justified request from a Status Report. (2)Favorable developments which grantee. (1)Grantees shall submit annual enable meeting time schedules and (b)Financial Status Report.—(1) performance reports unless the objectives sooner or at less cost than Form.Grantees will use Standard Form awarding agency requires quarterly or sinticipated or producing more beneficial 269 or 269A.Financial Status Report. to semi-annual reports.However, results than originally planned. report the status of funds for all performance reports will not be required (e)Federal agencies may make site nonconstruction grants and for I more frequently than quarterly.Annual visits as warranted by program needs. construction grants when required in reports shall be due 90 days after the 10 Waivers.extensions. (1)Federal accordance with paragraph grant year,quarterly or semi-annual agencies may waive any performance 4 3-L41(e)(2)(iii)of this section. reports shall be due 30 days after the report required by this part if not (2)Accounting basis. Each grantee reporting period.The final performance needed. will report program outlays and program report will be due 90 days after the (2)The grantee may waive any income on a cash or accrual basis as expiration or termination of grant performance report from a subgrantee prescribed by the awarding agency.If support.if a justified request is Hhen not needed.The grantee may the Federal agency requires accrual submitted by a grantee. the Federal extend the due date for any performance information and the grantee's agency may extend the due date for any report from a subgrantee if the grantee accounting records are not normally ( performance report.Additionally, v ill still be able to meet its performance kept on the ai curet basis. the grantee requirements for unnecessary performance reports may be waived by reporting obligations to the Federal shall not be required to convert its p g og a agency. accounting system but shall develop the Federal agency. such accrual information through and (2) Performance reports will contain. §$-5 9'41 Financial Reporting. for each grant.brief information on the analysis of the documentation on hand. following: (a)General. (1)Except as provided in (3)Frequency.The Federal agency (i)A comparison of actual paragraphs(a)(2) and(5)of this section. may prescribe the frequency of the accomplishments to the objectives grantees will use only the forms report for each project or program. established for the period.Where the specified in paragraphs(a) through(e)of However.the report will not be required output of the project can be quantified,a this section,and such supplementary or more frequently than quarterly.lf the 9 computation of the cost per uother forms as may from time-to time be Federal agency does not specify the unit of 1+ output may be r required if that authorized by OMB,for. frequency of the report.it will be information e be useful. (i)Submitting financial reports to submitted annually.A final report will (ii)The reasons for slippage if Federal agencies,or be required upon expiration or established objectives were not met. (ii)Requesting advances or termination of grant support. (iii)Additional pertinent information reimbursements when letters of credit (4)Due date.When reports are including.when appropriate.analysis are not used. required on a quarterly or semiannual and explanation of cost overruns or high (2)Grantees nbed not apply the forms basis.they will be due 30 days after the unit costs. prescribed in this section in dealing with reporting period.When required on an (3)Grantees will not be required to their subgrantees.However,grantees annual basis.they will be due 90 days submit more than the original and two shall not impose more burdensome after the grant year.Final reports will be copies of performance reports. requirements on subgrantees. due 90 days after the expiration or 1i (4)Grantees will adhere to the- 13)Grantees shall follow all termination of grant support. standards in this section in prescribing applicable standard and supplemental (c)Federal Cosh Transactions performance reporting requirements for Federal agency instructions approved by Report--41)Form.(i)For grants paid by subgrantees. OMB to the extend required under the letter or credit.Treasury check (c)Construction performance repotu. Paperwork Reduction Act of 1980 for use advances or electronic transfer of funds. For the most part.on-site technical in connection with forma specified in the grantee will submit the Standard inspections and certified percentage-of- paragraphs(b)through(e)of this Form 272.Federal Cash Transactions completion data aro relied on heavily by section.Federal agencies may issue Report,and when necessary.its Federal agencies to monitorprogress substantive supplementary instructions continuation sheet.Standard Form 272x, under construction grants and only with the approval of OMB-Federal unless the terms of the award exempt subgrants.The Federal agency will agencies may shade out or instruct the the grantee from this requirement. require additional formal performance grantee to disregard any fine item that (ii)These reports will be used by the reports only when considered the Federal agency finds unnecessary Federal agency to monitor cash necessary,and never more frequently for its decisionmaking purposes. advanced to grantees and to obtain than quarterly. 14)Grantees will not be required to disbursement or outlay information for i (d)SigniJicont developments.Events submit more than the original and two each grantlrom grantees.The format of may occur between the scheduled copies of forms required under tMs part. the report may be adapted as i • Federal Register /0. 53. No. 48 / Friday. March 1'r. 1988 11ples and Regulations 6101 l appropriate when reporting is to be electronic funds transfer or Treasury The awarding agency will request { accomplished with the assistance of check advance. transfer of records to its custody when it automatic data processing equipment (i) When a construction grant is paid determines that the records possess provided that the information to be by letter of credit.electronic funds long-term retention value. When the submitted is not changed in substance. transfer or Treasury check advances, records are transferred to or maintained (2)Forecasts of Federal cash the grantee will report its outlays to the by the Federal agency. the 3-year I,I requirements. Forecasts of Federal cash Federal agency using Standard Form retention requirement is not applicable requirements may be required in the 271.Outlay Report and Request for to the grantee or subgrantee. "Remarks"section of the report. Reimbursement for Construction (c)Starting dote of retention period— (3)Cash in hands of subgrantees. Programs.The Federal agency will (1)Ceneno/. When grant support is When considered necessary and provide any necessary special continued or renewed at annual or other feasible by the Federal agency.grantees instruction.However. frequent and due intervals. the retention period for the may be required to report the amount of date shall be governed by 4 and records of each funding period starts on cash advances in excess of three days' (3)and(4). the day the grantee or subgrantee needs in the hands of their subgrantees (ii)When a construction grant is paid submits to the awarding agency its or contractors and to provide short by Treasury check advances based-on single or last expenditure report for that 1 narrative explanations of actions taken periodic requests from the grantee,the period.However.if grant support is by the grantee to reduce the excess advances will be requested on the form continued or renewed quarterly, the i balances. specified in 4 A 5 41(d). retention period for each year's records { (4)Frequency,and due date. Grantees (iii)The Federal agency may starts on the day the grantee submits its must submit the report no later than 15 substitute the Financial Status Report expenditure report for the last quarter of 1 working days following the end of each specified in 1 8?41(b)for the Outlay the Federal fiscal year.In all other { quarter.However, where an advance Report and Request for Reimbursement cases,the retention period starts on the t either by letter of credit or electronic for Construction Programs. day the grantee submits its final transfer of funds is authorized at an (3)Accounting basis. The accounting expenditure report.If an expenditure annualized rate of one million dollars or basis for the Outlay Report and Request report has been waived,the retention more. the Federal agency may require for Reimbursement for Construction period starts on the day the report the report to be submitted within 15 Pro rams shall be governed by would have been due. working days following the end of each 4 r41(b)(2). (2)Real property and equipment { month. � records.The retention period for real (d)Request for advance or 4$�.a2 Retention and access reimbursement—(1)Advance payments. requirements for records. property and equipment records starts Requests for Treasury check advance (a)Applicability. (1)This section from the date of the disposition or payments will be submitted on Standard applies to all financial and replacement or transfer at the direction Form 270.Request for Advance or programmatic records.supporting of the awarding agency. Reimbursement. (This form will not be documents,statistical records,and other (3)Records for income transactions I so used for drawdowns under a letter of records of grantees or subgrantees caierg ranont eeor smust re support. In some credit.electronic funds transfer or when which are: cases grantees must report income atter Treasury check advance payments are (i)Required to be maintained by the the period of grant support.Where there made to the grantee automatically on a terms of this Part,program regulations is such a requirement,the retention predetermined basis.) or the grant agreement.or• period for the records pertaining to the (2)Reimbursements.Requests for (ii)Otherwise reasonably considered earning of the income starts from the reimbursement under nonconstruction as pertinent to program regulations or end of the grantee's fiscal year in which grants will also be submitted on the grant agreement. the income is earned. Standard Form 270.(For reimbursement (2)This section does not apply to (4)Indirect cost rote proposals.cost requests under construction grants.see records maintained by contractors or allocations plans.etc.This paragraph paragraph(e)(1)of this section.) . subcontractors.For a requirement to applies to the following types of (3)The frequency for submitting place a provision concerning records in documents.and their supporting records: 1 pa merit requests is treated in certain kinds of contracts,see indirect cost rate computations or 4 41(b)(3). JU-36(i)(10). proposals,cost allocation plans.and any (e)Outlay rep"rt and request for (b)Length of retention period.(1) similar accounting computations of the reimbursement for construction Except as otherwise provided.records rate at which a particular group of costs programs.(1)Grants that support must be retained for three years from is chargeable(such as computer usage consttuct:on activities paid by the starting date specified in paragraph chargeback rates or composite fringe reimbursement method. (c)of this section. benefit rated. (i)Requests for reimbursement under (2)If any litigation.claim,negotiation. (i)If submitted for negotiotion. If the construction grants will be submitted on audit or other action involving the proposal.plan.or other computation is Standard Form 271.Outlay Report and records has been started before the required to be submitted to the Federal Request for Reimbursement for expiration of the 3-year period,the Government(or to the grantee)to form 1 Construction Programs.Federal agencies records must be retained until the basis for negotiation of the rate.then- may.however.prescribe the Request for completion of the action and resolution the 3•yeer jetention period for its Advance or Reimbursement form. of all issues which arise from it,or until supporting records starts from the date specified in (I RILS-41(d).instead of this the end of the regular 3-year period. of such submission. form. whichever is later. (ii)If not submitted for negotiation.If (h)The frequency for submitting (3)To avoid duplicate recordkeeping, the proposal.plan.or other computation reimbursement requests is treated in awarding agencies may make special Is not required to be submitted to the ►. ;85 -41(b)(3). arrangements with grantees and Federal Government(or to the grantee) (2)Grants that support construction subgrantees to retain any records which for negotiation purposes,then the 3-year ;:�.• activities paid by letter of credit, are continuously needed for joint use. retention period for the proposal plan,or i ,g1Q2 Federal 8e6;istet / VA No. 48 / Friday, March 11. 1988 / Rut nd Begututior.s computation and its suppiorU4 records (ra Effects of suspension and actions and all required work of the starts froth end of the fiscal year(or termination. Costs of grantee or grant has been completed. other accounting period)ooverad by the subgrantee resulting from obligations •(b)Reports. Within 90 days after the t proposal.plan, or otber computation. incurred by the grantee or subgrantee expiration or termination of the grant. ,(d)Substitution of microfllar. Copies during a suspension or after Termination the grantee must submit all financiul. made by microfilming• photocopying,or of-an award are not allowable unless performance.and other reports required similar methods may be substituted for the awarding agency expressly as a condition of the grant. Upon request the original records. authorizes them is the notice of by the grantee.Federal agencies may (e)Access to records—(1)Records of suspension or termination or extend this timeframe.These may grantees and subgrantees.The awarding subsequently.Other grantee or include but are not limited to: agency and the Comptroller General of subgrantee costa during suspension or (1)Final performance or progress the United States,or any of their after termination which are necessary report. authorized representatives,shallhave and not reasonably avoidable are (2)Financial Status Report(SF269)or the right of access to any pertinent allowable if: Outlay Report and Request for books. documents.papers,or other 41)The costs result from obligations Reimbursement for Construction records of grantees and subgrantees which were properly incurred by the Programs(SF-27'11(as applicable.) which.are pertinent to the grant.in order grantee or subgrantee before the 13)Final request forpoyment(SF--2701 to make Audits,examinations.excerpts, effective date of suspension or (if applicable). and transcripts. termination,are not in anticipation of it. (4)Invention disclosure(if (2)Expiration of right of access.The and,in the case of a termination,are applicable). rights of access in this section must not noncancellable.and. (5)Federolly•awned property report: be limited to the required retention (2)The costs would be allowable if In accordance with I-B-5—32(f). a period but shall last as long as the the award were not suspended or grantee must submit an inventory of all records are retained. expired normally at the end of the federally owned property(as distinct W Restrictions on public access.The funding period in which the termination from property acquired with grant Federal Freedom of Information Act(5 takes effect. funds)for which it is accountable and U.S.C.552)does not apply to records (d)Relationship to Debarment and request disposition instructions from the Unless required by Federal.State,or Suspension.The enforcement remedies Federal agency of property no longer i local law,grantees and subgrantees are identified in this section,including needed. not required to permit public access to suspension and termination.do not (c)Cost adjustment.The Federal their records. preclude grantee or subgrantee from agency will,within 90 days after receipt I 5 43 Enforcement. being subject to"Debarment and of reports in paragraph(b)of this 1 (a)Remedies for noncomplianceAl a Suspnsion"under E.O.12549(see section,make upward or downward grantee or subgrantee material! fails to 1-65 35)' adjustments to the allowable costs. 8 8 Y (d)Cash adjustments. (1)The Federal comply with any term of an award, -X5--44 Termination for convenience• agency will make prompt payment to the whether stated in a Federal statute or Except as provided in g 85 43 grantee for allowable reimbursable regulation. an assurance. in a State plan awards may be terminated in whole or costs. or application,a notice of award.or in part only as follows: (2)The grantee must immediately elsewhere,the awarding agency may (a)By the awarding agency with the refund to the Federal agency any take one or more of the following consent of the grantee or subgrantee in balance of unobligated(unencumbered) actions,as appropriate in the which case the two parties shall agree cash advanced that is not authorized to circumstances: upon the termination conditions, be retained for use on other grants. ,(I)Temporarily withhold cash including the effective date and in the payments pending correction of the case of partial termination.the portion 1-895-51 Later disallowances and deficiency by the grantee or s:ibgrantee to be terminated,Dr I adjustments. or more severe enforcement action by (b)By the prantia or subgrantee upon The closeout of a grant does not the awarding agency. written notification to the awarding affect: (2)Disallow(that is.deny both use of agency,setting forth the reasons for (a)The Federal agency's right to funds and matching credit for)all or part such vermination.the effective date,and disallow costs and recover funds on the of the cost of the acti%ity or action not in in the case of partial termination,the basis of a later audit or other review; compliance. portion to be terminated.However.If.in (b)The grantee's obligation to return (3)Wholly or partly suspend or the case of a partial termination,the any funds due as a result of later terminate the current award for The awarding agency determines that the refunds.corrections,or other grantee's or subgrantee's program, remaining portion of the award wiU not transactions: 14)Withhold further awards for The accomplish the purposes for which the (c)Records retention as required in program or award was made,the awarding agency 85 A7m 15)Take other remedies that may be may terminale the award in its entirety (d)Property management legally available. - under either f AS 43 or paragraph(a) requirements in 5S 5 1 and 1 (b)Hearings.appeals.In taking an of this section f_1531-and enforcement action.the awarding (e)Audit requirements in 4_$1_26. agency will provide the grantee or Subpart D—Attet•The-Grant i subgrantee an opportunity for such Requirements 1-�-52 f.otkeno^of amounts dui bearing.appeal.or other administrative (a)Any funds paid to a grantee in proceeding to which thegrantee or 4—Um cosaout. excess of the amount to which the i subgrantee is entitled underany statute (a)General The Federal agency will grantee is finally determined to be or regulation applicable To.theaction close-out the award mhenat determines entitled tinder the terms of the award Involved. that.all applicable administrative constitute a debt to the Federal /, Federal Register / VOW No. 48 / Friday. March 11, 1988 / Rud, and Regulations 8103 { Government. If not paid within a (b)Except where otherwise provided Subpart E—Entitlement(Reserved I reasonable period after demand, the by statutes or regulations, the Federal Federal agency may reduce the debt by: agency will charge interest on an (FR Doc.88-5251 Filed 3-10-88.8 45 dmf (1) Making an adminstrative offset overdue debt in accordance with the SILLING CODES 3410-KS-Y,64SO-4-Y 1025-01-Y. against other requests for Federal Claims Collection Standards(4 23-M.6 32 1-4t.3-Y.�710-37•Y-0110-u-Y. .51a 71-Y,�r17-01-Y,310-01-Y, 4000-01-Y, 7515-01.Y, reimbursements, CFR Ch.II).The date from which 4320-01-Y.rsso-Sa-M.4110-nc-Y.6714-71-Y. .150- (2) Withholding advance payments interest is computed is not extended by 04-M.I S I-M. S3 -0g1��53 01-Y, 70)"I.Y. otherwise due to the grantee.or litigation or the filing of any form of (3)Other action permitted by law. appeal. I I i 1 1 I I r I 9 I i I � i I I i f